Motilal Oswal Bullish on These 3 Stocks: Tata Consumer, Dalmia Bharat & Mahanagar Gas for Up to 20% Gains

Motilal Oswal has identified three promising stocks, Tata Consumer Products, Dalmia Bharat and Mahanagar Gas which are expected to perform well even in a declining market. The brokerage sees potential upside in each of these stocks with Tata Consumer Products offering the highest potential return of up to 20%. The firm's selection is based on each company's strong fundamentals, sectoral advantages, and growth prospects.

Motilal Oswal's Top Three Picks: Tata Consumer Share in List

Tata Consumer Products is viewed as a top pick with a target price of Rs 1,270, implying a 20% upside from current levels. Motilal Oswal expects improved margins in the Indian beverage segment, driven by stabilising tea prices and better crop yields.

The company's growth businesses are projected to gain traction starting in the second quarter of FY26, while its international operations are likely to continue delivering steady performance. Over FY25-27, the company is expected to post a compound annual growth rate (CAGR) of 10% in revenue, 12% in EBITDA and 13% in net profit.

Tata Consumer is considered attractive due to its strong margin outlook, consistent global operations, and the defensive nature of its consumer goods business.

Dalmia Bharat Share: Check Buy Rating

Dalmia Bharat has also received a Buy rating, with a target price of Rs 2,660, indicating a potential upside of 17%. The company's recent performance exceeded expectations largely due to efficient cost control, although volumes were slightly below forecast.

Motilal Oswal is optimistic about cement demand recovering after the monsoon season, which should support healthy operating profit margins. Furthermore, Dalmia Bharat has announced significant expansion plans aimed at enhancing its long-term growth and competitive position in its core markets in eastern and southern India.

The brokerage estimates a volume CAGR of 7% between FY25 and FY28 and a steady increase in EBITDA per tonne, rising from Rs 820 in FY25 to Rs 1,130 in FY26, Rs 1,170 in FY27, and Rs 1,210 in FY28. This makes Dalmia Bharat a strong cyclical bet with long-term potential.

Mahanagar Gas Stocks in Motilal Oswal's Top Picks

Mahanagar Gas rounds out the list with a target price of Rs 1,700, offering a potential 15% return. The company is expected to achieve a 9% CAGR in volume over FY25-27, supported by strategic initiatives such as partnerships with original equipment manufacturers (OEMs) for converting commercial vehicles to CNG and offering guaranteed discounts to new industrial and commercial PNG customers.

Although upcoming changes in gas transmission tariffs-shifting from a three-zone to a two-zone regime-are likely to impact CNG EBITDA margins by Rs 0.6-0.7 per standard cubic meter (scm), Motilal Oswal believes the company can pass on these costs to customers.

As a result, they have slightly lowered their EBITDA/scm margin assumptions to Rs 9.2 for FY26 and Rs 9.5 for FY27. Despite the regulatory challenge, Mahanagar Gas is considered a stable and resilient play with manageable risks.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.