Buy these 5 beaten stocks following the October share market downturn.

Buy these 5 beaten stocks following the October share market downturn.

equities to purchase: According to Emkay Global, these five equities are all appealing from a one-year viewpoint, even if the bearish momentum might not reverse right away.

Many equities have dropped more than 15% from their 52-week highs, despite the NSE benchmark Nifty correcting 6% in October. Following the recent decline, Emkay Global has selected five investment ideas that appear appealing. According to the brokerage, these five equities are all appealing from a one-year view, even though the bearish trend might not reverse right away.

IndusInd Bank Ltd.

According to Emkay Global, IndusInd Bank’s MFI suffering is short-term and isn’t a typical downturn that wipes out significant portions of the book. It stated that the bank’s choice to forgo expansion rather than lower credit requirements is an underappreciated advantage.

In H2FY25, the car book ought to get more traction. According to Emkay, the non-performing loans (NPLs) in some categories could continue for a further one to two quarters, although this is more of a seasoning component than a serious asset quality concern.

Saregama India Ltd.

The company’s failure to win the offer to buy Dharma Productions appears to have had a negative impact on the shares. That’s fortunate, Emkay remarked.

The lumpy, asset-heavy, low-margin nature of Dharma would have negatively impacted Saregama’s return ratios and balance sheet. The music licensing industry has bright future potential. There are substantial benefits to the paid user penetration rate, which is less than 3%. According to the report, “quarter-to-quarter may not be the best way to look at this business because acquiring music rights comes with lumpy costs.”

According to Emkay, the Saregama stock has dropped 26% from its high and is currently trading at a 30-time one-year forward multiple. It stated that a constant OCF/Ebitda of 60% and a consistent and increasing ROIC of more than 20% sustain the stock.

Escorts Kubota Ltd

Following the sale of its Railway Equipment Division to Sona BLW, Escorts’ shares recently saw a correction since the sale price seemed to be lower than anticipated.

“However, this may present a buying opportunity given the positive agricultural outlook from an above-average monsoon leading to a pickup in rural demand and favorable industry base that could support a tractor upcycle, which we believe may start from H2FY25,” Emkay stated.

Along with Kubota’s increasing sourcing from India, Escorts’ strategic activities in product extension, channel development, and enhanced capacity to meet prospects in India and export markets are also anticipated to promote mid-to-long term growth.

“The stock has corrected 18 per cent from its peak and trades at 24 times core Sep-26E PE vs 27 times for M&M, supported by 16 per cent EPS CAGR in FY25E-27E and over 30 per cent ROIC,” Emkay stated.

Hero MotoCorp, Ltd.

According to Emkay, the 2W cycle is still ongoing. Despite structural problems including high penetration, the industry is emerging from a five-year downturn. Emkay doesn’t think the rise will end in two to three years.

“After a lengthy break, the budget 2W share is increasing, which is more advantageous to HMCL than to others. The dismal 2Q results appear to be an anomaly, since channel checks indicate significant Christmas demand. With a promising 2HFY25 approaching, the company is currently trading at a very reasonable 18 times 1YF, making it appear to be an excellent opportunity to buy,” the statement said.

Mahindra & Mahindra Financial Services Ltd

Raul Rebello, the CEO of Mahindra Finance, is bolstering the company with better loan delivery and controls, according to Emkay. It sees a realistic route to a return on asset (ROA) of 2.5%, even if it takes some time to reach that level.

Another long-term benefit that will fortify the company and lessen ROA volatility is portfolio diversification. The company is now trading at an appealing 1.5x PBV after a sell-off triggered by the recent book clean-up, which is a long-term positive. Even if it takes a while (one to two years), we see a great rerating potential,” it stated.

Disclaimer: The information in the aforementioned article is news and educational in nature; it is not a suggestion for a purchase or sale. Before making any financial decisions, users are advised by TraderPulse to consult with qualified professionals.