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27 May 2025

Five stocks to buy from analysts this week - May 27, 2025

1. Arvind Fashions:

Anand Rathi maintains a ‘Buy’ rating on this apparel company with a target price of Rs 681, indicating an upside of 50.6%. The company's share price has taken a hit recently, declining by 20.7% over the past six months. Arvind Fashions markets and distributes branded apparel and accessories, and reported a net loss of Rs 93.2 crore in Q4FY25, against a profit of Rs 24.3 crore in Q4FY24. The loss was mainly due to a one-time deferred tax charge of Rs 1,200 crore, following a shift in its subsidiary Arvind Lifestyle Brands’ tax rate from 35% to 25%.

Looking past that figure, all five core brands (US Polo, Tommy Hilfiger, etc.) posted double-digit revenue growth in Q4, with most also delivering double-digit EBITDA growth. For the full year, the company reported 8.5% revenue growth and a 100 bps improvement in its EBITDA margin. This performance was supported by premiumization and a shift toward stronger, well-established brands.

Analyst Vaishnavi Mandhaniya finds initial FY26 trends encouraging, noting improved comparable growth (same-store sales) in the first 45 days. She expects supportive macro conditions and tax cuts to drive growth above 5% in FY26 (5.5% in FY25).

The company’s management maintains its guidance of 12-15% revenue growth in FY26, supported by a recovery in the wholesale channel and steady growth in the retail channel.

2. Karur Vysya Bank:

Emkay reiterates its ‘Buy’ rating on this bank with a target price of Rs 300, a 32.3% upside. In Q4FY25, the bank’s gross NPA ratio improved by 64 bps YoY to 0.8%, supported by lower slippages, higher write-offs, and better recoveries. Net NPAs stood at 0.2%. Analysts Anand Dama, Nikhil Vaishnav, and Kunaal N note this is among the lowest NPAs in its peer group, including City Union, Ujjivan, and Equitas SFB. The bank features in a screener of stocks with good Trendlyne valuation scores.

The management expects gross NPAs to stay below 1% and net NPAs of around 0.5% in FY26, with slippages likely to remain under 1%. Net interest margin (NIM) was broadly stable at 4.1% due to a shift toward higher-yielding, secured retail loans. However, the bank expects margins to moderate to 3.7–3.75%, in line with possible policy rate cuts.

For FY25, the bank’s net profit rose 21% to Rs 1,942 crore, while revenue grew 16.7% driven by higher interest income and investment earnings. Dama and team expect the bank to deliver a return on equity (RoE) of 16–18%, supported by strong asset quality, healthy capital and provision buffers, and stable management.

3. Bharat Electronics:

ICICI Securities maintains its ‘Buy’ rating on this defence company and raises the target price to Rs 420, indicating an upside of 8.9%. In Q4FY25, the company’s revenue grew 6.8% YoY to Rs 9,149 crore and net profit rose 18.4% to Rs 2,127 crore, helped by high-margin orders and improved execution.

For FY25, revenue grew 15% and net profit rose 33.4%, driven by an increase in new orders. The company's management expects an order inflow of over Rs 57,000 crore over the next 12–13 months, driven by emergency procurement orders from the Ministry of Defence and export demand.

Analysts Amit Dixit and Mohit Lohia remain optimistic about Bharat Electronics’ software-defined radios (SDRs) segment for naval programmes. They expect BEL to secure 85% of the upcoming SDR orders from the Indian Navy, with a potential order book of Rs 8,000–10,000 crore.

BEL targets a 15% revenue CAGR and 20% profit CAGR over the next 3–4 years. Analysts also remain positive about the company’s growth prospects beyond defence. They expect order book execution to remain strong, backed by healthy margins over the next 2–3 years.

4. Transport Corp of India:

Sharekhan maintains a ‘Buy’ rating on this logistics solutions player with a target price of Rs 1,350, implying a 18% upside. In FY25, the company’s revenue rose 11.6% YoY to Rs 4,491.8 crore, led by the supply chain management (SCM) segment. Growth in SCM was supported by new contracts and expansion in the warehousing, quick commerce, and automotive sectors. Its net profit increased by 16.8% during the year.

Transport Corporation’s management expects 10–12% growth in revenue and profit for FY26. The SCM segment is projected to grow 12–15% and remain the key revenue driver. Analysts note the company’s plans to invest Rs 400–450 crore in FY26 to expand infrastructure, including ships, trucks, and warehouses.

Analysts believe the company is well-positioned to benefit from the Centre’s AtmaNirbhar Bharat push and global supply chain shifts. They estimate revenue and net profit to grow by 12.4% and 15.4%, respectively, over FY26–27.

5. Sun Pharmaceuticals:

Motilal Oswal maintains a ‘Buy’ rating on this pharma company with a target price of Rs 2,000, an upside of 18.8%. In Q4FY25, the company’s revenue grew 8.2% YoY to Rs 12,958 crore but missed estimates by 4% due to lower-than-expected sales in global specialty drugs and rest of the world (ROW) markets. Net profit also missed estimates by 4% due to higher litigation expenses and restructuring of US operations.

During the quarter, the company launched 10 new products across multiple therapy areas, such as pain management and anti-diabetics. These launches are expected to drive an 11% sales CAGR in the DF segment by FY27. Analyst Tushar Manudhane expects Sun Pharma to outperform the industry in India’s domestic formulation (DF) market due to new product launches and strong growth in existing brands.

For FY25, the company's revenue grew 9.4% and net profit rose 14.4%. The management aims to achieve mid-to-high single-digit revenue growth in FY26, supported by new specialty product launches in 2025.

The company plans to invest Rs 830 crore in FY26 towards promotional activities and research and development (R&D) expansion for its specialty portfolio. The analysts project the company’s net profit to grow at a CAGR of 17% over FY26–27.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The Baseline

23 May 2025

Five Interesting Stocks Today - May 23, 2025

By Trendlyne Analysis

1.Data Patterns:

This defence and aerospace electronics solutions provider rose 3.5% over the past week after announcing its Q4FY25 results on May 19. During the quarter, the company’s net profit grew 60.4% YoY to Rs 114 crore, and revenue increased 109%, driven by strong execution of defence contracts and a robust order backlog.

The company receives around 57% of its revenue from the production and design segment, which grew 168% YoY to Rs 225 crore in Q4. Its key customer, the Defence Research and Development Organisation (DRDO), accounted for 55% of total revenue.

For FY25, Data Patterns' revenue grew 33% YoY and net profit rose 22%, beating Trendlyne’s Forecaster estimates. However, earnings faced pressure during Q2 and Q3 due to delayed orders and postponed deliveries. The company closed the year with an order book of Rs 730 crore, including Rs 355 crore of new orders from radar and electronic warfare systems in FY25. Radar systems contribute 60% to revenue, while electronic warfare systems account for 20%.

Over the past 18 months, the company has invested Rs 140 crore in developing fire control radars, electronic warfare receivers, and shipborne communication systems. It plans to launch these products in FY26.

Commenting on the outlook for FY26, Srinivasagopalan Rangarajan, MD, states, “We anticipate orders worth Rs 1,000–2,000 crore and 20–25% growth in revenue and profit. With the defense ministry planning to double procurement over the next four to five years and rising tensions at the border, we expect strong repeat orders and faster contract clearances for radar systems, electronic warfare suites, seekers, and avionics.”

Post results, Nirmal Bang maintains a ‘Buy’ rating on the stock and highlights the company’s strong order book in the radar and electronic warfare segment. The brokerage notes that management’s expectation of receiving emergency procurement orders from the Ministry of Defence (MoD) will support near-term growth. It expects the EBITDA margin to expand by 40 bps by FY27.

2. JSW Energy:

This power & electric utilities company rose by 2.8% after it announced its Q4FY25 and full-year results on May 15. In April, the company finalized two significant acquisitions: the 4.7 GW renewable energy platform from O2 Power for Rs 12,468 crore and KSK Mahanadi Power Co. for Rs 16,084 crore, following the National Company Law Tribunal's (NCLT) approval of its resolution plan.

Speaking about the new acquisitions, Sharad Mahendra, CEO of the company, said, “These two acquisitions are key growth drivers moving forward, both at the EBITDA and PAT levels. In an impressive turnaround, JSW Mahanadi (formerly KSK Mahanadi) achieved a 77% Plant Load Factor (PLF) within just 25 days of operation.”

The company’s net profit rose 16.1% YoY to Rs 408.1 crore in Q4FY25, helped by lower fuel costs. Revenue increased 15.7% YoY, driven by higher sales from the thermal and renewables segments. The company's Q4 net profit surpassed Trendlyne’s Forecaster estimates by 26.7%, driven by an expansion in its power portfolio. It appears in a screener of stocks outperforming their industry over the past month.

