4 stocks to buy for 20-28% potential returns in 12 months

YES Securities on Tuesday came out with a list of stocks, which it thinks can deliver over 20 per cent return each in the next 12 months. They are Larsen & Toubro Ltd (L&T), RR Kabel Ltd, Chambal Fertilisers and Chemicals Ltd and FIEM Industries Ltd. The domestic brokerage has 'Buy' rating on all the four stocks, with price targets that suggest up to 28 per cent upside potential

Larsen & Toubro | Target: Rs 4,294 | Upside potential: 20% 
YES Securities said the engineering, construction and manufacturing firm, which operates in over 50 countries, stands to benefit from global trends like renewable energy and infrastructure growth, particularly in the Middle East and Africa, where it secured contracts such as Saudi Arabia’s $1.5 billion NEOM project. Domestically, India’s infrastructure push and the National Infrastructure Pipeline (NIP) provide additional growth opportunities, the brokerage said. L&T's strong order book of Rs 4.91 lakh crore, efficient project management, and global footprint make it a reliable choice for stable and sustainable returns, YES Securities said.

Chambal Fertilisers| Target: Rs 620 | Upside potential: 22%
The largest private-sector Urea manufacturer in India recently became debt-free after repaying term loans from the subsidies it received during the June quarter. The company continues to diversify with new product launches, focusing on hybrid and research seeds. YES Securities said Chambal is well-positioned for growth, driven by favorable agricultural conditions and ongoing innovations, which makes it a compelling Buy.

"These factors are expected to drive strong demand for fertilizers and agrochemicals, providing a tailwind for the company’s core business. The robust product pipeline, particularly in the CPC-SN segment, further supports this growth outlook. The company’s ongoing efforts to diversify its portfolio with innovative, high-margin products are expected to enhance both revenue growth and profitability. Citing all the above factors Chambal fertilizers presents a compelling investment case," it said.

FIEM Industries | Target: Rs 2,100 | Upside potential: 24%

A leading player in the automotive lighting and rear-view mirrors, primarily catering to two-wheeler manufacturers, FIEM Industries is seen capitalising on strong industry tailwinds, with India’s two-wheeler market projected to grow at a CAGR of 8-9 per cent over the next five years, driven by rising urbanization and increasing disposable incomes.  The electric vehicle (EV) market is also expected to see rapid growth, with EV two-wheeler sales projected to expand at a CAGR of 40 per cent by 2030, creating increased demand for FIEM’s LED lighting and automotive components, YES Securities said.

Additionally, the Indian government’s push for local manufacturing and increasing the automotive sector’s contribution in GDP from 7.5 per cent to 12 per cent by 2026 may providw further growth opportunities for FIEM in the OEM space, it said.

“FIEM has consistently outperformed the industry with a revenue CAGR of 11 per cent over the past decade. We thereby expect FIEM to continue to outperform two-wheeler industry growth over FY25-FY27E. The company’s entry in the four- wheeler LED lighting segment provides new growth opportunity, add to this, the company’s strong balance sheet and healthy returns profile making it a compelling BUY,” the brokerage said.

RR Kabel | Target: Rs 1,954 | Upside potential: 28%
RR Kabel a wires and cables industry player, YES Securities said, holds the distinction of having 37 international product certifications, one of the highest amongst its industry peers. The government’s intensifying focus on infrastructure, strong tailwinds from real estate sector and increased electrification of villages are expected to spur the wires and cables industry growth. Further, India’s energy requirement is also expected to surge over the years led by a rise in industrial activities. All these factors combined make RR Kabel an interesting prospect for a BUY rating, YES Securities said.

“The company has achieved a remarkable 34 per cent CAGR in revenue from FY21 to FY24, showcasing its robust expansion trajectory. What distinguishes RR Kabel is its predominant focus on the B2C segment, where it leads with a substantial 74 per cent revenue share, emphasizing its dedication to meeting consumer needs,” it said.