Best stocks to trade today, 22 May, as recommended by Trade Brains Portal

Best stocks to trade as recommended by Trade Brains Portal

Coal India Ltd (Current price: ₹ 405)

• Target price: ₹492 in 12 months
• Stop-loss: ₹ 362
• Why it’s recommended: The company is the largest coal producer in India and operates through 84 mining areas spread over eight states of India. Coal India Ltd. is a “Maharatna” central PSU under the control of the Ministry of Coal, with 63.13% ownership by the Government of India. It has 310 mines and a coal production of 781 million tonnes as of FY25.

Despite privatization in coal mining through government auction, the company enjoys a monopoly, controlling 48% of India’s proven reserves and contributing 78% of the total domestic coal production.

Revenue from operations stood at Rs. 1,43,369 crore as of FY25, which has been growing at 12% CAGR since FY21. The company has significantly improved its margins through better cost realizations. Net profit margin stood at 24.6% in FY25, up from 15.36% in FY21, with a dividend payout ratio of 46%. Additionally, CIL has distributed ₹5.15 per share as a final dividend for FY25, along with an interim dividend of ₹5.60 and ₹15.75 per share. CIL has a high dividend yield of 6.5% for FY25.

The company expects to achieve 1 billion tons of coal production by 2028-29 and 1.22 billion tons of coal production by 2034-35. To achieve this guidance, the company plans to do a capex of ₹16,000 crore to increase its washing capacity, coal mining capacity, first mile connectivity (FMC) projects, and development of rail infrastructure for improving evacuation capabilities.

Also Read: Can Coal India reinvent itself fast enough to ride energy’s imminent disruption?

In November 2024, CIL commissioned its largest solar installation to date, a 50 MW plant at Nigahi under Northern Coalfields Limited, demonstrating its diversification towards renewable energy as India strives to reach 500 GW from non-fossil sources by 2030. Additionally, Coal India plans to supply 4500 MW of carbon-free energy, in a phased manner, to upcoming green ammonia facilities, making it one of the world’s largest renewable energy contracts.

• Risk factor: The company needs environmental and forest approvals, especially in greenfield projects; delays in these approvals impact the operations. CIL is highly susceptible to socio-political factors and regulatory requirements. The company currently has a shortage of last-mile connectivity and logistics infrastructure. Privatization in coal mining may also impact the monopoly status in the long term.

Colgate-Palmolive (India) Ltd (Current price: ₹ 2,659)

• Target price: ₹ 3,250 in 12 months
• Stop-loss: ₹ 2,363
• Why it’s recommended: Colgate-Palmolive India Ltd. is one of the largest oral care companies in India, with a significant presence of over 50% market share in the toothpaste category and a wide distribution network of over 6.5 million outlets. In FY25, Colgate-Palmolive reported revenue from operations of ₹5,999.20 crore, a growth of 6.3% YoY from ₹5,644.18 in FY24. Net profit after tax for FY25 stood at ₹1,436.81 crore as compared to ₹1,323.66 crore, a growth of 8.5% YoY.

The company has declared a 2nd interim dividend of ₹27 per share, with a total dividend of ₹51 per share for FY25. Colgate continued to maintain product superiority through the relaunch of “Colgate Strong Teeth.” The company has introduced India’s largest oral health initiative, the Oral Health Movement, which provides personalized dental screening reports powered by AI.

Demonstrating a commitment to innovation, Colgate has also implemented an AI-ML-driven system to offer tailored product recommendations to 1.7 million retail outlets. This strategy has led to a 14% improvement in product assortment over a two-year CAGR, with participating stores showing 1.2 times higher growth than others.

According to company, estimates, around 272 million households purchase toothpaste over seven times a year, with an average of 1.5 tubes per purchase, resulting in approximately 2.3 billion tubes sold annually.

The Indian toothpaste market is expected to grow at a CAGR of 4.23% between 2025 and 2034, reaching $2,180 million by 2034. In FY25, the overall revenue of toothpaste and oral health amounted to $1.96 billion, and in terms of per-person revenue, India generated $1.35 per individual in FY25.

The oral care market is driven by increasing oral health awareness, increased disposable income, and demand for premium dental products. An uptrend in toothpaste consumption is observed, with the rapid expansion of distribution channels across the country and the faster-than-ever evolving e-commerce sector, contributing to the Indian toothpaste market growth.

The e-commerce market, valued at $125 billion in FY24, is expected to reach $325 billion by 2030, exhibiting a growth rate of 5-17%.

• Risk factor: Colgate faces intense competition from other players like Dabur and Patanjali, especially with the peers offering a variety of toothpastes in the Ayurvedic category, which is gaining more popularity. Additionally, numerous regional and local players offer affordable alternatives to intensify price competition.

The company also faces concentration risk, as approximately 95% of revenues come from the oral care business.

Also Read: DLF’s Q1 launches to set the tone for FY26 pre-sales trajectory

Market Recap

The Indian market opened on a positive note today, with Nifty 50 opening at 24,744 and reaching an intraday high of 24,946, up by 262 points or 1.06%, whereas BSE Sensex opened at 81,327.61 and peaked at 82,021.64, up by 835 points or 1.03%. Nifty 50 closed at 24,813, up by 129.5 points, or 0.52%, with an RSI of 59.87 and above the 20/50/100/200 EMA in the daily time frame. The BSE Sensex closed at 81,596.63, up by 410.19 points, or 0.51%, with an RSI of 58.8, and above all four EMAs.

Nifty Realty was among the top gainers today, closing at 938.70, surging by 15.9 points, or 1.72%, with Raymond Ltd. leading the index, gaining 2.91%, and continuing its rally due to its real estate segment demerger update. Nifty Pharma was up by 267.5 points, or 1.25%, and closed at 21,723.65. This rise came after the news about price cuts on the branded drugs by the US Department of Health and Human Services (HHS), which came as a relief to generic & biosimilar medicine producers in India.

Nifty Consumer Durables was the only major index in the red today, closing at 37,961.55, down by -0.49% or -187 points. The major laggard for this index was Dixon Technologies, which was down 5.76%.

Also Read: IDFC’s growth hits a speed bump. Is the stock’s bounce-back at risk?

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