Video summary

Top 29 Stocks in 2026! High Growth, Low Valuation Opportunities | Dont miss this - Rahul Jain

Main summary

Key takeaways

Finance

Investing style / concept (GARP)

  • GARP (Growth at Reasonable Price): combine growth (EPS expansion) with value/valuation discipline using a “reasonable valuation” approach based on PEG.
  • Source/origin cited: Peter Lynch.

Data source / tool used

  • TickerTape (including mention of TickerTape Pro).
  • The screener output is presented as methodology, not a direct buy list.

Step-by-step stock shortlisting methodology (as demonstrated)

  1. Start with a large universe

    • Go to TickerTape screener → Indian stocks.
    • Remove existing filters (e.g., close price, P/E ratio, returns, etc.).

  2. Filter by size (liquidity/scale proxy)

    • Market cap > 5,000 crores
    • Result shown: ~854 stocks

  3. Filter by profitability quality

    • ROE (Return on Equity) > 15%
    • Result shown: ~377 stocks

  4. Filter by EPS growth (multi-horizon)

    • Growth is defined specifically as EPS growth rate, using three filters:
      • 5-year historical EPS growth rate > 10%
      • 1-year historical EPS growth rate > 10%
      • 1-year forward EPS growth rate > 10%
    • Result shown: ~98 stocks
    • Forecast caution:
      • Forward EPS growth is an estimate (not guaranteed).
      • TickerTape/analysts provide high / median / low scenarios.
      • The screener’s forward growth uses the median base case (example stock shown: High 25.38% / Median 12.92% / Low 2.01%).

  5. Create/compute a “reasonable valuation” metric using PEG

    • Defines PEG = (P/E) / (EPS growth rate).
    • Since no direct PEG filter is available, a custom filter is built:
      • P/E ratio ÷ 1-year forward EPS growth rate
    • Target “reasonable” valuation range:
      • Forward PEG between 0 and 2
    • Result shown: ~50 stocks

  6. Portfolio construction / concentration caution (sector-level)

    • If the approach causes heavy exposure to a sector (example: IT or two-wheelers), avoid concentration beyond existing portfolio weight.
    • He suggests not going above if already around ~20–25% in that sector.

  7. Rank within the shortlist (additional diligence needed)

    • Sort by lower PEG first (lower PEG = “better” under this logic).
    • Warning: don’t buy blindly—must understand why valuations are low.

  8. Deep-dive “why it’s cheap” checks (illustrative example: NMDC Ltd.)

    • Example selected: NMDC Limited (explicitly not a recommendation).
    • Suggested workflow:
      • Optionally ignore price points initially (technical analysis later).
      • Review sentiment / con-call summary (June 2026 con-call mentioned).
      • Distinguish short-term valuation pressure vs long-term drivers.
    • Example issue described:
      • Valuation fell due to a one-off trading/profitability consolidation hit
      • EBITDA margin down from 42% to 33%
      • Guidance aims to restore EBITDA ~42–43% for FY27

  9. Fundamental and risk checks (illustrative framework)

    • Tailwind/strategy validation:
      • Demand relevance and industry outlook.
    • Capex and execution:
      • NMDC example: planned capex ~40,000 to 50,000 crores over the next 2–3 years
      • Production target aspiration:
        • Target by 2030: ~100 million tons
        • Production referenced:
          • 2025: ~45 million tons
      • He also highlights incremental production pace vs historical pace:
        • historically adding ~10m tons over ~10–20 years
        • versus aiming ~10m tons per year over the next ~5 years
    • Cash flow discipline:
      • Emphasizes cash flow analysis
      • Avoid companies where operating cash flow is consistently negative
    • Valuation cross-check:
      • Ensure the company trades below its median on P/E and P/B
      • He also mentions checking PEG, P/E, P/B, median P/E, median P/B

  10. Optional tightening of filters

    • Example: tighten PEG range from 0–2 to PEG ≤ 1.5
    • Result shown: reduces from 50 to ~29 companies

Key numbers & thresholds explicitly stated

  • Market cap: > 5,000 crores → ~854
  • ROE: > 15% → ~377
  • EPS growth:
    • 5Y historical > 10%
    • 1Y historical > 10%
    • 1Y forward > 10%
    • → ~98
  • Forward PEG filter:
    • 0 to 2
    • → ~50
  • Tighter PEG example:
    • PEG ≤ 1.5
    • → ~29
  • Forecast illustration (median base case):
    • High 25.38% / Median 12.92% / Low 2.01%
  • NMDC example (not a recommendation):
    • EBITDA margin: 42% → 33%
    • Management target: EBITDA 42–43% for FY27
    • Capex: ~40,000–50,000 crores in next 2–3 years
    • Production target:
      • ~100 million tons by 2030
      • ~45 million tons in 2025

Disclosures / disclaimers

  • Presenter stated as a SEBI registered research analyst.
  • Repeated caution:
    • Not a buy/sell recommendation
    • Don’t blindly buy screened stocks
    • Screener results change over time because prices, P/E, and EPS estimates change
  • Forecast disclaimer:
    • Forward EPS growth is not guaranteed; based on analyst estimates/consensus scenarios.

Tickers / companies mentioned

  • NMDC Limited
    • Used as an illustrative deep-dive example only; explicitly “not a recommendation at all.”

Presenters / sources

  • Rahul Jain / Rahul Jan (presenter; SEBI-registered research analyst credential claimed)
  • Peter Lynch (credited for the GARP concept/methodology reference)

Original video