UBS picks: Reliance Industries, Adani Ports, among 10 largecap stocks that can rally up to 42%

Just as confidence in India’s macro story was beginning to build, the energy supply shock triggered by the ongoing Middle East conflict involving the US, Israel and Iran has reintroduced fresh headwinds. With input costs rising sharply and markets turning increasingly volatile, uncertainty around the interest rate outlook has further clouded the near-term picture. Rising oil prices amid ongoing geopolitical tensions are emerging as a key risk for Indian equities, with potential implications for both earnings growth and market valuations. But the brokerage has named 10 stocks that could ride the oil shock. Here’s the full list:

With a target price of Rs 1,780 per share, the brokerage implies an upside potential of 26% from current market levels. The company has some exposure to crude sourcing from the Middle East, although we expect this risk to be mitigated through near-term diversification towards alternative supply sources. Around 35% of earnings are linked to the oil-to-chemicals (O2C) business, where Reliance could benefit from strong product cracks.

One of India’s leading telecom companies has a target price of Rs 2,400, an upside of 31% from current market levels. Valuations have turned more attractive following the recent weakness in the stock, driven by broader macro factors as well as investor concerns around a potential delay in tariff hikes and the company’s planned investment in an NBFC. However, the company’s cash flows remain resilient, and its growth outlook continues to be supported by rising data consumption across both mobile and home broadband segments.

The brokerage implies an upside of 8% as it set a price target of Rs 410 per share. UBS highlighted NTPC as a defensive pick, noting that around 62% of its estimated fair value is derived from the regulated equity business, which offers predictable returns. The brokerage expects a potential pickup in power demand, particularly if El Niño conditions materialise.

The pharma major has a target price of Rs 2,000 per share. This implies an upside potential of 11.1% from current levels. The domestic business outlook remains stable for pharma companies. Export performance may face pressure from higher logistics costs. However, most companies currently hold around 2-3 months of channel inventory, which should help them to continue to meet export demand over the near term.

With a target price of Rs 1,800 per share, it implies an upside 31% from current market levels. The share price has declined 17% from its recent peak on February 5, compared with a 13% drop in the Sensex and an 8% fall in the JSWI over the same period, likely reflecting concerns linked to the Middle East conflict. While potential disruptions to the Strait of Hormuz may weigh on port throughput in the near term, UBS believes the company’s diversified exposure should help cushion the impact.

With a target price of Rs 1,210, the brokerage believes the stock could rally nearly 40% from current levels. Aluminium industry fundamentals are robust, backed by a 45mt capacity cap and resilient demand from mainland China. Given the tight supply conditions, prolonged tensions in the Middle East, which accounts for 8-9% of global aluminium output, this poses further upside risk to the price of aluminium.

The stock could rally 42% from current levels, believes UBS, as it has assigned a target price of Rs 1,470. While GCPL is exposed to commodities like palm oil and certain crude oil derivatives, the company has a dominant market share in the Home Insecticides business (crude-dependent raw material) and Soaps (palm-oil exposure) and therefore cost pass-through is usual with a lag of a quarter or so. UBS also likes the continual improvement in performance of GCPL’s International business (GAUM).

With a target of Rs 1,630, the upside potential translates to 29.57% from current market levels. India suffers from under-penetration across all financial segments. India’s domestic private credit-to-GDP ratio is still lower than other developed and developing economies, similarly, the life insurance premium penetration is low at 3% of GDP vs other developed and developing economies. In the current volatile environment, its preference is for stocks that offer earnings resilience and supporting valuations. ICICI Bank, among banks, passes both these requirements.

The brokerage implies an upside 15% given the target price of Rs 8,750 per share. We remain positive on the growth outlook for the hospital sector as structural drivers are intact: an ageing population, increase in lifestyle-related disorders, greater healthcare insurance coverage, and rising income levels. Private hospitals are a key beneficiary of this theme. We like Apollo Hospitals within the covered names, the brokerage added.

With a target price of Rs 2,410 per share, the brokerage implies an upside of 30.5% from current market levels. The company remains a compelling investment in India’s life insurance sector, in our view, supported by robust distribution strength and a consistent track record of embedded value (EV) growth. Our investment thesis centres on its ability to deliver a CAGR of 18% in EV over FY25-28e, driven by a recovery in annualised premium equivalent (APE) growth, deepening relationships with distributors and largely stable margins.

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