BlueChip stocks to buy now for an upside potential of up to 37%; Are these in your portfolio?

Nifty has declined over 15 percent from its peak in September last year, presenting investors with an opportunity to acquire fundamentally strong stocks at significant discounts in both price and valuation. Amid this market correction, Jefferies has issued a Buy recommendation on Reliance Industries and Axis Securities on ICICI Bank.

1. Reliance Industries

Reliance Industries Limited (RIL) is India’s largest conglomerate, with diversified businesses in energy, petrochemicals, retail, telecommunications, and digital services. It has a market capitalization of Rs. 16,39,447 Crore, the stock of Reliance Industries Limited opened 1.87 percent up from yesterday’s close of Rs. 1,175. Later, it went up slightly and made a high of Rs. 1,214, up 3,31 percent. 

Jefferies has given a price target of Rs. 1,660, which translates to an upside of 37.07 percent from current levels of Rs. 1,211. And they believe that the worst is done, and it is time for growth for the stock.

Jefferies believes that the weakness in Oil to Chemicals (O2C) will reverse, which they have been facing due to weak gasoline demand in China. They expect 14 percent EBITDA growth for the O2C segment. 

They also expect the performance of the retail segment to grow as the store closure is largely behind, and it will aid the same store sales growth. The express deliveries from Jiomart are available across 4,000 pincodes, which delivers within 40 mins. 

Jefferies expects JIO to deliver 18 percent CAGR in Revenue and 22 percent CAGR in EBITDA, over FY25-27 given the rise in tariffs of mobile and broadband verticals. Reliance share could also be supported from the possible listing of Jio.

The company reported a 6.61 percent YoY increase in revenue from Rs. 2,25,086 Crore in Q3FY24 to Rs. 2,39,986 Crore in Q3FY25. On a QoQ basis, the company reported an increase of 3.64 percent in revenue from Rs. 2,31,535 Crore in the previous quarter.

Their Net profit saw an increase of 11.65 percent YoY from Rs. 19,641 Crore to Rs. 21,930 Crore for the same period. On a QoQ basis, the company reported a decrease of 13.49 percent in Net profit from Rs 19,323 Crore in the previous quarter. 

Also read: 5 Stocks backed by LIC with positive returns this year despite steep decline in markets

2. ICICI BANK

ICICI Bank, one of India’s leading private-sector banks headquartered in Mumbai, offers a wide range of financial products and services. It has a market capitalization of Rs. 8,61,268 Crore, the stock of ICICI Bank Limited opened 1.00 percent up from yesterday’s close of Rs. 1,228.which is also the day high for the stock. 

Axis Securities has given an overweight price target of Rs. 1,500, which translates to an upside of Rs. 23.45 percent from current levels of Rs. 1,215. And also maintain this bank as their top pick among banks.

Axis Securities states that they expect the strong medium term performance to continue and primarily will be driven by robust growth while keeping its Cash to Deposit Ratio (C-D) in balance. Have a steady approach in building up its fee income profile (income that they get from fees charged for services), keep their Operating expenses ratios in check, have good asset quality metrics. And Axis Securities expects the company to maintain a Return on Assets (RoA) of 2.2 to 2.3 percent and Return on Equity (RoE) of 17 to 18 percent.

The company reported a 15.10 percent YoY increase in revenue from Rs. 40,865 Crore in Q3FY24 to Rs. 47,037 Crore in Q3FY25. On a QoQ basis, the company reported an increase of 1.54 percent in revenue from Rs. 46,326 Crore in the previous quarter.

Their Net profit saw an increase of 20.25 percent YoY from Rs. 11,515 Crore to Rs. 13,847 Crore for the same period. On a QoQ basis, the company reported a decrease of 0.42 percent in Net profit from Rs 13,906 Crore in the previous quarter.

Written By Abhishek Das

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