Top Stock Picks For May 2025: Motherson, Quess, Indegene Among Equitymaster’s Long-Term Value Bets

Equitymaster sees long-term upside in five undervalued stocks with strong earnings, sectoral tailwinds, and expansion plans across auto, staffing, drilling, pharma-tech, and chemicals.

Equitymaster Research on Thursday identified five fundamentally strong Indian stocks that it believes remain under-owned and underappreciated, despite consistent earnings growth and sectoral tailwinds.

The list includes companies from auto components, specialty chemicals, energy services, staffing, and pharma-tech — each trading below historical valuation multiples and showing improving profitability and business expansion, Equitymaster said in a note.

Samvardhana Motherson International Ltd

The auto ancillary supplier reported an 18% year-on-year rise in revenue and 38% growth in profit after tax for the nine months ended December 2024. 

Equitymaster said the company, which serves global clients including Mercedes-Benz, Volkswagen, and Airbus, is expanding into aerospace and consumer electronics. 

The stock trades at a price-to-earnings (PE) ratio of 23, well below its five-year median of 44.7. It is down 14.2% YTD.

Ddev Plastiks Industries Ltd

Ddev Plastiks, a market leader in polymer compounds, holds over 50% share in the Sioplas market and is expanding into higher-margin segments such as halogen-free flame retardants. 

The company remains debt-free and is funding its growth internally, Equitymaster noted. Its current PE of 14.4 compares to a five-year median of 15.5.

The stock is down 1.9% YTD.

Jindal Drilling and Industries Ltd 

The offshore drilling services provider posted a 40% quarter-on-quarter rise in revenue and a doubling of EBITDA in the third quarter of FY25. 

With a Rs 16.4 billion order book providing earnings visibility through FY28, and a net cash balance sheet, the company is well-positioned to benefit from rising rig demand and day rates, according to Equitymaster. 

Shares trade at a PE of 15.4 versus a five-year median of 17.2. It is down 17.7% YTD.

Quess Corp Ltd

India’s largest staffing and business services company reported a 34% rise in PAT in Q3 FY25 and is planning a three-way demerger to unlock shareholder value. 

The company is shifting focus towards digital staffing and IT services, Equitymaster said. The stock trades at a PE of 13.5, below its five-year median of 18.

Quess shares are down 49.3% YTD.

Indegene Ltd 

The digital health solutions provider serves major global pharmaceutical clients, with 60% of revenue coming from top 20 pharma companies.

It posted a 20.8% EBITDA margin in Q3 and is investing in European expansion, automation, and generative AI. 

Despite a premium valuation of 35.8x earnings, Equitymaster said its scalable model and high client retention make it a strong long-term play.

Indegene shares are down 11.8% YTD.

“These are not momentum bets, but high-quality businesses trading at reasonable valuations,” Equitymaster said. “They offer potential compounding benefits as market interest catches up with fundamentals.”

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