Global brokerage firm Nomura has turned optimistic on select stocks across auto components, IT, and oil refining sectors. In its latest report, the brokerage has issued ‘Buy’ calls on Sona BLW Precision Forgings, eClerx Services, and Indian Oil Corporation (IOCL) projecting an upside potential of up to 25%.
Let’s take a look at the three stocks and what Nomura finds attractive in each.
Nomura on Sona BLW Precision Forgings
The firm has assigned a ‘Buy’ rating with a target price of Rs 605 to Sona BLW Precision Forgings. This translates to an upside potential of 25% from the current levels.
According to the brokerage report, Nomura believes that Sona BLW is well-positioned to benefit from new business wins amid the restructuring of auto component supply chains in Europe.
The brokerage said, “We believe potential business wins from struggling auto component suppliers in the EU will be a key upside for Sona. Opportunity size in the near term is around EUR 300 million, from which Sona can get 15-20% share, in our view.”
Nomura highlighted that the company’s revenue mix continues to diversify across multiple segments like traction motors, suspension motors, and railway components. It also noted that Sona’s dependency on its largest EV customer has fallen sharply, pointing, “With the largest EV customer’s share dropping to only 6% in Q2 (23% in FY22), further downside risks are limited.”
However, the brokerage also pointed out some near-term challenges: “In the near-term, chip shortages at Nexperia and fire at Novelis plant in the US could impact production for its customers, though.”
Nomura on eClerx Services
Nomura has reiterated a ‘Buy’ rating on eClerx Services, setting a target price of Rs 5,200. This implies an 8.6% upside potential from the current market price. The brokerage expects strong revenue growth driven by strong deal momentum and margin discipline.
As per the brokerage report, “We lift our revenue growth forecast by 220–420 bps for FY26–FY28, based on strong deal wins in H1 FY26 and pipeline. We expect eClerx to record dollar revenue growth of 17–18% YoY over FY26–FY28.”
The company’s margins have also been ahead of expectations. Nomura noted, “EBITDA margin at 27% (+340bp quarter-on-quarter) was better than our expectation of 26%. In Q2, the quarter on quarter depreciation of the rupee Vs the US dollar contributed approx. 200 bps to margin expansion for the company.”
The brokerage, however, expects some moderation ahead. It noted. “In the near term (i.e. Q3), eClerx expects slightly lower margin, baking in current USD/INR and investment needs in the analytics business.”
Nomura expects margins to stabilise between 24–28%.
Nomura on Indian Oil Corporation
In the energy sector, Nomura remains bullish on Indian Oil Corporation (IOCL), assigning a ‘Buy’ rating with a target price of Rs 160 per share. This implies an upside potential of around 6.7%.
According to the brokerage report, Indian Oil Corporation’s Q2FY26 performance significantly exceeded expectations. “Indian Oil Corporation’s Q2FY26 EBITDA of Rs 14,600 crore was sharply above our estimate by 36% and up 16% QoQ (+287% YoY), reflecting a much better refining performance vs our estimates.”
Nomura attributed the outperformance to robust refining margins, stating, “Core refining margin of $8.9/bbl was sharply above our estimate of $6.3/bbl and increased from $6.9/bbl in Q1 and was at a premium of $4.9/bbl to the benchmark Singapore GRM (gross refining margins) of $4.0/bbl.”