The company's positive growth in this quarter was driven by significant expansion in its operational portfolio to ~12.2GW. To achieve its Strategy 3.0 goals, the company is expanding its renewable and thermal power portfolio through organic growth and strategic acquisitions. Its key projects under development include renewables and thermal power projects, pumped hydro storage, battery storage systems and green hydrogen manufacturing. The company's management has guided for Rs 15,000-18,000 crore capex in FY26 and is targeting a total capex of Rs 1.3 lakh crore over the next 5 years.

ICICI Securities maintains a ‘Buy’ rating on JSW Energy. The brokerage notes that the company is transitioning into a renewable energy-focused player over the next 2–3 years, with integrated solar manufacturing and utility-scale storage. However, it warns that project delays and merchant price volatility could pose risks, so the brokerage has reduced its target price to Rs 612.

3. Crompton Greaves Consumer Electricals:

This household appliances player has risen 7.2% over the past week after announcing its Q4FY25 results on May 15. Crompton Greaves’ net profit grew 22.5% YoY to Rs 169.5 crore, helped by lower raw materials and finance costs, beating Trendlyne’s Forecaster estimates by 3.9%. It appears in a screener of stocks with the highest foreign institutional investor (FII) holdings.

During the quarter, revenue increased 5% YoY to Rs 2,076.6 crore, led by improvements in the electric consumer durables and Butterfly products segments. EBITDA margin was up 245bps YoY. Meanwhile, Crompton Greaves’ revenue grew 7.5% YoY for the full year to Rs 7,864 crore, and net profit increased 26.4%.

Crompton Greaves’ 2022 acquisition, Butterfly Gandhimathi Appliances, had dragged earnings for the past seven quarters but saw a revival in revenue (up 10.8% YoY) in Q4FY25. This was led by strong growth across key categories such as mixer grinders, cookers, and wet grinders. Meanwhile, the electric consumer durables segment grew 5.7% YoY.

During the final quarter of FY25, the company announced its foray into the rooftop solar business. The management highlighted that it has invested in supply chain arrangements and plans to leverage Crompton’s brand and distribution network. Commenting on this, Kaleeswaran Arunachalam, the CFO, said, “The size of the opportunity in the solar rooftop business is significant. The category is valued at Rs 20,000 crore and offers strong growth potential.”

Analysts see strong potential for Crompton in the rooftop solar space, building on its success in solar pumps. The company introduced new products in the solar pump segment, expanded its addressable market, and recorded sales of nearly Rs 200 crore during the year.

ICICI Securities retains its Buy rating on Crompton Greaves with a lower target price of Rs 420. The brokerage expects muted Q1FY26 with unseasonal rains across India, and has trimmed its FY26–27 earnings estimates by 0.4-3.2%.

4. DLF:

This New Delhi basedreal estate company surged 9.5% over the past week after announcing its results. The companyreported revenue growth of 29% in FY25, with net profit growth of 60%. Both revenue and net profit surpassedForecaster estimates by a wide margin.

DLF gets around 52% of its revenue from the real estate development business, another 35% from rental income and the remaining 12% from service and maintenance. DLFreported sales bookings growth of 44% YoY at Rs 21,200 crore in FY25, with over half of this coming from its super-luxury Dahilas Project in Gurugram.

DLF’s rental business, which is mainly a 67:33 joint venture with Singapore’s sovereign wealth fund, GIC, reported a net profit growth of 21% YoY, driven by demand for workspaces and higher rent.

Analysts expect the DLF’s rental business to witness capex-led growth over FY26-30. MD of the rental business, Sriram Khattar,said, “Capex in Rentco (rental business) in FY26 and FY27 will be in the ballpark of Rs 5,000 crore.” He added, “This is a big jump from what we used to see earlier because of the pace of execution of the downtowns and the completion of Atrium Place.”

Khattar highlights that the company has adequate land to continue growing for the next several years. He believes this is a “very, very big competitive advantage” over other developers continuously scouting for land. The firm guides for booking sales similar to this year for FY26 in the range of Rs 20,000-22,000 crore.

ICICI Securitiesmaintains a ‘Buy’ rating on the stock as it expects its booking sales to surpass guidance for FY26 and grow at a CAGR of 13.5% over FY26-27. Risks to the business include a slowdown in residential demand in the NCR region and the impact of work-from-home on its rental business.

5. Sai Life Science:

This pharma company rose 4.5% on June 14 after announcing its Q4FY25 results. The company’s net profit surged 57% to Rs 88.3 crore, beating Forecaster estimates by 25.6% due to lower interest expense.

Its revenue grew 33% to Rs 589 crore, helped by higher demand for its combined contract research organization (CRO) and contract development and manufacturing organization (CDMO) services.

The revenue contribution from the CRO and CDMO segments was 37% and 63%, respectively. Siva Chittor, Director and CFO of the company said, “We expect to get to an EBITDA margin of 28% to 30% from current 25% over a 3 to 5-year period and our average growth on revenue will be between 15% and 20% for the same period, broadly in line with the 16% growth in FY25.”

During the quarter, the company expanded its manufacturing capacity by 30% and strengthened its ability to handle complex and late-stage projects. In April 2025, it launched a dedicated peptide research centre at its integrated R&D campus in Hyderabad to meet the rising demand for peptide synthesis and antibody-drug conjugates (ADCs).

Siva mentioned that Sai Life sees no immediate risk from recent US policy actions, including drug pricing reforms to lower prescription drug costs. However, CROs may face pressure as US pharma companies can cut R&D spending to offset the impact of new drug pricing rules. About 20% of Sai Life’s orders come from US pharma firms.

The company reduced its debt by Rs 720 crore during the year, meeting its IPO commitment. It invested Rs 408 crore in capital expenditure to scale manufacturing and strengthen discovery capabilities. Commenting on the capex, Siva noted that for FY26, the company plans to invest Rs 700 crore, with 60-65% towards manufacturing and the rest for R&D, including Rs 50-60 crore for new areas like peptides and ADCs.

Post results, Morgan Stanley raised its target price to Rs 911 from Rs 865, citing strong CRDMO-led growth, increased capex, and a 26% rise in contract research. It maintained its ‘overweight’ rating.

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

The Baseline

21 May 2025

From grid to gains: Transformer makers electrify the market

By Omkar Chitnis

When you hear the word “Transformer,” you might picture a humming grey box behind your building. This electrical device is the backbone of energy systems that keep your lights on and appliances running.

Technologies like IoT, automation, and data analytics has fueled a bull run in the power sector. Power companies adopted these tools to increase efficiency and lower costs, leading to strong growth in electricity generation, transmission, and distribution businesses.

In the shadows of the tech boom and green revolution, transformer shares have become investors' darlings in the last five years. In this edition of Chart of the Week, we examine the five-year returns of transformer stocks and analyse the key factors driving their strong growth.

The ongoing upgradation of power lines in India and North America has created a stable growth phase for transformer makers. Visweswara Reddy, chairman of Indo Tech Transformers, said, “Unlike earlier cycles where demand peaked for 3–4 years and then dipped, the current phase is more stable and should last 12–15 years, supported by transformer replacements in India and North America.”

Due to rising energy demand, transformers are facing a similar shortage to that of Nvidia’s GPU chips.

Ashish Agarwal, Head of Solar and Storage at BluePine Energy, said, “Rapid growth in railways, transmission upgrades, and renewable projects has raised transformer demand and pricing. Indian engineering, procurement, and construction (EPC) contractors executing overseas projects are boosting exports by leveraging the local supply chain.”

The global transformer market reached $76.4 billion in FY24 and is projected to reach $101.4 billion by FY29 due to increased demand from industries, data centers, and households. The Nifty Energy index has gained 193% in the past five years.

This growth in power consumption has increased demand for transmission infrastructure projects and boosted the earnings of transformer manufacturers like Transformers & Rectifiers, Voltamp Transformers, and Shilchar Technologies.

Government initiatives such as the Export Promotion Mission, National Manufacturing Mission, and Production Linked Incentive (PLI) encouraged domestic manufacturing and increased transformer exports.

Transformer makers power up capacity amid surge in orders

Rising power demand and steady government capital expenditure have pushed transformer makers to expand capacity, with large orders from industrial and utility segments driving growth.

Transformers and Rectifiers, a heavy electrical equipment industry player, leads specialty transformer manufacturing with a 25% market share. Its share price has risen 14,468% in five years, driven by an order book that grew at a CAGR of 35.8% and increasing government projects.

As of March FY25, the order book stood at Rs 5,132 crore. Foreign institutional investors (FII) raised their stake by 6.8% YoY in Q4FY25.

The company plans to increase operational efficiency through backward integration to reduce risks from price volatility and supply disruptions.

Management aims to achieve Rs 8,200 crore in revenue by FY28. Satyen Mamtora, MD of Transformers & Rectifiers, notes, “We are improving margins through operational efficiency and enhancing production capacity by reducing supply chain risks through backward integration. We expect FY26 revenue of Rs 3,500 crore with 15–16% profit margins.”

