Stock Market Insights for the Week Starting January 20, 2025

According to Motilal Oswal Financial Services Ltd, the spotlight shines on Shriram Finance and Bharat Electronics as the top stock recommendations for the upcoming week. Here's why these stocks are catching the attention of investors:

Shriram Finance: A Strategic Investment

Shriram Finance's diversified portfolio has positioned it uniquely to navigate the cyclical nature of the CV business. With the sale of its housing finance subsidiary to Warburg Pincus for ₹39b, the company anticipates a post-tax exceptional gain of ₹13b, bolstering its balance sheet and potentially leading to a credit rating upgrade. Analysts predict a PAT CAGR of ~19% and RoA/RoE of 3.3%/17% by FY27E, driven by an expanded distribution network and innovative product offerings.

Bharat Electronics: Defense Sector's Rising Star

Bharat Electronics stands to gain significantly from defense indigenization, with key orders like QRSAM, MRSAM, and Tejas Mk1A on the horizon. A robust order book of ₹746 billion ensures strong revenue visibility, complemented by stable margins and a focus on increasing exports and non-defense contributions. Revenue is expected to grow at a 17% CAGR over FY24-27, supported by a ₹110b cash surplus and strategic market expansions.

Disclaimer: The opinions, analyses, and recommendations expressed herein are those of the brokerage and do not reflect the views of The Times of India. Always consult with a qualified investment advisor or financial planner before making any investment decisions.