The stock markets have seen significant pressure recently but it could be an opportunity for some buying on dips. The brokerage firm Nuvama has maintained a ‘Buy’ rating to these four stocks- SAIL, Berger Paints, Muthoot Finance, and Lupin. According to the brokerage firm, these stocks have a strong growth potential despite the headwinds.
Let’s take a look at the four stock recommendations by Nuvama in the down market.
Nuvama on SAIL: To benefit from safeguard duty on steel imports
As per the brokerage firm, SAIL reported a solid Q3FY25 performance, with an adjusted EBITDA of Rs 20.3 billion, surpassing the estimated Rs 17.9 billion and marks a 60% QoQ increase, majorly driven by lower costs of production.
The brokerage in its report added, “SAIL will be the biggest beneficiary of any safeguard duty on steel imports.” The brokerage has upgraded SAIL from ‘Reduce’ to ‘Buy’ following a 40% stock decline and has revised the target price to Rs 123 from Rs 112.
The shares price of SAIL today, February 13 is trading at Rs 110.75 apiece on NSE, up by 4.73% in the intraday.
Nuvama on Berger Paints: Rising market share a positive
The paint maker, Berger Paints reported mixed results for Q3FY25, with revenue growing 3.2% YoY while EBITDA declined 1.7% YoY. The company’s volume growth stood at 7.4%, but price reductions of 4% to 5% and slower growth in premium and luxury segments affected revenue.
Despite this, the brokerage firm remains optimistic, noting in its report that Berger Paints is making steady market share gains even in a competitive environment.
Furthermore, the brokerage has revised its FY25E/26E/27E earnings per share estimates downward by 9.4%/4.9%/4.2%, setting a revised TP of Rs 595 (earlier Rs 625) but maintaining a ‘Buy’ rating.
Nuvama on Muthoot Finance: Rally in gold price supports growth
In the Q3FY25, Muthoot Finance poste an AUM growth accelerating to 34% YoY and 8% QoQ. This was driven by a 1.5% increase in tonnage, 3% rise in gold prices, and stable net interest margins.
The brokerage believes that Muthoot is well-positioned for sustained growth and has upgraded the stock from ‘Reduce’ to ‘Buy’, revising the TP to Rs 2,550 from Rs 2,400.
According to the brokerage, “Gold prices moving up and a consistent performance from Muthoot Finance make it an attractive bet.”
In the intraday trading today, Muthoot Finance share price is trading at Rs 2,321.50 per share, up by 6.32%
Nuvama on Lupin: Strong earnings visibility
The pharma company, Lupin posted better than expected Q3FY25 results, with revenue, adjusted EBITDA, and PAT beating consensus estimates by 1%, 13%, and 17%, respectively.
According to the brokerage firm, “Lupin offers strong earnings visibility due to a lucrative launch pipeline and increasing market share in gSpiriva.”
The brokerage sees steady revenue growth of 10% CAGR over FY24 – FY27, with EBITDA and PAT expected to grow at 18% and 27% CAGR, respectively. Furthermore, the brokerage has maintained a ‘Buy’ rating with an unchanged TP of Rs 2,466.
Lupin share price surged over 3% in the intraday, trading at Rs 2,100 apiece. The 52 week high stands at Rs 2,402.90 and the low at Rs 1,493.30 per share.