Voltamp Transformersholds a 15% share in the organized industrial application transformer market. Since FY20, its share price has risen 833%, and revenue has grown at a CAGR of 18.2% to Rs 2,018.9 crore in FY25, driven by diversification across data centers, oil & gas, infrastructure, and renewable energy sectors.

The company improved its net profit margin from 10% in FY20 to 16.8% in FY25, helped by higher sales of industrial transformers rated above 5 MVA and better pricing. It plans to invest Rs 200 crore to expand its manufacturing facility to produce up to 250 MVA transformers.

CG Power and Industrial Solutions derives 36% of its revenue from the power system business vertical, including the transformer business. The company increased transformer sales by implementing IoT-enabled transformers to improve efficiency, and introduced high-voltage current transformers above 800 kV. These features attracted orders from private and public companies, growing the order book at a CAGR of 42.8% in the past five years to Rs 9,909 crore.

The company plans to invest Rs 712 crore to expand transformer manufacturing capacity by 45,000 MVA, increasing total capacity to 85,000 MVA by FY28 for extra-high voltage applications. Major customers include Power Grid, Tata Power, NTPC, Larsen & Toubro, Sterling Wilson, and SPML Infra.

Ajay Jain, vice president of CG Power and Industrial Solutions, said, “We expect double-digit growth in the distribution transformer market in the next few years. We are focusing on the industrial segment, so we are investing in that segment for capacity expansion.”

Export growth lifts transformer makers' earnings

Indian transformer manufacturers are shifting their focus to international markets to increase margins and reduce dependency on local demand. Indian companies remain unaffected by tariff impacts, as most supply transformers to the Middle East and Europe.

Additionally, with support from the government’s National Manufacturing Mission, companies like Shilchar Technologies and Hitachi Energy are expanding exports of medium and high-voltage transformers to Southeast Asia, Africa, and Latin America.

Shilchar Technologies has been a standout performer, with its shares rising from the FY20 low of Rs 48 to an FY25 high of Rs 14,380, gaining 14,958%. The company shifted its product mix toward customizing transformers for renewable energy projects. This strategy improved pricing and boosted sales.

Export contribution doubled from 23% in FY20 to 50% in FY25 by entering new markets, including North America, Europe, and several countries in the South Asian market, and improved profitability driven by price gains.

On the export outlook and tariff risks, Alay J. Shah, MD of Shilchar Technologies, said, “North America accounts for about 20% of our exports, with the remaining primarily from the Middle East and North Africa. We remain confident that potential US tariffs will have minimal impact. We will monitor the situation closely as the 90-day tariff pause ends and adjust our strategy if needed.”

Apar Industries leads the power transformer oil segment with a 60% market share. Its shares have risen 2,547% in the past five years, driven by an order book that grew at a CAGR of 29% to Rs 7,163 crore.

The company ranks as the world’s third-largest transformer oil manufacturer. It exports transformer oils to 95 countries. Higher realizations from global markets have raised their international revenue share from 37% in FY20 to 44% in FY25.

Hitachi Energy manufactures 315 MVA transformers, and its shares have risen 1,805% over the past five years. The company reduced reliance on the domestic market by expanding exports of high-margin ultra-high-voltage transformers, with export contribution to order inflows rising from 18% in FY20 to 40% in FY25, leading to the net profit margin improvement from 2.9% to 6%.

The company’s order book grew at a CAGR of 43%, reaching Rs 19,245 crore, driven by rising orders from industries, transportation, and data centers. Strong traction drove domestic institutional investors (DII) to increase their stake by 3.3% year-on-year in Q4FY25.

To capitalize on the growing demand, Hitachi Energy plans to invest around Rs 2,000 crore over the next 4-5 years to expand manufacturing of large power transformers, focusing on customized units for renewable projects and government work orders.

N Venu, CEO of Hitachi Energy India, notes, “Hitachi Energy India's primary focus continues to be the domestic market, supported by a strong pipeline across renewables, transmission, energy storage, and data centers. The company aims to maintain double-digit EBITDA margins in FY26.”

The Baseline

21 May 2025

What CEOs are saying about FY26 | Screener: Stocks gaining momentum after Q4 results

By Tejas MD

Financial markets have a way of surprising you. Just when everyone was talking about the Nifty 50 being stuck in a correction, the index pulled a fast one, breaking through the psychological 25,000 mark on May 15 and now hovering around 5% of its all-time highs.

A sharp 14% rebound from April lows is a reminder of how fast momentum can flip.

Not everyone is celebrating yet. As Q4 earnings come in and global trade concerns grow, especially with renewed talks about US tariffs, many CEOs are showing more caution than confidence. Volatility remains high, and most CEOs seem to be in a “wait-and-watch” mode as they look ahead to FY26.

It’s a bit like getting stuck in Bangalore traffic after a downpour—you know you’ll start moving at some point, but for now, all you can do is sit tight and hope the road clears soon.

In this Week’s Analyticks,

Cautious but not quiet: What CEOs are betting on for FY26
Screener: Stocks gaining momentum after net profit and operating profit margin improvements in Q4FY25

Uncertain times, cautious optimism: What CEOs are saying about FY26

Caution has been the dominant tone in Q4FY25 earnings calls, as global uncertainties—especially US tariff developments—cast a shadow over an otherwise strong financial performance by Indian companies.

Despite good Q4 results, management commentary was quite guarded, even when analysts pushed management to stick their necks out. CEOs across sectors signaled the need for more “clarity” in economic developments.

We used Trendlyne’s ‘Discover’ tool to track the key concerns CEOs raised in these earnings calls.

Many leaders have pinned hopes on a sharp turnaround in the second half of FY26. Bajaj Finserv’s President, S. Sreenivasan, put it plainly, “We believe the geopolitical and external environment will be volatile in the first half of FY26, but we are very cautiously optimistic about H2 of the coming year when we should come back to growth”.

Uncertainty and caution lead earnings call themes in Q4

Optimism hasn’t entirely vanished. CEOs highlighted strong demand trends—especially in FMCG, paints, and chemicals—as reasons for confidence. Domestic demand is proving resilient.

Most FMCG companies are upbeat about demand in FY26, thanks to softer food inflation, tax and interest rate cuts, and expectations of a good monsoon.

When asked about the outlook, Dabur CEO Mohit Malhotra said, “We are seeing green shoots in the business. So, I think food inflation is moderating. Going forward, sequential improvement is what we expect”.

While firms like JBM Auto, L&T, and Happiest Minds raised their FY26 guidance on strong Q4 results, tech majors Infosys, HCL Tech, and Wipro cut their growth forecasts, citing global uncertainty and weak client demand.

Tariff fog hangs over Q4 earnings calls

Top CEO talking points: Trump and tariffs

CEOs were on edge the previous quarter, but expected clarity on US tariffs by April 1st. But that clarity never came. As Q4 unfolded, Trump’s shifting stance on trade has kept the outlook murky.

Many CEOs pointed to tariffs and delays in trade agreements as a drag on decision-making, with order bookings either delayed or paused altogether. Companies like Jindal Stainless and UltraTech Cement have responded by shifting focus to domestic markets.

While explaining the dip in EBITDA per tonne, Jindal Stainless’s MD pointed to rising trade tensions as a factor. “Trade uncertainty picked up with Mr. Trump taking over. Many of our export bookings came under pressure or were put on hold, so we had to divert more volumes into the domestic market.”

CEOs are concerned about macro issues

Tech CEOs echoed these challenges. TCS CEO K. Krithivasan highlighted the inflationary impact of tariffs and the toll on IT spending: “Client IT budgets have remained flat.” CEOs are also raising slowdown and recessionary fears.

FY26: CEOs are hopeful about lower inflation and a capex push

Some CEOs sounded upbeat about FY26, pointing to easing inflation in India and early signs of a rebound in manufacturing and services. Management teams aren’t just talking up the outlook – they are backing it with spending.

FY26 key priorities: what CEOs are focusing on

Tata Steel, for instance, has announced a massive Rs 15,000 crore capital expenditure plan for FY26, which aims to drive expansion and launch new projects.

Companies like Polycab are looking at exports to fuel the next growth phase. After a slowdown in the US, Polycab is actively targeting Europe, the Middle East and Australia, with plans to ramp up revenue from these regions in the coming year.

CEOs highlighted growth pockets—especially in government contracts and pharma. For example, public sector demand has rebounded, benefiting firms like Blue Star and Netweb Technologies, after a Q3 slowdown due to elections. Blue Star’s CFO noted, “While the Industrial and BFSI sectors remained muted, government orders showed signs of revival during this quarter.”

Industry opportunities: what are CEOs bullish about?

In pharma, the spotlight was on new product launches. Cipla and Dr. Reddy’s focus on complex generics, while Alembic Pharma and Aarti Drugs are gaining momentum in API.

Meanwhile, Trump’s May 12 executive order to make US prescription drug prices the lowest globally has sparked concern. But Indian generic drug makers aren’t too worried.

