Nuvama Institutional Equities has identified three stocks and rated them ‘Buy’. These include Godrej Consumer Products, Sobha, and Dabur India. The brokerage house sees as much as 40% upside potential in one of these stocks over 12 months. 

Nuvama listed out a detailed rationale for these counters after they reported their quarterly business update for Q1FY27.

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Nuvama on Godrej Consumer

Nuvama has maintained its Buy rating on Godrej Consumer, with a price target of Rs 1,505, implying an upside of almost 40% from the closing price of July 3. The brokerage report came after the company posted its quarterly business update for Q4.

Input costs remained elevated in Q1, easing towards quarter-end, with the company mitigating via calibrated pricing actions, cost savings programmes and media optimisation. The brokerage expects margin to recover progressively through FY27.

“We now reckon consolidated revenue/EBITDA shall expand 17.1%/12.4% YoY (earlier 12%/10% YoY). India volumes and sales to grow 8% and 12% YoY, respectively. Indonesia volumes/sales to grow 10%/15% YoY (ahead of initial estimate) as competitive intensity eases, while GAUM sales to expand 20%,” said Nuvama. 

Nuvama on Sobha

Nuvama maintained its Buy rating on Sobha as well, while keeping the price target at Rs 1,702, which looks at a lift of 18% from the current market price. Sobha’s Q1FY27 overall pre-sales came in at Rs 3,660 crore (up 76% YoY and 79% QoQ), its best-ever quarterly pre-sales. The company’s share of bookings shot up 74% YoY to Rs 2,990 crore. 

The strong show was driven by 6.9 msf of launches during the quarter, including the much-awaited Hoskote project. Bengaluru’s share in overall sales (by value) surged to 57% during the quarter. Realisation rose 9% YoY to Rs 15,655 per square feet in Q1FY27. 

“As highlighted in our report Making sense of the housing cycle, Bengaluru can still deliver volume growth. We reckon Sobha’s sales shall improve going ahead, riding better geographical diversification,” said Nuvama. 

Nuvama on Dabur India

Nuvama retained its ‘Buy’ rating on Dabur India, with a target price of Rs 620, implying an upside of approximately 40%. Dabur released its Q1FY27 business update, which is marginally ahead of the brokerage’s initial expectations. 

“We estimate consolidated revenue and EBITDA shall grow 11% YoY and 10.7% YoY, respectively (our initial estimate: 9.5% and 7.2% YoY). India volumes to rise 7% YoY (+6% YoY in Q4FY26;-1% YoY in Q1FY26), aided by improving demand trends and rural outpacing urban,” said Nuvama. 

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The brokerage expects the company’s international business is likely to grow ahead of its estimates (17% and 11–12% in INR/CC terms). Home and Personal Care segment is expected to grow near teens (in line with the estimate of 11–12%), driven by high-teens growth in Hair Oils and Shampoo. Oral Care is likely to grow at near double-digit (earlier expectation of high-single digit), led by Meswak (double-digit growth). 

Conclusion

The Q1 business update indicates an encouraging start to the financial year for the three companies despite the global headwinds. Improving demand trends, especially in the rural areas, helped offset the impact of geopolitical tension on raw material prices. However, the second half of the year is seen as the ultimate game-changer for India Inc. 

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.