Today, we recommend two stocks, one from the fertilisers sector and another from the financial services sector, as recommended by the Trade Brains Portal, to buy for an upside potential of more than 39%. The fertiliser sector is vital to the Indian economy by driving agricultural productivity and ensuring food security for its large population. Meanwhile, the financial services sector is vital to India’s economic development, acting as the primary engine for converting domestic savings into productive investments. We also analysed the market’s performance on Monday to understand what may lie ahead for the stock indices in the coming days.
1. Chambal Fertilisers & Chemicals Ltd
- Current price: Rs 545
- Target price: Rs 680
- Upside: 24.8%
- Time frame: 12 Months
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Why it’s recommended
Chambal Fertilisers and Chemicals Ltd., established in 1985, produces around 15% of India’s total urea production. It is the leading fertilizer supplier in Rajasthan, Madhya Pradesh, Punjab, and Haryana, and it supports farmers across 11 states spanning northern, eastern, central, and western India. The company has a wide-reaching distribution network that includes 22,000 village-level outlets, 2,200 dealers, and 15 regional offices. Among private urea producers in the country, Chambal holds the largest market share. It operates 3 state-of-the-art urea plants located in Gadepan, Rajasthan.
In the financial year 2024-25 (FY25), Chambal reported revenue of Rs 16,646 crore and a profit after tax (PAT) of Rs 1,649 crore. Urea production increased to 34.61 lakh metric tons from 33.83 lakh metric tons the previous year. Sales volumes also rose to 34.71 lakh metric tons from 32.56 lakh metric tons in FY24. The company aims to expand its phosphoric acid production capacity from 5 lakh MT to 7 lakh MT by 2027. Its NPK (nitrogen, phosphorus, potassium) fertilizer segment is projected to grow 2.5 times in FY26.
In Q1 FY26, the company reported revenue from operations of Rs 5,697.61 crore, up by 16% YoY, and PAT rose by 22.5% YoY to Rs 549 crore. The company’s sales volume of P&K fertilizers, comprising DAP, MOP, NPK, and Triple Super Phosphate (TSP), was strong at 4.21 lakh metric tons, compared to 2.41 lakh metric tons last year, representing a growth of almost 70%. The company introduced 13 new CPC products, primarily comprising weedicides and insecticides, and also inaugurated the Crop Protection Laboratory with its partner, TERI (The Energy and Resources Institute).
Through its joint venture IMACID in Morocco, Chambal produced 5.25 lakh MT and sold 4.35 lakh MT of product in FY25 and is under implementation to increase the capacity of phosphoric acid from 5 lakh tons to 7 lakh tons. For its Technical Ammonium Nitrate (TAN) project, it allocated Rs 300 crore in FY25 and plans to invest Rs 1,200 crore in FY26. The TAN plant will have a production capacity of 2.4 lakh MT. Of the Rs 900 crore total project cost, Rs 650 crore has already been spent, with the remaining Rs 250 crore to be used in FY26.
The company expects the project to start generating revenue in Q3/Q4 of FY26, with commercial operations beginning in January 2026. The TAN facility is expected to operate at 80-90% of its capacity. Additionally, Chambal plans to import 1.3 lakh MT of DAP and TSP for the upcoming Kharif season. The TAN initiative is in line with the company’s margin goals. Consistent margin performance in the CPC-SN segment is driven by strategic partnerships, product diversification, and volume expansion. Early inventory buildup and attractive pricing have positioned the company well for the Kharif season.
Risk Factor
Chambal operates in a heavily regulated industry. Government policies, including a reduction in subsidies without corresponding price increases and stricter energy consumption norms under the 2015 Urea Policy, with further tightening expected by the end of FY25, could impact the company’s operations and profitability.
2. Housing and Urban Development Corporation Ltd
- Current price: Rs 211
- Target price: Rs 295
- Upside: 39.6%
- Time frame: 14-16 months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
HUDCO (Housing and Urban Development Corporation Ltd.) serves as the nodal agency for the government’s ‘Housing for All’ initiative and actively supports schemes like the Jal Jeevan Mission and Pradhan Mantri Awas Yojana. The company provides financing and consultancy services for projects sanctioned under these programs. In FY25, HUDCO achieved record-high performance in both loan sanctions and disbursements. Loan approvals surged by 55.31% to Rs 1,27,952 crore, while disbursements grew by 122.59% to Rs 40,038 crore. Interest income also rose significantly by 33%, reaching Rs 10,200 crore, up from Rs 7,653 crore in FY24.
Its net interest margin (NIM), including the external benchmark rate (EBR), remained steady at 3.22% in FY25 compared to 3.18% in FY24. Management has guided for an NIM range of 3.25%-3.3% over the next two years. The company’s debt-to-equity ratio increased to 5.72x in FY25 from 4.05x in FY24, while its cost of funds improved by 35 basis points-dropping to 6.75% from 7.1%, due to strategic market timing and diversification of funding sources.
