Trade Brains Portal recommends two stocks for 21 July

Over the past three weeks, the Sensex has shed nearly 2,300 points, or close to 3%, while the Nifty 50 has also declined by around 3%.

On Friday, the Nifty 50 fell 143 points, or 0.57%, to close at 24,968.40, while the Sensex dropped 502 points, or 0.61%, to settle at 81,757.73.

The broader market also came under pressure, with recent outperformers in the mid- and small-cap segments witnessing a sell-off. The BSE Midcap and Smallcap indices declined 0.62% and 0.64%, respectively.

Against this backdrop, Trade Brains Portal has picked two stocks—one from the telecom services sector and another from the plastic products sector.

Tata Communications Ltd

Current price: ₹1,764

Target price: ₹2,085 in16-24 months

Stop-loss: ₹1,600

Why it’s recommended: Founded in 1986, Tata Communications Ltd., a part of the Tata Group, is a global digital ecosystem facilitator that supports the fast-expanding digital economy in over 190 countries and territories. Through a wide range of services, including next-generation connectivity, cloud and security solutions, collaboration tools, media services, IoT, and customer engagement platforms, the company drives digital transformation for businesses all over the world. Tata Communications links organizations to 80% of the top cloud providers globally, and it serves 300 of the Fortune 500 firms.

Consolidated operating revenue in Q1 FY26 was ₹5,959.85 crore, up 6.5% YoY from ₹5,592.32 crore in Q1 FY25. For the first quarter of FY26, the company’s profit after taxes was ₹190.14 crore. Over the past two years, the company has maintained its growth momentum, with digital revenues increasing 29.5%, from ₹4,500 crore in FY23 to ₹9,100 crore in FY25. In India and abroad, the business experienced strong year-over-year growth in the enterprise market segment. In FY25, international enterprise increased by up to 20% year over year, while Indian enterprise rose by 8.7% year over year.

Regarding acquisitions, the business is putting cost-synergy initiatives into action. Although Switch and Kaleyra have been working on this for 24 and 18 months, respectively, they are both approaching the inflection point, and it is anticipated that the synergies will become apparent in the upcoming quarters. Also, the company board approved the Inter Group Share Purchase Agreement (SPA) for the purchase of Solutions Infini Technologies (India) Private Ltd (also known as “SI India”) from Kaleyra S.P.A. for a total of ₹123.6 crore.

The company is foraying into new segments like digital fabric tools and AI cloud. They already exist in very promising categories like CIS (Customer Interaction Suite), Secure Access Service Edge (SASE), and Unified Cloud Network (UCN). The need for sophisticated cybersecurity, scalable cloud infrastructure, and robust networks is rising significantly as a result of the industry’s rapid adoption of AI. Tata Communications is in a strong position to take advantage of this chance by adding innovative solutions to its portfolio in important areas.

Risk factors: The rivalry for Tata Communications is intensifying in a number of areas. System integrators are growing their managed service offerings, OEMs are venturing into the cybersecurity market, cloud providers are progressively branching out into telecom services, and specialized technology suppliers are going straight for business clients. At the same time, enterprise services are becoming more and more important to traditional telecom companies. The company may see pricing challenges and a drop in its margins if it can’t keep its market leadership and effectively differentiate its services.

Astral Ltd

Current price: ₹1,507

Target price: ₹1,875 in 16-24 months

Stop-loss: ₹1,320

Why it’s recommended: Established in 1996, Astral Ltd has grown to become a market leader in the building materials industry, known for its high-quality and innovative products. As of FY25, the company has 26 manufacturing facilities and a combined production capacity of 5,49,126 (MTPA). They serve millions of consumers with excellence and dependability through a strong network of 3,610+ distributors and 2.5+ lakh dealers.

The company’s product line includes eight high-growth product categories that make pipes and fittings, water tanks, adhesives and sealants, bathware, specialty valves, construction chemicals, and infrastructure products. Additionally, it has entered the paint, faucet, and sanitaryware industries. By exporting to more than 31 countries, Astral is also growing its global presence and providing high-quality products.

