Top 2 Stocks to Buy for a Potential Upside of 13%: TradeBrains Portal Recommendations
In this article, we explore two promising stocks from the pharmaceutical and real estate sectors, recommended by the TradeBrains Portal, with an upside potential of up to 13%. We also provide an analysis of their performance and market trends.
CiplaOberoi RealtyPharmaceutical SectorReal Estate SectorInvestmentReal EstateMay 20, 2025
1. Cipla
- CMP: ₹ 1,491
- Target: ₹ 1,690
- Upside: 13%
- Time Frame: 12 Months
Rationale
In FY25, Cipla saw a growth of 8% YoY in its income from operations at Rs 27,548 crore, with an EBITDA growth of 14% at Rs 7,128 crore. Their EBITDA margin grew from 24.5% in FY24 to 25.9% in FY25, and the return on invested capital (ROIC) grew to 33% from 31% last year. Cipla recorded a profit after tax (PAT) growth of 28%, from Rs 4,106 crore in FY24 to Rs 5,273 crore in FY25, with their PAT margin expanding from 16.1% to 19.1% now.
Cipla’s research and development investment stood at Rs 1,524 crore, which is 5.5% of revenue. The company’s total debt has been reduced from Rs 559 crore in FY24 to Rs 438 crore in FY25, and it has been maintaining a healthy cash balance of Rs 10,807 crore as of FY25.
One Indian business that accounts for 42% of Cipla’s revenue grew at a healthy 7% YoY during FY25. Cipla’s branded prescription business continued to outpace the market growth in key chronic therapies like respiratory, anti-infectives, urology, and cardiac. Trade Generics is back on a growth trajectory with 19 new launches in FY25, and anchor brands of the subsidiary Cipla Health Limited (CHL) continue to grow bigger. Additionally, Cipla’s asthma inhaler “Foracort” became the 1st brand to cross Rs 900 crore revenue in the history of the Indian pharmaceutical market.
Cipla’s North America business, contributing 29% of total revenue, grew marginally by 3% and secured drug approvals from ANDA & NDA for Lanreotide Injection, Nilotinib, and Nano Paclitaxel. The company is focused on expanding its pipeline, with key respiratory, peptide, and complex generic assets in progress, and several launches expected between FY26–FY28. Two 505(b)(2) asset launches are anticipated in 2–3 years, with further filings in oligonucleotides and biosimilars underway. Cipla’s One Africa business, constituting 14% of revenue, grew at 12%, and the emerging markets and Europe business, which accounts for 13% of revenue, saw a growth of 15%.
Risk Factor
Cipla operates in a highly regulated industry; thus, any changes in regulatory norms or failure to comply with existing norms could impact its operations. Additionally, any interruptions in the supply chain and non-compliance with required quality norms by vendors can disrupt its manufacturing process, leading to product shortages and a material adverse impact on the reputation and revenues. Additionally, the US president’s recent plan to cut down drug prices in the country could impact the revenues of Cipla, as the company generates 29% of its revenue from North America as of FY25.
2. Oberoi Realty
- CMP: ₹ 1,735
- Target: ₹ 1,950
- Upside: 12%
- Time Frame: 12 Months
Rationale
The real estate market in India is the second-highest employment generator, which is expected to reach US$ 1 trillion in market size by 2030. India’s real estate investments surged to a record high in 2024, such that equity investments reached $11.4 billion, registering a 54% YoY growth rate. The Indian gateway cities dominated the inflow, with Delhi NCR, Mumbai, and Bangalore accounting for 65% of total investment activity. Key drivers for this rapid transformation are the emergence of nuclear families, rapid urbanization, and rising household income, helping to push the growth of the real estate industry. Moving forward, data centers, healthcare, hotels, and education sectors will be promising alternative investment horizons with significant capital inflows in the real estate sector.
In FY25, Oberoi Realty recorded a revenue of Rs 5,474 crore from Rs 4,818 crore in FY24, a growth of 13%. Its net profit is Rs 2,225.5 crore from Rs 1,927 crore, an increase of 15.5%. Operating margins at 62.94% from 57.83%, the projects’ income grew by 12% to Rs 4,106.25 crore, rental grew by 48% to Rs 869.39 crore, hospitality grew by 9% to Rs 191.89 crore, property management services grew by 48% to Rs 73.03 crore, and other operating income grew by 180% to Rs 45.71 crore. In FY25, the company has delivered 12,80,133 sq.ft of carpet area with 927 units booked, amounting to sales of Rs 5,260 crore, including the flagship projects Elysian, Jardin, Forestville, Eternia, Enigma, Sky City, and Three Sixty West – ORL.
The company has delivered 324 lakh sq. ft. of Gross Leasable Area (GLA) in the commercial, retail, and hospitality space, with the operating revenue amounting to Rs 964 crore and EBITDA of Rs 768 crore in FY25. The popular brands include Commerz I, Commerz II, Commerz III, Oberoi Mall, and The Westin Mumbai Garden City.
On the sustainability side, Oberoi Realty has commissioned a Decentralized Solid Waste Management project in Shahapur, Thane district, has achieved 1,298 mt waste diversion from landfills, and targets to achieve 4,175 mt by FY27.
Risk Factor
The real estate sector in India is highly regulated with a complex web of policies at both the central and state levels. This leads to delays in approvals and inconsistencies in the projects. Moreover, the real estate field is cyclical, and a highly fragmented market structure, because of large regional players, brings strong competition, playing an important role in market share and pricing power. This field is affected by macroeconomic factors such as government policies and fluctuations in supply and demand. However, any significant decline in the industry and global investment environment may have a negative impact on the company.
Market Recap May 19, 2025
The Indian market opened flat again on Monday, with Nifty 50 opening at 25,005 and BSE Sensex opening at 82,355. The broad indices fell slightly today, and the Nifty dropped below the 25,000 mark. Nifty 50 closed at 24,945, down by -74 points, or -0.30%, with an RSI of 63.61, below the overbought zone of 70, and was trading above all four 20/50/100/200 EMAs in the daily timeframe. Whereas, the Sensex closed at 82,059, down by -271 points, or -0.33%, with an RSI of 62.56, and was trading above all four EMAs as well.
Among the sectoral gainers, Nifty Realty gained 20.65 points, or 2.26%, closing at 933, with gainers including Raymond Ltd.
Frequently Asked Questions
What is the current market price of Cipla?
The current market price of Cipla is ₹ 1,491.
What is the target price for Cipla as per TradeBrains Portal?
The target price for Cipla as per TradeBrains Portal is ₹ 1,690.
What is the expected upside potential for Oberoi Realty?
The expected upside potential for Oberoi Realty is 12%.
What are the key drivers for the growth of the real estate industry in India?
The key drivers for the growth of the real estate industry in India include the emergence of nuclear families, rapid urbanization, and rising household income.
What are the main risks associated with investing in Cipla?
The main risks associated with investing in Cipla include regulatory changes, supply chain disruptions, and potential impacts from the US president's plan to cut drug prices.
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