Rain Industries, Tata Steel and more: SMIFS’ top stock picks for short, medium and long-term gains

Indian benchmark index Nifty rose by over one percent in August, despite macroeconomic challenges and recession concerns. The Bank of Japan's interest rate hike to 0.25 percent, along with geopolitical tensions and US recession fears, triggered a market sell-off early in the month. However, improved macroeconomic data eased concerns, leading to a market recovery after initial declines.

While September started on a strong note, with the benchmark Nifty hitting new highs, however, it later slipped in the red on the back of global woes.

Amid this backdrop, brokerage house SMIFS has released four stock picks—Rain Industries, Tata Steel, Sequent Scientific, and Bodal Chemicals—for investors seeking short-, medium-, and long-term opportunities.

Rain Industries: A Techno-Funda Buy

Technical View: SMIFS has issued a bullish recommendation on Rain Industries, citing both technical and fundamental strengths. The stock, which closed at ₹168.95, is stuck in a range and appears oversold, with indicators like the RSI and stochastic oscillator suggesting a rise towards ₹210. Based on these technical signals, SMIFS advises investors to buy Rain Industries in the price range of ₹150– ₹140, with a stop-loss set at a closing price below ₹120.

Fundamental View: As per the brokerage, Rain Industries is showing encouraging signs of recovery in its carbon segment, driven by rising demand for primary aluminium, supported by infrastructure projects, electric vehicles, and lightweight manufacturing. While global aluminium production remains strong, particularly in China, Western markets have been affected by inflation and reduced government spending. 

However, Rain Industries' ongoing expansions in Europe and the Americas are positioning the company for growth, it stated. In the second quarter, it reported an EBITDA of ₹490 crore, and margins are expected to normalise to historical levels of 15 percent to 16 percent by CY25 as raw material costs align with selling prices. Additionally, the company is focused on reducing its debt, with SMIFS projecting the net debt-to-EBITDA ratio to drop to 3x by FY25, noted SMIFS. 

Rain’s Advanced Materials division, especially products like CARBORES and PETRORES, continues to perform well, with a growing emphasis on eco-friendly materials. With a projected EPS of ₹25 by CY26 and a price target of ₹210, SMIFS recommends a buy.

Short-Term Buy: Tata Steel

For short-term investors, SMIFS recommends Tata Steel, currently trading at ₹151.30. The stock has retraced from recent highs and found support around the ₹140 level. With indicators such as the stochastic oscillator and RSI signalling a potential rebound, SMIFS suggests buying Tata Steel in the price range of ₹145– ₹140, with a target of ₹180 and a stop-loss below ₹120.

Medium-Term Buy: Sequent Scientific

Sequent Scientific, which closed at ₹177, is recommended as a medium-term buy. The stock has broken out of an Inverse Head and Shoulder pattern, supported by strong volume growth. With technical indicators like the RSI and ADX signalling further upward movement, SMIFS advises buying Sequent Scientific in the ₹150–140 range, with a target of ₹240 and a stop-loss below ₹100.

Long-Term Pick: Bodal Chemicals

SMIFS has a positive outlook for Bodal Chemicals, recommending the stock as a long-term buy with a target price of ₹132, representing a potential upside of 58 percent from its current ₹83.60. Bodal Chemicals is expected to benefit from a demand recovery in its end-user industries, including textiles, dyes, and pigments. The company’s benzene derivatives business is also expected to add to its revenue and EBITDA in the coming quarters.

With the stock trading at 9.3x on its expected EPS of ₹11.3 for September 2026, SMIFS assigns a target multiple of 15x, reflecting the anticipated recovery in global demand and Bodal Chemicals’ improved visibility in the agro and pharma sectors. The stock is poised to benefit from robust demand in H2FY25E, making it an attractive long-term investment.

SMIFS has presented a variety of stock picks for different investment horizons, from short-term opportunities in Tata Steel to long-term growth potential in Bodal Chemicals. Rain Industries, with its improving fundamentals and debt reduction strategy, remains a key buy recommendation, supported by a favourable global aluminium market. Investors are encouraged to take advantage of dips in the recommended price ranges to capitalise on these opportunities.

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 taking any investment decisions.