Today, we recommend two stocks, one from the financial services (capital markets) sector and another from the IT sector, recommended by the Trade Brains Portal, to buy for an upside potential of more than 27%. India’s capital markets are being propelled by growing retail participation, rapid adoption of digital and AI-powered platforms, supportive government reforms, robust growth in MF AUM, and the nation’s strong economic expansion driven by a youthful population.
The IT sector stands as a key pillar of India’s economic growth, fueled by increasing adoption of artificial intelligence, cloud modernisation initiatives, and the rapid expansion of Global Capability Centres (GCCs). We also analysed the market’s performance on Thursday to understand what may lie ahead for the stock indices in the coming days.
1. BSE Ltd
- CMP: Rs 2,512
- Target: Rs 3,200
- Upside: 27.39%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Established in 1875, the Bombay Stock Exchange (BSE) is Asia’s oldest and one of India’s most prestigious financial institutions. It provides a robust platform for trading a wide spectrum of financial instruments, including equities, derivatives, mutual funds, and debt securities. Known for its remarkable execution speed of just 6 microseconds, the BSE holds the distinction of being the fastest stock exchange in the world. As of Q1 FY26, it had 5,452 listed companies with a combined market capitalisation of USD 5.25 trillion and over 219 million registered investors.
The exchange also operates StAR MF Plus, an advanced platform tailored for financial distributors and advisors, offering access to more than 14,320 mutual fund schemes. By Q1 FY26, BSE StAR MF had expanded its footprint to 721 cities, supported by a network of 80,977 distributors and 244.12 million registered investors.
In Q1 FY26, the company achieved a total income of Rs 1,044.45 crore, marking a 56% year-on-year growth and its best quarterly performance in its 150-year history. This revenue surge was primarily driven by robust growth in transaction-linked income, other operating income, and investment income. Operating EBITDA rose to Rs 626 crore from Rs 282 crore in the previous year, with margins improving significantly to 65% from 47%.
Profit after tax surged 104% year-on-year to Rs 538.17 crore. Transaction charges, which include income from equity cash, equity derivatives, mutual funds, and clearing house operations, jumped 84% YoY to Rs 737 crore from Rs 400 crore. Other operating income increased 57% YoY to Rs 70 crore from Rs 45 crore, while investment income grew 28% to Rs 79 crore from Rs 61 crore.
During the quarter, BSE also witnessed 21 new equity listings across its main and SME platforms, collectively raising Rs 14,237 crore. As of Q1 FY26, BSE had approximately 528 members, 79 lakh registered unique client codes (UCCs), and 330 foreign portfolio investors (FPIs). Transactions on the BSE StAR MF platform grew by 30% year-on-year, reaching 18.3 crore in Q1 FY26 compared to 14.1 crore a year earlier.
The exchange surpassed the milestone of 600 SME listings, with July 2025 emerging as a record month featuring 18 new listings that collectively raised Rs 880 crore. Throughout Q1 FY26, BSE platforms remained the preferred avenue for Indian companies seeking to raise capital, facilitating a total mobilisation of Rs 7.59 lakh crore across a wide range of financial instruments, including equities, debt securities, bonds, commercial papers, and mutual funds.
Risk Factor
The company’s business depends significantly on the volume and value of trades conducted on its trading platform, the number of orders handled through its mutual fund distribution platform, the count of active market investors, the quantity of new listings, and the capital raised from these listings. BSE operates in a highly competitive industry where it competes globally with numerous market participants for listings, clearing, trading, settlement volumes, and the distribution of financial products. Additionally, the company faces risks related to rapid technological advancements and shifting economic conditions, making its environment both dynamic and challenging.
2. Persistent Systems
- CMP: Rs 5,828
- Target: Rs 6,700
- Upside: 14.96%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Founded in 1990, Persistent Systems Ltd. is a prominent global provider of software and technology services. The company caters to a broad spectrum of industries, including Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), Software and Hi-Tech, as well as Telecom and Media. Its extensive service offerings encompass digital strategy and design, software product engineering, customer experience transformation, cloud and infrastructure management, intelligent automation, enterprise security, systems integration, application development and maintenance, and data analytics. As of Q2 FY26, Persistent employs 26,224 professionals across 18 countries, with a trailing twelve-month attrition rate of 13.8%.
In Q2 FY26, Persistent Systems reported a year-over-year revenue increase of 23.6%, rising from Rs 2,897.15 crore in Q2 FY25 to Rs 3,580.72 crore, marking the 22nd consecutive quarter of revenue growth. Sequentially, revenue grew by 4.2%, with a YoY growth of 17.6%, and operating margins improved to 16.3%. Profit after tax (PAT) surged by 45.1% YoY to Rs 471.47 crore, while earnings before interest and taxes (EBIT) increased by 43.7% YoY to Rs 583.74 crore.
