Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting May 19, 2025) are Bharti Airtel and Varun Beverages. Let’s take a look:
Bharti AirtelBharti’s 4QFY25 performance was in-line. India wireless revenue/EBITDA grew ~1%/2% QoQ, offset by fewer days. Consol. net debt inched up by ~INR50b due to the redemption of USD1b perpetual bonds.We continue to favor BHARTI’s superior execution on premiumization.Robust FCF of ~INR97b/ ~INR390b in Q4/FY25, along with moderating capex, should lead to significant FCF generation of ~INR1t in FY26-27E. We model a 14%/17% CAGR in Bharti’s consolidated revenue/EBITDA (FY25-28E) driven by an expected ~15% India wireless tariff hike (Dec’25), faster home broadband growth, & continued strong double-digit growth in Africa.Varun BeveragesVarun Beverages delivered strong 1QCY24 performance with 29% YoY revenue growth, driven by robust 30% volume growth (15.5% organic). While margins remained flat YoY at 22.7% due to lower-margin South Africa consolidation, domestic demand stayed healthy with double-digit growth. VBL maintained its volume growth trajectory in the domestic market & its expansion in international markets. Management is confident about its double-digit growth guidance on the back of industry tailwinds and expansion into new markets. We project 18%/16%/26% revenue/EBITDA/PAT CAGRs over CY25-26. As PepsiCo’s key franchisee, VBL is well-placed to capitalize on India’s underpenetrated beverage market and rural refrigeration growth.Disclaimer: The opinions, analyses and recommendations expressed herein are those of brokerage and do not reflect the views of The Times of India. Always consult with a qualified investment advisor or financial planner before making any investment decisions.
