Today, we recommend two stocks, one from the fertilisers sector and another from the Water Management sector, as recommended by the Trade Brains Portal, to buy for an upside potential of more than 31%. The fertiliser sector is vital to the Indian economy by driving agricultural productivity and ensuring food security for its large population.
India faces significant water stress, with projected demand expected to outstrip supply by 2030. India’s water management sector is being propelled by rising demand fueled by a rapidly growing population, accelerating industrial activity, and fast-paced urbanization, all further intensified by climate change and increasing water scarcity. We also analysed the market’s performance on Wednesday to understand what may lie ahead for the stock indices in the coming days.
1. Gujarat State Fertilizers & Chemicals Ltd
- Current price: Rs 202.4
- Target price: Rs 265
- Upside: 31%
- 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 1962, Gujarat State Fertilisers & Chemicals Ltd. (GSFC) was India’s first joint sector industrial complex and has since evolved into a leading integrated producer of fertilisers and industrial chemicals. The company has a broad product range backed by strong in-house R&D and globally accredited certifications, including ISO and Responsible Care.
GSFC operates primarily through two key divisions: fertilisers and industrial products. Its industrial portfolio includes caprolactam, nylon-6, melamine, and methanol, while the fertiliser segment comprises products like urea, ammonium sulfate, and diammonium phosphate (DAP).
In FY25, GSFC recorded a revenue of Rs 9,533.9 crore, a 4.14% rise from Rs 9,154.6 crore in FY24, driven mainly by its fertiliser business, which saw efficiency gains and better cost control. For Q1 FY26, revenue from operations stood at Rs 2,184 crore, a marginal 1% increase year-over-year from Rs 2,163 crore.
Profit before tax (PBT) jumped 63% YoY to Rs 184 crore, while profit after tax (PAT) climbed 59% YoY to Rs 139 crore. Fertiliser revenue for the quarter edged up 1.15% YoY to Rs 1,631.52 crore, indicating a steady start to the year with enhanced profitability.
For FY25, fertiliser revenue increased by 7.3% YoY to Rs 7,331.8 crore from Rs 6,834.62 crore in FY24, bolstered by a 15.3% rise in total sales volume. The company projects an EBITDA of Rs 3,000 per metric ton for fertilisers in FY26. PBT rose 7.4% YoY to Rs 756.27 crore, and PAT was up 5% YoY at Rs 591 crore. Operationally, GSFC’s revamped Urea-II plant is now fully functional, and a 15 MW solar power project at Charanka Patan has been commissioned.
Additionally, the Phosphoric Acid (PA) and Sulfuric Acid (SA) capacity expansion at Sikka is progressing, with the commissioning of the SA V unit expected in the first half of FY26. Capital expenditure plans include Rs 600 crore for enhancing urea production capacity and a combined Rs 753 crore for the SA V project over the next six months.
Looking forward, the management aims to maintain a balanced approach between domestic production and imports, particularly in DAP and other fertiliser grades, to safeguard margins and improve nutrient efficiency. It also expects stable demand for melamine and other industrial products, anticipating a stronger performance in Q2 FY26.
Risk Factor
GSFC’s profitability is closely tied to regulatory frameworks and government subsidy policies. Fertiliser prices and subsidy structures are tightly controlled by the government, which significantly impacts the financial health of producers. Timely receipt of subsidies is vital for liquidity. With raw material prices stabilising, the government has begun reducing subsidies, compelling companies like GSFC to increasingly depend on short-term borrowings.
2. Enviro Infra Engineers Ltd
- Current price: ₹ 255
- Target price: ₹ 335
- Upside: 31.37%
- Time frame: 12 months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Since its establishment in 2009, the company has been actively involved in a range of water and wastewater infrastructure projects, including drinking water treatment plants (WTPs), sewage treatment plants (STPs), common effluent treatment plants (CETPs), industrial water reuse systems, wastewater management solutions, and both urban and rural drinking water distribution networks for various government entities. Additionally, it operates as an EPC contractor and project developer under the Hybrid Annuity Model (HAM). With a presence in over eleven states, the company has completed 52 projects to date.
In FY25, the company posted strong operational performance, with revenue reaching Rs 1,066 crore, a 46% YoY increase compared to FY24. PAT also surged by 66% YoY to Rs 177.15 crore. Q4FY25 saw a solid performance, with sales growing 31% YoY and PAT rising 30% YoY. Looking ahead, the company aims to sustain healthy EBITDA margins of 22% to 24%, while targeting an annual growth rate of 35% to 40% as it continues its expansion strategy.
