A defensive sector - healthcare - dominates this week’s analyst picks, with three out of five stocks from this space. 

1. Healthcare Global Enterprises:

ICICI Direct maintains a ‘Buy’ rating on this hospital operator with a target price of Rs 600, indicating an upside of 28.3%. Healthcare Global Enterprises (HCG) specializes in establishing and managing hospitals and medical diagnostic services, focusing on advanced cancer treatments. In Q2FY25, the company reported a revenue growth of 14% YoY to Rs 553 crore, supported by a 15% rise in its hospitals business. The average revenue per occupied bed (ARPOB) stood at Rs 45,188, marking a 7% increase.

HCG’s EBITDA margins stood at 17.3%. The company’s management anticipates margins to gradually improve to around 20% by Q4FY25, supported by higher occupancy rates and an improved payee mix. Analysts Siddhant Khandekar, Shubh Mehta, and Vedant Nilekar highlight that rising margins at new centres and the integration of Vizag Hospital, which holds over 30% market share in Vizag, will drive growth.

The company is developing two advanced hospitals in North Bangalore and Whitefield, with a combined capacity of 125 beds, expected to be fully operational by early FY26. It plans to expand its total bed capacity to 900 within three years. The analysts project a revenue CAGR of 6.8% and a net profit CAGR of 15.1% for FY25-26.

2. DOMS Industries:

Axis Direct maintains a ‘Buy’ rating on this stationary products company with a target price of Rs 3,120. This indicates a potential upside of 14.4%. Analysts Preeyam Tolia and Suhanee Shome are positive about the company's growth, highlighting its efforts to diversify its product range. DOMS is expanding into the larger pens category, moving beyond its focus on small pencils, and entering fast-growing sectors like bags, toys, and diapers.

DOMS has recently acquired a 51.8% stake in Unilcan Healthcare for Rs 55 crore, which makes baby diapers and wet wipes under the ‘Wowper’ brand. The diaper market, valued at $2 billion, is expected to grow to $3 billion in the coming years. The company's distribution network is expected to expand Unilcan’s reach across India, increasing market penetration beyond its current 12-state presence.

In Q2FY25, the company’s revenue grew by 19.7% YoY to 458 crore, driven by higher average selling prices, expanded distribution, and the integration of the Unilcan portfolio, which added Rs 14.3 crore (3% of sales) over 15 days. Its distribution reached 135,000 outlets, up from 125,000 in Q1FY25, a 10,000-outlet increase. 

For FY25, the management expects revenue growth of over 20% and EBITDA margins of 17-17.5%, down from 18.8% in Q2, due to higher costs of polymers, waxes, and the integration of the lower-margin Unilcan acquisition.

3. Krishna Institute of Medical Sciences:

Edelweiss reiterates its ‘Buy’ rating on this healthcare facilities company with a target price of Rs 630, indicating a potential upside of 11.1%. The company reported a 19% YoY revenue growth to Rs 777.3 crore in Q2FY25, exceeding the Trendlyne Forecaster estimates by 4.8%. Net profit rose by 19% to Rs 121 crore, while EBITDA margins improved by 89 bps to 28.1%. Analysts Ranvir Singh and Pawan Bhatia said “The margins are expected to remain stable for H2FY25, with the ramp-up of newly launched units likely to drive further improvements."

Krishna Institute of Medical Sciences (KIMS) has expanded its operations with the launch of its Nashik unit (325 beds) and the newly acquired Queen’s NRI Hospital in Vizag (300 beds) during Q2, increasing its total bed capacity to 4,610. Additionally, the company signed operations and management (O&M) agreements with two hospitals, Kannur (200 beds) and Guntur (200 beds), set to begin operations in Q3FY25. With these O&M hospitals, KIMS' total bed capacity is projected to reach ~5,000 in FY25, up from 3,975 in FY24.

Singh and Bhatia are optimistic about the upcoming projects in Thane, Bangalore, Srikakulam, and Ongole, expected to commence operations in H2. They note that a 22% YoY growth in average revenue per occupied bed (ARPOB) during H1 indicates the potential for better-than-expected ARPOB performance for the full year.

4. Archean Chemical Industries:

KR Choksey maintains its ‘Buy’ rating on this chemical firm with a target price of Rs 890. This indicates an upside of 31.3%. Archean Chemical Industries’ (ACI) revenue fell 17% YoY in Q2FY25 due to a 19% drop in the industrial salt segment, which accounted for 62% of total sales. The decline was mainly caused by inventory losses worth Rs 40 crore due to a cyclone. Poor road conditions also disrupted logistics, reducing export volumes to 7.5 lakh tonnes, as ACI depends on over 300 trucks for salt transportation.

The company’s bromine business, however, grew 11% YoY in Q2FY25, with volumes rising to 4,800 MT from 3,400 MT in Q2FY24, supported by steady domestic demand. Analyst Dipak Saha highlights that ACI’s growing bromine derivatives business could help shift its focus from basic commodities to more value-added specialty products, offsetting weaknesses in its core operations.

ACI targets over 10 lakh tonnes of industrial salt per quarter in H2FY25, recovering from disruptions in H1. The company’s management also aims to produce 20,000 tonnes of bromine in FY25, driven by strong domestic demand and better market conditions, with plans to increase production to 25,000 tonnes in FY26.

5. Jupiter Life Line Hospitals:

Anand Rathi initiates its ‘Buy’ rating on this hospital chain with a target price of Rs 1,740, indicating an upside of 16.8%. The company reported a 9% YoY rise in average revenue per occupied bed (ARPOB) during H1FY25, led by ARPOB at Rs 66,700, Rs 55,000, and Rs 44,700 for its Thane, Pune, and Indore units, respectively. Analysts Himanshu Binani and Rohan Shukla mention “The recent insurance rate revisions at the Pune hospital and new insurance tie-ups at the Indore facility should further enhance ARPOB and occupancy rates.”

In Q2FY25, Jupiter Lifeline Hospitals reported a 23% YoY increase in revenue to Rs 322.6 crore and a 53% rise in net profit. The results were in-line with the brokerage’s expectations, with revenue surpassing Trendlyne Forecaster estimates by 5.2%, though net profit missed by 1.5%. The growth was driven by higher occupancy across hospitals. Binani and Shukla project 14% revenue and 21% EBITDA CAGR over FY25-27, supported by increasing occupancy at Pune and Indore hospitals.

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

(You can find all analyst picks here)