Zomato to Grasim to Aditya Birla Capital — here are six stocks that brokerages say you should buy

• Nifty closed at below 16,100 whereas Sensex fell 303.35 points to 53,749.26 on May 25.
• Jefferies and UBS have issued a Buy call on Zomato’s shares with a target price of ₹100 and ₹130, respectively.
• As many as seven brokerages have given a “buy” call for Aditya Birla Capital shares within the range of ₹120 to ₹169.

The Indian stock market has been going through a slump for quite some time — thanks to the Russia-Ukraine war, interest rate hikes and an ever-rising inflation. Yet, even in these tough times, there are stocks which are worth buying either due to their valuations or the promise that they hold for the future.

Here are the stocks that brokerages highly recommend since they could be undervalued due to the overall bearish sentiment.

Zomato

UBS and Jefferies issued a ‘buy’ call on Zomato’s shares after the company’s performance in FY22. Jefferies set the target price at ₹100, whereas UBS pegs it higher at ₹130. The current market price of Zomato at ₹62 as on May 25.

JP Morgan and Morgan Stanley have also given Zomato an ‘overweight’ rating with target price of ₹130 and ₹135, respectively. An overweight rating on a stock usually means that it deserves a higher weighting than the benchmark's current weighting.

The stock of the company which listed late last year, has been a victim of a domino effect after PayTm’s listing debacle. The markets have been wary of all loss-making companies since then.

Aditya Birla Capital

Seven brokerages — including Motilal Oswal, Credit Suisse, HDFC Securities, ICICI Securities, Investes and Morgan Stanley — gave a ‘buy’ call for Aditya Birla Capital after its healthy earnings in the fourth quarter. Their target price ranges within the range of ₹120 to ₹169.

ICICI Securities has pegged the highest target price at ₹169, whereas Credit Suisse’s price was at the lowest with ₹130. The company’s shares were trading at ₹95.8, as on May 25.

Grasim Industries

ICICI Securities issued an ‘add’ call on Grasim Industries with a target price of ₹1,580. An ‘add’ rating means that investors should buy more stocks of the company. The current market price of Grasim Industries is ₹1,379.4. The brokerage believes that Grasim could reach the defined target price within a year.

Hindustan Petroleum Corporation

ICICI Securities has issued an ‘add’ call on the shares of Hindustan Petroleum Corporation with a target price of ₹260. The company’s shares were trading at ₹233.9 as on May 25. The brokerage expects the stock of this fuel retailer to reach the defined target in a year.

Ashok Leyland

LKP Securities gave a ‘buy’ call for Ashok Leyland with a target price of ₹173. The company’s shares were trading at ₹139.55, as on May 25.

“The near-term demand recovery may come under pressure due to higher interest costs and fuel cost hikes; however, we remain optimistic over the medium term, led by pickup in the replacement segment given higher fleet utilization levels and fleet operators’ profitability,” the company said.

Minda Industries

Anand Rathi has issued a buy call on Minda Industries — an auto ancillary company— with a target price of ₹1,106. The brokerage expects Minda Industries to reach the defined target in a span of one year. The current market price of the company is ₹891.7, as on May 25.

Disclaimer: The article highlights the view of the brokerage firms and investment banks.

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