Finding stocks with strong upside potential is one thing and looking for companies backed by improving business performance is another.
The domestic brokerage house Motilal Oswal in its latest report has given a ‘Buy’ rating to three stocks. The three companies come from different sectors. These include food delivery and quick commerce player Eternal, real estate developer Sunteck Realty, and lifestyle retailer Arvind Fashions.
The expected upside ranges from 31% to as much as 69%, as per Motilal Oswal report.
Let’s take a look at why the brokerage remains positive on these three companies.
Eternal: Can Blinkit continue driving growth?
Motilal Oswal has retained its ‘Buy’ rating on Eternal. The brokerage has kept a target price of Rs 400. This implies an upside potential of around 41% from the current market price.
According to the brokerage report, competition in the quick commerce segment remains intense, but the market has become more predictable than before. The report noted, “Competitive intensity in quick commerce remains high.” However, it also added that “competition has now become predictable.”
As per the brokerage report, Blinkit’s business model is becoming stronger despite continued competition. The management has also increased its long-term profitability guidance, expecting adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margins to move towards 6%.
The brokerage further highlighted that Eternal continues to target more than 60% growth in Net Order Value (NOV) over the coming years, while aiming for USD 1 billion EBITDA by FY29.
At the same time, Motilal Oswal pointed out that higher warehouse investments resulted in increased capital expenditure during the quarter. However, it believes these investments are necessary to support future growth.
Furthermore, the report also noted that the food delivery business continues to recover steadily despite rising competition.
Sunteck Realty: Is real estate momentum still intact?
Motilal Oswal has reiterated its ‘Buy’ rating on Suntech Realty with a revised target price of Rs 490. This indicates a potential upside of nearly 69%.
The company’s pre-sales increased 20% year-on-year during the June quarter. This was largely driven by premium and luxury housing demand.
The brokerage expects this momentum to continue as the company prepares multiple project launches across Mumbai and surrounding regions.
As per the report, the company has a healthy launch pipeline worth around Rs 7,100 crore, while management is targeting 25-30% pre-sales growth during the current financial year.
The brokerage expects Sunteck Realty’s pre-sales to grow at a 25% compound annual growth rate (CAGR) between FY26 and FY28.
Another factor highlighted in the report is the company’s balance sheet. According to Motilal Oswal, healthy cash generation and low leverage continue to provide financial flexibility for future business development.
The brokerage also noted, “The stock is trading at a 45% discount to NAV (ex-Dubai project).” It added that the Dubai project could provide additional upside once it is launched.
Arvind Fashions: Premium brands support growth
Motilal Oswal has maintained its ‘Buy’ rating on Arvind Fashions with a target price of Rs 620, implying an upside of around 31%.
The report noted that retail growth remained healthy during the June quarter, while direct-to-consumer channels now contribute a larger share of total revenue.
As per the Motilal Oswal report, better sourcing efficiencies, lower discounting and premium product sales helped improve margins during the quarter.
The brokerage expects the company to deliver around 13% revenue CAGR, 18% EBITDA CAGR, and nearly 30% profit after tax (PAT) CAGR between FY26 and FY28.
Motilal Oswal also highlighted that Arvind Fashions continues to trade at a valuation discount compared with some of its peers despite stronger earnings growth.
Which stock offers the highest upside?
Sunteck Realty offers the highest potential upside of around 69%, followed by Eternal at 41% and Arvind Fashions at 31%, as per the brokerage rating.
Although each company operates in a different sector, the brokerage believes improving business execution, healthy growth visibility, expanding margins and long-term earnings potential remain the common factors supporting its positive outlook.
Disclaimer: The stock ratings, price targets, and financial projections mentioned in this article are sourced from a third-party brokerage report and do not constitute personal financial advice, an endorsement, or an offer or solicitation to buy or sell securities. Equity investments are subject to market risks, and price targets may vary based on market conditions and company performance. Readers are advised to perform their own due diligence and consult a SEBI-registered financial advisor before making any investment decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.
