Indian stock market commenced October on a subdued note, with benchmark indices Sensex and Nifty 50 declining approximately 1.5% during the first two trading sessions of the month. The stock market witnessed a sharp downturn on Thursday, driven by weak global cues, as escalating tensions in the Middle East, particularly the Israel-Iran conflict, weighed heavily on investor sentiment.
DRChoksey FinServ has recommended six stocks to buy this month which it projects can have an upside potential of up to 28%.
The October stock picks by Deven Choksey Research include ACC, Glenmark Pharma, Godrej Consumer Products, Rossari Biotech, State Bank of India (SBI) and Tata Motors.
Here are the top stocks to buy in October:
Deven Choksey Research expects ACC to report revenue, EBITDA and PAT CAGR of 8.8%, 15.1% and 8.4%, respectively over FY24 to FY26E. The brokerage firm maintains its multiple of 13.0x to FY26E EBITDA of ₹40,527 crore to arrive at a target price of ₹2,923 per share. It has a ‘Buy’ rating on ACC shares.
The brokerage firm has a ‘Buy’ call on Glenmark Pharmaceuticals shares with a target price of ₹1,894 apiece. It expects the company’s revenue to grow at 10.0% CAGR and Adj. PAT to grow at 42.5% CAGR over FY23-FY26E.
Currently, Glenmark Pharma stock is trading at PE multiples of 35.1x/27.1x based on FY25E/FY26E EPS, respectively. We assign a PE multiple of 31.0x on FY26E EPS of ₹61.1 to arrive at a target price of ₹1,894, Deven Choksey Research said.
Godrej Consumer Products is implementing a growth-focused strategy that involves pursuing acquisitions, cross-selling, entering new categories, and expanding its Total Addressable Market (TAM) for current products. The company has boosted reinvestments, particularly increasing marketing spend by 36% YoY in FY24. Strategic initiatives, such as enhancing inventory management in RCCL and Indonesia, along with divesting non-core businesses, aim to stabilize performance and enhance earnings growth, said the brokerage firm.
It estimates Revenue, EBITDA and PAT CAGR of 10.1%, 14% and 18.5%, respectively, from FY24 to FY26E. It has an ‘Accumulate’ rating on Godrej Consumer Products shares and a target price of ₹1,541 apiece.
Deven Choksey Research estimates Rossari Biotech’s revenue to grow at 20.3% CAGR and PAT to grow at 22.7% CAGR over FY24-FY26E. Rossari Biotech stock is trading at a PE multiple of 31.6/25.5x based on FY25E/FY26E EPS, respectively. The brokerage firm assigned a PE multiple of 29x on FY26E EPS of ₹35.7 to arrive at a target price of ₹1,034 per share and has a ‘Buy’ rating on the stock.
SBI continued its positive trend in terms of return ratios, achieving a 21.0% Return on Equity (RoE) and a 1.1% Return on Assets (RoA) on an annualized basis in Q1FY25. ROA has continuously improved from FY19 onwards, primarily led by the surge in overall profitability. SBI’s capital position remains healthy for future growth opportunities, and the bank is prepared to raise additional capital if needed, Deven Choksey Research said.
It values the bank at 1.5x FY26E P/ABV on an ABV of ₹520.6 per share and assigns the subsidiaries a value of ₹231 per share. It maintained SBI share price target of ₹1,010 apiece with a ‘Buy’ rating on the stock.
The brokerage firm expects an EV/EBITDA multiple for JLR at 3.2x FY26E EBITDA and values the Chery-JLR JV at 2.4x EV/EBITDA, Tata Motors-CV at 14.0x, and Tata Motors-PV at 16.0x, reflecting steady prospects. With positive outlooks for CV and JLR, it set a target price of ₹1,156 for Tata Motors shares, including ₹42 for Tata Technologies. It has an ‘Accumulate’ rating on Tata Motors stock.
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 making any investment decisions.