Morepen Lab’s CEO, Sushil Suri, said, “Thankfully, we’re in the generics space. These rules mainly target patented drugs, not us.” He added, “Even if President Trump wants to shake things up, the US has no alternative. They simply don’t have domestic manufacturing for generics—they rely on India.”

One thread runs through commentary by CEOs across major companies: until there’s clarity on trade policy, management teams will delay some big decisions.

Screener: Stocks gaining momentum after improvements in net profit and operating profit margin in Q4FY25

Capital markets stocks’ operating margins rise in Q4

As the Q4FY25 results season comes to a close, we look at stocks where profitability has improved YoY. This screener shows stocks with rising Trendlyne momentum scores MoM after YoY growth in net profit and operating profit margins in Q4FY25.

The screener is dominated by stocks from the finance, healthcare services, capital markets, electric utilities, and electrical equipment/products. Major stocks that show up in the screener are BSE, Reliance Power, 360 One Wam, Premier Energies, IDBI Bank, Inventurus Knowledge Solutions, and IndiaMART InterMESH.

BSE’s net profit surged 361.9% YoY during Q4FY25, with its operating profit margin expanding 32.5 percentage points to 60.5%. This capital markets company’s Trendlyne momentum score jumped MoM to 73.2. According to analysts at HDFC Securities, a 44.5% YoY reduction in regulatory fees and a Rs 109.4 crore return from provisions for the Settlement Guarantee Fund (SGF) helped improve profitability.

Reliance Power also shows up in the screener after its net profit grew 131.5% YoY in Q4FY25, with operating profit margin expanding 20 percentage points. This electric utilities company’s Trendlyne momentum score increased MoM to 63.7 post results. Its net profit and operating margin improved due to lower fuel consumption, finance, depreciation & amortisation, and generation & administration expenses.

You can find some popular screeners here.

Signing off this week,

The Trendlyne Team

The Baseline

20 May 2025

Five stocks to buy from analysts this week - May 20, 2025

By Omkar Chitnis

1. Tata Steel:

ICICI Securities maintains its ‘Buy’ rating on this steel company and raises the target price to Rs 190, indicating an upside of 19%. Tata Steel’s EBITDA/tonne increased by Rs 1,000 QoQ in Q4FY25, up from Rs 600, due to higher selling prices and lower fixed costs.

In Q4FY25, sales volume grew 3.3% YoY to 5.6 million tonnes, driven by higher production at the Odisha facility. Tata Steel Netherlands (TSN) reported a profit of Rs 120 crore in Q4FY25, compared to a loss in the same quarter last year.

Analysts Amit Dixit and Mohit Lohia expect Tata Steel’s overall EBITDA to grow 47% to Rs 37,100 crore in FY26, driven by improvements in the UK business. They also expect profits to rise in Q1FY26 due to higher selling prices of Rs 3,000 per tonne in India and a reduction of fixed costs by Rs 1,800-2,000 per tonne.

The management aims to reduce fixed costs by Rs 11,500 crore by FY27 across India, UK, and Netherlands operations. It expects cost reductions to help its Netherlands and the UK businesses break even by Q2FY26. The company plans to invest Rs 15,000 crore in capital expenditure in FY26 and reduce debt by Rs 3,000 crore.

2. V-Guard Industries:

Anand Rathi retains its ‘Buy’ rating on this electrical appliance company with a target price of Rs 475, indicating an upside potential of 25.1%. The company’s Q4FY25 revenue rose 14.5% YoY to Rs 1,538.1 crore, driven by strong growth in the electrical and electronics segments. Net profit grew 19.6% to Rs 91.1 crore due to lower interest costs.

Analyst Prasheel Gandhi expects the company’s electronics vertical to maintain strong momentum, led by stabilizers, inverter batteries, and the solar rooftop segment. He anticipates the solar rooftop business will contribute significant revenue over the next 4–5 years.

V-Guard Industries’ battery business revenue grew in double digits YoY in FY25. The management aims to increase battery capacity with an investment of Rs 50 crore and expects a revenue potential of Rs 300–400 crore in 2.5 years. The analysts project the company’s revenue and net profit to grow at a CAGR of 14.2% and 28.8%, respectively, over FY26–27.

3. Bank of Baroda:

Sharekhan maintains a ‘Buy’ rating on this bank with a target price of Rs 260, indicating an upside of 10%. In Q4FY25, Bank of Baroda’s net profit rose 3.3% YoY to Rs 5,048 crore. Treasury gains more than doubled to Rs 1,559 crore, supporting overall profitability and pushing return on assets (RoA) to around 1.2%. The analysts said, “We believe the bank is likely to sustain RoAs at ~1.0% in FY26 led by recoveries and higher treasury gains.”

Net interest income (NII) declined 7% YoY in Q4FY25, while net interest margin (NIM) fell by 33 basis points due to lower loan yields and higher cost of funds. The analysts believe the pressure on NIMs and asset quality volatility can be managed through recoveries, treasury gains, and a better mix of loans and deposits. They also highlighted the bank’s focus on growing current account savings account (CASA) and retail term deposits, while cutting back on bulk deposits to support long-term growth.

The bank’s gross non-performing assets (NPA) fell 10 bps YoY to 2.3% in the quarter. Analysts expect NII and net profit to grow by 8.5% and 2.8% over FY26–27, aided by stable asset quality.

4. Vijaya Diagnostic Center:

Emkay reiterates its ‘Buy’ rating on this healthcare services provider chain with a target price of Rs 1,150, indicating an upside of 24.6%. Analysts Anshul Agrawal and Abin Benny believe the next 2–3 years look promising, supported by the timely commissioning of new labs in non-core geographies (such as Pune, Kolkata) and management’s guidance of over 15% sales CAGR during FY26–28, despite the asset-heavy model.

In Q4FY25, Vijaya Diagnostic’s revenue rose 12% YoY to Rs 173 crore, led by a 20% growth in the wellness segment, which contributed 15% of total revenue. However, the EBITDA margin declined by 90 bps YoY to 39.8% due to expansion-related costs. Agrawal and Benny expect margins to improve to 40.5% by FY28, backed by the management’s target to achieve breakeven within 12 months for each new lab.

The company has commissioned two new labs in Q1FY26 and plans to add three more in the next 3–4 months. Analysts believe growth will also be supported by the management’s plan to increase prices by 1–2% across various test categories during FY26.

5. Blue Jet Healthcare:

Motilal Oswal reiterates its ‘Buy’ rating on this pharma company with a target price of Rs 965, implying an upside of 21%. In Q4FY25, the company’s revenue grew 85.1% YoY to Rs 3,404 crore, driven by higher sales in pharmaceutical intermediates. Net profit rose 177% to Rs 1,101 crore, helped by new capacity additions and improved plant efficiency.

Blue Jet's capex for FY25 stood at Rs 300 crore on research and development (R&D) and expansion of production capacity. Analysts Aman Chowdhary and Sumant Kumar expect strong revenue visibility in FY26, driven by rising demand for pharma intermediates and active pharmaceutical ingredients (APIs). They project the revenue share from the pharma intermediates to rise to 25% by FY27, up from 17% in FY25, aided by expansion into new markets such as Canada, the US, and Europe.

Analysts expect strong revenue growth from the API segment in FY26, driven by new product launches and increased production capacity. They project Blue Jet’s revenue and net profit to grow at a CAGR of 27% and 25%, respectively, over FY26–27.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The Baseline

20 May 2025

Which stocks did superstar investors sell in Q4FY25?

By Melissa Koshy

The portfolio changes of superstar investors like RARE Enterprises, Ashish Kacholia, Sunil Singhania, and Vijay Kedia offer valuable insights into the market, especially during periods of volatility. Their buys and sells help investors identify potentially profitable sectors and stocks. Let’s take a look at the sells made by these superstar investors in Q4FY25.

The chart below shows changes in superstar investors' current portfolio net worth (note that net worth reflects share price changes in current holdings and new buys and sells).

Most superstars see a fall in their net worth in Q4FY25

Previously, we focused on the key superstar buys in Q4FY25. Now, let's analyse their sells. The last quarter of FY25 turned volatile - most superstar investors remained cautious and increased stake sales, continuing the trend from the previous quarter. The chart below highlights their biggest sells during this period.

Biggest sells by superstars in Q4FY25

RARE Enterprises cuts a 2.1% stake in an edible oils maker

Rakesh Jhunjhunwala’s portfolio, currently managed by Rekha Jhunjhunwala and investment firm RARE Enterprises, reduced holdings in three companies during Q4. The portfolio’s net worth has risen by 24.4% to Rs 62,580 crore as of May 19, primarily due to the infusion from Inventurus Knowledge Solutions. It disclosed a 49.3% stake in the company when its IPO was listed on December 19.

RARE Enterprises trims stake in three firms

In the January-March quarter, the late big bull’s portfolio reduced its stake in Sundrop Brands by 2.1%. The portfolio held a 7% stake in the firm for two consecutive quarters. This edible oils maker has gained 13.3% in the past year, but underperformed its industry by 5.8% points.