In Q1FY26, the company delivered a strong performance, with revenue rising 17.4% YoY to Rs 240.9 crore. EBITDA increased by 25.2% YoY to Rs 64.2 crore, while PAT surged 41.8% YoY to Rs 42.5 crore. During the quarter, the company entered the Zero Liquid Discharge (ZLD) segment, winning a Rs 395.5 crore CETP project from MIDC. It also secured significant sewage treatment plant (STP) and sewer network contracts worth over Rs 527 crore in Karnataka and Chhattisgarh.
Expanding into renewable energy, the company has commissioned 69 MW of solar capacity across Odisha and Maharashtra. It currently holds an operations and maintenance (O&M) portfolio valued at Rs 945.9 crore and maintains a strong order book of Rs 2,997.1 crore, with an additional Rs 5,000 crore in bids under consideration. In total, new EPC and O&M project wins during the quarter amounted to over Rs 788.5 crore.
Looking ahead, the company plans to scale up project sizes, targeting STPs from 50 MLD to 200 MLD and CETPs from 20 MLD to 50 MLD. It is also actively exploring opportunities in solar asset development and EPC contracts, while continuing to expand its footprint in water infrastructure through technologies such as water reuse, ultrafiltration, reverse osmosis (RO), and ZLD systems.
Risk factor
The company’s revenue and profitability are heavily reliant on securing new contracts. However, due to the highly competitive nature of the industry, firms are often required to submit aggressive bids to win projects, which in turn limits their operating margins. Additionally, the water EPC sector is seasonal, with over 70% of the work typically carried out during the six dry months, as monsoon conditions from May to October hinder progress. Therefore, maintaining profitability largely depends on achieving strong operational efficiency.
Market Recap 24/09/2025
The Nifty 50 began Wednesday’s session on a negative note, opening at 25,108.75, down -60.75 points from its previous close of 25,169.5. It hit a low of 25,027.45 during the day before settling at 25,056.9, marking a decline of -112.6 points, or -0.45%. Despite the fall, the index continued to trade above its 20, 50, 100, and 200-day exponential moving averages. The BSE Sensex mirrored this bearish trend, opening lower at 81,917.65, a drop of -184.45 points, and closing at 81,715.63, down -386.47 points, or -0.47%.
Technical indicators showed moderate momentum, with the RSI at 52.17 for Nifty and 51.01 for Sensex, both comfortably below the overbought threshold of 70. The Bank Nifty also ended in the red, losing -388.25 points, or -0.70%, to close at 55,121.5. The broad indices declined for the fourth consecutive session today amid high volatility caused by weak investor sentiment.
Almost all the indices ended in red, with only a few gainers. Among sectoral performers, the Nifty CPSE Index led the gainers, rising by 13 points, or 0.20%, to close at 6,526.6. Power Grid Corporation of India Ltd rose 1.63%. Other stocks, such as NLC India Ltd, NTPC Ltd, and ONGC Ltd, also rallied, gaining up to 1.5%. The Nifty FMCG Index ended higher by 97.40 points, or 0.18%, closing at 55,378.95, with notable gains from Hindustan Unilever Ltd, which rose to 1.08%. Other FMCG stocks such as Tata Consumer Products Ltd, Nestle India Ltd, and United Spirits also gained by up to 1.03%.
On the flip side, the Nifty Realty Index was the worst performer of the session, falling by -22.75 points, or -2.49%, to close at 890.6. Among the major losers were Godrej Properties Ltd., which dropped -4.02%, along with DLF Ltd, Phoenix Mills Ltd, and Oberoi Realty Ltd, each shedding up to -3.4%.
The Nifty Auto Index also registered a decline, ending at 27,007.6, down -314.35 points or -1.15%. Companies like Samvardhana Motherson International Ltd, Bharat Forge Ltd, and Balkrishna Industries Ltd lost as much as -3.7%. Meanwhile, the Nifty Energy Index also struggled, closing at 35,506.70, a drop of -319.5 points or -0.89%.
Asian markets were mostly mixed on Wednesday. Japan’s Nikkei 225 gained 54.34 points or 0.12%, to finish at 45,548. China’s Shanghai Composite Index also gained 31.81 points or 0.83%, to close at 3,853.64. Hong Kong’s Hang Seng Index increased by 424.88 points or 1.60%, ending at 26,584. However, South Korea’s KOSPI declined -14.05 points or -0.40%, to settle at 3,472.14. As of 4:50 p.m. IST, U.S. Dow Jones Futures were up by 65.27 points or 0.14%, trading at 46,358.05.
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