Apollo Hospitals To Lupin Labs: PL Capital Sees Up to 30% Upside In THESE Stocks; Rejigs High Conviction Picks

Apollo Hospitals Enterprise, Lupin Labs, and Samhi Hotels may see a surge in their valuation in the long term due to favourable growth aspects and other factors, according to PL Capital's report. The brokerage

Multiple factors like demerger updates, improved domestic and international sales, and fund infusion are likely to aid the growth outlook Apollo Hospitals Enterprise, Lupin, and Samhi Hotels. Stocks of these companies may see up to 30% surge in their valuations in long-term, according to PL Capital report.

Top Three Stocks Added to PL Capital's List

Considering the healthy growth aspects of these companies, the brokerage has added these three stocks to its list of conviction picks. A few other names were also eliminated from PL Capital's Conviction Picks.

Apollo Hospitals

Apollo Hospital's core business valuation may see a surge with the demerger of HealthCo. The demerger will also enable focused growth and better capital allocation, according to PL Capital. The stake sale of Advent and merger with Keimed will help in the formation of an integrated pharmacy distribution platform and the digital breakeven is expected in four quarters.

"We estimate 27% EBITDA CAGR over FY25-27E and recommend 'BUY' with TP of Rs8,350/share; valuing the hospital business at 26x EV/EBITDA, offline pharmacy at 30x EV/EBITDA, and Apollo 24/7 at 1x sales," noted PL Capital in its report.

Lupin Labs

The pharmaceutical company's business is largely dependent on its domestic sales and in the United States. The margins are likely to improve with better product mix and cost optimisation measures. Lupin Labs may sustain its performance in the present quarter with margins likely to improve with continuous focus on niche launches in the US, clearance from USFDA for facilities, domestic formulations and cost optimisation measures. The brokerage has maintained a 'Buy' rating for the stock.

Samhi Hotels

The company may see growth in its business and a surge in valuations due to fund infusion by GIC and consequent deleveraging with its net debt reduction to Rs 14 billion. "SAMHI IN trades at 14.2x/11.7x our FY26E/FY27E EBITDA (adjusting for the minority interest in newly formed JV platform funded by GIC) and now has valuation as well as BS comfort. Retain BUY with a TP of Rs308 (15.5x FY27E EBITDA)," stated the brokerage in its report.

Which Stocks Have Been Removed From Conviction Picks?

The company has removed Max Healthcare, Britannia, M&M, Sun Pharma, Rainbow Hospitals, Chalet and Eris from conviction picks, citing that the stock prices are close to the target prices, which gives investors less scope for gains.

Top Conviction Picks By PL Capital

Large Cap

Company	CMP (Rs.)	TP (Rs.)	Upside
ABB India	5,648	6,851	21.3%
Apollo Hospitals Enterprise	7,220	8,350	15.7%
Bharti Airtel	1,921	2,148	11.8%
Hindustan Aeronautics	4,886	5,500	12.6%
ICICI Bank	1,423	1,700	19.5%
InterGlobe Aviation	5,932	6,691	12.8%
ITC	419	538	28.3%
Kotak Mahindra Bank	2,204	2,400	8.9%
Lupin	1,926	2,400	24.6%
Titan Company	3,405	3,756	10.3%

Mid / Small Caps

Company	CMP (Rs.)	TP (Rs.)	Upside
Astral Ltd	1,495	1,630	9.0%
Crompton Greaves Consumer Electricals	339	423	24.9%
Ingersoll-Rand (India)	4,202	4,522	7.6%
Indian Railway Catering and Tourism Corp	770	864	12.2%
KEI Industries	3,733	4,455	19.4%
Samhi Hotels	238	308	29.4%
Triveni Turbine	649	772	19.0%

Stock Market Outlook

Despite big events and disruptions around global tariff wars, Israel Iran war and other geopolitical tensions, the Indian stock markets continued to its upward trajectory ever since recovering from its correction territory.Foreign institutional investors (FIIs) remain net sellers year to date (YTD), but its impact was neutralised by strong domestic institutional inflows (DIIs).

"Markets seem to have learnt to live with global volatility and adverse geopolitical news flows given flip flops in US policies around tariffs and big variations in crude and global politics. India US trade deal remains a WIP with issues around agriculture, dairy, GM crops and labor-intensive industries, with no easy solution to these long pending issues."

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