In a market where stock movements remain uneven, investors’ attention shifts to many individual companies and their recent financial performance. Many of the factors such as revenue trends, profitability, and business visibility play a major role in identifying which stocks are better positioned in the current market.
The domestic brokerage house Motilal Oswal, in its latest report has rated a select number of stocks across information technology, chemicals and recycling as ‘Buy’. As per the brokerage firm, these stocks offer upside potential of up to 42% from current levels.
Let’s take a look at what Motilal Oswal is saying and the investment rationale behind every counter –
Motilal Oswal on Zensar Technologies
Motilal Oswal has maintained a ‘Buy’ rating on Zensar Technologies. It is an information technology services company. The brokerage has set a target price of Rs 1,000. This implies an upside potential of around 42% from the current market price.
According to the brokerage report, Zensar’s revenue declined 1.3% quarter-on-quarter in constant currency terms during the Q3FY26, which was slightly better than expectations. While some business verticals saw growth, others remained under pressure.
The brokerage noted, “Zensar’s Q3FY26 revenue declined 1.3% QoQ CC (vs. our est. of a 1.7% CC decline).”
Margins, however, stood out. Motilal Oswal said, “EBIT margin was 16.0% (est. 14.3%), up 240bp QoQ.” The improvement was driven by a higher offshore mix, favourable foreign exchange movement and operational efficiencies.
Adjusted profit after tax rose sharply. the brokerage added, “Adj. PAT of Rs 219.1 crore…was above our estimate of Rs 179.8 crore.”
Motilal Oswal on Atul
Motilal Oswal has also given a ‘Buy’ rating on Atul, a diversified chemicals company, with a target price of Rs 7,500. This indicates an upside potential of nearly 29%, according to the brokerage report.
Atul reported in-line revenue growth of 11% year-on-year for the December quarter. The Performance and Other Chemicals segment remained the key contributor, while the Life Science Chemicals segment also posted steady growth.
The brokerage highlighted that profitability improved more sharply than revenue. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 29% year-on-year, while adjusted profit after tax jumped 74%.
Motilal Oswal said, “We increase our FY26/FY27/FY28 earnings estimates by 9%/5%/11% on the back of better-than-expected earnings in Q3FY26.”
The brokerage values the stock based on future earnings visibility and capacity expansion plans. According to the report, “We value the stock at 25x FY28E EPS to arrive at our target price of Rs 7,500. Reiterate ‘Buy’.”
Motilal Oswal on Gravita India
Gravita India, which operates in the recycling space, is another stock where Motilal Oswal has reiterated a ‘Buy’ rating. The brokerage has set a target price of Rs 2,030, indicating an upside potential of around 31%.
According to the brokerage report, Gravita’s revenue grew modestly by 2% year-on-year in Q3FY26, as overall volumes declined slightly. The brokerage noted, “Adjusted EBITDA grew 13.5% YoY to Rs 120 crore, owing to 14% YoY increase in overall EBITDA/kg.”
The brokerage expects volume momentum to improve in the coming quarters as new facilities become operational. It added, “We reiterate our ‘Buy’ rating on the stock with a TP of Rs 2,030 (premised on 25x FY28E EPS).”
Conclusion
Across all three stocks, Motilal Oswal’s recommendations are largely based on margin performance, earnings visibility and future capacity expansion rather than immediate growth acceleration.
According to the brokerage report, while near-term challenges remain, these companies offer potential upside if execution holds and demand conditions stabilise.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.