The domestic brokerage house Motilal Oswal has a Buy recommendation on these two stocks on March 17. Along with business fundamentals, the brokerage house has also analysed the valuations of the stock shares before deciding on the final recommendation.
Here is a quick look at the two stocks in focus-
Motilal Oswal on Kirloskar Oil Engines
The company is expected to benefit from a shift in focus towards mid to high kVA segments in powergen, increased focus towards new areas in the industrial segment, improved touchpoints in the distribution segment, and better profitability of the B2C division over the next few years. According to the report, the initiatives are aligned with these areas. “We expect results to be visible over the next few years. We trim our estimates by 4%/6% for FY26/27 to bake in slightly lower margin and continue to value the company at 25x Mar’27 earnings. The current stock price is factoring in extreme pessimism related to growth and margins, which we believe is unwarranted,” said Motilal Oswal in a research note. The brokerage house has a ‘Buy’ rating on the stock with a target price of Rs 1,150.
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The India telecom giants took a tariff hike sometime back, which has raised the industry revenue by 4% sequentially and 15% year-on-year. Motilal Oswal chose Bharti Airtel as its top pick in the sector as it was the biggest beneficiary of tariff hikes. Its incremental remote monitoring system (RMS) jumped to 50% sequentially over the last two quarters, compared to 39% overall RMS.
“We believe significant improvement in data subscription proportion and minimum recharge hikes have also been a key driver for Bharti’s industry-leading ARPU,” said Motilal Oswal. Bharti Airtel outperformed its peers in terms of AGR and ARPU growth. The company’s AGR rose 5% quarter-on-quarter to Rs 27,400 crore while the average revenue per user increased to Rs 23,800 crore by 6% QoQ. After Bharti Airtel, the brokerage form chose Reliance Industries as its top pick. “We believe RJio and Bharti are still likely to continue gaining market share at Vi’s expense, given their deeper pockets and superior FCF generation. We continue to prefer Bharti and RIL in the telecom space,” said Motilal Oswal.
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