1. Federal Bank:

Motilal Oswal maintains its ‘Buy’ rating on this bank with a target price of Rs 250, a 14.3% upside. Federal Bank is focusing on strengthening its deposit base by boosting growth in current account (CA) deposits. Overall deposit growth was moderate at 12% in FY25, led by a 15.6% increase in current and savings account (CASA) deposits. However, the CASA ratio remained modest at around 30.2%.

Analysts Nitin Aggarwal, Dixit Sankharva, and Disha Singhal expect deposit growth to pick up pace, projecting a CAGR of 15.1% over FY26–28. A push to grow CA deposits and a stronger non-resident (NR) customer base will be key here. They estimate that the CASA ratio will improve to 34–35% by FY28.

The bank's asset quality remains strong, with gross non-performing assets (GNPA) at 1.8% and net NPA at 0.4% in FY25, along with a healthy provision coverage ratio (PCR) of over 75%. While Federal Bank remains cautious on unsecured lending, it may gradually increase exposure as the environment improves. Analysts estimate the bank will achieve around 17% CAGR in loans over FY26–28.

The health of a bank has historically depended on management keeping a steady head during boom times, and limiting over-lending and unsecured lending. In this vein, Aggarwal, Sankharva, and Singhal note that the new CEO KVS Manian “is focusing on sustainable, returns-driven growth”. They expect return on assets and return on equity to improve by FY28, supported by better margins and a stronger asset mix. However, they add, “near-term net interest margins (NIMs) may face pressure from high funding costs.”

2. Metro Brands:

Emkay reiterates its ‘Buy’ rating on this footwear seller with a target price of Rs 1,400, a 23.2% upside. Metro is strategically filling product gaps in its portfolio and continues to be a preferred platform for international brands entering India. The company has been appointed as the exclusive retail and digital partner for Clarks in India and neighbouring countries—Bangladesh, Bhutan, Nepal, Maldives, and Sri Lanka.

Clarks is known for its comfort-focused premium footwear, with an average selling price of Rs 3,000–7,000. Metro will manage Clarks' e-commerce channels in India, including its website.

Kaushal Paresh, CFO, said during the Q4 results, “E-commerce is growing faster than our overall business. Going forward, the focus will shift to profitability while also exploring opportunities in quick commerce. We will continue to spend 3 to 4% of revenue on advertising to promote new launches and boost brand awareness.”

Metro has declined by 6.6% over the past six months. Analysts Devanshu Bansal and Mohit Dodeja highlight that the stock has delivered a 15% revenue CAGR over the last decade and has the potential to perform even better in the coming years.

3. Radico Khaitan:

Sharekhan initiates a ‘Buy’ rating on this beverage company with a target price of Rs 3,090, a 20.2% upside. In FY25, the company’s operating profit margin rose by 160 basis points to 13.9%, driven by higher sales of premium products and cost optimisation in its production and packaging verticals.

Since April 2022, the company has incurred a capex of Rs 950 crore (funded partly by debt of Rs 631 crore), for the expansion of its Rampur and Sitapur facilities. Management plans to reduce debt by 35–40% in FY26 and aims to become debt-free by FY27. Analysts believe this will improve earnings growth and expect the return on equity to rise to 18% by FY27 from the current 13%.

Over FY21–25, the company’s revenue and volume from the prestige & above (P&A) segment grew at a CAGR of 25% and 19%, respectively, thanks to strong performance in its core brands. Analysts expect a double-digit growth momentum in the P&A segment, with a CAGR volume growth of 52% by FY27 from new launches in premium and luxury brands and expansion in both domestic and international markets.

Management aims to improve profit margins by approximately 100 basis points each year, reaching a target of around 17–19% in three years. Analysts believe the UK-India free trade agreement (FTA) will reduce import duties and boost the company’s profitability on UK exports. They estimate revenue and net profit to grow by 18% and 41%, respectively, over FY26–27.

4. Escorts Kubota:

Geojit BNP Paribas initiates a ‘Buy’ rating on this commercial vehicle manufacturer with a target price of Rs 3,801, a 14.5% upside. In FY25, revenue rose 15.7% to Rs 10,705.1 crore, while net profit grew 20.5% to Rs 1,264.9 crore, driven by an increase in tractor sales, lower commodity costs and price realisation.

Analyst Saji John writes that Escorts Kubota is the third-largest agricultural tractor manufacturer in India with an 11.1% market share. He expects its volume growth to improve in FY26 due to strong agricultural output and the government’s infrastructure projects, which will support sales of construction equipment.

The company has planned a capital expenditure of Rs 350–400 crore for FY26 to expand its manufacturing facility and develop new products. Management plans to launch the new Powertrac paddy series of tractors in the 52–60 horsepower (HP) range for southern markets in Q3 FY26. Additionally, it aims to introduce mid-segment tractors in the 40–45 HP range in Q2 FY26 to fill product gaps.

The analyst projects mid-single-digit growth for the domestic tractor segment in FY26, driven by new product launches in both the construction equipment and tractor segments. They expect exports to grow by 20–25% in FY26 and estimate revenue and net profit will rise by 10.5% and 16%, respectively, over FY26–27.

5. GAIL (India):

ICICI Securities reiterates its ‘Buy’ rating on this utility company, with a target price of Rs 245, a 29.2% upside. In FY25, revenue rose 6.6%, while net profit grew 25.7% to Rs 12,499.8 crore, driven by higher gas and polymer production volumes.

The management aims to achieve a profit of Rs 4,000–4,500 crore from the gas business in FY26, down from Rs 4,833 crore in FY25. This is due to the shutdown of its Kanpur fertiliser plant and the delay in commissioning the Durgapur-Haldia and Dhamra-Haldia pipelines. However, the management plans to sell 105 million standard cubic meters per day (mmscmd) of gas in FY26, up from 101 mmscmd in FY25, through new domestic and international contracts.

The company plans to invest Rs 10,700 crore in FY26 to expand its petrochemical facility at Usar and the Dabhol Liquefied Natural Gas (LNG) terminal. Analysts Probal Sen and Hardik Solanki expect the company to boost its revenue by raising gas tariffs by 15–20% in the first half of FY26.

Analysts see strong business prospects for GAIL by FY27 and FY28, driven by a recovery in its petrochemicals segment and the commissioning of new LNG plants, which will boost demand for gas transportation and trading. They forecast net profit growth of 10% over FY26–28.

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

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