ITC, IRCTC to KEI: PL Capital adds THESE five stocks in high conviction picks removing Infosys, Reliance, LT, two others

Brokerage firm Prabhudas Lilladher (PL Capital) has included ITC, Indian Railway Catering and Tourism Corporation (IRCTC), KEI Industries, Triveni Turbine, and Eris Lifesciences in its list of high-conviction stocks. 

At the same time, it excluded prominent names like Infosys, Reliance Industries Ltd (RIL), and Larsen & Toubro (L&T), Polycab India Ltd, and DOMS Industries from its conviction picks due to short-term growth challenges like the global tariff conflicts, fluctuations in crude oil prices, and limited opportunities for re-rating.

Model Portfolio Changes

In terms of their model portfolio, the brokerage continues to have a positive outlook on sectors such as banks, healthcare, consumer and telecom.

"We are increasing weight on Banks, Telecom, Consumer and Healthcare while we are reducing weight on capital Goods. We turn underweight on Auto, IT services and Oil and Gas. We increase weight on ICICI Bank, Kotak Mahindra Bank, ITC, BEL and Bharti Airtel. We add Apollo Hospital, Pidilite and Eicher to the model portfolio. We are removing Polycab, HCL Tech and Astral from the model portfolio. We are reducing weights in L&T, Infosys, RIL and small changes in a few others," said the brokerage in its report.

Nifty 50 Outlook

The brokerage reports that Nifty 50 has experienced a 3.8% decline year-to-date due to sluggish domestic demand, a reduction in Nifty 50 EPS, foreign institutional investor (FII) selling, and ongoing tariff disputes contributing to the turmoil. Since October 2024, Nifty 50 EPS has seen its earnings per share (EPS) lowered by 6.2% and 5.6% for FY26/27, with the potential for further reductions in 1H26 due to tariff disputes and an unpredictable environment. The brokerage anticipates that domestically focused sectors will perform better in the near future. It predicts that Hospitals, Domestic Pharmaceuticals, Retail, certain staples, Banks, defense, and power sectors will excel in the upcoming term.

“We value Nifty 50 at 7.5% discount to 15-year average (18.9x) PE at 17.5 with March 27 EPS of 1,460 and arrive at 12-month target of 25521 (25,689 earlier),” the brokerage said.

High-conviction picks

ITC

The brokerage anticipates that margins will improve across all sectors following 2Q26, which is likely to boost profit growth. The ITC is appealing at a FY27 PE of 21x and offers a 4% dividend yield. The brokerage firm recommends a BUY rating with a target price set at ₹524.

Eris Lifesciences

The brokerage indicates that with a projected EPS turnaround in FY26E/27E and a rise in ROCE to 20% by FY27E, Eris is strategically positioned for sustainable growth and asset generation. The firm is currently valued at 13.6 times FY27E EV/EBITDA, which offers reassurance regarding its valuations.

IRCTC

The brokerage noted that the stock is presently valued at 41x/38x our projected earnings for FY26E/FY27E. In light of the recent decline, the brokerage has revised its recommendation for IRCTC to BUY, setting a target price of ₹850 (44x FY27E EPS).

The brokerage indicated that steady revenue growth accompanied by strong return ratios (27.5% RoCE / 20.3% RoE in FY24) will support the maintenance of valuations. Maintain a ‘BUY’ rating with a target price of ₹4,278.

Triveni Turbine

The brokerage indicated that Triveni Turbine is well positioned for ongoing growth due to several factors: 1) the global shift in energy and a generation gap driving the demand for its industrial and API turbines, 2) a solid order book of ₹18.2bn (0.9x TTM revenue) with strong inquiries from both domestic and international markets, 3) TRIV’s venture into higher MW turbines (120 MW), which opens access to a larger market, 4) demand arising from oil and gas applications in the Middle East and industrial generation in Europe and the Americas, and 5) an increasing proportion of exports (~61%) and aftermarket services (~30%) within the order book.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.