Asset quality also showed notable improvement. The gross non-performing asset (GNPA) ratio declined to 1.67% in FY25 from 2.71% in FY24, while net NPA (NNPA) improved to 0.25% from 0.36%. HUDCO maintained a strong provision coverage ratio of 85.44%. The company has committed to resolving all NPAs within 18 months and expects to recover Rs 400-Rs 500 crore from NPA settlements during FY26.
In FY26, HUDCO grew its loan sanctions by 143% QoQ to Rs 34,224 crore from Rs 14,097 crore in Q1 FY25. Their loan disbursement rose by 1.48% QoQ to Rs 12,812 crore, and loan outstanding increased by 30% QoQ to Rs 1,34,410 crore. The interest income also grew to 34% QoQ to Rs 2,925 crore. Going forward, the company has kept a long-term target of a Rs 3 lakh crore loan book by 2030 and a Rs 1.5 lakh crore loan book by FY26.
Regarding shareholder returns, HUDCO’s board approved a final dividend of Rs 1.05 per share for FY25, delivering a dividend payout ratio of 41.50%. This follows two interim dividends of Rs 2.05 and Rs 1.05 per share, bringing the total dividend payout for FY25 to Rs 4.15 per share.
Risk Factors
HUDCO’s credit exposure is primarily linked to certain state governments and public sector agencies. While the regulator has allowed some flexibility, failure to reduce exposure within set deadlines or violations of Fiscal Responsibility and Budget Management (FRBM) norms could result in penalties and increased capital requirements. Additionally, HUDCO faces stiff competition from banks and financial institutions that benefit from lower-cost funding through CASA (current and savings account) deposits.
Market Recap 01/09/2025
Monday’s trading session began on a bullish note, with broader market indices ending in the green after declining for three consecutive trading sessions. The Nifty 50 opened slightly higher at 24,432.70, up 5.85 points from the previous close of 24,426.85, and climbed further to close at 24,625.05. This marked a rise of 198.20 points, or 0.81%, with the index finishing below the 20-day, 50-day, and 100-day EMAs but still holding above the 200-day EMAs on the daily chart. The BSE Sensex mirrored the upward trend, opening at 79,828.99 and closing at 80,364.49, registering a jump of 554.84 points, or 0.70%.
Momentum indicators also reflected weakening sentiment, with the Nifty 50’s Relative Strength Index (RSI) at 45.50 and the Sensex RSI at 43.48, both comfortably below the overbought threshold of 70. The Bank Nifty Index also followed the same trend, closing at 54,002.45 after shedding 346.80 points, or 0.65%. This rise came as India registered strong GDP growth in Q1FY26 of 7.8%, which exceeded market expectations.
The majority of the sectoral indices ended the day in green. The Nifty Auto Index was the top gainer, closing at 25,660.00, up by 699.15 points, or 2.80%. Tube Investments of India Ltd led the gains with a 6.05% increase, followed by auto stocks, including Samvardhana Motherson International, which gained 4.30%, and Exide Industries Ltd, which rose by 4.04%.
The Nifty Consumer Durable Index was also among the top gainers, closing at 39,393.95, up by 803.00 points, or 2.08%. Dixon Technologies led the gains with a 5.34% increase, followed by other consumer durable stocks, including Amber Enterprises, which gained 5.00%, and PG Electroplast Ltd, which rose by 4.10% on Monday. Other indices such as Nifty Midcap 50, Nifty Smallcap 50, and Nifty PSE rose up to 2.03% on Monday.
Among the major losers, the Nifty Media Index plunged the most on Monday’s trading session. The index decreased by -5.15 points, or -0.32%, closing at 1,606.85. Zee Entertainment was the major loser, dropping -1.79%; Hathway Cable declined -0.82%, and Tips Music Ltd fell -0.58%. Another major laggard was the Nifty Pharma Index, which closed at 21,778.85, losing -25.20 points, or -0.12%. Major losers include Sun Pharmaceutical, Ajanta Pharma, and Ipca Laboratories Ltd, whose shares declined by up to -1.96% on Monday.
Asian markets were trading on a mixed note on Monday, with the Shanghai Composite Index closing at 3,875.53, gaining 17.60 points, or 0.45%. On the other hand, South Korea’s KOSPI Index closed at 3,142.93, down -43.08 points, or -1.37%. Japan’s Nikkei 225 Index also closed on a bearish note at 42,145.00, lost -573.47 points, or -1.36%. Meanwhile, Hong Kong’s Hang Seng Index ended at 25,629.00, gaining 551.38 points, or 2.15%. The US Dow Jones Futures were trading at 45,548.80, marginally up by 4.91 points, or 0.01%, as of 4.50 p.m. IST.
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