Stocks to buy in FY25: After touching a three-month low in mid-March 2024, the small and medium indices witnessed a strong rise in the last fortnight of FY24. This has created a buzz in these segments as the Indian stock market resumes activities in the new financial year. According to stock market experts, after months of underperformance, small and mid-cap stocks are attracting strong buying interest. However, they said investors with low risk appetite should go for the mid-cap stocks, while those with high-risk appetite and time horizon can go for the small-cap stocks first. On stocks to buy in FY25, experts have recommended five stocks to buy for the long term – Tata Chemicals, Indus Tower, IREDA, Mahindra Lifespaces, and Shakti Pumps.
Small-cap vs mid-cap: Which stock to buy now?
Advising stock market investors to look at the mid-cap stocks, Manish Chowdhury, Head of Research at StoxBox said, “In the current investment landscape, our focus is on mid-cap companies demonstrating robust earnings visibility and continued growth in their margins. We prefer those companies with lower leverage, indicating a healthier balance sheet and reduced financial risk. However, it is important to acknowledge the inherent difficulty in short-term forecasting due to market volatility. Despite the challenges in predicting short-term trends, we maintain confidence in the long-term potential of selective mid-cap companies.”
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Suggesting stock market investors to choose small or mid cap stocks based on their risk appetite, VLA Ambala, Founder of Stock Market Today said, “After months of underperformance, Small and mid cap indices have bounced back, presenting new opportunities for investors to explore based on their objectives and risk appetite .”
Stocks to buy for the long term
Asked about stocks to buy when the Indian stock market opens in FY25, SEBI registered equity research analyst VLA Ambala said, “TATACHEM, with a YoY gain of 16.26%, offers an entry at ₹980 to ₹1020 and projection of ₹1150 to ₹1400. INDUSTOWER, with YoY gains of 91.11%, offers an entry price of ₹21 to ₹23 and purpose of ₹26 to ₹40. They can also explore IREDA which saw 126.67% YoY gains at its entry price of ₹127 to ₹135, targeting ₹150 to ₹170″
“At the current juncture, amid significant volatility in the Indian market, the growth trajectory of Mahindra Lifespace and Shakti Pumps (India) Ltd. appears to be intact,” StoxBox’s Manish Chowdhury said.
Mahindra Lifespaces share price outlook
The StoxBox expert said Mahindra Lifespaces’ recent Kandivali Phase 1 launch exceeded expectations, with pre-sales exceeding expectations. ₹800 crore, marking a pivotal moment for the company. This achievement lays the foundation for great value creation in the foreseeable future. Mahindra Lifespace aims to raise its Gross Development Value (GDV) from ₹15,000 crore to ₹45,000 crore within five years. The company’s strategic focus on profitable micromarkets and premium segments positions it for significant growth. Under the able leadership of Mr. Anish Shah, Mahindra Lifespace has emerged as a growth gem within the Mahindra Group. The projected trajectory includes a goal to grow revenue 5x over the next 5-7 years, indicating a clear path to expansion and enhanced profitability. In terms of market valuation, we typically value reputable properties like Mahindra Lifespace at 5x EV/sale, signaling a great potential of around 23% of the current price.
Shakti Pumps share price outlook
StoxBox’s Manish Chowdhury went on to add that his other pick is Shakti Pumps (India) Ltd. as it is expected that more than 69,000 pumps are expected to be installed over the next two-year period, and healthy revenue guidance coupled with stable quarterly performance. , The company’s top line and order book look promising for the coming period ensuring robust growth for the company. Under the PM KUSUM Scheme, more than 35 Lakh solar pumps will be installed by FY28. The average solar pump installation price is around Rs. 3 Lakh, so the total market opportunity stands at ₹1,050 billion. Therefore, being a market leader in the industry, Shakti Pumps India Ltd is poised to benefit from such a scheme over the years. Considering the long-term scenario, the high energy targets of the government and the ease of installation of the company’s products are expected to propel the market. These factors, coupled with volatile fuel prices associated with fuel-based pumping systems, are going to create abundant opportunities for solar-based pumping systems. The current macro situation, healthy order book and increasing government support to the sector make us constructive on the company and assign a buy rating, which has reached 24% up from the current price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and trading companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 30 Mar 2024, 12:00 IST