Investment firm Motilal Oswal Financial Services Ltd has identified two standout stocks for investors in the week commencing December 29, 2025. The brokerage's top picks are natural resources player Midwest Ltd and cement major Ambuja Cements, both of which are seen offering significant upside potential based on their strategic growth plans.
Detailed Analysis of the Top Stock Picks
Let's delve into the specifics of each recommendation, starting with their current market price and targets. Midwest Ltd has a current market price (CMP) of Rs 1,690 with a target price (TP) of Rs 2,000, implying an upside of 18%. Ambuja Cements has a CMP of Rs 554 and a TP of Rs 750, which suggests a substantial 35% potential gain.
Midwest Ltd: Granite Giant Diversifying into High-Growth Segments
Midwest holds a dominant position as India's largest exporter of Black Galaxy granite, commanding an impressive market share of approximately 64%. The company benefits from long-life reserves, which support stable volumes, strong pricing power, and industry-leading margins without significant strain on its balance sheet.
However, the company's real growth story lies in its strategic diversification. Midwest is actively expanding into high-purity quartz and heavy mineral sands. This move is designed to reduce its historical dependence on granite and tap into rapidly growing industries such as solar power, semiconductors, and titanium production.
The near-monopoly cash flow from its granite business, including the Black Galaxy and Absolute Black varieties, is effectively funding these new, high-margin ventures. As a result, the revenue concentration from granite is projected to plummet from about 96-98% in FY25 to around 50% by FY28. Motilal Oswal forecasts a sharp acceleration, expecting a revenue, EBITDA, and adjusted PAT compound annual growth rate (CAGR) of 36%, 47%, and 56%, respectively, over the FY25 to FY28 period.
Ambuja Cements: Expansion and Cost Synergies Drive Outlook
Ambuja Cements, part of the Adani Group, is poised for significant expansion. Its promoter group recently secured resolution rights under the Insolvency and Bankruptcy Code (IBC) for Jaiprakash Associates Ltd (JAL). This development could lead to the transfer of JAL's cement assets, comprising about 5.2 million tonnes per annum (mtpa) of grinding and 3.3 mtpa of clinker capacity, to Ambuja. This acquisition would substantially expand Ambuja's footprint in central India.
Simultaneously, the company has set an ambitious target to achieve an EBITDA of Rs 1,500 per ton by FY28. This goal is to be driven by cost savings of Rs 500 to Rs 550 per ton across several areas, including energy, logistics, raw material synergies, and overheads. The overall aim is to reduce the total cost from approximately Rs 4,200 to Rs 3,650 per ton.
Further growth is expected from brownfield and greenfield expansions across East, North, and West India, which will help diversify its geographical presence. The brokerage estimates that Ambuja Cements will deliver a consolidated EBITDA and PAT CAGR of 20% and 25%, respectively, from FY26 to FY28. Consolidated volume is also expected to grow at a 10% CAGR during the same period.
Investment Implications and Final View
Motilal Oswal's analysis presents two distinct yet compelling investment narratives. Midwest offers a classic case of a cash-rich market leader using its strength to fund a transformative shift into future-facing, high-growth industries. Ambuja Cements, on the other hand, is leveraging industry consolidation and rigorous cost optimization to enhance its scale and profitability significantly.
For investors, these picks represent opportunities tied to concrete expansion plans and clear financial targets. The projected upsides of 18% and 35% for Midwest and Ambuja Cement, respectively, underscore the brokerage's confidence in their medium-term trajectories. As always, investors are advised to consider their own risk appetite and conduct further research before making any investment decisions.
