Best stocks to trade for today, 16 May, as recommended by Trade Brains Portal

Crompton Greaves Consumer Electricals Ltd

• Current price: ₹ 327
• Target price: ₹ 410 in 12 months
• Stop-loss: ₹ 285
• Why it’s recommended: It is a leading electrical consumer durables company with more than 12,000 SKUs and strong growth prospects, fueled by a focus on brand building and consumer sentiments. The company has generated the highest-ever revenue, ₹7,932 crore as of FY25, up by 7.4% YoY. It is also able to increase its gross and Ebitda margins, led by input cost reduction, mix improvement, cost optimization measures, and other expense fronts. Ebitda margins improved by 154 bps YoY, standing at 11.3% as of FY25.

Net profit margin for FY25 stood at 7.11%, improved by 112 bps YoY. Net profit stood at ₹564 crore in FY25, growing by 27.8% YoY. A strong distribution network of 300,000+ retailers, more than 6,500 channel partners, and a consistent pace of product introductions have enabled the company to keep a constant market share across categories, with fans at 26%, pumps at 18%, the light-emitting diode (LED) segment at 9%, geysers at 11%, and air coolers at 5%.

India's consumer durables sector is projected to grow at a CAGR of 11%, reaching ₹trillion by 2029. Crompton 2.0 (Nucleus and Xtech) vision is implemented to help accelerate revenue growth to double digits. This vision is aimed at increasing the market share and growing sustainably in core products like fans, pumps, and large domestic appliances. It also aims to transform the lighting business through product innovation, range expansion across panels, premiumization of products, and forays into new segments. To establish the vision and maintain the competitive advantage, the company increased its R&D spend as a percentage of revenue from 0.5% in FY21 to 1.1% in FY24. The board of directors has recommended a dividend of ₹3 per share for FY25.

• Risk factor: The company faces competition in the domestic consumer durables sector that has intensified over the past few years. Organized players such as Havells India Ltd. have established a strong consumer connection and brand recall and are facing pricing pressures from unorganized players. Further, raw materials and purchases of traded goods account for 68-70% of sales. Key inputs such as copper, aluminum, and steel volatility due to geopolitical issues and supply chain concerns may hamper the margins.

Also read: Premium products fan hopes for Crompton; Butterfly turnaround vital

Imagicaaworld Entertainment Ltd

• Current price: ₹ 64.31
• Target price: ₹ 80 in 12 months
• Stop-loss: ₹ 56
• Why it’s recommended: Imagicaaworld Entertainment is India’s leading theme and water park, including Imagicaa, Wet’nJoy, Sai Teerth, and Aqua-Imagicaa, which are the top brand portfolio. As of Q2FY25, Imagicaaworld Entertainment Ltd. operates multiple theme and water parks spread across 220 acres, attracting around 2.8 million annual footfalls. The parks feature over 150 rides, and the company also manages a 5-star deluxe hotel with 287 rooms and 13,000+ sq. ft. of banquet and event space.

In Q3 FY25, the company reported its revenue at ₹91.8 crores, up 31% from ₹70 crores YoY, and for the first nine months, the revenue soared 50% YoY to ₹315.81 crores. The company has two reportable segments: the Park division, which contributes 84% of its revenue, or ₹76.89 crores, and the hotel, which contributes 16% of its revenue, or ₹14.96 crores, as of Q3 FY25. 

Imagicaaworld is a seasonal business that performs well in summer. The majority of their revenue comes from the first quarter of every financial year. The June quarter revenue grew by a CAGR of 44% in the last three years, and we expect that Q1 FY26 will be a good quarter, driven by the increased number of customers, because of weather conditions like extreme heat and summer vacations influencing the growth. 

Further, the Indian amusement and theme park industry is to grow at a healthy 9-11% CAGR from FY2024 to FY2030. Further, the demand is influenced by India's rising urbanization, and rising disposable income will fuel the growth of the water parks. In addition, the company announced a strategic expansion of the Aqua Imagica brand with a new water park in Indore. The new Indore water park, spread over 18 acres, promises to offer 20 rides. Further, the brand Wet n’ Joy Lonavala adds 10 new thrilling rides, bringing the total number of water attractions to 31.

As of FY24, the company’s footfall stood at 1.36 million, and its average revenue per user (ARPU) stood at ₹1,510 in FY24, compared to ₹1,459 in FY23. The ARPU split into ticket sales of ₹970 and food & beverages was ₹333, retail was at ₹104, and others were at ₹133. 

• Risk factor: Imagicaaworld Entertainment is highly seasonal, with around 71% of its revenue generated in a single quarter ending in June, reflecting heavy dependence on that period. Further, their net profit includes other exceptional items, which are non-core revenue that masks potential weaknesses in the core business. Any decline in revenue during this quarter significantly impacts the company’s overall financial performance.

Market Recap

On Thursday, Nifty 50 hit the 25,000 mark after seven months since October 2024. It touched the intraday high of 25,116 points, trading above both 50 DMA and 200 DMA with RSI at 66.2, and closed at 25,062, surging 395 points, or 1.60%. The jump came after the news that President Trump revealed that India has proposed a trade agreement to the US, potentially eliminating tariffs on a wide array of American products. 

The BSE Sensex closed at 82,531 points, rising by 1,200 points, or 1.48%. Bank Nifty closed in green, up by 554 points, or 1.01%, closing at 55,356.

All the indices ended positive today. The Nifty Auto was among the top gainers, jumping 1.92%, or 448 points, to 23,808, with Hero MotoCorp leading the index, which surged by 6.2%. Nifty Realty is also among the top gainers today, closing at 898 points, up by 17 points, or 1.92%, with Raymond leading the index, surging 4.99% and closing at ₹579. This jump in the stock is due to its announcement of demerging its real estate business and listing it separately on the stock exchanges.

The Nifty Metal jumped 1.74%, or 158 points, to 9,210. The top losers today: IndusInd Bank at ₹780, declined by 0.17%. While the top gainers today were Hero Moto Corp at ₹4,318, gaining 6.17%; JSW Steel at ₹1,037, rising by 4.82%; and Tata Motors at ₹729, surging by 4.30%.

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