Wait & Hope - Rewards will be worth it !

 "All human wisdom is summed up in two words; wait and hope.' - Alexandre Dumas

This saying seems apt for the Indian markets as the 18 month long corrective phase which started in September 2024 has extended till April 2026. Post Modi led NDA coming back to power in June 2024 the markets have not had it easy both from a capital market policy & performance standpoint. Higher taxes on buyback & dividend, increasing STT & increasing capital gains tax has impacted return expectations of FIIs thus seeing steady drawdowns. 

In addition to this 2025 was a volatile year from a global perspective for India. India-Pakistan engaged in a brief war, Trump imposed harsh tariffs, Indian rupee depreciated sharply & emergence of AI is threatening Indian IT like never before. US-Iran conflict has escalated affecting the Middle East in an unprecedented manner with a new narrative on both escalation & de-escalation being created by the hour both by the media & a loud mouthed US president. Hopefully the April 8th ceasefire is the end to this chapter for the time being. Despite the ceasefire, we think global inflation due to crude & freight will remain elevated. We will see an upward pressure on yields & fiscal deficit will be revised upwards or government spending will take a hit.

While we can incessantly ramble on the macro & conjure statistics to prove one thing or the other but the only thing of relevance is to find opportunities that have corrected beyond logic & business impact is minimal. Despite the ceasefire & the rally stocks are below levels when this war started. The below mentioned businesses are available at 50-70% lower than the highs they made in the last 3 years.  

Raymond Realty(CMP 430, Market Cap ~2,800 crores)

Raymond demerged its real estate division which got listed at ~ Rs. 1000 in July 2025. They are amongst the top 5 developers in MMR region. MMR has seen a significant infra boost since BJP came to power in the state in 2014 thus Thane/ Navi Mumbai are seeing significant traction.

• The company has 100 acres of land in Thane & is steadily developing the same with total revenue potential of 25000 crores at current prices. They have already sold inventory worth ~8500 crores & collected ~7000 crores. Delivery has been before schedule & tremendous goodwill amongst residents/ brokers has been created thus sales traction for ongoing projects/ launches is strong. 
• The company has done 7 JDAs with revenue potential of 17000 crores. 4 have been launched across Bandra, Wadala & Sion with two more launches expected in 12-15 months. 
• The company is expecting a quarterly revenue run rate of ~1000 crores & expects EBITDA margin to be in the 15-20% range. Net debt is at ~200 crores thus we can expect this company to generate cash of 500-600 crores per annum assuming no growth. Management is guiding for 20% growth.     
• They recorded the highest ever pre-sales in Q4FY26 of ~1500 crores & have signed another JDA in Kandivali.  

The company while developing its own land bank has pivoted to partnering with land owners across MMR thus transitioning from an asset unlocking play to real estate developer with demonstrating expertise & creating goodwill. 

TATA Motors PV(CMP 330, Market Cap ~120,000 crores)

Tata Motors PV is the demerged passenger vehicle arm of Tata Motors housing the JLR business & the Indian PV business. 

The Indian PV business is India's second largest outpacing Hyundai & Mahindra. Hyundai's growth has flattened while Tata & Mahindra grow at 25-30% in the domestic business. Mahindra is a complex entity housing multiple businesses thus comparison of market caps becomes tricky but Hyundai houses just the India operations both domestic & exports. Hyundai's market cap is at ~150000 crores thus implying that the market is attributing no value to the JLR business.

JLR is a global behemoth which sells over 400,000 does a turnover of ~400000 crores & generates a PAT of ~20,000 crores with OCF of ~50,000 crores. The business faced a major hacking incident which led to two months of plant shutdown which disrupted the UK economy. The plant is almost on track although a week long shutdown is underway due to a fire at a suppliers factory thus halting production in the UK plant. 

However a business of this size which owns the cult brand Land Rover/ Range Rover & is pivotal to the UK economy is being valued negatively. In our opinion this anomaly will correct soon & the business will be valued at 0.5-1x sales in FY 27.

Aditya Birla Money (CMP 120, Market Cap ~700 crores)

AB Capital's subsidiary AB Money is the broking & wealth management arm of the group. The optionality's that this business enjoys is high & they have been showing significant growth on all counts. The company has put in place its digital architecture & leveraged the Aditya Birla brand to spread its physical reach to 70 branches and ~1000 franchise outlets. The DP assets stand at 75000 crores & a client base of 9 Lakhs.   

FY27 expected revenues to be close to ~500 crores & PAT of close to 100 crores. No rerating has taken place & growth has been in line with earnings so far. The potential to scale this business is very high as distribution of products, broking & even new avenues as commodities start on the platform. 

The stock has corrected more than 60% from its all time high & the broking industry has seen reduced volumes due to regulatory changes. However the growing market share trajectory of this company holds this business in good stead.      

GNFC (CMP 420, Market Cap ~6200 crores) 

GNFC is India's leading industrial chemical player. The company is one of India’s largest ammonia manufacturers and South Asia's largest Toluene Di-Isocyanate (TDI) producer. It operates one of the largest single-stream urea facilities in India. It is the sole producer of Acetic Acid and one of only 2 producers of Formic Acid in India. Besides it is a leading player in Methanol, Ethyl Acetate, weak Nitric Acid, concentrated Nitric Acid & Ammonium Nitrate. This expertise & integration is almost impossible to replicate & thus the company is cash generating machine. 

It sits on cash & investments in excess of 4000 crores & is undergoing a capex of almost 2500 crores from internal accruals. The Iran war & damage to refineries has disrupted the chemicals space & thus pricing tailwind exists. Further the rupee depreciation has made imports expensive further strengthening GNFCs position. While shortage of gas implies the fertilizer business might suffer but the chemical business will more than makeup for it.