In a recent update, Prabhudas Lilladher (PL Capital) has made some noteworthy changes to its high-conviction stock list, adding several promising companies while also removing others. This strategic shift reflects the brokerage’s response to current market conditions, including global tariff disputes and fluctuating crude oil prices. Investors looking for insights into the stock market will find PL Capital’s revised portfolio particularly interesting, as it aligns with emerging trends across various sectors.

New High-Conviction Stocks

The brokerage has embraced ITC, Indian Railway Catering and Tourism Corporation (IRCTC), KEI Industries, Triveni Turbine, and Eris Lifesciences as its latest high-conviction picks. Each of these companies shows potential for growth, making them attractive choices for investors seeking stability and profitability amid market volatility.

Stocks Removed from Conviction Picks

In a shift away from certain high-profile names, PL Capital has excluded Infosys, Reliance Industries Ltd (RIL), Larsen & Toubro (L&T), Polycab India Ltd, and DOMS Industries. This decision comes in light of short-term growth challenges and the broader economic context, emphasizing the importance of adaptability in investment strategies.

Sector Outlook and Changes

PL Capital remains optimistic about various sectors, emphasizing a positive stance on Banks, Healthcare, Consumer goods, Telecom, and Capital goods. Here’s a breakdown of their current strategy:

• Increased focus on:

  • Banks
  • Telecom
  • Consumer sectors
  • Healthcare
• Reduced focus on:
  • Capital Goods
  • Auto Sector
  • IT Services
  • Oil and Gas

Nifty 50 Performance Insights

The Nifty 50 index has faced a decline of 3.8% year-to-date, driven by sluggish domestic demand and foreign institutional investor (FII) selling. The brokerage has noted a 6.2% reduction in Nifty 50 earnings per share (EPS) since October 2024 and anticipates further adjustments due to ongoing tariff disputes. Despite this, sectors focused on domestic markets, including Healthcare, Retail, and Banking, are projected to outperform in the near future.

High-Conviction Stock Details

ITC

PL Capital projects that margins for ITC will enhance post-Q2 FY26, leading to robust profit growth. Valued at a 21x price-to-earnings ratio for FY27, ITC also offers a 4% dividend yield. The brokerage maintains a BUY recommendation, targeting a price of ₹524.

Eris Lifesciences

Eris is on track for a significant EPS turnaround, with an expected return on capital employed (ROCE) of 20% by FY27. Currently valued at 13.6 times FY27 EV/EBITDA, it represents a compelling investment opportunity, with a focus on sustainable growth.

IRCTC

The stock is currently priced at 41x/38x projected earnings for FY26/FY27. Following a recent decline, PL Capital has upgraded its recommendation for IRCTC to BUY, with a target price of ₹850.

Triveni Turbine

Triveni Turbine is poised for growth, driven by several factors:

• Global shifts in energy demand
• A robust order book of ₹18.2 billion
• Expansion into higher MW turbines (120 MW)

With increasing exports and aftermarket services, Triveni is well-positioned to capitalize on market opportunities.

Conclusion

Investors should keep an eye on PL Capital’s high-conviction stocks as they navigate through a challenging economic landscape. The strategic adjustments made by the brokerage reflect a keen understanding of market dynamics and consumer needs. For those looking to optimize their portfolios, exploring these recommendations could be a wise move in today’s fluctuating market.

For further insights, you may explore more about Nifty 50 trends and stock recommendations on trusted financial news platforms.