Indian indices have been on a downward trend in all four sessions of October, declining 3.5 per cent so far, after four straight months of gains. This comes on the back of escalating geo-political tensions in the Middle East and continued outflows by foreign investors. Going ahead, the market awaits the RBI monetary policy, due later this week, as well as the September quarter results.
Amid this backdrop, brokerage house Yes Securities has come out with 4 top stock picks for October.
Let's take a look:
Cholamandalam Investment and Finance Company: Yes Securities issued a buy recommendation on Cholamandalam Investment and Finance Company (CIFCL), with a target price of ₹1,820, indicating an upside potential of 21.5 per cent from the last close.
As part of the Murugappa group, CIFCL is a leading NBFC in India, offering services like vehicle financing, home loans, loans against property, and SME loans. The company projected a 25-30 per cent growth over the next three years, supported by improving net interest margins (NIMs) as the cost of funds stabilises and portfolio yields increase. CIFCL aims to grow its market share by targeting larger loan segments while maintaining strong asset quality. Its outlook remains promising, driven by strategic expansion into rural areas and product diversification. Management expects better NIMs, lower credit costs, and improved profitability, making CIFCL a compelling investment, said the brokerage.
Tata Consultancy Services: The brokerage has a buy call on the IT major with a target price of ₹5,292, implying an upside potential of 24.5 per cent from its previous close.
Yes Securities highlighted that Tata Consultancy Services (TCS) leveraged its deep industry expertise to secure large strategic deals, achieving a total contract value (TCV) of $8.3 billion in the recent quarter. This strong performance, combined with investments in workforce development and partnerships positions TCS for sustained growth. As businesses increasingly rely on technology for a competitive edge, TCS remains a compelling investment, as per the brokerage.
Yes Securities also noted that TCS stands to benefit from global factors like the U.S. Federal Reserve’s potential rate cuts, boosting client spending in key markets. Growing demand for cloud services, data analytics, and cybersecurity further support the IT major's growth prospects.
Emcure Pharma: The brokerage has a buy call on the stock with a target price of ₹1,900, indicating an upside potential of 33.3 per cent from its previous close.
Yes Securities noted that Emcure Pharmaceuticals ranks as the 15th largest pharma company by domestic sales and holds the top spot in the gynaecology sector. Emcure’s lack of direct exposure to the U.S. generics market provides greater earnings visibility. The company has increased its field force by over 20 per cent, boosting prescriber penetration.
Emcure aims to enhance its market position by expanding its prescriber base, developing strong brands, launching innovative products, and increasing market share. With investments in production lines and new capacities, Yes Securities expects Emcure to generate significant free cash flow. Its strong growth, robust margins, and low capital needs make it a compelling investment.
Nestle India: The brokerage has a buy call on the FMCG major with a target price of ₹3,237, implying an upside potential of 24.5 per cent from the last closing price.
Yes Securities reported that Nestle India, a subsidiary of the global food and beverage giant Nestlé S.A., remains a key player in India’s fast-moving consumer goods (FMCG) sector. The company operates nine manufacturing facilities and maintains an extensive distribution network, spanning over 5,000 distributors and nearly 8 million retail outlets. Its geographic reach extends into tier-2 and tier-3 cities, with a growing emphasis on e-commerce and digital channels, especially post-pandemic.
Rural growth is expected to rebound in the upcoming quarters, driven by favourable monsoons, increased government spending, and a rise in urban remittances, all of which are likely to support the rural recovery. This, combined with Nestle India’s continued focus on expanding its presence in rural areas, positions the company for market-leading growth, making it an attractive investment opportunity, said the brokerage house.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
