Stocks recommendations -July 16, 2025

Retail & Lifestyle

Vishal Mega Mart (MOSL – Buy, TP ₹165)
• A unique retail play on Tier 2+ India’s rising aspirations.
• Operates in a ₹70T+ opportunity with 73% revenues from private labels.
• Focused on value retail across apparel (44%), GM (28%), and FMCG (28%).
• Double-digit growth across revenue/EBITDA/PAT: 19%/20%/24% CAGR expected.
Trend and Relevance: High-growth, rural value retail leader with lean cost structure.

Aditya Birla Lifestyle (Bernstein – Market Perform, TP ₹170)
• Brand-led business resetting its growth agenda.
• Lifestyle category is saturated, but emerging brands offer tailwinds.
• Expected growth: ~9.5% CAGR FY25–30.
Trend and Relevance: Limited upside due to segment saturation; needs strong execution.

Manufacturing & Electronics

Dixon Technologies
• CLSA: High Conviction Outperform, TP ₹19,000
• Nomura: Buy, TP ₹21,409
• JPMorgan: Overweight, TP ₹17,700
Key Triggers:
• Foray into camera modules & precision components via JV with Q Tech.
• Value addition in smartphones to rise to 45–55% from current 15–17%.
• Backward integration to improve margins by 150–200bps; EPS upside of 2–5%.
Trend and Relevance: Structural margin expansion and EPS upgrades through JVs and vertical integration.

Insurance & Financials

HDFC Life
• Citi: Buy, TP ₹975 | HSBC: Buy, TP ₹900 | MS: Overweight, TP ₹840
• Macquarie: Underperform, TP ₹720 | MOSL: Buy, TP ₹7,910 | Nuvama: Buy, TP ₹7,920
Takeaways:
• VNB margin stable at ~25%; APE growth supported by ULIP and PAR.
• Business is agile with deepening distribution, but valuations seen as rich (Macquarie).
• MOSL/Nuvama trim FY26–27 margin estimates by 50 bps post Q1.
Trend and Relevance: Mixed sentiment. While core strength remains, margin trajectory is a key watch.

ICICI Prudential Life
• Citi: Buy, TP ₹850 | MOSL: Buy, TP ₹780 | Nuvama: Buy, TP ₹770
Highlights:
• Strong performance in non-linked savings & protection.
• Margins up at 24.5%; VNB guidance revised upward.
• Re-rating potential due to improving persistency and mix.
Trend and Relevance: Strong margin profile and product mix support positive view.

ICICI Lombard
• Macquarie: Outperform, TP ₹2,255
• MS: Equal Weight, TP ₹1,885
• MOSL: Buy, TP ₹2,400
• Nuvama: Buy, TP ₹2,340
Summary:
• Q1 PAT beat estimates due to investment income.
• Combined ratio a bit weak, but stable trends expected going forward.
• Premium growth expected to revive with better motor segment traction.
Trend and Relevance: Healthy margin outlook; competition in motor and health remains a risk.

Pharmaceuticals & Biotech

Biocon (MOSL – Positive)
• USFDA approval for Kirsty — the first interchangeable biosimilar to Insulin Aspart (Novolog, $1.2B sales).
• Competitor landscape still emerging; capacity constraints at Novo may benefit Biocon.
Trend and Relevance: Major regulatory milestone with large market potential.

Sun Pharma
• Settled US litigation with Incyte; launching Leqselvi in the US for alopecia areata.
Trend and Relevance: Expands non-oncology portfolio; enhances US revenue pipeline.

Agrochemicals
Rallis India (HSBC – Reduce, TP ₹250)
• 1Q beat estimates; volume-led growth and better margin from cost optimization.
• Structural improvement likely gradual; valuation stretched.
Trend and Relevance: Improving operations, but near-term upside limited.

FMCG & Agri
AWL Agri (JPMorgan – Underweight, TP ₹260)
• Weak quarter; muted palm oil volumes dragged edible oils.
• Food & FMCG segment focus is on reviving revenue, even if margins moderate.
Trend and Relevance: Margin pressure + demand headwinds = cautious outlook.

Auto & EV
Tesla India Launch – Sector Commentary
• Bernstein: Focused on brand, not volumes yet; limited near-term risk to local OEMs.
• Macquarie: M&M, Tata not under threat due to Tesla’s premium pricing.
• Citi: No overlap with Mahindra EV customer base. Watch if tariffs drop or local manufacturing begins.
Trend and Relevance: Tesla presence is not a near-term threat, but watch policy/duty changes.

Banks
HDFC Bank (Macquarie – Outperform, TP ₹2,400)
• Q1 weak for subsidiary HDB; margin expansion of 10bps helped offset some weakness.
Trend and Relevance: Near-term vehicle finance sluggish; longer-term outlook stable.

Real Estate
Oberoi Realty (MS – Equal-weight, TP ₹1,700)
• Acquisition of Versova land; low impact on NAV. Gross margin ~55%.
• Launch likely in FY28; long-dated value unlocking.
Trend and Relevance: Strong pipeline; execution is medium to long-term.

Technology & Platforms

Just Dial (Citi – Buy, TP ₹1,100)
• Revenue growth slowed to 6% YoY; traffic grew just 7%.
• CMP at <8x Mar’27E PE (ex-cash); strong balance sheet.
Trend and Relevance: Valuation comfort + upside from potential cash deployment.