Markets are under pressure in today’s session (March 23), with benchmark indices slipping more than 2% in intraday trade. The sharp fall has kept investors cautious, but it has also brought certain stocks into focus. The domestic brokerage house Motilal Oswal has identified three stocks where it sees upside potential ranging from 18% to as high as 73% in select counters.
The brokerage has picked names across sectors from information technology to jewellery retail and auto components.
Let’s take a look at the stocks the brokerage is bullish and what is the rationale behind this outlook –
Motilal Oswal on Coforge: Valuations in focus after sharp correction
Motilal Oswal has given a ‘Buy’ rating to this tech sector stock. It has set a target price of Rs 1,880 for the stock. This implies an upside potential of about 73% from current levels.
According to the brokerage report, Coforge has seen a notable correction in recent months.
“Since the US-Iran conflict broke out, Coforge has witnessed a decline of 9-10% (45% from its peak),” Motilal Oswal noted in its report.
The brokerage believes that the stock may have already factored in most of the risks. It noted, “We believe the stock is currently pricing in an extreme bear-case scenario.”
Even after adjusting estimates, the brokerage says valuations remain reasonable, stating that “at current levels, valuations appear attractive (19x/15x FY27/28E P/E).”
However, the report also highlighted near-term concerns. Coforge has exposure to the travel sector and the Middle East region, which could impact growth if uncertainties continue.
Still, the brokerage pointed to a strong order pipeline and stable client demand as supporting factors.
Motilal Oswal on Kalyan Jewellers: Demand remains steady despite high gold prices
In the gold sector stock space, Kalyan Jewellers India has been highlighted with a target price of Rs 550 and a ‘Buy’ rating. This indicates an upside potential of around 44%.
According to the brokerage report, “Kalyan Jewellers is likely to sustain a strong growth trajectory as India’s jewellery demand for top brands remains strong.” This comes despite a sharp increase in gold prices.
The company has reported strong growth in its India business. This is driven by both same-store sales growth and expansion of its store network.
The report states that “the India business reported 35% revenue growth for Kalyan Jewellers, driven by around 20% same-store sales growth and network expansion (net additions of around 40 My Kalyan and 37 Candere stores). Non-South markets (54% of revenue) outperformed and clocked 42% growth vs 28% growth in the South, reflecting successful pan-India diversification.”
Motilal Oswal also pointed out that demand trends have remained stable during the wedding season. At the same time, the company is expanding its presence beyond southern markets, which is supporting overall growth.
On the financial side, the brokerage noted improvement in margins and balance sheet strength. It added that “the company continues to focus on vendor consolidation and cost optimisation to sustain margin expansion.”
However, it also flagged that geopolitical challenges in the Middle East region could impact growth in the near term, as that region contributes a part of the company’s revenue.
Motilal Oswal CIE Automotive India: Gradual recovery in demand
The third stock in focus is CIE Automotive India, where the brokerage sees an upside of about 18% with a target price of Rs 546 and ‘Buy’ rating.
Motilal Oswal in its report pointed out that the company’s India business is showing signs of recovery after a period of slow growth. Demand has improved across segments, supported by policy changes such as Goods and Services Tax (GST) rate cuts.
The report added, “over the last few quarters, CIE had witnessed slower growth in its India business; however, this trend has reversed after GST rate cuts.”
New order wins are also expected to support future growth. At the same time, the company is working on maintaining margins despite rising input costs.
In its international business, particularly in Europe, demand remains weak. However, the company is focusing on protecting margins. The brokerage highlights that “despite a weak demand outlook, CIE aims to sustain its margins at the ‘new normal’ of demand.”
Conclusion
Even as markets remain volatile, brokerage views suggest that stock-specific opportunities continue to emerge. The focus, however, remains on how these companies manage sector-specific risks and global uncertainties in the coming quarters.
Disclaimer: This article provides factual analysis only and is not, and 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.