Stocks to buy in FY25: Top 5 mid-cap, small-cap shares to buy in new fiscal


Stocks to buy in FY25: After touching a three-month low in mid-March 2024, the small-cap and mid-cap indices witnessed strong upside in the last fortnight of FY24. This has created a buzz in these segments when the Indian stock market resumes activities in the new financial year. According to stock market experts, after months of underperformance, the small-cap and mid-cap stocks are attracting strong buying interest. However, they said that investors with a low-risk appetite should go for the mid-cap stocks whereas those who have a high-risk appetite and time horizon, can go for the small-cap stocks first. On stocks to buy in FY25, experts recommended five shares to buy for 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 revenue visibility and sustained growth momentum in their margins. We prefer those companies with lower leverage, indicating a healthier balance sheet and reduced financial risk. However, it’s 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.”

Also Read: Experts see gold price at 75,000 per 10 gm level in FY25

Suggesting stock market investors to choose small-cap or mid-cap stocks based on their risk appetite, VLA Ambala, Founder of Stock Market Today said, “After months of underperformance, Small-cap and mid-cap indices have rebounded, presenting fresh opportunities for investors to explore based on their goals and risk appetite.”

Shares to buy for long term

Asked about shares 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 a projection of 1150 to 1400. INDUSTOWER, with YoY gains of 91.11%, offers an entry price of 21 to 23 and a target 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, amidst significant volatility in the Indian market, Mahindra Lifespace’s and Shakti Pumps (India) Ltd.’s growth trajectory appears to be intact,” Manish Chowdhury of StoxBox said.

Mahindra Lifespaces share price outlook

The StoxBox expert said that Mahindra Lifespaces’ recent launch of Kandivali Phase 1 has surpassed expectations, with pre-sales exceeding 800 crores, marking a pivotal moment for the company. This achievement lays the foundation for substantial value creation in the foreseeable future. Mahindra Lifespace aims to elevate its Gross Development Value (GDV) from 15,000 crores to 45,000 crores within five years. The company’s strategic focus on lucrative micro markets and premium segments positions it for significant growth. Under the adept leadership of Mr. Anish Shah, Mahindra Lifespace has emerged as a growth gem within the Mahindra Group. The envisioned trajectory includes a target of growing revenue by 5x over the next 5-7 years, indicating a clear path toward expansion and enhanced profitability. Regarding market valuation, we typically value reputed real estate companies like Mahindra Lifespace at 5x EV/sales, signaling a substantial upside potential of around 23% from the current price.

Shakti Pumps share price outlook

Manish Chowdhury of StoxBox went on to add that his other pick is Shakti Pumps (India) Ltd. as it is expected that over 69,000 pumps are expected to be installed over the next two-year period, and healthy revenue guidance coupled with stable quarterly performance, the top line and order book of the company looks promising for the coming period ensuring robust growth for the company. Under the PM KUSUM Scheme, over 35 Lakh solar pumps will be installed until 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 government’s high energy targets and the ease of installation of the company’s products are expected to drive the market ahead. These factors, coupled with volatile fuel prices associated with fuel-based pumping systems, are about to create ample opportunities for solar-based pumping systems. The current macro situation, a healthy order book, and rising government support towards the sector make us constructive on the company and assign a buy rating that has arrived at a 24% upside from the current price.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking 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 PM IST


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