Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting May 5, 2025) are Varun Beverages and JSW Infrastructure. Let’s take a look:
VBL
Varun Beverages Ltd 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.Management remains confident in long-term double-digit volume growth, supported by distribution expansion (visi-coolers) and a shift towards healthier beverages (nimbooz +100% YoY). International markets, though margin-dilutive, offer scale-up potential. We maintain BUY (55x CY26E EPS), projecting 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.
JSW Infra
JSW Infrastructure concluded FY25 with strong growth in cargo volumes of 117Mn tons (+9% YoY). Revenue rose 19% YoY to ₹44.8Bn, while APAT grew ~22% YoY, reflecting steady progress toward its 400 MTPA port capacity goal by FY30. Boosted by Navkar acquisition, the logistics segment targets ₹80b revenue by FY30. With a strong balance sheet and positive outlook, the company is poised to benefit from India’s infrastructure growth and rising third-party cargo demand despite global headwinds.We expect JSWINFRA to strengthen its market dominance, leading to 13% volume CAGR over FY25-27. This, along with a sharp rise in logistics revenues, is expected to drive revenue/EBITDA/APAT CAGR of 22%/23%/18% over FY25-27.
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