In this article, we look at two stocks from the consumer durables and real estate sectors to buy for upside potential of more than 15%, recommended by Trade Brains Portal. Further, we analyze the market’s performance yesterday and also look at some stocks to watch out for today.
1. Whirlpool of India
- CMP: ₹ 1,266
- Target: ₹ 1,490
- Upside: 18%
- Time frame: 12 Months
Why it’s recommended
The washing machine industry stood at Rs 25,000 crore, expected to grow by 7.4% CAGR till FY29. Key growth drivers are increasing share of fully automatic washing machines, inverted ACs, and larger refrigerators due to premiumization and prioritization of aesthetics beyond just functional machines. Penetration of smart appliances is estimated to reach 10% by 2028 from 4% in 2023. Other key factors, such as the availability of credit for consumer financing and omnichannel availability, may act as a tailwind for the sector. Currently, India’s penetration of ACs & refrigerators is 10% and 35%, respectively, way lower than the world average. Further, AC penetration in India is projected to reach 40% by 2050.
To align with the changing customer preferences, the company has launched a new range of products in its washing machine portfolio with high-capacity ranges to cater to the ever-growing needs of the Indian consumer. The company tends to do around 30% of its business during the June quarter due to higher sales volume supported by the summer season. The company is investing a huge amount of money in refrigeration capacities and products to align with the premiumization trend. The company is also planning to increase its stake in the Elica brand as it continues to perform really well, adding profit margins. The company improved its standalone EBITDA & profit, driven by strong volume growth, cost productivity actions, and an improved mix of premium and high-margin portfolios.
Risk factor
A large portion of rural and semi-urban areas still face issues with affordability, high upfront costs, and lifecycle costs. To increase the penetration in India, this problem needs to be addressed. Due to higher logistics inefficiencies, India has a higher cost of logistics, accounting for around 13%-14% of India’s GDP, compared to the global average of approximately 8%. Indian companies invest less than 0.7% of their revenue in R&D as compared to global leaders, who allocate 2% to 3% of their revenue to R&D, which leads to assembly-led value chains in many categories, and eventually, the profit margins are low.
2. Godrej Properties Ltd
- CMP: ₹ 2,102
- Target: ₹ 2,450
- Upside: 16.5%
- Time frame: 12 Months
Why it’s recommended
In FY25, the Godrej Properties revenue from operations grew by 62% to Rs 4,923 crore from Rs 3,036 crore YoY, their EBITDA grew by 79% to Rs 2,089 crore from Rs 1,167 crore, while the net profit rose by 86% to Rs 1,389 crore from Rs 747 crore. They achieved a 47% increase in project completions and exceeded their annual booking target by 109%, and with Rs 17,047 crore as the highest collections, the company delivered 18.4 million sq. ft. In FY25, the company achieved 12 projects across 6 cities for a booking value of more than Rs 1,000 crore, and 34 new projects and phases were launched during the financial year across 7 cities.
The company added 14 new projects with a total saleable area of 19 million sq ft and expects new business developments with a future booking value of Rs. 26,450 crore and achieved 123% of its annual guidance for deliveries. In commercial projects, they received an occupancy certificate for 4 projects with a leasable area of 4.3 million sq. ft. and leased 2.39 million sq. ft. of net area across 6 assets in FY25. In addition, there are plans to launch projects worth Rs 40,000 crore, including Ashok Vihar, Worli, and Bangalore for FY26. The company plans to invest in growing residential bookings to over Rs 32,500 crore by launching a large number of exciting new projects.
The company’s strength is that over 1 billion people globally use a Godrej Industries Group product, and they are well established in the global markets. The company has a strong pipeline by adding 80 residential projects with 154 million sq. ft area since 2018. The company’s access to capital is the lowest bank funding rate in the sector. The company has delivered 66 million sq. ft. of real estate since 2018. The full-year operating cash flow (OCF) stood at Rs 7,484 crore, a YoY growth of 73%. This OCF is the highest ever by any listed real estate developer in India to date. Currently, the company holds 4.3% market share in real estate development.
Risk factor
The real estate sector is cyclical, and a highly fragmented market structure, because of large regional players, brings high competition, which plays a vital role in market share and pricing power. In addition, being cyclical, the sector is influenced by macroeconomic factors such as government policies and supply-demand fluctuations. However, any future significant downturn in the industry and the overall investment climate may adversely impact the business.
