Top stocks to buy: Stock recommendations for the week starting April 21, 2025 - Hindustan Aeronautics and Castrol

Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting April 21, 2025) are Hindustan Aeronautics and Castrol. Let’s take a look:
Hindustan Aeronautics
Hindustan Aeronautics (HAL) is a market leader in aerospace defence. It boasts a strong order book of ₹1.8t as of Mar '25, along with a promising prospect pipeline of ₹6t, which is likely to be awarded over next few years.HAL is transitioning from traditional licensed model to indigenized model and is currently working on marque projects such as Tejas Mk1, Tejas Mk1a, Su-30 upgrade, Dornier-25, and LUH, et al. These projects are anticipated to fuel manufacturing revenue growth for HAL. Near-term catalysts will emerge with aircraft deliveries as GE engine supplies resumes for Tejas Mk1A from FY26, while medium to long term triggers hinge on order finalizations for 97 Tejas Mk1A, Tejas Mk-II, LUH, AMCA and others. We initiate coverage on HAL with BUY rating & TP ₹5,100. We estimate 29%/33%/29% revenue/EBITDA/PAT CAGR over FY25-27.
Castrol
Brent Crude has fallen to its 4-year low amid US-China trade tensions and rising supply. This is beneficial for lubricant companies like Castrol, potentially leading to improved profit margins. As part of its future plans for advanced EV and data center testing, Castrol opened a technology center in Patalganga, equipped with blending & testing capabilities. For its lubricant business, it is targeting above industry average growth rate of 4-5%.Management is optimistic about India’s lubricant demand potential, driven by low car penetration. Castrol's focus on brand building, distribution, and new products supports its market leadership. We estimate ~23% EBITDA margin for CY25 and CY26, reflecting confidence in profitability and growth.
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