During the latest quarter, RARE reduced its stake by 0.3% in the department stores chain Baazar Style Retail, taking its holding to 3.4%. The company has declined by 26.7% over the past year, underperforming its industry by 38.5%. It also has an expensive valuation, scoring only 20.8 as per Trendlyne’s Valuation score.

RARE Enterprises also cut its stake in Nazara Technologies by 0.2%, and now holds 7.1% in the internet software & services company. The portfolio has reduced its stake in the company for the past six quarters. Nazara has surged 102.9% in the past year. Trendlyne’s DVM score classifies it as an Expensive Rocket as it trades in the PE Sell Zone.

Ashish Kacholia adjusts holdings in key sectors

Ashish Kacholia’s net worth declined by 14.9% to Rs 2,670 crore as of May 19 as he dialled back on multiple stocks.

Ashish Kacholia pares stakes in multiple companies in Q4

During the latest quarter, Kacholia cut a 1.4% stake in Awfis Space Solutions, a special consumer services company. The company has weak financials and features in a screener of stocks with low Piotroski scores. The company is trading at an expensive valuation, suggested by Trendlyne’s valuation score of below 30, and is displaying a neutral momentum with Trendlyne’s momentum score of 39.

The marquee investor reduced his stake in industrial machinery maker Walchandnagar Industries by 0.6%, taking his holding to 2.6%. Trendlyne classifies the company as an Expensive Performer. The company posted a loss of Rs 41.8 crore in FY24 and Rs 29.8 crore during 9MFY25. It has been reporting losses since FY13, except in FY23.

High valuations, sustained FII selling, and weak market sentiment in mid- and small-cap stocks likely prompted Kacholia’s portfolio trimming in Q4.

Kacholia cut a 0.2% stake in specialty chemical firm Yasho Industries during the quarter, and now holds 3.9%. The company’s share price has declined by 8% over the past year, underperforming its industry by 20.9% points. It has a low Durability score of 35 and an expensive valuation, scoring 10.3.

During Q4, Kacholia offloaded 0.1% each in Vasa Denticity and Ami Organics. He held 3.8% and 1.8% stakes in the healthcare supplies and pharma companies in Q3FY25. Both companies feature in a screener of stocks with high PE (PE > 40).

The ace investor also sold 0.1% each in Universal Autofoundry and Sanjivani paranteral. The auto parts & equipment maker and pharma stock feature in a screener of bearish stocks. Universal Autofoundry has underperformed its industry by 59.6% points in the past year. Sanjivani is currently trading in the Strong Sell Zone, indicating it is trading above its historical PE.

Sunil Singhania’s Abakkus Fund cuts stakes in two firms to below 1%

Sunil Singhania’s Abakkus Fundsaw its net worth fall by 14.9% to Rs 2,535.2 crore. The fund cut its holdings in two companies to below 1% and trimmed minor stakes in four others during Q4FY25.

Singhania reduces holdings in BirlaNu, Uniparts and others

Singhania’s fund reduced its holdings to below 1% each in cement & cement products maker BirlaNu and heavy electrical equipment firm Uniparts India. BirlaNu features in a screener of profit-to-loss companies (companies that moved from profit to loss QoQ). It has declined by 10.4% in the past year, underperforming its industry by 23.5% points. Uniparts ranks medium in Trendlyne’s checklist. It is currently trading in the Sell Zone.

During Q4, Abakkkus Fund lowered its stake in Sarda Energy & Minerals by 0.3% and now holds 1.5% in the steel products maker. The company is a Mid-range Performer and also features in a screener of stocks where mutual funds decreased their holdings last quarter.

Singhania’s fund cut 0.1% each inauto parts makerShriram Pistons,specialty retail firmEthos,industrial machinery companyAnup Engineering, andIT consulting playerMastek in the March quarter. He now holds a 1% stake each in Shriram Pistons and Ethos, 3.6% in Anup Engineering and a 2.8% stake in Mastek. All four companies have declining net cash flows. Ethos and Anup Engineering have expensive valuation scores, while Shriram Pistons and Mastek have technically neutral momentum scores.

Vijay Kedia makes minor stake sales during Q4

Vijay Kedia’s net worth decreased by 24.1% to Rs 1,440.2 crore as of May 19. During the quarter, he reduced his stake in auto parts maker Precision Camshafts from 3.2% in Q3 to 2.1%. Over the past year, the company’s share price fell 10.8%, underperforming its industry by 15.8% points.

Kedia cuts his stake in Precision Camshafts, Tejas Networks and others

During the quarter, Kedia also cut a 0.3% stake in telecom equipment maker Tejas Networks. He held a 1.9% stake for five consecutive quarters before reducing it to 1.3% in Q3FY25. The company’s share price declined by 38.4% over the past year and is classified as a Slowing Down Stock by Trendlyne.

The ace investor further reduced his stakes in Global Vectra Helicorp and Sudarshan Chemical Industries by 0.3% and 0.2%, respectively, bringing his holdings to 4.9% and 1.3%. Global Vectra posted a loss of Rs 13.3 crore in 9MFY25 and a marginal profit of Rs 1.2 crore in FY24, while Sudarshan Chemicals is considered overvalued based on its current PE.

Kedia also sold a minor stake in Elecon Engineering, now holding 1.1% in the industrial machinery manufacturer.

Dolly Khanna cuts stakes in multiple companies

Dolly Khanna reduced her holdings in eight companies during Q4FY25, including four where her stake fell below 1%. Despite the reductions, her net worth rose by 22.5% to Rs 557 crore as of May 19, supported by new additions and stake increases. She added two new companies, Polyplex Corp and GHCL, and increased her stake in seven others during the quarter.

She lowered her stake in steel products maker Indian Metals & Ferro Alloys and oil exploration company Selan Exploration from 1.2% to below 1%. Over the past year, Indian Metals’ share price declined by 11.5%, while Selan Exploration dropped by 12.1%.

Dolly Khanna cuts stakes in four companies to below 1%

Khanna also reduced her stake in Nile and POCL Enterprises to below 1%. Both companies are currently in the PE Sell zone and appear in a screener of stocks with declining net cash flow.

During the quarter, she trimmed her stake in Zuari Industries by 1.3%, bringing it down to 1.6%. Trendlyne classifies this sugar company as a Mid-range Performer due to its medium financial strength, valuation, and a neutral Momentum score.

She also cut her stake in packaging firm Rajshree Polypack by 0.1%, now holding 1.1%. The company’s share price has fallen 27.5% over the past year, underperforming its industry by 74.5% points.

Khanna made a minor reduction in Rajshree Sugars & Chemicals as well during the quarter.

Porinju Veliyath reduces stake in an IT consulting firm to below 1%

Porinju V Veliyath’s net worth fell 33.7% to Rs 196.2 crore as of May 19. During the quarter, he reduced his stake in IT consulting firm RPSG Ventures to below 1%, down from 1.4% in Q3. The company’s share price has fallen 6.1% over the last six months but is up 32.2% over the past year.

Porinju pares stake in RPSG Ventures to below 1%; reduces holding in Kaya

He also cut his stake in Kaya, a skincare clinic chain, to 1.3% after consistently holding 2.9% for the past three quarters. Kaya holds a medium rank on the Trendlyne Checklist and has a neutral momentum score of 47.8. Its share price has underperformed its industry by 48% points over the past year.

Additionally, during the quarter, Veliyath marginally reduced his stake in Max India, a holding company.

The Baseline

16 May 2025

Five Interesting Stocks Today - May 16, 2025

By Trendlyne Analysis

1. Titan:

This gems and jewellery major has seen a 7.8% increase in its share price over the past week. The rise is due to its Q4FY25 results, in which it reported an 18.8% YoY growth in revenue to Rs 15,032 crore, helped by higher sales across segments. Net profit grew 13% YoY to Rs 871 crore, driven by inventory destocking.

For the full year, Titan’s revenue was up 18.4% YoY at Rs 60,456 crore, beating Trendlyne’s Forecaster estimates by 3.4%. However, net profit declined 4.6% to Rs 3,337 crore, due to higher raw material, employee benefits, depreciation, and advertising expenses.

In Q4, the jewellery segment (which contributes over 88% to the total revenue) rose 25% YoY, driven by growth in ticket size. Meanwhile, Titan’s watches and wearables segment grew 20%, led by improved domestic analogue watch sales and strong growth in the Helios retail channel.

Gold prices have surged around 35% YoY in FY25, prompting consumers to rethink jewellery purchases. Commenting on this, Ajoy Chawla, the CEO of the jewellery division, said, “Sentiment has weakened, especially in the sub-Rs 50,000 range, as more products move above that mark. I think more and more customers are going to be open to lower caratage as they adjust to higher prices.”

