Stocks to buy today: CLSA upgrades Muthoot Finance to outperform; Morgan Stanley sees over 20% upside in Varun Beverages

Brokerage firms have shared their latest recommendations on key stocks, highlighting strong growth potential across various sectors for the next 12 months.

CLSA has upgraded Muthoot Finance to "Outperform," citing robust momentum in the gold loan segment, while HSBC maintains a "Buy" rating on Mahindra & Mahindra (M&M), supported by a solid SUV order book and diversified business model.

Meanwhile, Morgan Stanley continues to remain "Overweight" on Varun Beverages, emphasizing strong growth momentum and expansion opportunities.

We have collated a list of recommendations from top brokerage firms from ETNow and other sources:

CLSA on Muthoot Finance: Upgrade to Outperform from Hold | Target Rs 2,400 (from Rs 2,000) | LTP Rs 2,200 | Upside 9%

CLSA has upgraded Muthoot Finance to "Outperform" from "Hold" and raised the target price to Rs 2,400 from Rs 2,000, implying a 9% upside from the last traded price of Rs 2,200.

The brokerage highlights that the gold loan segment has shown strong momentum in the first nine months of FY25, despite challenges in the personal loan segment.

Banks have reported a significant 70% year-on-year growth in gold loans as of December 2024, with SBI leading the market with a 25% share. Among NBFCs, Muthoot Finance has witnessed a robust 31% year-on-year growth, while Manappuram Finance has grown by 17%, benefiting from the sector’s momentum and restrictions on certain peers.

Given the higher loan growth expectations, CLSA has lifted Muthoot Finance’s FY25-27 earnings estimates by 1-4%.

HSBC on M&M: Maintain Buy | Target price Rs 3,520 (from Rs 3,390) | LTP Rs 3,137 | Upside 12%

HSBC has maintained a "Buy" rating on Mahindra & Mahindra (M&M) and raised the target price to Rs 3,520 from Rs 3,390, indicating a 12% upside from the last traded price of Rs 3,137.

The brokerage does not foresee any downside risk to growth expectations, supported by M&M's strong SUV order book. It expects the SUV business to continue outperforming the industry in FY26, while the tractor segment is also likely to see better growth, particularly in southern markets.

Despite the overall weakness in passenger vehicle demand, HSBC remains positive on M&M due to its well-diversified business model.

Morgan Stanley on Varun Beverages: Maintain Overweight | Target Rs 674 | LTP Rs 548 | Upside 23%

Morgan Stanley has maintained an "Overweight" rating on Varun Beverages with a target price of Rs 674, implying a 23% upside from the last traded price of Rs 548.

The brokerage reiterated its guidance for volume and margin growth in CY25, highlighting that the company’s growth momentum remains strong in Q1CY25.

Management has stated that competition from Campa in India has not had any noticeable impact on its performance. Notably, the market already consists of 20% share held by B-brands, which are priced lower than Pepsi.

Additionally, Varun Beverages sees significant expansion opportunities, with double-digit growth potential in distribution from its current 4 million outlets.

The company remains confident that the market is large enough to accommodate new competitors without affecting its growth trajectory.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)