The company’s revenue for FY25 was ₹5,832.4 crore, up 3.4% year over year from ₹5,641.4 crore in FY24. Ebitda increased 2.8% YoY to ₹987.2 crore from ₹960.3 crore in FY24, with the net profit of ₹519 crore. Paints & adhesives business revenue climbed 9.1% YoY to ₹1636.1 crore, while their Plumbing business revenue grew by 1.3% to ₹4196.3 crore YoY. In the last five years, their revenue has grown at a CAGR of 16.5%, Ebitda has grown by 10.48% while PBT grew by 7.15%.

The company has invested about ₹1,000 crore in new plant expansions in Hyderabad, Guwahati, Bhubaneswar, and Kanpur during the past two years.

In addition to expanding Dahej’s capacity for more chemistries in the upcoming year, the company is starting a fully automated solvent cement plant, which is the pipe-joining chemical plant. With the acquisition of Al Aziz Plastics, the company looks forward to expanding its product portfolio in domestic and international markets. In the upcoming years, Astral hopes to achieve 15% to 20% paint revenue by concentrating on quality and innovation.

Risk factors: Astral’s main raw materials, which include UPVC, CPVC, PPR, and HDPE resins, are derived from crude oil by-products. The price of these raw materials is directly impacted by changes in the price of crude oil globally, which has an effect on Astral’s production costs and profitability.

Market recap – 18 July

The Nifty 50 opened flat on Friday at 25,108.5, unchanged from the previous session’s close. After slipping to an intraday low of 24,918.6, the index ended the day at 24,968.4, down 143.05 points or 0.57%, marking its second consecutive session of decline. The Nifty also closed below the psychological 25,000 mark and the 20-day exponential moving average (EMA). The relative strength index (RSI) stood at 43—well below the overbought threshold of 70—indicating weakening momentum.

The Sensex mirrored this trend, closing 501.51 points, or 0.61%, lower at 81,757.7. Its RSI on the daily chart was 42, and it too ended below its 20-day EMA. Market sentiment was weighed down by caution ahead of earnings announcements, muted results from IT companies, and concerns about potential disruptions to global trade.

Losses were broad-based across sectors, though a few indices managed to eke out gains. The Nifty Media Index was the top performer, rising 16.8 points or 0.96% to close at 1,771. Key contributors included Saregama India (+4.6%), PVR Inox (+4.4%), and Dish TV India (+1.2%).

The Nifty Metal Index also advanced, climbing 34.85 points or 0.37% to close at 9,458.2. NMDC Ltd and SAIL were the standout gainers, rising 2.7% and 2.13%, respectively.

On the flip side, the Nifty Private Bank Index dropped 408.85 points or 1.46% to close at 27,534, dragged down by heavyweights such as Axis Bank (–5.2%), RBL Bank, and HDFC Bank. The Nifty Consumer Durables Index also saw a sharp decline, falling 368.9 points or 0.95% to end at 38,630, largely due to profit booking.

Asian markets were mixed. Hong Kong’s Hang Seng rose 326.71 points or 1.32% to 24,825.66, while China’s Shanghai Composite gained 17.65 points or 0.50% to close at 3,534.48. South Korea’s Kospi slipped 4.22 points or 0.13% to 3,188.07, and Japan’s Nikkei 225 dropped 82.08 points or 0.20% to settle at 39,819.11. As of 5:00 p.m. IST, Dow Jones Futures were trading 68.7 points or 0.15% higher at 44,551.21.

For the week, the BSE Sensex declined 0.9%, while the Nifty 50 slipped 0.72%. The downtrend was driven by a cautious start to the earnings season, investor concerns over the US-India trade agreement, and a generally risk-off tone in global markets.

Trade Brains Portal is a stock analysis platform. Its trade name is Dailyraven Technologies Pvt. Ltd, and its Sebi-registered research analyst registration number is INH000015729.

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