The Nifty logged its worst 1-day losses in 9 months on Friday- February 28 and fear has gripped investors. However, as most seasoned market analysts would recommend, this is also a potential opportunity to look for value buys. Here are some stocks that leading brokerages like Jefferies, Motilal Oswal and Nuvama are positive on and have put a Buy recommendation despite the recent correction –
Jefferies on Polycab: Top pick in cable & wire industry
Jefferies has identified Polycab as the top pick in the cable and wire industry. They have a Buy rating on the stock with a target price of Rs 7,700 per share. This implies a whopping 63% upside for Polycab share price from current level. According to the brokerage, the “target price premium to the stock’s historical 5-year average is on the back of higher volumes from capex, housing and benefits from strategic initiatives.” The stock is their top pick in the cable and wire segment. According to Jefferies, sales in residential segment can potentially commence immediately compared to power transmission and industrial cables which need 2-4 years for prequalification. As a result, they see the competitive impact of a new big player like UltraTech to be lesser on Polycab as the company has “65-70% of its sales mix is Cables (B2B). Whereas impact on Housing wires / B2C players such as Finolex and Havells could be relatively higher.”
Motilal Oswal on LTIMindtree- Buy recommendation, sees room for 35% upside
The Tech stocks were badly beaten in trade and LTIMindtree is down 10% in past 5 sessions. However, Motilal Oswal has a Buy on the stock with a price target of Rs 6,600 per share. This implies an upside of 35% for the share price. According to Motilal Oswal, the stock is “bruised but oversold.” They see the “risk-reward ratio favourable in the stock and valuations attractive now.” According to them, the “near-term catalysts—weakness in hi-tech in Q4 and management’s time to settle in—preclude an immediate recovery in price, but we reiterate Buy on strong fundamentals and keep our focus on the turnaround.” The Motilal Oswal Report states that, “The appointment of Venu Lambu is a positive and should provide the company with much- needed growth momentum. We also believe his appointment will help stem the top-level attrition,” a key concern for the company. However, that said, “the new management will take their time to settle in and drive growth, and we believe the actual benefits may accrue in FY27.”
Nuvama On Schaeffler India: Buy recommendation but cut in earnings expectation
Nuvama maintains a Buy rating on Schaeffler India with the price target revised lower to Rs 4,279 per share from Rs 4,571 per share. Even with the price target revised lower, they see 40% upside to the Schaeffler India share price from current levels. The brokerage maintains that one of the key positives is the fact that the “company continues to generate strong cash flows (Rs 160 crore in Q4CY24). Meanwhile, it plans to moderate capex ahead in view of the subdued demand scenario.” Schaeffler India’s focus on localisation, launches and strong businesses are the other key positives.
Schaeffler India has been expanding its footprint and establishing connections for Koovers. According to the Nuvama report, “With an eye on the Asia and America markets, the focus on localisation and favourable cost structure help the company gain orders from across the globe. Localisation for the quarter stood at 76% and the company aims to inch it up to 80% over medium term.” The Hosur plant, which has been set up at a capital outlay of Rs 300 crore, shall be operational by Q1CY25 and will be used to produce products at the component level, moving onto transmission, EV (motors and gearbox).