3 weeks ago
From Reliance Industries to Tata Motors, Macquarie sees upside potential between 17% to 35% on these six Nifty 50 constituents over the next three to six months.
By Hormaz Fatakia April 2, 2025, 11:00:41 AM IST (Published)
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Brokerage firm Macquarie believes that consensus earnings estimates are still optimistic and that the pace of domestic liquidity, which has been a key contributor in supporting the market, has ebbed as well. It expects the market resilience to be tested going forward. Yet, it has recommended six Nifty stocks to buy as a tactical trade for the next three to six months. These stocks have upsides ranging from 18% to as high as 35%. Here is a look at these six names:
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Reliance Industries | Macquarie has a price target of ₹1,500 on Reliance Industries, implying a potential upside of 18% from current levels. It attributed the recent underperformance to consensus earnings cuts, a softer retail business and a lack of consolidated earnings growth. However, it sees positive newsflow during the next 6-12 months as the group EPS is at an inflection point, renewable capacity gets commissioned and more progress towards a retail spin-off. An acceleration in retail revenue growth will be a greater sentiment positive, Macquarie said.
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NTPC | Macquarie said that the IMD warning for heatwaves will not have a material near-term earnings implication, although it does boost the case for long-term power-based capacity additions. The management sharing more details on nuclear power capacity should add to the conviction around the stock's long-term growth trajectory, Macquarie said, whose ₹475 price target implies a potential upside of 35%.
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Wipro | Macquarie has a price target of ₹320 on the stock, which implies a 25% potential upside from current levels. The brokerage said that Wipro may pay even more to its shareholders as the balance sheet boasts of excess cash even after the new capital allocation policy. It sees a potential dividend yield to be between 5% to 6% over the next 12 months, which offers downside protection. A potential upside trigger is growth converging with largecap peers in the first quarter of financial year 2026, which, according to Macquarie, is not factored in by buy-side estimates.
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Tata Motors | Tata Motors shares are oversold with the recent underperformance largely driven by volume and margin risks to JLR's US business, Macquarie said, adding that a net cash JLR in FY25, premiumisation focus and better-than-expected FY26 margins and cash flow can drive the near-term outlook. Macquarie's price target of ₹826 on Tata Motors implies a potential upside of 23%.
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Bharat Electronics | The stock has declined on Wednesday after it missed its order inflow guidance for financial year 2025. However, Macquarie called this a spillover and expects strong guidance from the management for the next financial year. Export opportunities should also help improve the company's EPS growth trajectory for the medium-term. Macquarie has a price target of ₹350 on BEL, implying a potential upside of 17%.
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Shriram Finance | An improving liquidity scenario, softer interest rates, stable asset quality and better growth relative to peers are near-term triggers for the stock, according to Macquarie, who also called Shriram Finance a valuation catch-up trade as current valuations are at a discount of 50% to 60% compared to some of its larger peers. Macquarie has a target of ₹800 on Shriram Finance, implying a potential upside of 23% from current levels.
