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Stocks To Buy Today, Oct 14: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday

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  Published in Stocks and Investing on Monday, October 13th 2025 at 23:39 GMT by Goodreturns
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Top 2 Stock Picks for Profitable Trading – Oct 14 (Insights from Riyank Arora, Mehta Equities)

The Indian equity market continues to display resilience amid a cautiously optimistic macro backdrop. On Oct 14, market participants are eyeing a handful of stocks that have shown consistent momentum, strong fundamentals, and attractive valuation gaps. Riyank Arora of Mehta Equities, known for his systematic approach to stock selection, highlighted two standout names that could offer both short‑term trading opportunities and longer‑term upside. This article distills the key takeaways from Arora’s picks, the catalysts driving their performance, and the risk profile each investor should consider.

1. M&M Financial – A Robust Player in the Mid‑Cap Banking Space

Why M&M Financial?

M&M Financial has emerged as a clear outlier among mid‑cap banks in terms of profitability and asset quality. Its aggressive loan growth, coupled with a disciplined risk management framework, has led to a series of consecutive earnings beats. Recent quarterly data shows:

• Net Profit Growth: A 34 % YoY increase in Q4 earnings, supported by higher loan growth and a shrinking non‑performing asset (NPA) ratio.
• Asset‑Quality Improvements: NPA ratio down to 3.8 % from 5.4 % last year, a testament to proactive provisioning and a focus on customer creditworthiness.
• Capital Adequacy: Tier‑1 capital ratio comfortably above the 13 % regulatory requirement, giving the bank room to expand its loan book.

Catalysts and Valuation

The bank’s valuation has slipped to a 12‑year low, with the price‑to‑earnings (P/E) ratio around 13x—well below the sector average of 18x. This discount is perceived as a buying window, especially considering:

• Growth Trajectory: Analysts project a 12‑15 % CAGR in net interest income for the next three years, driven by a growing retail and SME base.
• Margin Expansion: A favorable interest rate spread, given the current RBI policy stance, is expected to sustain profit margins.
• Strategic Initiatives: M&M Financial’s expansion into Tier‑2 and Tier‑3 cities, coupled with digital banking initiatives, should capture underserved markets.

Trading Strategy

Arora recommends a buy‑and‑hold approach with a target of ₹650, assuming a 15‑20 % upside from current levels. The bank’s support levels lie around ₹580, making it a good short‑term play if the price stabilizes near this floor. Traders looking for a shorter horizon can target a 10 % upside by setting a profit‑taking target around ₹630 before the next earnings announcement.

2. Asian Paints – The Paint Industry’s Growth Story

Why Asian Paints?

Asian Paints has long been a benchmark for the Indian paint sector. Despite the macro‑economic slowdown, the company’s strategic positioning and diversified product portfolio continue to deliver resilient performance. Key highlights include:

• Revenue Upswing: Q4 revenue grew by 8.5 % YoY, driven by a robust demand for both consumer and industrial paints.
• Profit Margins: Net profit margin expanded to 21.3 % from 18.9 % last year, owing to efficient cost controls and better input price management.
• Distribution Reach: A network of over 5,000 retail outlets and 200 manufacturing plants gives the company an extensive footprint.

Catalysts and Valuation

Asian Paints trades at a P/E ratio of 24x—slightly above the sector average but justified by its solid growth prospects. Upcoming catalysts include:

• New Product Launches: The launch of eco‑friendly paint lines positions the company to tap into the growing sustainability trend.
• Emerging Markets: Expansion into South‑East Asian markets through strategic joint ventures could diversify revenue streams.
• Monetary Policy Impact: A gradual tightening of RBI rates could benefit the company’s interest income as it has a sizeable portfolio of fixed‑rate loans.

Trading Strategy

Arora advises a targeted entry around ₹4,250 with a stop‑loss at ₹3,950 to capture a potential upside of 15 %. Given the company’s earnings calendar, a disciplined approach to buying post earnings and holding until the next dividend declaration can lock in profits. For the medium‑term trader, a 12‑month horizon to ₹4,700 aligns with analyst projections of 10‑12 % annual growth.

3. Macro Context & Risk Factors

While both picks show compelling fundamentals, it’s crucial to weigh macro‑economic and sector‑specific risks:

• Interest Rate Sensitivity: Rising rates could compress banks’ net interest margins and increase borrowing costs for paint manufacturers.
• Commodity Price Volatility: Input prices for paint (e.g., pigments, resins) are exposed to oil price swings, potentially eroding margins.
• Regulatory Changes: Banking regulations, such as stricter provisioning norms, could impact M&M Financial’s profitability.

Arora underscores the importance of diversifying across sectors and maintaining a watch on regulatory developments.

4. Additional Resources & Further Reading

For those interested in a broader view of the market, the following GoodReturns pieces provide complementary insights:

• “Top 10 Mid‑Cap Banks to Watch” – An in‑depth look at the mid‑cap banking landscape.
• “Consumer Goods Outlook for 2025” – A sectoral analysis of growth drivers in consumer staples.
• “How RBI’s Monetary Policy Affects the Equity Market” – A primer on central bank actions and market implications.

These resources can help contextualize the picks within the larger market narrative.

5. Key Takeaways

• M&M Financial offers a compelling value proposition for mid‑cap banking investors, with robust growth, improving asset quality, and a discount valuation.
• Asian Paints remains a stalwart in the consumer goods sector, poised for continued expansion through product innovation and geographic diversification.
• Both stocks carry inherent risks tied to macro‑economic cycles and sector dynamics, necessitating vigilant risk management.
• A disciplined entry‑exit strategy, aligned with earnings calendars and sector catalysts, can maximize upside while mitigating downside exposure.

Arora’s top picks illustrate the blend of fundamental strength and market timing that can yield profitable trading outcomes in the Indian equity market. By integrating these insights into a broader investment framework, traders can enhance their probability of success while maintaining a balanced risk profile.