Amid surging gold prices, consumers are opting for lightweight and lower carat jewellery (14K, 18K), with CaratLane launching 9K (9 carat gold is 37.5% pure gold, combined with metals like silver, copper, and zinc) pieces to attract value-focused buyers. Titan expects strong growth in its jewellery division, targeting 15–20% revenue growth in FY26. Tailwinds like more wedding dates and income-tax cuts are also expected to support demand.

The company added 72 stores on a net basis during the quarter, taking its retail store count to 3,312. Titan holds an 8% market share in the Indian jewellery market and has been working on expanding its retail footprint.

JM Financial hasupgraded its rating on Titan to ‘Buy’ and set a higher target price of Rs 3,725. The brokerage believes the rise in gold prices has shifted consumer preference toward lower carat, lightweight jewellery with relatively lower making charges. A correction in gold prices could revive demand and support margin improvement.

2. Berger Paints:

This paints company has risen 7% in the past week after announcing its Q4FY25 results. Its revenue grew 7.3% YoY to Rs 2,720 crore, driven by strong performance in the decorative segment. It outperformed key rivals in revenue growth, with Asian Paints reporting a 4.3% decline and Kansai Nerolac posting just 2.7% growth. The company saw a 7.4% increase in sales volume and a 190 bps YoY rise in EBITDA margin, as strong demand for premium paints and lower raw material costs helped offset the impact of last year’s price cuts.

For the full year, Berger Paints' revenue grew 3.1%, and net profit rose 1.1%, surpassing Forecaster estimates. The company gained market share, increasing from 19.5% in FY24 to 20.3% in FY25. MD & CEO Abhijit Roy highlighted that the fading impact of past price cuts is expected to narrow the gap between volume and value growth, supporting stronger value growth going forward.

Speaking on expansion plans, Roy said, “We have a capex plan of around Rs 850 crore over the next two years. About Rs 400 crore will go towards commissioning our Hindupuram plant and phase-1 of the Panagar operations (new paint manufacturing facility) in FY26. Another Rs 250 to 350 crore is expected to be spent in FY27.”

The company appears in a screener of stocks that benefit from lower crude oil prices. It rose 1.9% on May 5 after crude prices dropped nearly 4% on oversupply concerns following OPEC+’s production hike. Despite falling oil prices, the management isn’t in favour of price cuts, as rutile prices (a mineral used in paint pigments) are expected to rise due to the government’s new anti-dumping duty.

Over the past year, Berger Paints' stock has risen 18.8%, outperforming its industry and the Nifty 50 index. The company's 5-year average P/E and forward P/E suggest the stock is undervalued. Its current price-to-earnings (PE) ratio of 56.5 is well below its 5-year average of 75.4. Based on analyst estimates, its forward PE is 58, suggesting potential for further upside.

Post results, Dolat Capital assigned an ‘Accumulate’ rating with a target price of Rs 616. The brokerage expects Berger’s revenue to grow 11.4% over FY26–27, supported by a rebound in demand. This recovery will likely be driven by higher disposable incomes, easing inflation, and an above-average monsoon.

3. Coromandel International:

This fertilizers company surged 7.6% over the past week after its subsidiary, Coromandel Chemicals, entered into a joint venture with Sakarni Plaster to manufacture and market green building materials using phospho gypsum. The stock has been hitting new highs following its inclusion in MSCI’s Global Standard Index as part of the May 2025 review. Due to this inclusion, IIFL Alternate Research and JM Financial estimate passive inflows of over Rs 1,800 crore.

In FY25, Coromandel reported a 10% YoY increase in revenue and 26% net profit growth, surpassing Forecaster estimates. This performance was aided by 15% volume growth and a decline in raw material costs. The company gets around 5% of its revenue from exports, mainly in the crop protection segment.

Although margins per tonne of fertiliser produced dipped marginally this year to Rs 4,150, Coromandel has maintained its FY26 guidance of Rs 5,000. To achieve this, the company is focusing on backward integration to ease supply bottlenecks. As part of this strategy, it acquired a majority stake in Baobab Mining and Chemicals Corporation in Senegal, which supplies rock phosphate and is expected to meet one-third of the company’s requirements.

Coromandel is scaling up its Nano DAP product, which can reduce the per acre usage of traditional DAP (a fertiliser) by half when mixed with one litre of Nano DAP. The company aims to increase sales of Nano DAP bottles 15-fold over the next 2–3 years, banking on rising domestic acceptance and export opportunities.

Commenting on the outlook for FY26, MD & CEO Sankarasubramanian S said, “Our turnover for the next year can be on the high double-digit side, supported by a healthy profit margin, with the changing portfolio towards high-margin products.”

Motilal Oswal maintains its ‘Buy’ rating on Coromandel and projects revenue growth of 12% and net profit growth of 23% in FY26, supported by stable agrochemical prices, improved inventory levels, and favourable weather across key regions. The brokerage also expects margins to improve over the next 2–3 years, driven by backward integration, higher demand, product innovation, and a strategic shift toward high-margin offerings in the crop protection segment.

4. Canara Bank:

This bank rose 13% over the past week after announcing its Q4FY25 results. During the quarter, the company’s net profit grew 28.3% YoY to Rs 5,070 crore and revenue increased 7.6%, driven by lower provisions and higher other income. The bank appears in a screener of stocks with decreasing provisions.

Revenue rose 9.6% in FY25, and profit increased 14.8%, exceeding Forecaster estimates. Despite the rising profit, the net interest margin (NIM) contracted by 25 bps YoY to 2.8% in Q4, led by higher deposit costs and a decline in net interest income (NII).

Canara Bank’s loan-to-deposit ratio (LDR) improved by 47 bps YoY to 73.6% in Q4FY25 as deposit growth outpaced loan growth. Loans grew 11%, driven by housing and vehicle loan growth. The bank also improved its asset quality by reducing the non-performing assets (NPA) ratio by 57 bps to 0.7% in FY25, driven by lower slippages and higher loan recoveries.

The company’s retail loan book increased 42.8% YoY, driven by a rise in retail gold loans from metropolitan customers after the bank discontinued agriculture gold loans. In April 2024, the RBI mandated that banks reclassify agriculture gold loans as retail gold loans.

The bank’s decision to reduce its lending rate by 10 bps across home, personal, and auto loans, effective May 12, also drove the stock price higher.

During the Q4 earnings call, Satyanarayana Raju, MD & CEO, outlined the growth roadmap for FY26. He said, “We are targeting 10–11% loan growth and 9–10% deposit growth in FY26. We aim to reduce gross NPAs to 2.5% and grow the retail gold loan portfolio to Rs 70,000 crore by the end of FY26, up from the current Rs 48,000 crore.”

Post results, Emkay Global retains its ‘Buy’ rating on the bank. The broker expects stronger treasury gains and lower provisions to drive an ROA of 0.9–1.1% over FY27–28.

5. Tata Elxsi:

This IT consulting & software company rose over 8% in the past week due to the free-trade agreement between India and the UK. On May 14, Mercedes-Benz Research and Development India selected the company for Vehicle Software Engineering and Software-Defined Vehicles (SDV) development.

The company announced its Q4FY25 and full-year results on April 17. It reported a 12.5% YoY decline in net profit for Q4FY25, reaching Rs 172.4 crore, due to a rise in raw material and employee benefit expenses. Its revenue rose by 1.3% YoY and beat Forecaster's estimate by 3.9% due to strong growth in the domestic business. Tata Elxsi appears in a screener of stocks where mutual funds have increased shareholding in the past month.

In FY25, the company saw a decline in revenue from the US, while contributions from India and other global markets grew. Manoj Raghavan, MD and CEO, Tata Elxsi, regarding this said, “We have been investing and actually building relationships in the emerging markets over more than 4-6 quarters. This is not a knee jerk reaction; it is part of a well planned strategy. Our focus on exploring new markets has proven valuable in navigating the current challenges in both the US and Europe.”

ICICI Securities upgraded Tata Elxsi to a ‘Reduce’ rating with a target price of Rs 4,250. The brokerage notes that while new deals offer short-term relief, structural and macroeconomic challenges persist amid tariff-related uncertainties. It expects margins to recover as growth rebounds in Q1FY26, with the onsite-offshore mix and contract structures (fixed price, time, and material) likely to remain stable.

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations

The Baseline

15 May 2025

A car running on flat tires: Pakistan's economy is struggling

By Swapnil Karkare

India just had one those weeks that reminds me of the Lenin line: “There are decades where nothing happens, and weeks where decades happen.” A terrorist attack took two countries to the brink of full-blown war and back. The 2025 conflict between India and Pakistan was different, or “dangerously different” from previous ones, as The Economist put it.

An unanswered question remains — why would Pakistan, with its economy on a ventilator, enter a fight it simply couldn't afford? Forget regional experts. Even checking with ChatGPT first would have helped:

But this assumes that Pakistan's leaders are rational actors. It's no secret that its economy has been in a dire state for a while now, with high inflation and unemployment, falling GDP growth, soaring debt, and barely enough reserves to buy a few weeks of imports. The country has clung to the life-raft of international aid — just a day before the ceasefire, the IMF handed Pakistan a billion dollars.

