Motilal Oswal has picked three stocks with a ‘Buy’ recommendation. The brokerage sees as much as 21% upside for one of these stocks, based on various factors. Here’s a detailed analysis of why these stocks were chosen.
Motilal Oswal on Ambuja Cements: Focus on premiumisation
Motilal Oswal maintained its ‘Buy’ rating on Ambuja Cements, with a target price of Rs 700, eyeing an upside of 21% from the current market price. The company’s market share increased to 14.5% from 11-12%, with a target of 17-18% by FY28 and 20% by FY30.
The management’s focus is on increasing its premium cement share, which currently accounts for 24% of its trade volume, with Rs 400/t higher profitability.
Also, the capacity expansion is on track, and Ambuja Cements’ management is confident of achieving the targeted capacity of 140 mtpa by FY28.
Further, the management of the company reiterated its EBITDA/t target of Rs 1,500/t by FY28, led by cost savings and an increasing share of premium cement.
Motilal Oswal on Apollo Hospitals: Pharmacy business spin-off bodes well
The brokerage house retained ‘Buy’ and kept the target price at Rs 8,720 on Apollo Hospitals, looking at an upside of 16%. According to the brokerage house, the proposal to demerge the pharmacy business—including offline pharmacy, online and telehealth operations, and Kiemed—into a new entity bodes well for long-term value creation across both the healthcare services (hospital/clinics business) and pharmacy businesses.
In fact, acquiring the remaining 74.5% stake brings the front-end pharmacy operations fully under the new firm, enabling the creation of a complete ecosystem and positioning it as the largest omnichannel pharmacy distribution/digital health platform.
“The demerger allows for a sharper strategic focus, with Apollo Hospitals concentrating on core healthcare services, while new firm drives growth in digital health and pharmacy distribution under dedicated leadership,’ said Motilal Oswal.
Motilal Oswal on CreditAcsess Gramin: Out of industry headwinds
Motilal Oswal has a Buy rating on CreditAccess Gramin, with a target price of Rs 1,485, implying an upside of 17% from the current market price. The brokerage believes that the company has successfully navigated a period of industry-wide challenges, demonstrating remarkable resilience and a return to normal operational efficiency. Also, new stress formation has largely normalised, supported by robust internal processes such as rigorous daily collection monitoring, detailed audit reports, and consistent tracking of centre attendance.
Going forward, the updated regulatory framework, particularly the revised qualifying asset criteria, offers a clear opportunity for CreditAccess Gramin to invest in and expand its non-qualifying asset portfolio. “This will enable the company to strengthen its microfinance foundation while building a more resilient and diversified balance sheet, paving the way for long-term value creation,” said Motilal Oswal.