Today, we recommend two stocks, one from the financial services sector and another from the water management sector, as recommended by the Trade Brains Portal, to buy for an upside potential of more than 26%. The financial services sector is essential to India’s economic growth, serving as the main driver that channels domestic savings into productive investments.
Meanwhile, the water management sector is crucial for India’s economic growth because it supports the dominant agricultural sector, drives industrial productivity, and creates numerous jobs in infrastructure development. We also analyzed the market’s performance on Tuesday to understand what may lie ahead for the stock indices in the coming days.
1. Mahindra & Mahindra Financial Services Ltd
- Current price: ₹ 260
- Target price: ₹ 315
- Upside: 21.1%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Mahindra & Mahindra Financial Services Ltd. is one of India’s leading non-banking financial companies (NBFCs), incorporated in 1991. It provides quality financial products and solutions to a diverse customer base across India, including rural and semi-urban areas. They have business assets under management (AUM) of Rs 1,22,008 crore as of Q1FY26, with their presence spanning 516,000 villages and 8,000 towns, operating through 1,350+ branches across 27 states and 7 Union Territories, supported by 6,000+ dealers and 10+ original equipment manufacturers (OEMs), and serving more than 11 million customers nationwide.
Their financial products include vehicle loans, SME finance, personal loans, insurance broking, housing finance, fixed deposits, and mutual fund schemes. In Q1FY26, their AUM grew by 15% to Rs 1,22,008 crore compared to Rs 1,06,339 crore in Q1FY25. The consolidated total income increased 15% YoY to Rs 5,013 crore, and profit after tax surged 6% to Rs 529 crore. The company’s loan book marked a growth of 15% YoY, reaching Rs 1,18,308 crore. Cost-to-Income ratio decreased further to 40.8% in Q1FY26 compared to 41.3% in Q1FY25. Mahindra Rural Housing Finance Limited, the subsidiary of the company, turned PAT positive in Q1FY26.
Additionally, as of Q1FY26, the company has maintained stable asset quality with a credit cost standing at 1.9%, a net interest margin at 6.7%, and a gross stage 3 (GS3) at 3.85%. The company has made continuous efforts to target resilient customers, streamline underwriting processes through integrations with third-party APIs, and enhance collection efficiencies through analytics-driven bounce prediction, PQA, and efficient stockyard management, among other initiatives.
Risk Factor
Potential defaults and an increase in non-performing assets, particularly in rural lending segments, pose a credit risk to M&M Finance. Despite having a robust structure for managing liquidity, the company is vulnerable to liquidity concerns due to its reliance on many funding sources, especially during volatile market times.
2. Va Tech Wabag Ltd
- Current price: ₹ 1,517
- Target price: ₹ 1,920
- Upside: 26.5%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
VA Tech Wabag Ltd. is the third-largest water technology company in the world and was founded in 1924. It provides environmentally friendly solutions to the industrial and municipal sectors. It employs more than 1,600 water professionals to serve almost 96 million people across more than 25 nations. Since 1995, Wabag has constructed over 1,500 water and wastewater treatment facilities and, with the assistance of research and development institutions in Europe and India, has more than 125 patents. As of Q1FY26, the company has a robust order book of Rs 15,777 crore, up by 15% YoY.
In Q1FY26, the company’s sales were Rs 734 crore, a 17.2% increase YoY, whereas EBITDA stood at Rs 95.6 crore, registering a growth of 17.5% YoY. Profit after taxes grew by 19.6% YoY, which stood at Rs 65.8 crore. In Q1FY26 company generated 43% of the revenue from outside India, while 57% from India. T
he company also had an order inflow of about Rs 2,583.4 crore and continued to be a preferred bidder in the projects, which are worth Rs 3,500 crore, as of Q1FY26. The company has been improving its cash position continuously, as Q1FY26 became the 10th consecutive quarter in which the company remained net cash positive. In Q1FY26, it backed an order of Rs 2,037.9 crore for a 300 MLD desalination project in Saudi Arabia.