We take a closer look at what's happening with our troubled neighbour.

Is the IMF hurting Pakistan?

The IMF’s bailout of Pakistan made headlines on May 9. It released $1.3 billion, the second tranche of its $7 billion package. The Russia-Ukraine war has spiked commodity prices and pushed Pakistan’s import bill through the roof. With enough money for just two weeks of imports, the Pakistan rupee tumbled, and inflation surged past 30%, sending the government into panic mode.

Many Indians were taken aback by IMF's willingness to give money to a country that has a long history of sheltering terrorists, from Osama Bin Laden to the Pahalgam attackers. But IMF has kept funding Pakistan to avert its bankruptcy and prevent regional chaos.

Pakistan has been in a never-ending loop of crisis and bailout, rinse and repeat. This is the 24th bailout of its economy since 1958. Economist William Easterly has noted that bailouts to bad governments usually delay reforms and worsen poverty. Imagine giving a gambler a bottomless wallet: when a country knows that help will keep coming, it has little incentive to fix its root problems.

The IMF must approve Pakistan’s FY26 (July ending) budget, scheduled in the first week of June, for it to go forward. Reports suggest that Pakistan is planning an 18% increase in defence spending. The fund’s bailout programme comes with conditions such as increasing tax revenue, and reducing wasteful expenditure. It will be interesting to see how the fund views this spending increase.

A grim comparison with India

On one side, we have a country that runs on bailouts. On the other side is India, which has not taken money from the IMF since 1991. Pakistan's economy is barely one-tenth the size of India's. India's foreign exchange reserves are nearly double Pakistan's GDP.

The comparison between the two neighbours paints a harsh picture:

A car running on flat tires? Pakistan has structural issues that need repair

High birth rates in Pakistan have led to a population boom, but it isn’t able to reap its benefits. For every 100 people working, 70 are dependents. This is a heavy load on family budgets, and has kept the national savings rate stubbornly low.

High GDP growth could have absorbed this pressure. But growth has been sluggish, and Pakistan's labour productivity ranks amongst the lowest globally. Years of ignoring education and healthcare have only made things worse.

Pakistan has to import essentials like fuel, machinery, edible oils, and fertilisers, which make up nearly 60% of its total imports. To keep them affordable, it needs to stop the rupee from falling. That means selling dollars from its reserves. But instead of earning those dollars through exports, it borrows them from institutions like the IMF. And when it’s time to repay, it resorts to more bailouts and relief programs.

Pakistan's stock market reflected the costs of escalation

Even if the IMF looked the other way, financial markets didn’t. The contrast was stark: relative calm in India, turmoil in Pakistan. That alone reflected the underlying difference in economic resilience.

Before Operation Sindoor, India had suspended the Indus Water Treaty, closed borders, and halted exports. Pakistan depends on the Indus basin for 80% of its farm water. Shashi Tharoor, a former Foreign Minister, said that Pakistan could run dry within four days in the event of a full-scale conflict. Moody’s also flagged that escalation could destabilise the economy and freeze foreign lending.

Between the Pahalgam attacks (April 22) and the ceasefire (May 9), Pakistan’s KSE-100 index dropped 13%, while India’s Nifty 50 stayed steady, up by 0.4%. On May 7, the day of Operation Sindoor, Indian markets opened lower – down by 0.6%, while KSE100 opened 6% lower. Post-ceasefire, both the markets rejoiced - Nifty 50 up by 3.8% from May 9, and KSE100 up by 13.3%, showing that the cost of conflict was simply too high for Pakistan.

Glimmers of hope

Indians shouldn't be rooting for Pakistan’s failure — a failed state tends to breed more terrorism, not less. The economy is very fragile right now, due to low productivity, poor human capital, and a dangerous dependence on imports and foreign lending.

With the help of the IMF, the Pakistani economy showed signs of revival in 2024, post-bailout. In March 2025, the fund noted, “Pakistan has made significant progress in restoring macroeconomic stability.” Prices and exchange rates were stabilising, interest rates softening.

Fitch upgraded Pakistan from CCC+ to B- while projecting a stable outlook. In December 2024, the government even launched a five-year economic blueprint, focused on enhancing exports, and digital transformation.

The vibes around Pakistan’s economy were getting better. Morgan Stanley listed it as an ‘unexpected winner’, as the KSE100 index gained 84% in 2024. Portfolio manager, Steven Quattry said, “You don’t have to stretch your imagination to make an investment case for Pakistan”. Investors like BlackRock, Eaton Vance Corporation, Legal & General, and Evli raised stakes in Pakistani companies.

Guns vs. Butter

So it is surprising that leaders acted the way they did amidst the country’s economic revival journey. Pakistan has risked losing not just manpower, infrastructure, and investors, but also long-term faith in its capability to revive itself.

Pakistan is a classic case of the ‘guns vs. butter’ dilemma. Every rupee spent on defence is a rupee not spent on education, healthcare, or food.

For example, in the late 1980s, Pakistan’s defence spending peaked at 7% of GDP. World Bank economist Parvez Hasan calculated that if just half of that had gone to development instead, Pakistan’s GDP growth from 1970 to 2010 could have been 2 percentage points higher, and the economy could’ve been twice its current size.

Frustration on the ground has been growing year after year. “They talk a lot, but we don’t see much change. It feels like they don’t understand what people are going through,” said a Pakistani student.Unless something dramatically changes, Pakistan’s economy will remain hostage to violence, underperformance and social instability - and a constant threat to India.

The Baseline

14 May 2025, 09:48AM

Chart of the week: From partnerships to diversification: Dixon Technologies powers ahead to new highs

By Omkar Chitnis

From the moment we wake up, devices shape our routines—the smartphone by our bedside, the TV in our living room, the washing machine humming in the background, and the laptop powering our workdays. In a world increasingly reliant on electronics, Dixon Technologies is seizing the chance to solidify its position as a leading player in the industry.

Over the past year, this third-party consumer electronics manufacturer saw its shares reach new highs. Strong financial results, strategic partnerships with global brands, and a rapid expansion of production capacity, supported by India’s Production-Linked Incentive (PLI) scheme, have fuelled this growth.

The company's share price tripled since January 2024, rising from Rs 6,500 in January 2024 to Rs 19,148 in May 2025 as it expanded its presence beyond electronics manufacturing services.

Saurabh Gupta, CFO of Dixon Technologies, said, “India’s push for electronics manufacturing presents a $10 billion opportunity in IT hardware. We expect Dixon to grow in this segment at a rate of 35–40% annually in the next few years.”

However, this optimism comes with a caveat. Dixon’s share price, with a P/E ratio of 122.6, is trading above the industry average of 85.1. Yet, it remains below the company’s historical averages. Dixon’s 5-year average P/E and forward P/E suggest the stock is still undervalued.

In this edition of the Chart of the Week, we analyze the company’s price action from its early joint ventures (JVs) with global brands in 2024 to its recent diversification.

Amid the reversal of US-China tariffs, companies like Apple and Alphabet view the tariff exemption as temporary relief. However, they plan to shift production to India to reduce dependency on a single country and mitigate future political risks.

Indian Electronics Manufacturing Service (EMS) companies like Dixon Technologies, Kaynes Technology, and PG Electroplast are capitalizing on this shift.

Dixon’s new deals power growth in CY24, but policy shift cools momentum

Dixon started CY24 with strong momentum, with its stock rising nearly 11.6% in February 2024, after commissioning a new manufacturing facility in Dehradun to produce washing machines for domestic and global players. The company also entered a contract manufacturing agreement with Compal Smart Device to manufacture mobile phones.

Three months later, Dixon's stock rose 27.5% in June 2024 after it signed a JV agreement with HKC Corporation to manufacture Liquid Crystal Modules (LCM) for smartphones, TVs, and auto displays.

However, Dixon’s momentum faced a temporary setback in July 2024 when the Indian government reduced import duties on mobile phones and chargers from 20% to 15%. While the move aimed to make devices more affordable for consumers, it raised concerns about increased competition from imported phones, potentially dampening the demand for Dixon’s local assembly services.

Despite the import duty change, Dixon's management expressed optimism. Atul Lall, MD of Dixon Technologies, stated, “We are optimistic on the government's positive response to the production-linked incentives scheme in electronics manufacturing. The mobile manufacturing ecosystem in India has matured, and the changes in import duties do not affect India’s competitiveness or strength.”

Following the brief downturn, Dixon’s stock regained momentum in September 2024, driven by its subsidiary Padget Electronics signing a Memorandum of Understanding (MoU) with Asus India to manufacture IT products and laptops.

After a series of agreements and MoUs, investors’ focus shifted to Dixon's Q2FY25 results. The stock gained after its net profit grew 263.2% YoY to Rs 389.9 crore on November 6, 2024, driven by higher mobile phone production and strong growth in the electronics manufacturing services (EMS) segment. Revenue rose 133.3% YoY to Rs 11,534 crore following its acquisition of an EMS provider, Ismartu, in mid-August.

