Stocks to trade today: Trade Brains Portal recommends two stocks for 26 Sept

Today, we recommend two stocks, one from the retail sector and another from the defence sector. India is the world’s fifth-largest global destination in the retail space. The retail industry in India is set to grow due to several factors, such as increasing purchasing power, increasing urbanisation, connected rural consumers, and increasing consumer spending.

Meanwhile, India’s defence production has grown at an extraordinary pace since the launch of the "Make in India" initiative, reaching a record ₹1,50,590 crore in FY25, with defence exports rising to an all-time high of ₹23,622 crore in FY25. We also analysed the market’s performance on Thursday to understand what may lie ahead for the stock indices in the coming days.

Two stock recommendations from Trade Brains Portal for 26 September

Trent Ltd (Current price: ₹4,742)

• Target price: ₹6,250 in 12 months
• Stop Loss: 3,988
• Why it’s recommended: Trent Ltd, established in 1998 and part of the Tata Group, has developed a robust and diverse retail footprint across 1,043 stores and 13.6 million sq. ft. of retail space in 242 cities, including 2 in Dubai. Its flagship brands include Westside, a prominent fashion retail chain with 248 stores across 86 cities, spanning over 5.5 million sq. ft.; Zudio, a value-focused fashion brand operating 766 stores in 235 cities, covering over 8 million sq. ft.; and Trent Hypermarket under the “Star" brand, with 77 stores in 10 cities, occupying more than 1.3 million sq. ft., catering to food and daily essentials. Collectively, these brands serve over 18 million WestStyle Club members, offering a comprehensive range of fashion and lifestyle products across consumer segments.

In Q1 FY26, Trent reported revenue of ₹4,883.5 crore, registering 19% YoY growth from ₹4,104.4 crore in Q1 FY25. Operating EBIT rose 21% YoY to ₹547 crore, while PAT stood at ₹424.7 crore, marking an 8.5% YoY increase. During the quarter, the company expanded its Westside footprint to 248 stores, up from 228 in Q1 FY25. Star stores increased to 77, compared to 72 in Q1 FY25, and Zudio saw significant expansion with 766 stores, up from 559 in Q1 FY25. Notable new launches included Westside outlets in Mumbai, Dehradun, Lucknow, and Vijayawada, and Zudio stores in Ghaziabad, Thrissur, Chennai, Nagpur, Pune, and Delhi.

Emerging categories such as beauty & personal care, innerwear, and footwear continued to gain momentum, contributing over 21% of the company's revenue. The Star business remained on a growth trajectory, reporting ₹869 crore in revenue in Q1 FY26, up from ₹815 crore in Q1 FY25. It currently comprises 77 stores, with 2 new additions during the quarter. The Star business houses private labels including Star, Fabsta, Klia, Smartle, and Zudio, which now contribute 73% of total sales. The company is consistently increasing the share of revenue from private labels.

India's retail market is projected at ₹89 lakh crore in 2025, expected to grow to ₹190 lakh crore by 2034. Meanwhile, the fashion and lifestyle segment, currently valued at ₹13 lakh crore in 2025, is anticipated to reach ₹18 lakh crore by 2028, expanding at a CAGR of 10-12%.

• Risk Factors: Certain non-apparel formats owned by the company, along with joint ventures, continue to post operational losses. The company faces intense competition from both unorganised retailers and organised players across physical and digital channels. Additionally, it remains exposed to fluctuations in discretionary consumer spending, which may affect sales and lead to inventory-related risks during economic slowdowns.

Bharat Dynamics Ltd. (Current price: ₹1,555)

• Target price: ₹1,995 in 12-14 months
• Stop Loss: 1,336
• Why it’s recommended: Incorporated in 1970, Bharat Dynamics Limited (BDL) is a Government of India enterprise under the Ministry of Defence, engaged in the manufacturing of Surface-to-Air Missiles (SAMs), Air-to-Air Missiles (AAMs), Anti-Tank Guided Missiles (ATGMs), torpedoes, and a variety of allied defence equipment. BDL operates through three manufacturing units, and its product portfolio includes systems like Torpedo Advanced Lightweight, Varunastra, Medium Range Surface-to-Air Missile, Dishani, and Anti-Submarine Warfare Suite.

In Q1 FY26, BDL reported revenue from operations of ₹247.93 crore, reflecting a 29.7% YoY growth over ₹191.17 crore in Q1 FY25. PBT margin improved significantly to 6.91%, up from 3.78% in Q1 FY25. The company’s PAT rose sharply by 154.11% YoY to ₹18.35 crore, compared to ₹7.22 crore in Q1 FY25. A key order worth ₹809 crore was secured from Armoured Vehicles Nigam Limited (AVNL) for the supply of ATGMs, to be executed over the next three years.