The company also aims to maintain at least a 3x order book to revenue ratio, 15–20% revenue growth, 13–15% EBITDA margins, a RoCE of more than 20%, and an ROE of more than 15%. In the next 4-5 years, it hopes to achieve a 70:30 municipal-industrial mix and a 50:50 split for India and the rest of the world. Management is confident of winning new orders and gave a positive medium-term guidance with an emphasis on profitability and execution over the next 3-4 years of visibility.
Risk Factor
It has a major exposure to international markets, which makes it susceptible to currency volatility. Additionally, 95% of its operations are dependent on the government, which puts it at risk for delays, sluggish execution, and elongated working capital. Project demand and financial performance are also susceptible to geopolitical uncertainty, global economic slowdowns, and regulatory changes in areas like the US, the Middle East, and Europe. It is exposed to the inherent cyclicality of the infrastructure sector and intense competition from other regional small players.
Market Recap 02/09/2025
Tuesday’s trading session began on a positive note, with broader market indices gaining slightly, but ended in the red. The Nifty 50 opened slightly higher at 24,653, up 27.95 points from the previous close of 24,625.05, and declined further to close at 24,579.6, marking a fall of -45.45 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 80,520.09, up 155.6 points from its previous close of 80,364.49, and closed at 80,157.88, registering a fall of -206.61 points, or -0.26%.
Momentum indicators also reflected weakening sentiment, with the Nifty 50’s Relative Strength Index (RSI) at 44.36 and the Sensex RSI at 41.95, both comfortably below the overbought threshold of 70. The Bank Nifty Index also followed the same trend, closing at 53,661 after shedding -341.45 points, or -0.63%. This fall came amidst the weak global sentiments, volatility in the market due to the Nifty F&O expiry shifting from Thursday to Tuesday, and profit booking by traders amidst the decision of the GST council, scheduled to be announced on September 4.
The majority of the sectoral indices ended the day in green. The Nifty CPSE Index was the top gainer, closing at 6,311.65 up by 79.20 points, or 1.27%. Cochin Shipyard Ltd led the gains with a 3.88% increase, followed by other CPSE stocks, including Power Grid Corporation Ltd, which gained 2.45%, and NTPC Ltd, which rose by 1.7%.
The Nifty PSE Index was also among the top gainers, closing at 9,475.25, up by 108.85 points, or 1.16%. RVNL Ltd led the gains with a 5.12% increase, followed by NMDC Ltd, which gained 4.57%, and Power Grid Corporation Ltd, which rose by 2.45% on Tuesday. Other indices such as Nifty FMCG, Nifty Energy, and Nifty Media rose by up to 1.12% on Tuesday.
Among the major losers, the Nifty Private Bank Index plunged the most on Tuesday’s trading session. The index decreased by -182.75 points, or -0.7%, closing at 26,089.70. Kotak Mahindra Bank Ltd was the major loser, dropping -1.33%; ICICI Bank Ltd declined -1.19%, and HDFC Bank Ltd fell -0.64%. Another major laggard was the Nifty Financial Services Index, which closed at 25,572.95, losing -170.55 points, or -0.7%. Major losers include SBI Cards & Payment Services Ltd, Cholamandalam Investments, and Kotak Mahindra Bank Ltd, whose shares declined by up to -2.15% on Tuesday.
Asian markets were trading on a mixed note on Tuesday, with the Shanghai Composite Index closing at 3,858.13, losing -17.39 points, or -0.45%. On the other hand, South Korea’s KOSPI Index closed at 3,172.35, up 29.42 points, or 0.94%. Japan’s Nikkei 225 Index also closed on a bullish note at 42,310.49, a gain of 121.7 points, or 0.29%. Meanwhile, Hong Kong’s Hang Seng Index ended at 25,496.55, losing -120.87 points, or -0.47% and the Shenzhen Component Index ended at 12,553.83, losing -275.11 points or -2.14%. The US Dow Jones Futures were trading at 45,337, down by -261 points, or -0.57%, as of 4.43 p.m. IST.
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