Brokerage firm Motilal Oswal has issued ‘Buy’ ratings on three companies from entirely different sectors – auto components maker SPR Auto Technologies, health insurer Niva Bupa, and pharma outsourcing firm Indegene, projecting upside potential ranging from 19% to 37% from their respective market prices.
What is driving the brokerage’s view on each stock? Let’s take a look –
SPR Auto Technologies: Betting beyond the piston
Motilal Oswal has initiated coverage with a ‘Buy’ rating and a target price of Rs 6,150. Based on the brokerage’s cited current market price, this represents an upside potential of about 37%.
SPR Auto Technologies is attempting to reduce its dependence on its traditional piston business by expanding into other automotive components.
According to the brokerage report, the company is using acquisitions to build a wider mobility-focused business. Its acquisitions include Antolin, Takahata, TGPEL and EMFi.
The brokerage expects this expansion to support earnings growth over the coming years. It estimates a 21% compound annual growth rate in profit after tax between FY26 and FY29.
The brokerage said, “SPR is evolving from being a traditional piston manufacturer into a diversified, technology-driven, powertrain-agnostic mobility platform through strategic inorganic acquisitions.”
Another factor to watch is the company’s Rs 1,000-crore qualified institutional placement, which could provide funds for future expansion.
Niva Bupa: Insurance rules are changing. What now?
Motilal Oswal has retained its ‘Buy’ rating and set a one-year target price of Rs 100, implying an upside of about 31%.
The insurance industry is also undergoing a regulatory shift. The Insurance Regulatory and Development Authority of India has proposed changes to distribution regulations. This has prompted insurers to reassess their business models.
As per Motilal Oswal report, Niva Bupa Health Insurance could see some near-term pressure as the industry adjusts. However, the brokerage believes the changes could be beneficial over the medium term.
Niva Bupa expects its expense of management to decline from 25% of gross written premium within two years to around 20% over five years.
The brokerage said, “We concur with the view that the measures are positive over the medium term, whereas in the shorter term, the industry will reassess product constructs and distribution architectures, which could weigh on growth.”
Indegene: Why pharma outsourcing matters
Another stock is Indegene, which operates in technology and services for the global life sciences industry. Motilal Oswal has upgraded Indegene to ‘Buy’ from ‘Neutral’ and set a target price of Rs 708, implying an upside potential of around 19%.
According to the Motilal Oswal report, pharmaceutical companies are increasingly outsourcing activities related to medical content, regulatory work and commercial operations.
The brokerage expects revenue, earnings before interest, taxes, depreciation and amortisation, and profit after tax to grow at strong rates over FY26-FY28.
It said, “We believe expanding drug pipelines, increasing clinical trial activity, and new disease areas are increasing complexity for life sciences companies, while regulatory and affordability pressures are tightening budgets and timelines.”
What investors need to watch
The three companies operate in very different industries, but the brokerage’s views are linked to specific changes in their respective businesses.
For SPR Auto Technologies, the focus is on acquisitions and diversification. For Niva Bupa, the key variable is how the proposed insurance regulations affect costs, pricing and distribution. For Indegene, the focus is on increasing outsourcing by global pharmaceutical companies.
Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This 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 before making any investment decisions.