3 ‘Buy’ recommendations by Motilal Oswal with 34% to 50% upside potential

The domestic brokerage house Motilal Oswal has identified three companies from completely different sectors where it sees meaningful upside from current levels. The brokerage has retained its ‘Buy’ rating on Safari Industries, Jain Resource Recycling and Emami, with target prices indicating upside potential ranging from 34% to as much as 50%.

So, what is driving the brokerage’s optimism? Let’s take a look –

Safari Industries: Can capacity expansion drive the next leg of growth?

Motilal Oswal has given a ‘Buy’ rating to Safari Industries. The brokerage has set a target price of Rs 2,250 to the stock and expects around 50% upside potential from the current market price.

The company’s revenue grew 11.5% year-on-year during the June quarter. This was driven by nearly 10% volume growth.

The brokerage noted, “Higher raw material prices impacted margins in Q1FY27, resulting in gross margin contraction.”

Even so, it believes the demand environment remains favourable. While April and May saw softer demand due to fewer wedding-related purchases, business improved sharply in June. 

The brokerage also highlighted recent price hikes across the luggage industry, including by Safari and several direct-to-consumer brands.

Motilal Oswal report noted, “We expect SII’s revenue momentum to outpace the industry (16% CAGR), driven by the addition of 0.15 million pieces per month of capacity at its Jaipur plant.”

Motilal Oswal expects the company to continue gaining market share through premium products, expansion of exclusive stores and new product launches. At the same time, it cautioned that rising competition from established brands and new-age players remains a key risk.

Jain Resource Recycling: Copper surge drives long-term thesis 

The brokerage also remains positive on Jain Resource Recycling, where it sees 42% upside despite trimming earnings estimates.

Jain Resource Recycling delivered 76% year-on-year revenue growth. Operating profit also increased despite higher logistics costs and lower scrap availability.

The brokerage observed, “Revenue grew 76% YoY to Rs 2,720 crore, led by a 2.5x YoY surge in the copper businesses.”

One of the key positives during the quarter was the improvement in profitability from copper and lead operations.

Looking ahead, the brokerage believes value-added copper products could become an important earnings driver. It said, “We expect value-added copper products to enhance profitability, with potential incremental EBITDA of ~Rs 25,000/MT at full utilization.”

Motilal Oswal also believes rising demand for recycled metals, better scrap availability and supportive regulations could strengthen the company’s long-term growth prospects.

Emami: Domestic volume resilient amid input cost spikes 

For Consumer goods company Emami, the brokerage house expects an upside of around 34% from the current market price.

The company’s consolidated revenue grew 15% year-on-year during the June quarter. This was supported by acquisitions as well as healthy domestic demand.

However, rising crude-linked raw material costs and disruptions linked to the West Asia conflict affected profitability.

The brokerage said, “Gross margin contracted sharply by 360bp YoY to 65.8%, impacted by high crude-linked input costs.”

Even with the pressure on margins, Motilal Oswal believes the company’s core domestic business remains healthy.

Motilal Oswal report added, “Core domestic demand remains healthy with 8% underlying volume growth.”

The brokerage expects calibrated price hikes, productivity initiatives and easing cost pressures to gradually support margin recovery over the coming quarters.

What investors need to watch 

These companies belong to completely different sectors – consumer goods, luggage and metal recycling.

According to the brokerage report, each company has identifiable growth drivers despite facing near-term challenges. For Safari Industries, it is capacity expansion and premiumisation. For Jain Resource Recycling, it is the growing demand for recycled copper and lead products. For Emami, it is steady domestic demand along with gradual margin recovery as cost pressures ease.

Disclaimer: The stock recommendations and target prices mentioned above are based on analysis by brokerage firm Motilal Oswal and do not constitute personal financial advice or an offer to buy or sell securities. Investment in equity markets involves risk of market fluctuations and capital loss; past performance or projected targets do not guarantee future returns. Investors should conduct independent research or consult a SEBI-registered financial advisor before making investment decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.