In the everyday churn of the world of stock market, not every stock moves in the same direction. Some counters see profit booking, others quietly attract attention based on future triggers rather than daily price swings.
In this constant hustle, leading brokerage firm Nuvama Institutional Equities has given a Buy recommendation on a set of stocks where it sees meaningful upside from current levels. According to the brokerage report, these some of these stocks offer upside potential of up to 52%, backed by sector-specific trends, earnings visibility and balance sheet changes.
Let’s take a look at the stocks Nuvama has put on its ‘Buy’ list and what is driving its view –
Nuvama on Vedanta
Vedanta is Nuvama’s top pick among metals and mining companies. The brokerage has retained its ‘Buy’ rating and raised its target price to Rs 806. This translates into an upside potential of around 28% from the current market price.
As per the brokerage report, Vedanta is in the final leg of receiving statutory clearances for demerger into five separately listed companies, unlocking value. The planned split is expected to separate aluminium, zinc, oil & gas, power, and steel businesses into independent listed entities.
The report also highlighted that “strong commodity prices, cost reduction along with volume growth further propelled our earlier investment thesis.”
Nuvama has increased its earnings before interest, tax, depreciation and amortisation (EBITDA) estimates for financial year 27-28 to factor in higher aluminium, zinc and silver prices. According to the brokerage report, this would lead EBITDA to grow at a compounded annual growth rate of 20% between financial years 2025 and 2028.
The brokerage further noted expectations of value unlocking amid demerger by raising valuation multiples for aluminium and revising assumptions for steel, iron ore and power businesses, leading to the revised target price of Rs 806.
Nuvama on ICICI Prudential Life Insurance
Nuvama has also maintained a ‘Buy’ rating on ICICI Prudential Life Insurance and raised its target price to Rs 790. From the current market price of around Rs 683, this implies an upside potential of nearly 16%.
According to the brokerage report, total annualised premium equivalent (APE) growth remained modest in the recent quarter, but profitability showed improvement. “Protection share improved 240 basis points year-on-year aiding value of new business (VNB) margin of 24.3%,” the report noted.
The brokerage believes that the goods and services tax (GST) exemption on protection products should support demand going ahead. As per the brokerage report, any margin impact from higher growth is likely to be offset through distributor commission renegotiation and operating cost optimisation.
Nuvama has marginally tweaked its VNB estimates for the next three financial years and raised the target price, while noting that the stock is trading at a lower price-to-embedded value multiple compared with historical levels.
Nuvama on ICICI Lombard General Insurance
ICICI Lombard General Insurance is another stock where Nuvama has reiterated a ‘Buy’ rating. The brokerage has set a target price of Rs 2,350. This indicates an upside potential of about 23% from the current market price of around Rs 1,913.
As per the brokerage report, gross direct premium income and gross written premium grew at a double-digit pace in the recent quarter, supported by strong growth in retail health insurance following the GST exemption. However, combined ratio levels remained elevated due to higher claims and cost pressures.
The report stated that “excluding impact of one-time wage code impact, combined ratio came in at 103.5%.” Nuvama believes the company’s relatively better portfolio management and recovery in the motor segment position it well compared to peers.
Nuvama on Just Dial
Among internet and digital platform stocks, Nuvama has retained a ‘Buy’ rating on Just Dial with a target price of Rs 1,100. From the current market price of about Rs 722, this implies a sharp upside potential of nearly 52%.
According to the brokerage report, revenue growth remains moderate, but profitability has improved in the short term. “Earnings before interest, tax, depreciation and amortisation margin came in at 31.2%, ahead of estimates,” the report noted.
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.