Synopsis: Emkay Global Financial Services has identified several stocks poised for growth in 2025, including Zomato, Lupin, and Tata Motors. The brokerage suggests that the current market correction presents an opportune time to focus on stocks with reasonable valuations. Additionally, Emkay views the Reserve Bank of India's (RBI) recent liquidity injection of ₹60,000 crore as a significant move to address liquidity shortages.
The Indian equity markets have experienced a correction, leading Emkay Global Financial Services to recommend focusing on stocks with attractive valuations.
The RBI's announcement on January 27, 2025, of Open Market Operations (OMO) to purchase Government of India securities worth ₹60,000 crore in three tranches, is seen as a strong statement of intent to address liquidity shortages.
This move is considered more impactful than an actual rate cut, as market rates respond immediately, and a rate cut without liquidity injection is ineffective.
Emkay's Top Stock Picks for 2025:
Emkay has identified several stocks across different market capitalizations that are expected to perform well in 2025:
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Large Cap Stocks:
- Zomato: Emkay has a 'Buy' rating on Zomato with a target price of ₹310, citing its strong growth in food delivery and quick commerce.
- Lupin: Recommended for its robust performance in the pharmaceutical sector.
- Tata Motors: Noted for its improving cash flow and balance sheet.
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Mid Cap Stocks:
- IndusInd Bank: Emkay views the recent correction as an opportunity, with the stock trading at 1.2 times its price-to-book value on a one-year forward basis.
- Escorts: Preferred for its strategic initiatives in product expansion and channel development.
- One97 Communications (Paytm): Emkay sees potential in Paytm due to its growth in payments and financial services.
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Small Cap Stocks:
- StoveKraft: Identified for its growth prospects in the home appliances sector.
- Metropolis Healthcare: Recommended for its strong position in the diagnostic services industry.
- Quess Corp: Noted for its diversified business model and growth potential.
Conclusion:
Emkay Global Financial Services suggests that the current market correction presents a favourable opportunity to invest in stocks with reasonable valuations.
The RBI's liquidity injection is expected to stimulate domestic equities, particularly in the Banking, Financial Services, and Insurance (BFSI) sector.
Investors are encouraged to consider Emkay's top picks for 2025, which span large, mid, and small-cap stocks across various sectors.
