6 Buy recommendations by Nomura, with 10% to 45% upside potential

The highest potential is seen in Dr Reddy’s Laboratories, while the three steel stocks form Nomura’s positive India steel view. Petronet LNG and Allied Blenders & Distillers add exposure to LNG infrastructure and premium spirits, respectively.

Nomura on Dr Reddy’s Laboratories: ‘Buy’

Nomura has retained its ‘Buy’ rating on Dr Reddy’s Laboratories with a target price of Rs 1,740, against the report price of Rs 1,201. That implies about 45% upside.

The brokerage’s latest note centres on the company’s biologics business, with USFDA clearance for its biologics facility and approval of biosimilar Abatacept as the two key upcoming milestones.

“The company is eagerly awaiting two key milestones: USFDA clearance/EIR for the biologics plant (due in the near term) and approval of biosimilar Abatacept (Intravenous), which has a target action date of 18 Dec 2026,” Nomura said.

Dr Reddy’s plans to launch Abatacept in more than 50 countries in the first wave if approved. Nomura said the company has already produced several batches at commercial scale and does not anticipate capacity bottlenecks or scale-up challenges.

Nomura on Tata Steel: ‘Buy’

Nomura has retained its ‘Buy’ rating on Tata Steel with a target price of Rs 240. This implies about 29% upside from current levels.

The brokerage expects Indian steelmakers to benefit from price increases implemented ahead of the first half of FY27.

“We maintain our positive outlook on the India steel sector, and believe the domestic steel industry is well positioned to benefit in 1HFY27F from the price hikes implemented, which in our view, are more than sufficient to absorb any cost inflation related to raw material,” Nomura said.

Nomura said domestic HRC prices were Rs 63,800 a tonne as of September 25, while rebar prices had risen to Rs 62,100 a tonne.

Nomura on Petronet LNG: ‘Buy’

Nomura has retained its ‘Buy’ rating on Petronet LNG with a target price of Rs 345. Against the current price of Rs 287, the implied upside is nearly 20%.

The brokerage’s latest assessment follows a visit to Petronet LNG’s Kochi terminal and discussions with management. The terminal has 5 million tonnes per annum of nameplate capacity, but utilisation is currently around 25% because of limited pipeline connectivity.

The key trigger is the Kochi-Mangaluru-Bangalore pipeline. Management expects mechanical completion by March 2027, after which Kochi volumes can be sold across India through the national gas grid.

Nomura said: “We believe regas volumes may see sequential improvement in 2Q (stable y-y) as more cargos get delivered from non-Middle East locations. Our DCF-based TP stays at INR345 as we maintain our WACC and terminal growth rate assumptions at 12% and 2%, respectively.”

Nomura on Allied Blenders & Distillers: ‘Buy’

Nomura has initiated coverage on Allied Blenders & Distillers with a ‘Buy’ rating and a target price of Rs 850. The current price of Rs 715 implies about 19% upside.

The brokerage sees premiumisation, new brand launches and backward integration supporting the company’s next phase of growth. Its Prestige & Above portfolio contributed 47% of sales in FY26, up from 37% in FY24.

Nomura expects the P&A volume mix to reach 50% by FY28 and sees the company’s more than Rs 1,600 crore planned capex across malt, ENA and PET supporting supply security and cost efficiency.

“We forecast an EPS CAGR of 26% over FY26-29F. We value ABDL at 48x P/E on Sep-28F EPS, at the lower-end of the sector average,” Nomura said.

Stock	Nomura rating	Target price	Upside
Dr Reddy’s Laboratories	‘Buy’	Rs 1,740	44.9%
Tata Steel	‘Buy’	Rs 240	29.0%
Petronet LNG	‘Buy’	Rs 345	20.2%
Allied Blenders & Distillers	‘Buy’	Rs 850	18.9%
Jindal Steel	‘Buy’	Rs 1,300	15.9%
JSW Steel	‘Buy’	Rs 1,400	9.7%

Nomura on Jindal Steel: ‘Buy’

Jindal Steel carries a ‘Buy’ rating from Nomura with a target price of Rs 1,300. Against the report price of Rs 1,122, the target implies about 16% upside.

Nomura values Jindal Steel at 8.5 times one-year forward EV/EBITDA on estimated steady-state EBITDA for June 2028. The brokerage’s risks include lower steel spreads, delays in expansion and cost overruns, and weaker domestic demand.

Nomura on JSW Steel: ‘Buy’

Nomura has retained its ‘Buy’ rating on JSW Steel with a target price of Rs 1,400. The report price of Rs 1,276 implies about 10% upside.

The brokerage arrives at the target using an 8.1 times one-year forward EV/EBITDA multiple on estimated steady-state EBITDA in June 2028.

Nomura’s sector view remains linked to domestic steel pricing and demand. It noted that rebar prices rose Rs 1,650 a tonne week-on-week to Rs 62,100 a tonne in the week ended September 25, while domestic HRC prices remained at Rs 63,800 a tonne.

Nomura on key stocks to watch

The Nomura ‘Buy’ recommendations are pegged on earnings outlook coupled with current market dynamics. Several local and global developments are also playing a key role in impacting sector-specific developments. The Japanese investment bank has also outlined the key risks involved in every sector under consideration. 

Disclaimer: This article is based solely on the Nomura research reports provided. The ratings, target prices, earnings estimates, business outlooks, valuation assumptions and other analytical views attributed to Nomura and its analysts are their own and have not been independently verified by the publication. The upside percentages are calculated using the prices and target prices stated in the respective reports and do not represent live market prices. Actual financial and operating results may differ from Nomura’s estimates because of regulatory outcomes, commodity prices, steel spreads, demand conditions, project execution, capacity utilisation, product approvals, competitive intensity, pricing and other business or market-related factors. This article is intended for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any security.