Stocks to buy: As Samvat 2083 is likely to begin soon, investors looking to position their portfolios for the next market cycle may find opportunities in companies with strong earnings visibility, expanding businesses and improving growth prospects.
After a challenging Samvat 2082, marked by foreign investor outflows, geopolitical uncertainty and elevated crude oil prices, Kotak Neo believes the correction in Indian equities has brought valuations to more reasonable levels.
The brokerage expects Nifty 50 earnings to grow around 18% in FY27 and 13% in FY28, creating a constructive backdrop for fundamentally strong stocks. Its latest Diwali investment report identifies seven stocks across sectors, including defence, technology, consumer businesses, chemicals, building materials and banking. Here are the seven picks, their ratings, 12-month price targets and investment rationale.
- Jubilant Ingrevia: BUY | Target price: ₹970 | Upside: 73.8%
Jubilant Ingrevia is Kotak Neo’s top pick in the chemicals sector, with a target price of ₹970 against the prevailing price of ₹558. The brokerage sees substantial recovery potential following the stock’s correction amid renewed Middle East hostilities, the acquisition of Zettaone and concerns over the outlook for its FMC contract.
Management has retained its FY27 EBITDA guidance of ₹750–800 crore and expects to approach the upper end after a strong first half. The existing order book is expected to generate incremental specialty chemicals revenue of ₹500 crore annually between FY27 and FY29. A growing new-product pipeline and continued strength in nutrition are additional positives.
2. Ujjivan Small Finance Bank: BUY | Target price: ₹85 | Upside: 60.4%
Kotak Neo has a BUY rating on Ujjivan Small Finance Bank, with a target of ₹85 compared with its current market price of ₹53. The brokerage highlighted the bank’s strong profitability and improving asset quality. It reported a 20% return on equity (RoE) and 2.4% return on assets (RoA) in Q2FY27. Slippages remained flat sequentially at 1.7%, while credit costs declined below 1%.
Its loan book expanded 32% year-on-year and deposits grew around 30%. The bank’s microfinance loan book grew 20%, although its share of the overall portfolio declined to 48%. Management maintained its FY27 RoA guidance at 1.8–2%.
3. Eternal: BUY | Target price: ₹435 | Upside: 26.5%
Eternal, the parent of Zomato and Blinkit, is transforming into a diversified consumer technology platform, with quick commerce emerging as a major growth driver. Kotak Neo has set a target price of ₹435 against the current price of ₹344. The brokerage noted that Zomato and Blinkit recorded year-on-year net order value growth of 21% and 79%, respectively, in Q2FY27, while adjusted EBITDA margins improved sequentially.
Blinkit aims to expand its network beyond 3,500 dark stores by March 2027. Kotak expects Eternal to deliver a 63% revenue CAGR over FY26–FY29, supported by quick commerce and food delivery. It also expects EBITDA margins to expand from 2.2% in FY26 to 4.6% by FY29.
4. APL Apollo Tubes: BUY | Target price: ₹2,594 | Upside: 19.8%
Kotak Neo has a BUY rating on APL Apollo Tubes, with a target price of ₹2,594 against the prevailing price of ₹2,165. India’s largest structural steel tube manufacturer has a broad product portfolio of more than 5,000 offerings and a distribution network of over 800 distributors across 300 cities.
The brokerage expects its planned capacity expansion from 5 million tonnes to 8 million tonnes by FY28 to support volume growth and market share gains. A rising contribution from value-added products is also expected to improve profitability. Revenue and profit after tax are projected to grow at CAGRs of around 16% and 19%, respectively, over FY26–FY29.
5. Persistent Systems: BUY | Target price: ₹6,500 | Upside: 7.5%
Kotak Neo has recommended Persistent Systems with a BUY rating and a target price of ₹6,500, compared with its current price of ₹6,048. The brokerage considers the company well-positioned to benefit from AI-led technology spending. The proposed Nagarro acquisition could help it expand its presence among enterprise clients, while providing an opportunity to improve the acquired business’s revenue growth and margins.
Strong bookings over recent quarters are expected to support near-term performance. Kotak estimates organic year-on-year revenue growth of 19.9% in constant currency in FY27 and expects consolidated earnings per share to grow at a CAGR of 31% during FY27–FY29.
6. Titan Company: ADD | Target price: ₹5,050 | Upside: 13.8%
Titan carries an ADD rating from Kotak Neo, with a target price of ₹5,050 against the current market price of ₹4,436. The brokerage believes a stable gold price environment could help the jewellery business gain market share and improve operating margins.
Titan has maintained its guidance for 19–20% CAGR in consolidated jewellery sales and expects to increase its market share by 250 basis points to 11%. With its market share still in single digits, the company sees considerable room for expansion. Kotak expects consolidated jewellery sales and EBIT to grow at CAGRs of 17% and 18%, respectively, over FY26–FY29.
7. Hindustan Aeronautics: ADD | Target price: ₹5,305 | Upside: 9.3%
Kotak Neo has an ADD rating on Hindustan Aeronautics (HAL), with a target price of ₹5,305 compared with its current price of ₹4,854. HAL’s integrated capabilities across aircraft production, repair, overhaul, upgrades, engines, avionics and lifecycle support remain key competitive strengths. Its order book stood at ₹2.55 lakh crore at the end of FY26, providing an estimated seven to eight years of revenue visibility.
The company also has a near-term opportunity pipeline of ₹90,000 crore. Upcoming programmes, including Tejas Mk2, Light Utility Helicopter and Indian Multi-Role Helicopter, along with the Su-30MKI upgrade, could support growth. Kotak expects revenue to grow at a 16% CAGR over the next five years.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
