Canara Bank to Hero MotoCorp: Eight stocks to buy for up to 15% gains on robust monsoon, strong Indian economy
The next key trigger for the Indian stock market would be the monsoon season. According to the India Meteorological Department (IMD) India is likely to experience above average monsoon rains in 2025.
This projection signals a potentially fruitful agriculture season which is crucial for rural demand and benefit sectors like agrochemicals, fertilizers, tractors, two-wheelers and FMCG. Green shoots of recovery in rural markets, sustained momentum in manufacturing and services sectors augur well for consumption demand in the near term, analysts said.
'Steadily improving macros like resilient GDP growth, down trending inflation and interest rates and declining fiscal and current account deficits lay the foundation for a strong economy and earnings recovery in the medium term. Investors should remain invested and buy quality stocks on dips,' said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
Meanwhile, brokerage firm Way2Wealth has released the list of Monsoon stock picks. The stocks are believed to gain from improving rural liquidity and demand on the back of better monsoon. It believes these quality stocks have strong fundamentals and a positive correlation to monsoon trends and other key macroeconomic indicators.
The brokerage firm suggests these stocks to buy for a time horizon of 6-8 months. These stocks to buy include Bayer CropScience, Canara Bank, Coromandel International, Emami, Godrej Agrovet, Hero MotoCorp, Supreme Industries and Swaraj Engines.
Here are the Monsoon stock picks by Way2Wealth:
Bayer CropScience is expected to maintain a revenue, EBITDA and PAT CAGR of 10%, 30% and 28% over FY25–27E, respectively. At the CMP, Bayer CropScience share price is trading at a P/E of 28x and an EV/EBITDA of 21x based on FY27E estimates, Way2Wealth said.
The brokerage firm assigns a 'Buy' rating to Way2Wealth shares with a target price of ₹ 6,450 apiece.
Canara Bank's balance sheet stands strong with CRAR at 16.3%. It will be further strengthened with IPO proceeds of Canara Robeco which will provide growth capital to the bank, said the brokerage firm. It has a 'Buy' call on Canara Bank shares with a target price of ₹ 125.
Coromandel International is progressing with key projects, targeting commissioning by FY26–27. It is focusing on capex realignment, backward integration, and new product growth such as Nano DAP, while maintaining a revenue, EBITDA and PAT CAGR of 9%, 22% and 17% over FY25-27E, respectively.
At the CMP, Coromandel International shares are trading at a P/E of 25x and an EV/EBITDA of 17x based on FY27E estimates. Way2Wealth assigns a 'Buy' rating to Coromandel International shares, with a target price of ₹ 2,700 apiece.
Emami remains committed to grow through various initiatives like newer launches, expanded reach and increased digital presence through e-commerce channels despite high inflationary environment and urban slowdown. Further, it has a strong presence in the niche personal care categories, with low penetration. At CMP, Emami stock is trading at 27x its FY26 P/E .
The brokerage firm recommends a 'Buy' call on Emami shares based on its strong fundamentals. It has Emami share price target of ₹ 660 apiece.
Godrej Agrovet's diversified products across less regulated agricultural inputs and outputs, leading market positions across all of them and high-quality management and parentage, makes it a proxy to ride the theme of Indian agriculture, said the brokerage firm. The company has a strong Balance Sheet and generates healthy cash flows and return ratios.
At CMP, Godrej Agrovet stock price is trading at 28x its FY26 P/E. The brokerage has a 'Buy' call on the stock with a target of ₹ 840 level.
Way2Wealth remains optimistic about growth of the company in the near term. The company currently trades at a P/E 15.9x on FY27E below its 5-year average P/E of 21.6x. It has a 'Buy' rating and Hero MotoCorp share price target of ₹ 5,000
A recovery in plumbing demand is anticipated as channel inventories stabilize and government spending picks up, the brokerage firm said as it remains optimistic about growth of the company in near term. Supreme Industries shares currently trade at a P/E 39.7x on FY27E below its 5-year Average PE of 42.2x. The brokerage recommends buying Supreme Industries shares for a target price of ₹ 4,750 apiece.
The company's engine business is likely to move in tandem with industry. Further, return ratios (RoCE: ~53+%, RoE: ~40%) along with positive FCF generation will also be among the key triggers, said the broking house. At CMP, Swaraj Engines share price is trading at 26x its FY26 P/E. It recommends buying Swaraj Engines shares for a target price of ₹ 4,600 apiece.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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