Stocks to buy: Kirloskar Brothers and VA Tech Wabag are two mid-cap stock picks amid falling Indian stock market

Stocks to buy: The Indian stock market benchmark indices, Sensex and Nifty 50, extended their losses on Monday, and traded nearly a percent lower each amid weak global market cues.

The Sensex crashed over 681 points, 0.91%, to 74,629, while the Nifty 50 was trading 208 points, or 0.92%, lower at 22,587. Bank Nifty index declined 530 points, or 1.08%, to 48,451.

Broader markets underperformed the frontliners, as the Nifty Smallcap 100 and the Nifty Midcap 100 index plunged more than 1% each. Baring Nifty Pharma, all other sectoral indices were trading in the red.

Meanwhile, Q3 results and management commentary of mid-cap companies indicate that demand is picking up in certain segments, while the broader outlook remains uncertain, according to Axis Securities.

Key factors to monitor going forward include shifts in private capex, domestic infrastructure spending, geopolitical developments affecting trade and logistics, and the imposition of Anti-Dumping Duties or Tariffs in the USA and other key markets, said the brokerage firm.

Axis Securities has picked two midcap stocks to buy based on its strong fundamentals and growth outlook. The two midcap stock picks by the brokerage firm are Kirloskar Brothers and VA Tech Wabag.

Kirloskar Brothers | Buy | Target Price: ₹2,100

With sustained demand from key end markets and a robust order book, Kirloskar Brothers remains on track to achieve double-digit revenue growth in FY25. The current order book provides strong revenue visibility, and order intake is expected to remain strong going forward. Additionally, the focus on cost optimisation and an improved product mix should support continued margin expansion, Axis Securities said.

The brokerage firm values Kirloskar Brothers stock at 25x FY27E EPS with a target price of ₹2,100 per share and has a ‘Buy’ rating on the stock.

VA Tech Wabag | Buy | Target Price: ₹1,970

VA Tech Wabag has consistently grown its order book while strategically enhancing its revenue quality and predictability, which aligns with this focus. The company is looking to increase its share of more profitable international, industrial, and O&M contracts, Axis Securities said.

With its current order book providing clear revenue visibility for the next 3-4 years, especially in terms of international orders, these strategic efforts are expected to help the company achieve its targeted margins, further strengthening its financial position and business sustainability, it added.

The brokerage firm has a ‘Buy’ rating on VA Tech Wabag shares with a target price of ₹1,970 per share, valuing it at 21x FY27E EPS.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.