Synopsis : Macquarie has retained ‘Outperform’ ratings on Power Grid, Godrej Consumer Products, Amber Enterprises, Delhivery and Petronet LNG. The brokerage sees 12-month total shareholder return potential ranging from 18% to about 51%, with Power Grid leading the list.
Macquarie is betting on five Indian stocks across power transmission, consumer goods, electronics manufacturing, logistics and energy, with estimated 12-month total shareholder return potential ranging from 18% to about 51%.
The global brokerage has retained its ‘Outperform’ rating on Power Grid Corporation of India, Godrej Consumer Products, Amber Enterprises India, Delhivery and Petronet LNG.
While each company operates in a completely different sector, Macquarie’s investment case revolves around a common theme: improving execution, stronger demand, operating leverage and new business opportunities.
Power Grid stands out as the brokerage’s highest-potential pick, supported by a rapidly expanding order book and a potential acceleration in capital expenditure. At the other end, Petronet LNG offers the lowest projected return among the five, but Macquarie remains positive on its volumes and regasification business.
Here’s a closer look at Macquarie’s five top stock picks and the key triggers investors should watch.
1. Power Grid Corporation: The highest potential return
Power Grid Corporation of India is Macquarie’s highest-upside pick among the five stocks.
The brokerage has retained its ‘Outperform’ rating and assigned a 12-month target price of Rs 400. Based on Macquarie’s estimates, the stock could deliver a total shareholder return of around 51%.
The biggest trigger is Power Grid’s strengthening order book.
The company has won the Barmer-II HVDC project and has also received a Letter of Intent for the Jam Khambhaliya Renewable Energy Zone project in Gujarat.
Together, the two projects could add approximately Rs 33,500 crore of approved project cost to Power Grid’s works-in-hand.
Macquarie estimates that these wins could take the company’s September-quarter order book to around Rs 2.1 lakh crore.
“With these two wins, Power Grid has converted the two largest projects currently in its bidding pipeline,” Macquarie said.
The brokerage estimates that the projects could result in additional annual capital expenditure of around Rs 7,500 crore over the next four to five years.
Macquarie is particularly optimistic about a potential acceleration in Power Grid’s capital expenditure and asset capitalisation.
The brokerage believes right-of-way issues, which have historically delayed project execution, could become less of a hurdle.
“We remain constructive on Power Grid and expect a sharp pick-up in Power Grid’s capex/capitalisation, as right-of-way issues see a structural decline,” Macquarie said.
The combined tariff from the two projects is estimated at around Rs 4,100 crore.
According to Macquarie, this could eventually represent approximately 9% of Power Grid’s FY27 annualised run-rate revenue. However, the brokerage expects the full revenue contribution from these projects to materialise only from FY31 onwards.
For investors, the key factors to watch will be new project wins, capital expenditure growth, project execution and the pace of asset capitalisation.
2. Godrej Consumer Products: Execution could drive the next phase
Macquarie has maintained its ‘Outperform’ rating on Godrej Consumer Products and assigned a 12-month target price of Rs 1,150.
The brokerage estimates a potential 12-month total shareholder return of approximately 25.4%.
The company is currently going through an important leadership transition.
CEO Sudhir Sitapati has resigned, with the company’s CFO taking over as the new CEO.
Macquarie acknowledges that the transition could create some near-term uncertainty. However, it believes the broader strategic direction of the company remains unchanged.
The brokerage expects a stronger focus on execution across key product categories, particularly soaps and household insecticides.
It also sees continued digital expansion and product innovation as important growth drivers.
“We like the focus on execution and the potential pickup in growth profile of core segments like soap, household insecticides, that it brings,” Macquarie said.
Godrej Consumer is also expected to focus on improving execution in both domestic and international markets.
A key factor will be the balance between investing aggressively in future growth opportunities and protecting margins.
Macquarie has retained its positive view on the stock and believes stronger volume growth and moderation in raw-material inflation could act as important catalysts.
The key things investors may want to track include the impact of the management transition, volume growth in core categories, commodity prices and margin performance.
3. Amber Enterprises: Beyond air conditioners and consumer durables
Macquarie has retained an ‘Outperform’ rating on Amber Enterprises India with a 12-month target price of Rs 8,900.
The brokerage estimates potential total shareholder returns of approximately 23.2%.
Amber reported a mixed first quarter.
Revenue came below Macquarie’s expectations, but EBITDA was ahead of estimates.
The company benefited from a stronger mix of higher-end air-conditioner products, which supported profitability.
However, rising input costs and weakness in the electronics business created pressure on overall revenue performance.
“Mixed 1Q results with a revenue miss and an EBITDA beat,” Macquarie said.
For Macquarie, however, the larger opportunity lies beyond the company’s traditional consumer-durables business.
Amber has been expanding into electronics manufacturing and electronic system design and manufacturing, or ESDM.
The brokerage believes Amber’s execution capabilities in the consumer-durables segment could provide a strong foundation for its expansion into electronics manufacturing.
“Amber’s execution in consumer durables sets a blueprint for its forays into ESDM, which should drive sustained revenue growth and higher margins,” Macquarie said.
The company could also benefit from lower commodity prices, new joint ventures, strategic partnerships and possible mergers and acquisitions.
