From Adani Ports, DLF to Reliance— Shrikant Chouhan of Kotak Securities sees up to 40% upside in these 10 stocks

The Indian stock market suffered significant losses on Tuesday, August 26, after the US administration revealed its plan to impose a 50 per cent tariff on Indian products ahead of the August 27 deadline.

The Sensex closed at 80,786.54, falling 849 points, or 1.04 per cent, while the Nifty 50 ended with a loss of 256 points, or 1.02 per cent, at 24,712.05. The BSE Midcap and Smallcap indices fell 1.34 per cent and 1.68 per cent, respectively.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, believes that the intraday market texture is weak, but a fresh selloff is possible only after the dismissal of the 24,650.

“Below 24,650, the index could retest the level of 24,550-24,500. On the flip side, above 20-day SMA or 24,750, a pullback move is likely to continue up to 24850-24900,” said Chouhan.

Chouhan is positive about 10 stocks for the long term, expecting an up to 40 per cent upside potential. Among these 10 stocks, he has “buy” ratings on six stocks, while the remaining four have “add” ratings. Do you own any of these?

Also Read | Expert view: Shrikant Chouhan on when Sensex can hit 1,00,000 and more

Stock picks for long-term

Adani Ports and Special Economic Zone | Last traded price (LTP): ₹1,315.50 | Buy | Fair value: ₹1,840 | Upside potential: 40%

Chouhan finds Adani Ports an attractive play on strong port volume growth with the ability to manage the volatility linked with the business well.

He also sees it as a strong investment platform that will continue to invest in logistics, margin and new port assets.

“The port business continues to expand margins. It continues to add brownfield capacities judiciously and make its presence felt in new markets,” said Chouhan.

DLF | LTP: ₹754.75 | Buy | Fair value: ₹1,020 | Upside potential: 35%

DLF delivered a robust Q1FY26 with pre-sales of ₹11,400 crore, up 78 per cent year-on-year (YoY), led by Privana North.

After quarter-end, the company launched its maiden Mumbai project, DLF Westpark, Andheri, achieving nearly ₹2,300 crore in sales in July, taking year-to-date (YTD) pre-sales to nearly ₹13,700 crore (nearly 60 per cent of FY26E guidance).

“A strong residential launch pipeline of nearly ₹62,900 crore and 2.8 crore sq. ft of pipeline annuity assets would ensure healthy growth across both segments. Healthy residential momentum, successful Mumbai debut, and annuity pipeline underpin our buy rating,” said Chouhan.

Jindal Steel & Power | LTP: ₹973.80 | Buy | Fair value: ₹1,225 | Upside potential: 26%

Jindal Steel is one of the India’s leading steel producers with significant presence in sectors like steel and mining.

It has a global presence through subsidiaries, mainly in Australia, Botswana, Indonesia, Mauritius, Mozambique, Madagascar, Namibia, South Africa, Tanzania and Zambia.

“We estimate a strong CAGR of 23 per cent and 32 per cent for EBITDA and EPS, respectively, over FY25-28E, as the company ramps up volumes and benefits from its various margin-accretion projects. Upside risks to domestic steel prices and muted costs should aid margins in the coming quarters. JSP remains our top buy in the metals sector,” said Chouhan.

Tech Mahindra | Previous close: ₹1,502.20 | Buy | Fair value: ₹1,830 | Upside potential: 22%

Tech Mahindra is showing gradual progress in its turnaround journey. Chouhan believes that a successful turnaround is on the cards, although a weak demand environment can make the margin journey more challenging to execute in the desired timeframe.

“Tech Mahindra is progressing well in multiple dimensions—(i) new deal wins continue to be healthy at $809 million and margin accretive, (ii) progress in operational levers such as offshore mix and subcontractor usage, and (iii) G&A optimisation of acquired entities,” said Chouhan.

“Tech Mahindra has executed well on many foundational elements of the turnaround, which will bear fruit in FY26-27E. We value the stock at 22 times June 2027E earnings, resulting in a fair value of ₹1,830,” Chouhan said.