Market Recap: May 13th
After the highest ever single-day gain in 4 years percentage-wise & the biggest jump ever in absolute terms on Monday, markets opened at 24,864 points, slightly lower than yesterday’s closing at 24,924 points. Nifty hit the intraday high of 24,973, trading above both the 50 DMA and 200 DMA with RSI at 62.89 and closing at 24,578, falling by 346 points, or -1.39%. The BSE Sensex closed at 81,148 points, falling by 1,282 points, or -1.55%. Bank Nifty also fell by 442 points, or -0.80%, closing at 54,940 points.
The NIFTY Media has been the top performer, closing at 1,616 points, up by 26.40 points (1.66%), with Zee Entertainment leading the index, closing at Rs 123.15, gaining 5.13% due to the arbitral tribunal rejecting all claims by Aditya Birla Finance Ltd. in a Rs 134 crore loan dispute.
The Nifty PSU Bank, among the top gainers, closed at 6,572 points, up by 101 points (1.56%) after slipping more than 4% last week due to a slow growth outlook in the deposit & lending book. Nifty Pharma is also among the top gainers today. The index closed at 21,359, up by 257 points (1.22%), positively affected due to Donald Trump’s executive order on pharma last night, as the US president announced he would reduce the domestic drug price by 30 to 80 percent later on and made a clear stance on his social media platform by stating, “Drug prices to be cut by 59%.” The US president would sign an executive order based on the “most favored nations” model, also known as international reference pricing.
Nifty IT and Nifty Service were among the top losers today. Nifty IT fell by 928 points, or -2.42%; stocks like Infosys & Powergrid have been among the top losers. Nifty Service is down by 527 points, or -1.60%; stocks like Infosys & Powergrid have been the top laggards.
Top Losers Today
Infosys, at Rs 1,568.6, fell by 3.58%; Powergrid, at Rs 298.45, declined by 3.43%; and Eternal, at Rs 231.65, was down by 3.28%. The underperformance of these major stocks added pressure on the indices, deepening the losses. The decline in Sensex and Nifty is primarily driven by profit bookings in key sectors like IT, FMCG, and services.
Top Gainers today
BEL at Rs 335.75 gained 4.01%, Heromoto at Rs 4,063.6 surged 1.97%, and Jiofin at Rs 267.4 rose 1.71%.
(Source: Trade Brains Portal)
Stocks to watch out for on May 14th
- Siemens Limited – Results announced – Revenue stood at Rs 81,700 crore as of FY25, down by 2.14% YoY. PBT stood at Rs 10,490 crore as of FY25, down by 26% YoY. PAT stood at Rs 11,971 crore as of FY25, down by 8.5% YoY.
- Tata Motors – Results Announced – Revenue stood at Rs 4,45,939 crore as of FY25, up by 1.4% YoY. PAT stood at Rs 23,278 crore as of FY25, down by 28% YoY. Operating margin stood at 13.28% as of FY25, compared to 14.01% in FY24.
- Aditya Birla Capital – Results Announced – Revenue stood at Rs 40,360 crore as of FY25, up by 20.6% YoY. PBT stood at Rs 3,142 crore as of FY25, up by 8% YoY. AUM stood at Rs 5,11,260 crore, up by 17% YoY.
- GlaxoSmithKline – Results Announced – The company reported a full-year revenue of Rs 3,749 crores, a growth of 8.5%, and profit after tax increased by 57% to Rs 927.6 crores.
- Bharti Hexacom – Results Announced – Their revenue from operations grew by 21% in FY25 to Rs 7,088 crore, up from Rs 8,548 crore in FY24. The company’s net profit jumped by 196%, from Rs 504 crore in FY24 to Rs 1,493 crore in FY25.
Major companies are announcing results today:
- Eicher Motors
- Hindustan Aeronautics Ltd
- Lupin
- Muthoot Finance
- Tata Power Company Ltd
- Torrent Power
- Shree Cement Ltd
- Piramal Pharma
- Jubilant Foodworks
- Apollo Tyres
- Sanofi India
- KPI Green Energy
- Berger Paints India
- Karnataka Bank
- Brigade Enterprises
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