The brokerage firm Motilal Oswal has turned cautious on select stocks. The firm has given a ‘Sell’ call on these three stocks which include Thermax, Fine Organic Industries, and Relaxo Footwears, indicating challenges in growth, margins, and valuations.
Here’s a look at the three stocks Motilal Oswal believes could face further pressure-
Thermax: Sell with target price of Rs 3,100; downside of 6%
Thermax has received a Sell rating from the brokerage firm, with a target price of Rs 3,100, implying a potential downside of 6% from current levels. According to the brokerage report, the company’s Q4FY25 numbers showed decent growth in revenue and EBITDA, but weak order inflows remain a concern.
The brokerage noted that while the Industrial Product division continues to perform well, the Industrial Infra and Green Solutions segments are still struggling due to cost pressures from older, low-margin projects. “We believe that lower ordering and continued cost pressures from legacy projects will have an impact on execution and profit growth for the company,” the report stated.
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Furthermore, the brokerage house has trimmed its FY26 and FY27 estimates by 5% each, expecting a 12% CAGR in revenue and 18% CAGR in PAT over FY25-27. As per the brokerage report, the Key risk factors include slower than expected private capex revival, rising commodity prices, and delays in new orders.
Fine Organic Industries: Sell with target price of Rs 3,660; downside of 12%
Fine Organic Industries has also landed on the brokerage’s Sell list, with a revised target price of Rs 3,660, 12% below the current trading price. As per the brokerage report, the company’s Q4FY25 performance disappointed on all fronts, with EBITDA down 18% YoY and margins under pressure.
The company’s management remains cautious about new contracts, citing policy uncertainties around import duties. According to brokerage house, “Valuations appear expensive for a company with no earnings growth during FY25-27,” as the stock currently trades at about 34x FY27 estimated earnings.
The report forecasts a muted outlook with a CAGR of 4%/-1%/-2% in revenue, EBITDA, and PAT respectively, over FY25-27. Challenges such as delays in new plant commissioning and over utilised existing facilities are expected to drag performance in the near term,
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