Coforge | LTP: ₹1,738.50 | Buy | Fair value: ₹2,000 | Upside potential: 15%

Chouhan believes Coforge will exit FY26 with a revenue run-rate of $200 crore. This is impressive against the backdrop of the industry slowdown where peers are struggling.

“Absolute revenue addition will be more than the companies in the big 5, impressive in our view. This growth will be augmented with margin expansion,” said Chouhan.

Coforge has created atypical but highly effective execution-centric measurement metrics.

The company has strong engineering capabilities and software assets to help in service delivery.

“We forecast EPS growth of 41.3 per cent in FY26E and 30 per cent in FY27E. We value the stock at 35 times June 2027E EPS and arrive at a fair value of ₹2,000,” said Chouhan.

Mahindra and Mahindra (M&M) | LTP: ₹3,330.90 | Buy | Fair value: ₹3,800 | Upside potential: 14%

Chouhan expects Mahindra and Mahindra to continue to outperform industry growth across the tractor and automotive segments, including the domestic passenger vehicle and commercial vehicle segments, given successful newer launches and strong brand equity.

The tractor segment is expected to continue its uptrend, driven by higher reservoir levels and expectations of a normal monsoon.

“M&M continues to execute well by maintaining a leadership position in all three segments, which makes us constructive on the name,” said Chouhan.

Amber Enterprises | LTP: ₹7,222.55 | Add | Fair value: ₹8,900 | Upside potential: 23%

Chouhan said Amber’s Q1FY26 results was above his expectations, driven by strong performance in the consumer durables segment despite a weak summer season.

Amber also continues expanding its non-RAC business by scaling up commercial AC and entering new verticals.

Amber has announced significant capex in the PCB business and has acquired two companies with an aim to expand the electronics segment.

“We expect revenues to see a CAGR of 22 per cent over FY25-28E, driven by growth in growth in components; electronics and Sidwal segments,” said Chouhan.

Canara Bank | LTP: ₹106 | Add | Fair value: ₹125 | Upside potential: 18%

Canara Bank continues to report steady business performance. In Q1FY26 it reported a robust 22 per cent YoY earnings growth, driven by 9 per cent operating profit growth and stable asset quality.

“Credit costs (nearly 90 bps) have scope to decline further as PCR on legacy bad loans approaches completion, which could mitigate near-term RoE (return on equity) pressure from declining NIM (net interest margin),” said Chouhan.

“While NIM compression may limit earnings acceleration, the bank’s steady credit quality, improving PCR, and earnings compounding potential support medium-term stability,” Chouhan said.

Castrol India | LTP: ₹200.95 | Add | Fair value: ₹235 | Upside potential: 17%

Chouhan believes Castrol’s pivot to volume over margins, high growth in industrials, expansion into the mass-market essential segment, and focus on rural areas make the near-term volume outlook positive.

Castrol India’s management team has guided for an EBITDA margin range of 21-24 per cent. The company plans to maintain this margin in the near term through price transfers and distribution efficiencies.

According to the company, with its much stronger growth versus industry growth of 3.5-4 per cent, its market share increased by nearly 40 bps to over 20 per cent in the first half of the calendar year 2025 (H1CY25).

Rural India is expected to be a key growth driver for Castrol’s automotive business.

The company has nearly 1,000 sub-distributors across India and a network of 30,000-35,000 retailers. Its management is optimistic about the growth of private vehicles in these areas.

“We are building in a volume growth of 5 per cent CAGR for CY24-27E. We value Castrol India on a DCF-based methodology and maintain an add rating with a fair value of ₹235, driven by roll-forward,” said Chouhan.

Reliance Industries (RIL) | LTP: ₹1,385.30 | Add | Fair value: ₹1,555 | Upside potential: 12%

With the decline in capex and lower working capital needs on lower commodity prices, Reliance became FCF (free cash flow) positive on a consolidated basis.

With the benefit of tariff hikes and lower capex, R-Jio also turned FCF positive, with FCF of nearly ₹4,000 crore in FY2025 (negative ₹151 billion in FY24).

“We expect capex to moderate further going ahead. The earnings outlook is sanguine for most key businesses. And, we continue to believe that the peak of net debt is behind the company. We expect EBITDA/EPS to see about 14 per cent CAGR over FY25-28E,” said Chouhan.

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