Amber therefore offers investors exposure not only to the consumer-appliance market but also to India’s rapidly expanding electronics-manufacturing ecosystem.
Key triggers include growth in the ESDM business, new partnerships, acquisitions, commodity-price movements and margin improvement.
4. Delhivery: Scale and operating leverage remain the key story
Macquarie has maintained its ‘Outperform’ rating on Delhivery with a 12-month target price of Rs 580.
The brokerage estimates a potential 12-month total shareholder return of approximately 23.1%.
Macquarie remains constructive on India’s long-term logistics and e-commerce growth opportunity.
Delhivery is attempting to strengthen its presence across third-party e-commerce logistics and part-truck-load, or PTL, services.
The brokerage has raised its revenue forecasts because of stronger parcel volumes.
However, it has reduced some of its near-term margin assumptions because of higher fuel costs.
Despite this, Macquarie expects operating leverage to become increasingly visible as the company scales.
“With scale, we continue to see strong operating leverage and margin expansion,” Macquarie said.
The company is targeting a significant improvement in profitability.
Management aims to double group adjusted EBITDA margins from around 5% to 10%.
It is also targeting an increase in pre-tax return on invested capital for its core transport business from approximately 16% to 25% over the next two to three years.
Macquarie believes Delhivery remains a cost leader in a technology-intensive logistics business.
The brokerage expects the company to continue consolidating market share as India’s e-commerce market expands.
For investors, the key numbers to watch will be parcel-volume growth, market-share gains, fuel costs, EBITDA margins and progress towards the company’s return-on-capital targets.
5. Petronet LNG: Strong utilisation supports the investment case
Petronet LNG is Macquarie’s lowest-return pick among the five, but the brokerage still sees meaningful potential.
Macquarie has retained its ‘Outperform’ rating and assigned a 12-month target price of Rs 320.
The brokerage estimates a potential total shareholder return of approximately 18.1%.
Macquarie’s confidence follows a stronger-than-expected June quarter.
The Dahej LNG terminal continued to operate at a high level despite disruptions to Qatar LNG supplies.
Terminal utilisation stood at approximately 86%, significantly above the 73% consensus reference cited by Macquarie.
“Petronet LNG’s June quarter results were above Bloomberg Consensus driven by better-than-expected Dahej terminal utilisation,” Macquarie said.
The company’s position as a major receiver of Qatar LNG remains an important structural advantage.
Macquarie also expects the increasing role of third-party regasification to support margins.
However, higher natural-gas prices remain a key risk because they could reduce overall gas demand.
The brokerage believes stronger-than-expected volumes could create upside to its FY27 volume estimates.
The major factors to track include Dahej terminal utilisation, LNG supply conditions, natural-gas prices, regasification volumes and the growth of third-party business.
Macquarie’s five stock picks ranked by potential 12-month TSR
Among the five stocks, Power Grid offers the highest potential return at approximately 51%, according to Macquarie’s estimates.
Godrej Consumer Products follows with a projected 12-month TSR of around 25.4%.
Amber Enterprises India has estimated return potential of approximately 23.2%, while Delhivery is close behind at around 23.1%.
Petronet LNG has the lowest estimated return in the group at approximately 18.1%.
In terms of target prices, Macquarie has set a target of Rs 400 for Power Grid, Rs 1,150 for Godrej Consumer Products, Rs 8,900 for Amber Enterprises India, Rs 580 for Delhivery and Rs 320 for Petronet LNG.
What is the common theme behind Macquarie’s picks?
These five stocks are not a single-sector bet.
Instead, Macquarie is focusing on companies with different business-specific catalysts.
Power Grid represents an order-book and capital-expenditure opportunity, with major transmission projects potentially supporting long-term revenue growth.
Godrej Consumer Products is an execution-driven consumer story, where stronger performance in core categories could improve growth.
Amber Enterprises offers exposure to the expanding electronics-manufacturing ecosystem, alongside its established consumer-durables business.
Delhivery is a logistics-scale and e-commerce-growth play, where rising volumes could translate into stronger operating leverage and margins.
Petronet LNG is primarily a utilisation and regasification story, supported by better-than-expected volumes at its Dahej terminal.
Conclusion
Macquarie’s five ‘Outperform’-rated stocks offer potential 12-month total shareholder returns ranging from approximately 18% to 51%.
Power Grid stands out with the highest potential return, driven by a rapidly growing order book, major project wins and expectations of stronger capital expenditure.
Godrej Consumer Products is an execution-led consumer opportunity, while Amber Enterprises represents a longer-term play on India’s electronics-manufacturing expansion.
Delhivery’s investment case is centred on logistics scale, e-commerce growth and operating leverage.
Petronet LNG, meanwhile, benefits from strong terminal utilisation and its strategic position in India’s LNG infrastructure.
However, target prices and return estimates are brokerage projections rather than guarantees. Actual stock performance will depend on company execution, demand conditions, commodity prices, competition, regulatory developments and broader market movements.
Disclaimer : This article is based on Macquarie Research and reflects the brokerage’s ratings, target prices, estimates and investment views. It is for informational and journalistic purposes only and should not be considered investment advice or a recommendation to buy, sell or hold any security. Investors should conduct their own research and consult a SEBI-registered investment adviser before making investment decisions.
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