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According to Street estimates, REC Ltd has a 12-month target price of ₹621 per share, compared to its Monday (February 24) closing price of ₹391.55 on the BSE. Similarly, the target price for another state-run company, Hindustan Aeronautics Ltd (HAL), stands at ₹4,943 per share. The defence PSU’s stock ended Monday’s session at ₹3,350.45.
Another company with significant upside potential is Adani Green Energy. The shares of the Adani-owned company rank second after REC, with a consensus target price of ₹1,301, implying a 56% increase from the current market price.
Interestingly, shares of both REC Ltd and HAL have corrected by as much as 40% from their respective highs reached in September last year. Notably, HAL hit a record high of ₹5,675 on July 9, 2024, and has been on a downward trend since then.
JP Morgan, which has an “overweight” rating on the stock with a twelve-month target price of ₹4,958 observed that the company’s order inflow has been strong through nine months ended December 2024.
“The nine months order inflow of ₹56,100 crore is healthy, driven by orders for Sukhoi Engines & Aircrafts. The order book in Q3FY25 stands at ₹1.3 lakh crore, up 58% year-on-year,” wrote JP Morgan in an investor note. The brokerage further said that the company expects orders of ₹1.65 lakh crore (additional LCAs and LCHs), underlining significant opportunity ahead.
On Monday, shares of Adani Green Energy plunged to a 52-week low of ₹818.50 on the BSE, as the broader market sell-off continued, with the Sensex extending its losses for the fifth consecutive session.
The benchmark BSE index has declined nearly 14% from its September peak, as foreign portfolio investors (FPIs) offloaded $23 billion worth of shares amid concerns over slowing economic growth and disappointing earnings. Meanwhile, the broader BSE100 index has fallen 15% from its high last year.
However, while the sell-off has somewhat eased high valuations, the benchmarks are still trading at nearly 19 times their one-year forward earnings estimates, down from 21 times in September.
Other companies with over 40% upside potential over the next year include Power Finance Corporation, Adani Ports & SEZ, and DLF, among others.
