Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting March 24, 2025) are Amber Enterprises and Kirloskar Oil. Let’s take a look:
Amber Enterprises
Amber Enterprises is a leading Indian contract manufacturer for RAC and components, with growing capabilities in EMS. It benefits from strong client additions and industry demand tailwinds. Q3FY25 revenue grew 65% YoY, driven by RAC & electronics. Future growth is supported by capacity expansion. Amber is expanding its EMS segment, investing INR 6.5B in Ascent Circuit, and participating in India’s component PLI via a JV with Korea Circuit. Govt push for domestic manufacturing and potential incentives for electronics could benefit Amber. We estimate a revenue/EBITDA/PAT CAGR of 26%/33%/62% over FY24-27.
Kirloskar Oil
Powergen market demand over last 2 quarters was impacted by steep pricing increase & pre-buying ahead of CPCB 4+ implementation Demand is expected to stabilize from FY26, with ind. Vol. reaching 36-38k units in Q4, leading to improved volumes for KOEL. We expect KOEL to benefit from a shift towards mid to high kVA powergen segments, increased focus on new industrial areas, improved distribution touchpoints and better B2C profitability in the coming years. We estimate KOEL to achieve 17%/19% CAGR in EBITDA/PAT, with strong growth in B2B & 10% CAGR in B2C segment & EBITDA margin expanding to 13% by FY26. Stock is trading at significant discount (23x/19x FY25/26 earnings) compared to market leaders, with CMP reflecting unwarranted pessimism about growth and margins.
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