If you are wondering about the right stocks to invest in the current market scenario, Nuvama Institutional Equities has some ideas. The brokerage house has picked three stocks with upside potential of as much as 57.5% in one of them. The brokerage picked these stocks after considering a wide range of factors.
We will get you a detailed analysis of why Nuvama selected these three stocks.
Nuvama on Motherson Sumi Wiring India: Greenfield ramp-up
Nuvama has maintained a ‘Buy’ rating on Motherson Sumi Wiring India, with a target price of Rs 57, implying an upside of 43%.
The brokerage sees upside in the stock on the back of ramp-ups at greenfield plants. The recently reported margin of 10% was impacted by ‘starting’ costs of greenfields, and the adjusted margin is higher at 12%.
Three greenfields together have a revenue potential of Rs 2,100 crore. The Pune and Navagam plants have commenced operations and are being ramped up, while the Kharkhauda plant will come on stream in Q2. The two plants are supplying high-low-voltage harnesses to Maruti Suzuki, Tata Motors, and M&M.
“There is competition from Yazaki and Aptiv, but Motherson Sumi benefits from higher scale, which gives it a better cost structure,” said Nuvama.
Nuvama on Ajax Engineering: Strong growth trajectory
Nuvama maintained its ‘Buy’ rating on Ajax Engineering, with a target price of Rs 850 per share, implying an upside of 20%.
The medium-term uptrend remains solid with a revenue CAGR of 11% over FY25-29 and EPS CAGR of 13% for the same time period.
Over the medium term, the Supply Chain and Logistics Management (SLCM) industry is expected to grow at a compounded rate of 15–18%. The non-SLCM industry shall concretely outpace SLCM. The share of mechanisation in concrete manufacturing is expected to rise from 25% in FY24 to 40%-plus in FY29.
Nuvama expects Ajax Engineering’s FY26 volume growth is likely to be a high single digit due to the transition to CEV-V norms. However, the brokerage expects that Ajax Engineering’s FY26 gross margin shall dip 150–200 basis points YoY due to CEV-V norms.
Nuvama on Texmaco Rail: Order book robust
Nuvama maintained its ‘Buy’ rating on Texmaco Rail, with a target price of Rs 211, implying an upside of 57.5%. This is despite Texmaco reporting a 16% YoY drop in Q1FY26 consolidated revenue due to continued wheelset availability issues. While EBITDA margin fell 200 basis points YoY to 7.8%, adjusted net profit plummeted 50% YoY in Q1FY26.
The company dispatched 1,815 wagons during the quarter (2,597 in Q4FY25, 10,612 in FY25). Texmaco ended the quarter with an order book of Rs 7,050 crore (1.4x book-to-bill) and won Rs 1,000 crore orders during the quarter.
“Inadequate wheelset availability and limited revenue visibility in the wake of the nil hike in outlay for railways (see Union Budget: Muted capex growth) compel us to trim FY26E EPS by 4%,” said Nunvama.