The company’s total contract value (TCV) for the trailing twelve months (TTM) stood at USD 609.2 million, with an annual contract value (ACV) of USD 447.9 million. Additionally, the company’s return on capital employed (ROCE) improved notably to 45.5% from 38.1% in the previous year, and return on equity (ROE) increased to 26.2% from 24.7%. The days’ sales outstanding (DSO) reduced from 92 days in Q2 FY25 to 75 days in Q2 FY26, indicating improved receivables management.
Persistent Systems has outlined a target to improve its operating margins by 100 basis points in FY26 and another 100 basis points in FY27, aiming for an overall margin increase of 200-300 basis points over 2-3 years. In Q2 FY26, the company secured several significant wins, including a comprehensive 360° collaboration and go-to-market partnership aimed at building and scaling AI infrastructure platforms using SASVA for a rapidly expanding global infrastructure provider.
Additionally, it is actively involved in enhancing customer experience and driving growth by transforming tax and accounting software for a global financial technology platform. The company is also deepening its engagement with the healthcare sector by modernising the digital presence of one of the world’s largest healthcare organisations.
Risk Factor
Persistent Systems operates on a moderate scale compared to larger domestic IT firms, which limits its pricing power and margins. Over 80% of its revenue is generated from the US market, exposing the company to region-specific challenges, including tariffs imposed by the US government. This heavy reliance on the US also subjects the company to foreign exchange risks due to its international revenue streams. Such dependencies underscore the sensitivity of Persistent’s business to geopolitical and economic shifts in its primary market, which may impact its financial stability and growth prospects.
Market Recap – 16th October 2025
On Thursday, the Nifty 50 opened on a positive note at 25,394.9, up 71.35 points from its previous close of 25,323.55. The index hit an intraday high of 25,625.4, crossing above the 25,600 level, before closing at 25,585.3, up 261.75 points, or 1.03%. The index remained above all key moving averages (20/50/100/200-day EMAs) on the daily chart, indicating some technical support. The BSE Sensex mirrored the Nifty’s trend, opening at 82,794.79, up 189.36 points from the previous close of 82,605.43. It followed a similar pattern, closing at 83,467.66, a gain of 862.23 points, or 1.04%.
Both indices showed moderate momentum, with RSI values for Nifty 50 at 66.82 and Sensex at 66.56, nearing the overbought threshold of 70. All the major indices remained positive on Thursday. The Bank Nifty Index ended in positive territory, increasing 622.65 points, or 1.1%, to 57,422.55. The rise was mainly due to the gains in banking shares, steady foreign inflows (FIIs invested Rs 68.64 crore and DIIs purchased shares worth Rs 4,650.08 crore on Wednesday), a boost in the investor sentiment from expectations around India-US trade talks, and positive global cues amid expectations of a US Federal Reserve rate cut.
Most of the indices ended in green on Thursday. The Nifty FMCG Index was the biggest gainer, gaining 2%, or 1,105.2 points, to 55,853.9. Stocks like Nestle India Ltd, Varun Beverages Ltd, Tata Consumer Products Ltd, and Britannia Industries saw gains of up to 2.9%. The Nifty Realty Index also posted gains, advancing 1.9%, or 17.4 points, to 932.8. Key stocks like Oberoi Realty, Godrej Properties, Sobha Ltd, and Signatureglobal Ltd were up by 5.4%.
The Nifty Consumer Durable Index followed the positive trend, closing at 38,752.1, up 1.5%, or 584.05 points. Stocks like Whirlpool of India Ltd gained 4.6%, while other consumer durable stocks, such as Titan Company Ltd and Blue Star Ltd, saw gains of up to 2.6%.
Nifty PSU index was the only loser for today, declining 0.4% or -34.35 points, closing at 7,688.75. PSU stocks such as Bank of Maharashtra, Indian Overseas Bank, and Bank of Baroda dropped up to -2.8%.
Asian markets followed a mixed sentiment today. Japan’s Nikkei 225 gained 1.27%, increasing 605.07 points, to close at 48,277.74. Hong Kong’s Hang Seng fell by -0.09%, closing at 25,888.51, while China’s Shanghai Composite increased 0.1%, to 3,916.22. Similarly, South Korea’s KOSPI Index rose 2.49%, ending at 3,748.37, and the Shenzhen Component Index was down -0.25%, closing at 13,086.40. At 4:43 p.m. IST, U.S. Dow Jones Futures were up 0.41%, at 46,681, a drop of 189 points.
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