The market might have offered hopes of a recovery, tariff pressures will persist through this quarter, Emkay Global warned, as it believes the key to market recovery is earnings stability. The brokerage expects FY26 earning forecasts to be resilient from here on, but feels investors must brace for extreme volatility to continue.
The brokearge came out with two screeners -- GARP (growth at a reasonable price) and QARP (quality at a reasonable price) -- focused on growth and quality, which offered a few stocks ideas that investors can consider to buy after the recent market correction. They included Motherson Sumi Wiring, JK Tyre, Adani Green Energy Ltd, Colgate-Palmolive Ltd, Bikaji Foods Ltd, Route Mobile, TeamLease Services and Kajaria Ceramics Ltd.
In the GARP screening, Emkay searched for stocks with estimated FY26 EPS growth greater than FY25 EPS growth, one-year forward PE at discount to the average of the last 5 years, EPS CAGR for FY22-24 greater than 12 per cent and FY26 ROE greater than 15 per cent. Besides, it also looked for stocks that have correctedmore than 35 per cent from their 52-week highs.
Based on them, it suggested stocks such as Motherson Sumi Wiring, Adani Green Energy, JK Tyre, Route Mobile, TeamLease Services and Bikaji Foods International.
Among these stocks, Emkay has 'Buy' ratings on Adani Green Energy (Target: Rs 2,550), Route Mobile (Target: Rs 1,700) and JK Tyre (Target: Rs 500). It has 'ADD' ratings on TeamLease Services (Target: Rs 2,800), Bikaji Foods International (Target: Rs 725) and Motherson Sumi Wiring India (Target: Rs 60).
In the QARP screening, Emkay looked for companies wit estimated OCF/Ebitda for FY26 greater than the FY23-FY25 average, with a minimum of 45 per cent for FY26. It searched for companies with positive free cash flow (FCF) in either FY25 or FY26, with cumulative positive FCF from FY23 to FY27.
ROCE consistently above 10 per cent for each year from FY23 to FY27, working capital days less than 90, one-year forward PER at discount to the average of the last 5 years, and stocks that have corrected more than 35 per cent from their 52-week highs, were some other criteria that Emkay Global screened.
The stocks that passed them included Motherson Sumi Wiring, JK Tyre, Colgate-Palmolive, TCI Express and Kajaria Ceramics. Emkay has 'Buy on Kajaria Ceramics with a target of Rs 1,250. It has 'ADD' on TCI Express with a target of Rs 875, but 'Reduce' on Colgate-Palmolive with a target of Rs 2,700.