Stocks to BUY: Shares of three companies remain on the radar of investors on the budget day. On the basis of quarterly results, big action can be seen in these stocks.
highlights
- During the quarterly results season, investors in the domestic stock market are keeping an eye on brokerage reports.
- In this series, Nuvama Institutional Equities has issued its latest opinion on Ambuja Cements, Bharat Dynamics and Bajaj Auto.
- While BUY ratings have been retained on Ambuja Cements and Bharat Dynamics, Bajaj Auto has been upgraded to BUY due to better growth outlook.
Stocks to BUY Today: Despite it being Sunday, Indian stock markets are open on 1 February due to the budget. Shares of three companies remain on the radar of investors on the budget day. On the basis of quarterly results, big action can be seen in these stocks. Brokerage firm Nuvama Institutional Equities has released its latest research report on Ambuja Cements, Bharat Dynamics Limited (BDL) and Bajaj Auto. Important updates have been given in the report regarding the quarterly results, further growth prospects and target prices of the three companies. Brokerage firm Nuvama Institutional Equities has released its latest report on select largecap and defense stocks.
Nuvama has revised target prices while maintaining BUY ratings on Ambuja Cements and Bharat Dynamics, while upgrading Bajaj Auto to BUY on strong demand and improved margin outlook. The report provides key takeaways on Q3FY26 results, cost pressures and growth strategy going forward.
Ambuja Cements: Focus on cost reduction, BUY rating intact
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Nuvama has maintained BUY rating on Ambuja Cements, however reduced the target price to Rs 709. Earlier it was kept at Rs 763. The company’s EBITDA in Q3FY26 was weaker than expected due to lower realizations and brand transition. Additionally, there were one-off costs related to asset overhauling at Sangli and Penna units.
Management expects industry volume growth to be 8% in Q4FY26. The company has guided the total cost to come down to ₹3,800/tonne by the end of FY27 and ₹3,650/tonne by the end of FY28. By December 2025 the cost had come down to Rs 4,000 per tonne.
Cost reduction benefits are expected to come from adoption of green energy, lower power and fuel costs, logistics improvements and group synergy. The capex will be funded entirely from internal cash flows. Due to increasing competition, the valuation multiple has been reduced from 20x to 19x EV/EBITDA.
Bharat Dynamics: Results affected by weak performance
Nuvama maintained BUY rating on Bharat Dynamics Limited (BDL), but reduced the target price to Rs 1,900. Earlier this target was Rs 2,020.
The company’s sales, EBITDA and PAT were well below estimates in Q3FY26. This was mainly due to weak performance and pressure on operating margins due to higher raw material costs.
The company’s order book stood at Rs 2600 crore, while order inflow so far in FY26 stood at Rs 536 crore. BDL has reiterated the target of Rs 1000 crore turnover by FY31. The company is working on diversification in areas like guided bombs, missiles, engines, space applications and propellants.
A target has been set to take the export revenue to 25–30% by 2029. FY26–FY28 EPS estimates have been cut by 18% due to weak performance.
Bajaj Auto: Strong growth outlook, upgraded to BUY
Nuvama has upgraded Bajaj Auto to BUY and increased the target price to Rs 11,000 from Rs 10,400 earlier.
The company’s EBITDA growth in Q3FY26 was in line with estimates. Revenue growth was supported by exports, double digit growth in domestic motorcycles, electric two-wheelers (E2W) and three-wheelers.
Nuvama has raised its FY27 and FY28 EPS estimates by 5% each due to improved volume and margin estimates. The company is expected to improve its share in the domestic two-wheeler market, which will be supported by the new 125cc affordable motorcycle model and new launches under the Pulsar, KTM and Triumph brands.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice in any way. ET NOW Swadesh recommends its readers and viewers to consult their financial advisors before taking any money-related decisions.
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