The markets ended on a negative note with the the Nifty closing below 22,500 but that it’s not all doom and gloom, While the pain continues in the mid and small caps continue, there are select stocks with attractive valuations at the moment. Nuvama Institutional Equities has listed out three stocks that offer significant upside from the current levels. Here is a look at the top 3 Buy recommendations –
Nuvama on Pidilite: Urban demand improvement
Nuvama has retained the Buy recommendation on Pidilite with a price target of Rs 3,660 per share. This implies upside target of over 34%. The brokerage firm expects urban demand “to improve Q2FY26 onwards spurred by tax benefits in the Budget and softer food inflation.” According to them, the “scale up in the paint business, ‘Haisha’ has been good so far and ‘Unofin’ (JV with Grupo Puma of Spain) will be the next Pioneer categories.”
Nuvama sees the brand ‘Roff’ “to cement itself a market leader in tile & stone solutions and expects the partnership with ‘CollTech’ opens up a huge opportunity in electronics and EV adhesives.” They are “cautiously optimistic on the demand landscape.”
Nuvama on Afcons: String fundamental growth
Nuvama has initiated coverage with a Buy recommendation on Afcons Infrastructure with a target price of Rs 535 per share. This implies over 16% upside from current levels. This EPC player, as per Nuvama Institutional Equities, “has built out diversified geographical and segmental exposure. Financially, efficient working capital management has allowed it to fund growth via internal accruals.” However, they identified key risks for the share price including “capex slowdown, volatility in commodity prices.”
Nuvama on BSE: Competition concerns
Nuvama has retained Buy rating on Asia’s oldest Stock Exchange but revised the target price lower to Rs 5160 per share from Rs 7,250. This still implies 30% upside for the stock from current levels. Given “heightened competitive intensity, uncertainty on incremental regulatory changes,” they have “reduced the FY26 earnings estimate for the share price to 13.4% and for FY27, expect 11.6% earnings growth.”
NSE has changed the expiry day for its derivative contracts to Monday, which is one day prior to that of BSE. According to Nuvama this could “lower volumes for the industry as trading avenues for retail traders, who are typically more active closer to expiry, will reduce. This shall moderate BSE’s market share to 18% (from 22% in February),” according to them.
Additionally, SEBI’s consultation paper on derivative exposure limits may clip growth, they added.