The markets are flat but are you wondering what stocks to invest in? Leading brokerage house, Nuvama has identified three stocks across automobiles, industrial manufacturing and renewable energy sectors where it sees meaningful upside from current levels.
The brokerage has maintained a ‘Buy’ rating on Mahindra & Mahindra, Schaeffler India and Waaree Energies, with potential upside ranging from about 15-43% based on its target prices.
Let’s take a look at why the brokerage house is bullish on these stocks and what is the rationale behind it –
Nuvama on Mahindra & Mahindra
Nuvama has retained a ‘Buy’ rating on Mahindra & Mahindra and set a target price of Rs 4,400. This implies an upside potential of around 26%.
According to the brokerage report, the company’s leadership outlined strong growth plans across its businesses. The report highlighted key points from their discussion with M&M Group CEO and MD Dr Anish Shah.
Some of the key points of discussion include, “i) Revenue is likely to compound at 15–40% across segments over FY26–FY30. ii) Consolidated auto revenue to expand at 8x over FY20–30E implying a 20% CAGR over FY25–30E led by growth in UV and CV. iii) Upcoming launches in coming years include BE7/ Vision series (S, X, T, SXT). iv) Consolidated farm revenue is likely to expand 3x over FY20-30E implying a 12% CAGR over FY25–FY30, led by industry growth of a 9% CAGR, market share gains and robust exports.”
The brokerage house expects steady revenue growth across passenger vehicles, commercial vehicles and farm equipment. The brokerage estimates revenue and core earnings compound annual growth rate (CAGR) of 16% and 19% respectively over FY25-28. It also expects a Return on Invested Capital of more than 60%.
Nuvama also highlighted performance across group companies. It said Mahindra Finance has completed its asset quality repair phase and is shifting towards calibrated growth. Tech Mahindra is working toward its FY27 estimate goal of 15% EBIT margin. Mahindra Lifespaces, Mahindra Logistics and Mahindra Aerospace are also expected to contribute through improved execution and global contracts.
The brokerage believes new vehicle launches and strong order response for recent models such as XUV7XO and XEV 9S could support growth in the auto segment.
It estimates auto segment revenue CAGR of 16% and farm segment revenue CAGR of 13% over financial year 2025 to financial year 2028.
Nuvama on Schaeffler India
Nuvama has also maintained a ‘Buy’ rating on Schaeffler India with a revised target price of Rs 4,900. This suggests an upside potential of roughly 15%.
According to the brokerage report, the company posted strong recent numbers. It said, “Revenue surged 28% YoY to Rs 27.2 billion, a 13% beat, owing to higher revenue in Auto Technologies (AT) and exports. Revenue was aided by growth of 49% in exports, 42% in AT, 23% in vehicle lifetime solutions and 13% in bearings and industrials. Adjusted EBITDA soared 36% to INR5.1bn, 12% above forecast due to revenue beat.”
The brokerage said it has increased its earnings estimates for calendar year 26-27 by 4% each, mainly due to expectations of higher revenue and better margins. It expects revenue to grow at around 10% and EBITDA at 12% between calendar year 25-27, with a Return on Invested Capital of about 29%.
According to the brokerage report, revenue growth could be driven by better penetration in markets such as Southeast Asia, Japan, Korea and parts of Europe. It also expects gains in Vehicle Lifetime Solutions and Auto Technologies, including recent order wins in electric axle components.
Nuvama on Waaree Energies
In the renewable energy space, Nuvama has maintained a ‘Buy’ rating on Waaree Energies with a target price of Rs 3,867. This implies an upside potential of nearly 43%.
According to the brokerage report, the company is positioning itself to benefit from long-term opportunities in renewable energy and green hydrogen. The report noted, “Waaree Energies is strategically evolving to benefit from the multi-decadal renewable energy/green hydrogen (GH2) opportunity. Waaree refuted any impact from US’ 126% countervailing duty on solar module imports from India citing applicability to cell origin, not module assembly.”
Nuvama believes diversification into green hydrogen, overseas manufacturing and polysilicon sourcing could reduce dependence on a single product line. It also noted that the stock trades at 18 to 17 times FY27-28 estimated earnings, which it considers reasonable given future growth expectations.
Conclusion
Across the three stocks, Nuvama sees upside potential ranging from about 15% in Schaeffler India to 26% in Mahindra & Mahindra and over 40% in Waaree Energies.