For FY25, BDL achieved production worth ₹3,767 crore, up from ₹2,592 crore in FY24, representing a 45% increase. Sales turnover stood at ₹3,345 crore, up 41% YoY from ₹2,369 crore. While PAT declined by 10.3% YoY to ₹550 crore due to a one-time provision of ₹141.40 crore for an onerous contract, the company achieved its highest-ever exports of ₹1,270 crore, up 689% YoY from ₹161 crore in FY24. New orders worth ₹6,668 crore were booked during FY25 for ATGMs, MR-SAMs, and other weapon systems for the Indian armed forces. The order book stood at ₹22,814 crore by year-end, 6.8x of FY25 revenue, providing strong visibility for future earnings.

Looking ahead, BDL expects new orders worth ₹20,000 crore over the next 2–3 years, with several contracts in advanced stages of finalisation. The company invested ₹222.92 crore in R&D in FY25, accounting for 6.66% of sales turnover, up from ₹75.37 crore in FY24. It is also setting up new manufacturing facilities in Ibrahimpatnam (Hyderabad), Amravati (Maharashtra), and Jhansi (Uttar Pradesh) to support the production of next-generation missiles, VSHORADs, rockets, and ATGM propellants. By 2030-31, BDL aims to achieve a turnover of ₹10,000 crore, establishing itself as a leading provider of strategic and tactical defence solutions. Additionally, it plans to derive 25% of annual turnover from exports by 2029, with a focus on ATGMs, SAMs, AAMs, underwater weapons, and avionics systems.

• Risk Factor: BDL’s revenue is heavily reliant on the Ministry of Defence (MoD), making it vulnerable to changes in defence procurement policies, funding allocations, and evolving requirements of the MoD. Furthermore, the company operates under a strict regulatory framework governed by MoD procurement rules, broader government policies, and compliance mandates, which can impact operational flexibility and execution timelines.

Market Recap

On Thursday, the Nifty 50 opened on a weak note, breaching the 25,100 mark and starting the session at 25,034.50, down -22.40 points from the previous close of 25,056.90. It hit an intraday low of 24,878.30 before ending the day below the 25,000 level, closing at 24,890.85, a loss of -166.05 points or -0.66%. Technically, the index managed to stay above its 100-day and 200-day exponential moving averages (EMAs) on the daily chart but slipped below the 20-day and 50-day EMAs, indicating near-term weakness.

The BSE Sensex mirrored Nifty’s downtrend, opening at 81,574.31, down -141.32 points from its previous close of 81,715.63. It traded mostly lower throughout the session and closed at 81,159.68, marking a fall of -555.95 points or -0.68%. Momentum indicators showed signs of softening, with the Relative Strength Index (RSI) for the Nifty 50 at 46.20 and Sensex at 45.17, both pulling back from the overbought zone (above 70). The Bank Nifty also ended lower by -145.30 points or -0.26%, settling at 54,976.20. Overall, benchmark indices declined for the fifth consecutive session, amid heightened volatility and dampened investor sentiment.

On the sectoral front, most indices closed in the red. However, the Nifty Metal Index bucked the trend, emerging as the top gainer, rising 22.45 points, or 0.22%, to finish at 10,082.55. Hindustan Copper Ltd led the rally with a 6.32% gain, while Hindustan Zinc Ltd and Vedanta Ltd added up to 3.06%.

Conversely, the Nifty Realty Index was the worst performer, declining -14.70 points or -1.65%, to close at 875.90. Godrej Properties Ltd dropped -2.56%, while Lodha Developers Ltd, Prestige Estates, and DLF Ltd fell by up to -2.54%. The Nifty IT Index also declined by -445.95 points or -1.27%, closing at 34,548.30, with stocks like Tata Consultancy Services, Coforge Ltd, Persistent Systems Ltd, and Oracle Financial Services Ltd falling as much as -1.97%. The Nifty Auto Index ended down -249.10 points or -0.92%, at 26,758.50.

In Asia, markets largely followed a bearish trajectory on Thursday. Hong Kong’s Hang Seng Index dipped -44.65 points or -0.17%, closing at 26,474.00, while China’s Shanghai Composite Index was nearly flat, losing -0.34 points or -0.01%, to end at 3,853.30. South Korea’s KOSPI Index slipped by -1.03 points or -0.03%, to settle at 3,471.11. In contrast, Japan’s Nikkei 225 Index managed to post gains, rising 98.69 points or 0.22%, to close at 45,729.00. As of 4:45 p.m. IST, US Dow Jones Futures were trading slightly lower at 46,092.97, down -26.32 points or -0.08%.

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