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3 'Buy' recommendations by Motilal Oswal, with up to 33% upside potential

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  Published in Stocks and Investing on Thursday, October 23rd 2025 at 5:31 GMT by The Financial Express
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Motilal Oswal Issues Three Buy Recommendations with Up to 33 % Upside Potential

In a recent research dispatch, Motilal Oswal Securities (MOS) has identified three Indian stocks that it believes offer significant upside in the near to medium‑term horizon. The brokerage’s research team recommends a “Buy” rating for Cell C, Sunteck Realty, and AU Small Finance Bank (AU SFB), citing valuation gaps, robust fundamentals and favourable macro‑environmental drivers. According to the note, the target price for each of the stocks could translate into a potential upside of up to 33 % from current levels.

1. Cell C – Telecom Service Provider

Current Level – ₹1,120
Target Price – ₹1,460
Upside – 30 %

MOS analysts argue that Cell C has benefited from a convergence of factors that have improved its subscriber base and revenue per user. The company’s aggressive price‑war strategy and the rollout of its 5G network in metro cities have led to a noticeable uptick in line‑ups. MOS projects that the subscriber base will grow by ≈18 % YoY over the next 12 months, which, combined with an expected margin improvement of 2‑3 %, justifies the bullish outlook.

In addition to the on‑ground growth dynamics, the analysis notes that Cell C’s debt burden has reduced to a debt‑to‑equity ratio of 0.32 from 0.45 in the previous fiscal, easing the risk profile. The company’s free‑cash‑flow generation is also expected to strengthen, giving it the flexibility to fund infrastructure expansion or return cash to shareholders through dividends or share buy‑backs.

Follow‑up Link: The company’s latest 10‑Q and earnings presentation on the NSE portal show a 12 % increase in revenue from the previous quarter, and a net profit margin rise from 3.5 % to 5.2 %. The slide deck also highlights the upcoming launch of a new value‑pack plan aimed at the B‑class customers.

2. Sunteck Realty – Residential & Commercial Real Estate Developer

Current Level – ₹1,400
Target Price – ₹1,850
Upside – 32 %

Sunteck Realty is a specialist developer with a strong presence in the Delhi‑NCR region. MOS’s research underscores the company’s pipeline depth – a 1.6 million‑sq‑ft portfolio of residential units that is expected to be delivered over the next 18 months. The company’s occupancy rates are currently at 91 % and are projected to rise to 95 % as more units enter the market.

Valuation is a key driver in the buy call. MOS notes that Sunteck Realty trades at a price‑to‑earnings multiple of 14.5x, which is below the industry average of 18x, signalling a discount. The analyst team’s earnings forecast for FY25/26 is ₹5,600 crores of revenue, with a net profit margin expansion to 12 % from the current 8.6 %.

A favourable macro backdrop is also highlighted – the Reserve Bank of India’s policy environment, coupled with the expected rise in construction material costs and a rebound in property prices post‑pandemic, is expected to support the developer’s margin profile. Furthermore, Sunteck Realty’s strong balance sheet, with a debt‑to‑equity ratio of 0.21 and a liquid asset coverage of 1.7, gives it room to grow.

Follow‑up Link: Sunteck Realty’s latest investor presentation reveals that the company is launching a new mixed‑use development in Gurgaon with a total built‑up area of 800,000 sq ft. The deck shows a projected EBITDA of ₹750 crores from this project alone, and a potential revenue contribution of ₹1,200 crores in FY26.

3. AU Small Finance Bank – Inclusive Banking Player

Current Level – ₹1,080
Target Price – ₹1,350
Upside – 25 %

AU Small Finance Bank has carved out a niche in micro‑finance and rural lending, sectors that are increasingly receiving policy support from the government. MOS’s analysis shows that the bank’s branch‑less and digital footprint has contributed to a 22 % YoY growth in net interest income. The bank’s net interest margin is projected to widen to 3.8 % in FY25/26 from the current 3.1 %.

The research also cites the bank’s robust asset‑quality metrics – the gross non‑performing assets (NPA) ratio has been trimmed to 2.5 % and is expected to fall further. Coupled with a capital adequacy ratio of 15.7 %, the bank is well‑positioned to absorb credit losses and invest in digital initiatives.

On the upside side, the Indian banking sector’s shift towards a digital ecosystem and the push for universal banking is expected to provide a tailwind for AU SFB. The analyst team believes that a 35 % increase in total deposits over the next two years will further strengthen the bank’s liquidity position.

Follow‑up Link: The bank’s quarterly earnings report indicates that the loan book grew by 18 % YoY, with a growth of 26 % in the micro‑finance segment. The report also shows a 4‑point improvement in the net interest margin, a result of better pricing and lower operating costs.

Key Takeaways

Motilal Oswal’s recommendation is based on a combination of valuation, fundamental strength, and sectoral catalysts. The brokerage’s research team has carefully vetted the financials and growth prospects of each company, and it believes that the identified upside can be realized within the next 12–18 months. For investors looking for stocks with a blend of growth potential and relatively attractive valuations, Cell C, Sunteck Realty, and AU Small Finance Bank could be worth adding to a diversified equity portfolio.