Commercial services stocks to trade on 26 May as recommended by expert Raja Venkatraman

However, the Trump Tariff, which imposes a 26% duty on Indian exports to the US, has disrupted global supply chains. This has particularly impacted logistics, automation, and consumer durable exports. Indian firms are responding with regional trade diversification and cost optimization, but pricing volatility and demand fluctuations remain challenges.

Despite these hurdles, the sector’s long-term growth prospects are supported by ongoing digitalization and strong domestic policy backing.

Following are the key sectoral trends:

- Sector Dynamics and Consolidation:

• Companies are actively pursuing consolidation and strategic realignments, including mergers, acquisitions, and alliances, to build scale and improve operational efficiency.
• Premiumization is at the forefront, as firms diversify product offerings and target high-end consumer segments along with traditional demand drivers.
• Enhanced credit guarantees for MSMEs have streamlined supply chains, enabling companies to secure favourable financing and optimistic order books.

- Cost Savings and Price Stabilization:

• In response to rising input costs, many constituents have implemented comprehensive cost-saving measures--optimizing logistics, streamlining operations, and renegotiating supplier contracts to stabilize raw material costs.
• Enhanced operational efficiency has led to reported year-over-year cost savings in the range of 5-7% for some key players, aiding in maintaining balanced margins.
• Price stabilization strategies are critical for offsetting inflationary pressures, ensuring that companies remain competitive while not compromising on quality.

- Challenges: Demand Revival, Pricing Trends, and Growth Prospects:

• Despite the strong fiscal backing from Budget 2025, the demand revival remains uneven. Urban markets show robust growth, yet rural regions—though benefiting from improved infrastructure—are witnessing a delayed recovery.
• Competitive pricing pressures continue to intensify as raw material inflation squeezes margins, forcing aggressive pricing strategies that could affect profitability.
• The external shock from the Trump Tariff scenario--where a 26% tariff is levied on certain Indian exports--adds complexity to cost structures, thereby challenging the long-term global competitiveness of these companies.
• Sustaining growth in a volatile macroeconomic environment necessitates proactive innovation and agility in pricing and supply chain management.

Based on the above, Raja Venkatraman has recommended the following two stocks:

Centum Electronics Ltd (current market price: ₹2,320)

• Strategy: Go long above ₹2,320 or on dips toward ₹2,240 with a stop loss below ₹2,200. Target: ₹2,550–2,650 in the next one month.

Centum Electronics Ltd specializes in Electronic System Design and Manufacturing (ESDM). They design, manufacture, and export electronic products, including systems, subsystems, modules, and printed circuit board assemblies. The company caters to various sectors like defence, aerospace, space, medical, transportation, and industrial.

Centum Electronics has demonstrated strong financial performance in Q4 2025, driven by strategic consolidation and operational efficiency. The company reported a 23.85% year-over-year revenue growth, increasing from ₹300.66 crore in Q4 FY24 to ₹372.38 crore in Q4 FY25.

Additionally, its net profit turned positive, shifting from a ₹6.89 crore loss in Q4 FY24 to a ₹21.53 crore profit in Q4 FY25. This turnaround was largely due to cost-saving measures, including logistics optimization and supplier contract renegotiations, which led to 5-7% operational cost reductions across key verticals.

After some major decline in the since December 2024 the prices saw a ‘V’ shaped recovery from March 2025 that slowly but steadily caught the attention of the retail participants. Further the steady interest that has been seen in the Defence space has managed to attract some strong attention to this counter. Since the last few weeks, the stock has witnessed a steady participation that saw the volume build up ahead of the numbers helping the prices nearly double from the lows.

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The revival seen in the last few days in May 2025 was indicating a upward climb coupled with some genuine buying at lower levels has once again triggered some upside. With the prices clearing the resistance zone (marked in a rectangle box) probability of heading higher is much higher. The long body candle formation and an uptick in momentum in the sector as a whole can be looked upon as an indication to go long. With the recent price move forming a nice long body formation suggests a potential rise towards 2700.

The Trump Tariff, imposing a 26% duty on Indian exports, has posed challenges, particularly in the defence and aerospace segments. However, Centum Electronics has mitigated risks through regional trade diversification and enhanced credit guarantees for MSMEs, strengthening its financial stability.

Linc Ltd (current market price: ₹150)

• Strategy: Go long above ₹152 or on dips to ₹145 with a stop below ₹140. Target: ₹169 in the next one month.

Linc Ltd is a prominent manufacturer of writing instruments and stationery, with a strong national and international presence in over 60 countries. They have a wide range of products, including ball pens, gel pens, and other stationery items, and are the exclusive distributor for brands like Uni-ball and Deli in India.

Linc has continued its strong financial growth in FY25, driven by strategic product diversification and operational efficiencies. The company reported a total income of ₹54,819 lakh, reflecting a 6.4% year-over-year increase, underscoring its resilience in a competitive market. A key driver of this expansion has been the Pentonic brand, whose contribution to overall sales rose from 34.3% in FY24 to 35.6% in FY25, strengthening Linc’s foothold in the premium stationery segment.

The company has maintained a healthy gross profit margin of 31.8%, supported by optimized manufacturing processes, raw material procurement strategies, and cost-saving initiatives that have boosted profitability.

Net profit stood at ₹3,804 lakh, marking an 11.2% increase compared to the previous fiscal year, reinforcing its sustained profitability. This growth comes as Linc strategically expands beyond pens into markers, highlighters, and pencils, tapping into the broader stationery market, which is expected to surge from ₹6,640 crore to ₹38,500 crore.

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The company’s focus on premiumization, product innovation, and increased brand visibility has solidified its market positioning.

Conclusion

In summary, the Commercial Services & Supplies sector is poised for steady growth through FY26.

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Government-backed infrastructure investments, digital transformation, and evolving consumer demand patterns offer long-term resilience. While challenges such as pricing pressures and global trade headwinds persist, adaptive strategies, driven by consolidation, cost control, and innovation, are setting the stage for sustained expansion.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.