Brokerage Firms Recommend Select FMCG and Energy Stocks for Value-led Growth
Equity analysts are eyeing active upside potential in select FMCG and energy sector stocks, based on strong fundamentals, valuation comfort, and positive demand indicators. Recent reports from top brokerages highlight Hindustan Unilever (HUL), Castrol India, and JSW Energy as key picks for investors seeking stable returns in the current market climate.
HUL: Rural Recovery and Premiumization in Focus
Hindustan Unilever has received a ‘Buy’ rating from brokerage firm Motilal Oswal, citing signs of consumption recovery in rural India and traction in premium categories. Despite a muted topline in the recent quarters, improving gross margins and operational efficiency are expected to translate into stronger profitability ahead. Analysts also noted supportive volume growth and gradual gains in discretionary segments like personal care, particularly in skin cleansing and hair care.
Increased penetration, sustained investments in brand-building, and HUL’s ability to manage input cost headwinds are projected to support margin expansion. According to estimates, the FMCG major is trading at levels that present “reasonable upside potential” for long-term investors.
Castrol India: Lubricant Demand Accelerating
Nuvama Institutional Equities sees Castrol India as an attractive value play, assigning a ‘Buy’ rating with an estimated upside of 26%. Key drivers include improved industrial activity and stable crude prices, which are bolstering margins. The brokerage emphasized strong dividend yields and consistent cash flows, making Castrol a favorable stock in the mid-cap FMCG and automotive consumables segment.
JSW Energy: Green Push and Capacity Expansion
Kotak Institutional Equities reiterated its bullish stance on JSW Energy, driven by the company’s aggressive renewable energy expansion. While not a typical FMCG player, its energy solutions underpin critical parts of the FMCG supply chain. Declining interest costs and improved project returns from new capacity additions position the stock for gradual rerating, especially as India accelerates its clean energy goals.
Analysts are optimistic that JSW’s diversified power portfolio and disciplined approach to capital allocation will unlock value over the medium term.
Market Outlook
As inflation levels ease and demand normalizes across core sectors, brokerages