Fundamental Picks: BSE 500 Stocks; 1 Pharma, 1 FMCG Stocks To BUY During July 22-27 Weekly Trade; Find Out!

After a volatile ride last week with Sensex outperforming Nifty and both benchmarks escaping the bearish trend, the Indian stock market is set to kick start its July 22-27 trading session with Union Budget and Q1 results taking centerstage. In the upcoming week, brokerage SMC Global Securities has recommended buying two stocks belonging to the pharma and FMCG segments. These two stocks are part of the BSE 500, midcap and have given double-digit returns year-to-date. They are part of SMC's fundamental picks.

First is Natco Pharma whose share price is at Rs 1224.10 apiece with a market cap of Rs 21,924.84 crore. The stock is less than Rs 100 away from hitting its 52-week high of Rs 1,311.00 apiece. YTD, NATCO is up by 50% on BSE.

Second up is packaged foods company, Bikaji Foods International which is currently at Rs 697.95 apiece, also near its 52-week high of Rs 747.95 apiece on BSE. The company's market cap is at Rs 17,475.42 cr0re. YTD, the stock climbed by 28% on BSE.

Here's what SMC Securities recommends about the two stocks:

Natco Pharma:

The company is engaged in the business of pharmaceuticals, which comprises research and development, manufacturing and selling of bulk drugs and finished dosage formulations comprised of FDFs and APIs. APIs business is strategic and serves captive requirements and third-party sales.

On the valuation, SMC said "The company has effectively established a local presence through its partners, ensuring sustained business growth. The management of the company plans to focus more on markets like Canada and Brazil, which offer robust growth opportunities going forward.

SMC cited that Natco continues to lay good foundation for business growth in the Asia-Pacific region. The management of the company is confident about its business growth, order books and the earnings outlook. Thus, it is expected that the stock will see a price target of Rs. 1551 in 8 to 10 months' time frame.

However, the risk factor for Natco ahead could be strict operational and strategic regulation coupled with currency fluctuation.

Bikaji Foods International:

This FMCG player is the third largest ethnic snacks company in India with an international footprint, selling Indian snacks and sweets, and is among the fastest growing companies in the Indian organised snacks market.

On the valuation, SMC said that Bikaji is doing well and according to the management of the company, it has delivered a remarkable volume growth of 15.3% during FY24. On the bottom-line front, the EBITDA margin for the year improved, which was led by a reduction in commodity prices, superior mix, operating leverage and effective cost management.

Moreover, SMC highlighted that Bikaji is strengthening its distribution network to achieve a deeper distribution across its core and focus markets. Thus, it is expected that the stock will see a price target of Rs. 830 in 8 to 10 months' time frame.

Among the risk factors for the stock's potential upside will be intense competition and economic slowdown.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.