Stocks to Buy: 2 Stocks that can deliver returns of up to 33%; Recommended by ICICI Securities

Synopsis: ICICI Securities, one of the top brokers in India, has picked two stocks, Akums Drugs Pharmaceuticals and Shriram Finance, highlighting an upside potential of up to 33%, driven by strong growth prospects and strategic market expansions.

ICICI Securities is a leading Indian financial services firm, known for its expertise in equity broking, wealth management, asset management, and investment banking. The company provides research-driven investment insights and personalised financial solutions to both retail and institutional investors.

One of the top brokers in India, ICICI Securities, has identified two high-conviction stocks and assigned a “Buy” rating, highlighting strong upside potential based on their analysis. In this article, let’s take a closer look at the two stocks in the spotlight:

Here are the two stocks to look at

Akums Drugs & Pharmaceuticals Ltd, established in 2004, is India’s largest Contract Development and Manufacturing Organization (CDMO), providing end-to-end pharma solutions for tablets, capsules, injectables, liquids, and more, serving leading pharma, nutraceutical, and cosmetic companies with a focus on quality, innovation, and large-scale production.

With a market capitalization of Rs. 7,052.82 crore, the shares of Akums Drugs Pharmaceuticals rose upto 0.5 percent, making a high of Rs. 453.85 per share compared to its previous closing price of Rs. 451.15 per share.

The stock is in focus after a leading indian brokerage firm, ICICI Securities, initiated a Buy Target of Rs. 600 on it with an upto 33 percent Upside Potential from the previous day’s close.

The company’s revenue declined by 1.51 percent from Rs. 1,033 crores to Rs. 1,018 crores in Q2FY25-26. Meanwhile, Net profit declined from Rs. 67 crores to Rs. 43 crores during the same period.

Rationale

Akums operates on a cost-plus model, where contracts are linked to the market prices of APIs, meaning the company may have to bear inventory costs even when these are higher than current market prices. Analysis of 30 APIs in the domestic market shows that prices for nearly half of them have either remained stable or improved, while the decline in a few others has been relatively modest. 

In Q2FY26, despite challenging market conditions caused by the GST rate reduction, the company achieved a 7% year-on-year volume growth and is expected to sustain this growth trajectory going forward.

At the end of Q2FY26, Akums’ CDMO plants were operating at 40% capacity, and the company is leveraging this excess capacity to expand into export markets. Akums has entered into a joint venture with the Government of Zambia to manufacture pharmaceutical products locally. The company plans to supply drugs worth USD 25 million per annum in FY27–28, with the run-rate expected to increase to USD 45–50 million once production at the new Zambian plant ramps up in H2FY28. 

Supplies for the European contract are set to begin in Q1FY28, likely generating annual revenues of INR 3–3.5 billion from these shipments. With operating leverage, these export orders are expected to be margin-accretive. Driven by stronger traction in its base CDMO business and the new export contracts, Akums’ CDMO segment is projected to grow at an 11.8% CAGR over FY25–28E, with an EBITDA margin of approximately 13.6% in FY28E.

Shriram Finance Ltd. is India’s leading retail asset financing Non-Banking Financial Company (NBFC), formed by the 2022 merger of Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital, part of the larger Shriram Group, known for catering to underserved rural & urban customers with diverse loans (CV, MSME, Gold, Personal, Two-Wheeler) and Fixed Deposits.

With a market capitalization of Rs. 1,83,348.14 crore, the shares of Shriram Finance Ltd rose upto 2.6 percent, making a high of Rs. 983.35 per share compared to its previous closing price of Rs. 957.85 per share.

The stock is in focus after a leading indian brokerage firm, ICICI Securities, initiated a Buy Target of Rs. 1,225 on it with an upto 28 percent Upside Potential from the previous day’s close.

The company’s revenue rose by 18.07 percent from Rs. 10,090 crores to Rs. 11,912 crores in Q2FY25-26. Meanwhile, Net profit rose from Rs. 2,153 crores to Rs. 2,314 crores during the same period.

Rationale

It is believed that improved leverage, supported by equity infusion and the involvement of a foreign partner with strong banking credentials, could accelerate SFL’s credit rating upgrade. The analysis indicates that as of September 2025, SFL’s cost of borrowing (CoB) is 100–125 bps higher than peers, and a credit rating upgrade would help narrow this gap in the near term. Specifically, SFL’s CoB stood at 8.8%, compared with 7.5% for Bajaj Finance and Aditya Birla Finance, 7.4% for Tata Capital, and 7.3% for L&T Finance. 

They now estimate a revised BVPS of INR 490 for FY27E, up from INR 393 earlier, driven by a 25% earnings upgrade. It maintains a BUY rating with a revised target price of INR 1,225 (previously INR 920), valuing SFL at 2.5x FY27E BVPS (unchanged from 2.5x Sep’26E).

The fresh equity infusion is expected to raise SFL’s CRAR to approximately 36%, while a potential credit rating upgrade would help reduce the gap in funding costs relative to peers. A lower cost of funds would benefit SFL in two key ways: (a) by enhancing its competitive edge, potentially accelerating growth from the current 15–17% range in the near term, or (b) by allowing the company to retain the advantage of lower funding costs, thereby improving profitability through NIM expansion. In either scenario, SFL’s structural RoE is likely to strengthen going forward.

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