Motilal Oswal, a prominent brokerage firm, has pinpointed several stocks that exhibit significant growth potential, issuing ‘Buy’ ratings for these selected companies. Spanning sectors from fast-moving consumer goods (FMCG) to defense and technology, these stocks are garnering attention for their promising outlook. Let’s take a closer look at Motilal Oswal’s top recommendations, which include Hindustan Unilever, Hindustan Aeronautics, SBI Life Insurance, Tech Mahindra, Persistent Systems, and Dalmia Bharat, along with the rationale behind their optimistic forecasts.

Hindustan Unilever: A Mixed Bag

Despite a lackluster performance in the fourth quarter of FY25, Hindustan Unilever Limited (HUL) remains a key focus for Motilal Oswal. The company reported a 3% year-on-year revenue increase to ₹15,450 crore, supported by a 2% volume growth.

• Rural demand is on a gradual uptick, while urban demand is still lagging.
• The Home Care segment saw volume growth, but EBIT dipped by 2% due to pricing strategies.
• In contrast, the Beauty & Wellbeing segment excelled, achieving a 6% revenue growth and 15% EBIT growth, primarily driven by a robust hair care lineup.

However, challenges remain in the Food & Refreshment segment, which experienced a 1% revenue drop and a 15% decline in EBIT. The management has adjusted its EBITDA margin guidance to 22-23% as it shifts focus towards volume growth and new product launches.

Hindustan Aeronautics: A Solid Future

Motilal Oswal has a positive outlook on Hindustan Aeronautics Limited (HAL), especially with increasing defense expenditure and stabilizing supply chains. The brokerage anticipates that HAL’s revenue will grow at a 29% compound annual growth rate (CAGR) from FY25 to FY27, largely fueled by an expansion in manufacturing capabilities.

• EBITDA margins are expected to remain robust, ranging between 25.9% to 27.6% over the next three years.
• The company’s profit after tax (PAT) is projected to grow at a 29% CAGR, bolstered by indigenous production and an annual capital expenditure range of ₹30-50 billion.

SBI Life Insurance: Strong Performance

Following a commendable fourth-quarter performance, SBI Life Insurance has caught the eye of Motilal Oswal. The firm reported a 2% year-on-year growth in new business annualized premium equivalent (APE), totaling ₹5,450 crore, while the value of new business (VNB) surged 10% to ₹1,660 crore.

• The notable VNB growth stemmed from a strategic shift towards non-ULIP products.
• The VNB margin expanded to 30.5%, surpassing expectations, with FY25 PAT climbing 27% YoY to ₹2,400 crore.

Looking ahead, management forecasts a 13-14% APE growth for FY26, with a significant boost from a 25% increase in agency channel productivity.

Tech Mahindra: Bright Prospects

Motilal Oswal has issued a ‘Buy’ rating for Tech Mahindra, setting a target price of ₹1,950, indicating a potential upside of 35% from current levels.

In Q4 FY25, the company reported revenues of USD 1.5 billion, reflecting a slight 1.5% decline quarter-over-quarter in constant currency. However, vital sectors like BFSI and Communications registered growth of 2.4% and 1.0%, respectively.

• The EBIT margin improved by 40 basis points to 10.5%, surpassing forecasts.
• The brokerage noted the ongoing restructuring under new leadership as a positive step, suggesting resilience independent of discretionary spending.

Persistent Systems: Strong Growth Ahead

The brokerage has reaffirmed its ‘Buy’ rating for Persistent Systems, projecting a target price of ₹6,450 based on the company’s robust revenue growth and margin expansion.

• In Q4 FY25, revenue grew 4.2% quarter-over-quarter in USD terms, and EBIT margin rose to 15.6%, with a 10.9% growth in EBIT.
• For FY25, the company achieved a 21.6% year-on-year revenue growth, reaffirming its ambitious USD 2 billion revenue target for FY27.

Motilal Oswal predicts a 19% revenue CAGR in USD terms through FY25-27, alongside a 23% EPS CAGR, reflecting solid margin gains.

Dalmia Bharat: Rising Potential

Motilal Oswal has raised its target price for Dalmia Bharat to ₹2,300 from ₹2,150, endorsing a ‘Buy’ recommendation.

• The company stands out as a low-cost producer, benefiting from a higher blending ratio and lower freight costs.
• Capacity expansion initiatives in Karnataka and Maharashtra are set to alleviate growth concerns.

With rising cement prices, particularly in southern India, profitability is expected to increase significantly in FY26. The brokerage has raised its EPS estimates by 22% for FY26, valuing the company at 12x FY27E EV/EBITDA, highlighting its favorable valuation.

These stocks are positioned for exciting growth, making them worthy of consideration for investors seeking solid opportunities in the current market landscape.