High conviction picks: Up to 44% upside - 5 large caps, 9 mid and small caps stocks | Check share price target
Discover high-conviction stock picks that analysts believe could yield significant returns amid market volatility. This article highlights five large-cap stocks and nine mid/small caps, detailing their target prices and potential upside.
Stocks to buy: Renewed US-Iran tensions, higher oil prices, and a spike in global bond yields have been keeping the Indian stock market under pressure of late. On a monthly scale, the benchmark Nifty slipped 1.2% in August, snapping its two-month winning streak.
However, India's resilient economy and healthy Q1FY27 earnings have prevented a crash and provided stock- and sector-specific opportunities.
The stock market is expected to remain volatile in the near term, largely due to geopolitical uncertainties.
"We fear a risk to demand and corporate profit growth in the coming quarters driven by (1) higher raw material prices in Q2 and Q3, (2) deficient monsoons, (3) successive price hikes in essential goods, and (4) global spike in commodities and higher crude prices," said PL Capital.
The brokerage firm noted cuts to Nifty EPS in the last 5 of the last 8 years' estimates and believes 17.7% Nifty EPS growth is at risk.
PL Capital values Nifty at a 10% discount to the 15-year average PE of 17.6 times with FY28 EPS of ₹1,537. The brokerage firm has revised the 12-month Nifty target to 27,123 from 27,019 earlier. According to the brokerage firm, Nifty is currently trading at 17.3 times one-year forward EPS, which is at 11.7% discount to the 15-year average PE of 19.6 times.
High conviction picks
PL Capital has made some tweaks to its list of high-conviction picks. It has removed Britannia Industries, Titan Company, DOMS Industries, and Rainbow Children’s Medicare from conviction picks, even as it remains positive on Britannia Industries and Titan Company.
"We are positive on Britannia Industries and Titan Company; however, given the expected impact of commodity inflation on margins and rich valuations, we are overweight on both. DOMS Industries will see near-term profit headwinds, and valuations will remain rich, given the gradual de- rating of the consumption space," said PL Capital.
It has added Supreme Industries, Amber Enterprises India, and Aster DM Quality Care to its conviction picks.
Large-cap stocks to buy
ICICI Bank | Target price: ₹1,850 | Upside potential: 29.4%
Bharti Airtel | Target price: ₹2,275 | Upside potential: 19.6%
Kotak Mahindra Bank | Target price: ₹480 | Upside potential: 15.2%
Shriram Finance | Target price: ₹1,250 | Upside potential: 11.9%
Larsen & Toubro | Target price: ₹4,425 | Upside potential: 9.6%
Mid and small-cap stocks to buy
CESC | Target price: ₹220 | Upside potential: 43.6%
Supreme Industries | Target price: ₹4,610 | Upside potential: 30.2%
Amber Enterprises India | Target price: ₹9,244 | Upside potential: 23.8%
Aster DM Quality Care | Target price: ₹920 | Upside potential: 20.7%
Engineers India | Target price: ₹294 | Upside potential: 17.4%
HealthCare Global Enterprises | Target price: ₹820 | Upside potential: 16%
Jindal Stainless | Target price: ₹821 | Upside potential: 15.2%
Blue Star | Target price: ₹1,653 | Upside potential: 11.3%
Ingersoll-Rand (India) | Target price: ₹5,029 | Upside potential: 10%
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.