Saurabh Gupta, CFO at Dixon Technologies, stated, “The 56% stake in Ismartu India, with its strong presence in smartphones and feature phones, is expected to add Rs 7,000–8,000 crore to Dixon's revenue by FY27.”Currently, Dixon derives 9% of its total revenue from the US market, primarily through manufacturing Motorola phones.

Dixon's CY24 rally stalls in early CY25

Building on a series of agreements and MoUs, Dixon Technologies' stock rose for six straight sessions in December 2024. The upward trend continued after it signed a JV with Vivo India to establish an original equipment manufacturing (OEM) business for Vivo's smartphones in the Indian market.

Dixon delivered an impressive 173.6% return in CY24, driven by strong growth and expanding partnerships. However, the momentum faltered at the start of CY25. On January 8, the Tata Group announced an $18 billion investment to enter the electronics and semiconductor space, extending far beyond its existing work with Apple, which had started in 2023. This news led to a 12.2% drop in Dixon’s share price as investors reassessed the competitive landscape.

Ekta Mittal, senior analyst at CCS Insight, notes, “Tata Electronics, looking to add clients like Xiaomi and Oppo, will intensify competition in the market, and a price war will follow. Smaller EMS players will find it difficult to match Tata’s scale, supplier deals, and end-to-end delivery capabilities.”

Dixon’s challenges worsened on January 21, 2025, when it missed Q3FY25 net profit estimates by 18.5%, due to higher depreciation and interest costs. The stock plunged 13% as brokerages responded with caution. Jefferies maintained an “underperform” rating, while Goldman Sachs initiated a “sell,” pointing to steep valuations and signs of slowing growth.

Despite a 7.4% decline in its stock price over the first four months of CY25, Dixon’s shares began to recover in late March 2025 after the company partnered with Signify Innovations (Philips Lighting) to expand its product portfolio in lighting products and accessories.

In April, Dixon stock gained momentum on reports suggesting that Alphabet may shift part of its Pixel smartphone production from Vietnam to India due to higher US tariffs on Vietnamese goods than Indian goods. Dixon currently manufactures nearly 70% of Pixel phones in India, and the stock also rose following the government announcement of the Rs 22,919 crore PLI scheme for non-semiconductor electronic components.

Dixon derives 89% of its revenue from mobile phone manufacturing. The company is expanding its product portfolio to include home appliances and consumer electronics to reduce its reliance on this segment.

Dixon plans to invest Rs 1,000 crore in high-margin components such as camera modules, battery packs, and precision parts. In H2FY25, the company secured orders from four global IT brands—HP, Lenovo, Acer, and Asus—for laptops and related IT hardware components. To cater to this demand, Dixon is setting up a dedicated manufacturing unit for IT hardware and telecom products, with production expected to begin in FY26.

Based on this development, Dixon is targeting Rs 3,500 crore in revenue from its IT hardware business by FY26. Atul Lall, MD of Dixon Technology, said, “For the sector and Dixon, the growth path is going to be extremely aggressive in investment and diversification in the future.”

The Baseline

13 May 2025, 05:09PM

Five stocks to buy from analysts this week - May 13, 2025

By Divyansh Pokharna

1. Godrej Consumer Products:

Anand Rathi reiterates its ‘Buy’ rating on this personal products maker with a target price of Rs 1,430, indicating an upside of 12.9%. In Q4FY25, the company’s revenue rose 6.3% YoY to Rs 3,598 crore, driven by 6% volume growth. However, EBITDA margin declined 120 bps to 21.1% due to inflation in palm oil costs.

Analyst Ajay Thakur expects the overall EBITDA margin to rise by 130 bps to 22.2% over FY25–27. He attributes this to price hikes in soaps, easing palm oil prices, and improving profitability in the international business. The management also projects a 24–27% EBITDA margin in the domestic business over the medium term and expects double-digit EBITDA growth in FY26. In Q4, revenue from Indonesia grew by 5%, while the GUAM region (Africa, the US, and the Middle East) posted 23% organic growth.

Thakur is optimistic as the company’s focus on building new categories, and product innovation have driven high-potential launches like Fab liquid detergent and its entry into pet care. It introduced a pet care brand, Godrej Ninja, in Tamil Nadu, and plans a national rollout in FY26.

The company is also focusing on expanding rural distribution. Through Project VISTAAR, its distribution network grew from 35,000 to 80,000 villages, reaching 6,20,000 rural outlets in FY25. This project had a 100bps impact on EBITDA margin. Analyst projects a 9.7% growth in revenue for FY26-27.

2. Hindustan Petroleum Corp (HPCL):

Emkay retains its ‘Buy’ rating on this refineries & petro-products company with a target price of Rs 500, an upside of 28.6%. HPCL’s refining volume rose 15% YoY to 6.7 million metric tonnes (mmt) in Q4FY25, with strong utilisation at 118%. Domestic sales grew 2.6% even as the overall industry declined 1.8%. For FY25, HPCL gained 0.25% market share, outperforming its other PSU peers. It features in a screener of stocks outperforming their industry price change in the quarter.

HPCL’s capex for FY25 stood at Rs 14,510 crore. Analysts Sabri Hazarika and Arya Patel note that its current major investment cycle is nearing completion. The focus now is on generating returns from this capex before starting the next phase under its 5-year plan of Rs 77,000 crore. The company is also working to maintain a healthy debt-to-equity ratio and ensure that repayments stay manageable. Its capex for FY26-27 is targeted at Rs 13,000–14,000 crore annually, including Rs 4,000 crore in equity, Rs 5,000 crore for refining, and the rest on marketing and other areas.

Hazarika and Patel project HPCL’s revenue and net profit to grow at a CAGR of 2.7% and 6.9%, respectively, over FY26–28.

3. Alembic Pharmaceuticals:

BOB Capital Markets maintains a ‘Buy’ rating on this pharma company with a target price of Rs 1,032, a potential upside of 15.2%. Alembic Pharma’s US sales grew 20% YoY in Q4FY25, driven by higher volumes and four new product launches. The company plans to launch 15 new products in FY26, with analysts expecting 3–4 of them to generate significant revenue.

The company’s research & development (R&D) spending is set to rise to Rs 6,000 crore in FY26 from Rs 5,200 crore in FY25. About 40% of this will go towards peptides, complex injectables, and ophthalmic products (eye-related), while the rest will focus on active pharmaceutical ingredients (APIs) and oral solids. US sales are expected to grow at 13% CAGR over FY26–27.

In FY25, Alembic’s net profit fell 8% YoY due to a 40% jump in finance costs from higher short-term debt. Inventory days increased to 148 from 110 last year, as the company built up stock for multiple delayed product launches and its new Jarod plant in Gujarat. Analyst Foram Parekh expects this to normalise in FY26.

Parekh expects FY26 to outperform FY25 across all key areas, with double-digit growth in domestic sales, new product launches in the US, and stronger growth in the high-margin Rest of the World (RoW) markets.

4. Ami Organics:

IDBI Capital upgrades its rating to 'Buy' on this pharma company with a target price of Rs 1,368, a potential upside of 16.5%. The company's revenue grew 37.2% in Q4FY25, and profit increased by 148.4%, driven by growth in its contract development and manufacturing organization (CDMO) business.

The management aims to achieve 25% revenue growth in FY26, up from the current 23%, driven by new product launches such as lithium-ion battery additives and a new specialty chemical product. The company plans to invest Rs 2,000 crore in FY26 to develop electrolyte additives, a solar power plant, and a pilot plant in Gujarat.

Analyst Jason highlights that the company aims to generate Rs 1,000 crore in revenue from its CDMO business by FY28 to meet growing demand. They expect the company to benefit from new CDMO contracts in H2FY26, driven by the shift from China to India. Analysts project a revenue CAGR of 25-30% for the company over the next two years.

5. APL Apollo Tubes:

Axis Direct maintains a ‘Buy’ rating on the steel tube manufacturer with a target price of Rs 1,920, implying a 11.3% upside. In Q4FY25, the company’s revenue grew 17% YoY to Rs 5,324 crore, driven by higher steel tube prices. Net profit rose 72% to Rs 293 crore, helped by lower energy costs and improved plant efficiency.

Analysts Aditya Welekar and Darsh Solanki expect the company to achieve EBITDA/tonne of Rs 5,000 in FY26, up from Rs 4,864, driven by higher volumes in the value-added products (VAP) portfolio and a reduction in employee cost per tonne from Rs 1,000 to Rs 600 by FY27.

Management aims to increase capacity from 4.5 million tonnes per annum (MTPA) to 6.8 MTPA by FY28 to tap into new markets in East India and raise exports to 10% from the current 6%, with an investment of Rs 1,500 crore. Analysts expect steel tube volumes to grow by 20% annually over the next 2–3 years and return on capital employed (ROCE) to improve to 35% in FY26, up from 25% in FY25.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)