In Samvat 2079, volatility could continue, though at a slower pace, being close to a peak in the rate hike cycle. The resumption of growth at the global level and particularly on the domestic front is required to shake off the sluggish mood and get back on the path of a sustained uptrend in the markets, said brokerage and research firm HDFC Securities in a note.
As part of its Diwali stock picks for Samvat 2079, the brokerage house has recommended ten stocks that investors can look to buy with a time horizon of till next Diwali.
HDFC Securities' top Diwali stock picks:
Aster DM Healthcare: Better case mix, price hikes and expansion in Tier 1 cities are likely to improve the company's ARPOB and Medical value tourism could find traction due to its focus on specialties, the note stated. The brokerage has a Buy tag on the stock with a target price of ₹278.
Bharat Dynamics: “BDL intends to leverage its experience to develop new products, such as new-generation SAMs, ATGMs, and heavyweight torpedoes, which would improve its topline. Strong revenue visibility, backed by a robust pipeline, large projects being awarded (Akash and next-gen ATGMs are expected to be awarded soon) and a focus on indigenisation and internal efficiency are likely to fuel earnings growth,” the brokerage said (Target price: ₹1,022).
Bharat Electronics: As per HDFC Securities, BEL’s financial profile remains strong because of healthy profitability and return indicators, zero net debt, superior liquidity and robust debt coverage metrics (Target price: ₹123).
Birla Corporation: The brokerage believes various cost saving initiatives taken by the company, increase in clinker capacity and coal extraction from captive mines would aid revenue and margin growth.(Target price: ₹1,069)
Cipla: “Cipla derived 45% of revenue from One India (branded generics, trade generics and consumer health), 20% from the US, 17% from South Africa, Sub-Saharan Africa, Global Access (SAGA), 13% from RoW and 3% from the API segment. Such diversity across geography as well as in the product base insulates the company from significant adverse fluctuations in revenue and profitability." (Target price: ₹1,283)
Deepak Fertilisers: The long-term growth of the company is expected to be underpinned by a change in its product mix, head room availability of additional capacities emerging from better operational management and de-bottlenecking, along with greenfield expansions, it said (target price: ₹1,058)
ICICI Bank: "The bank is focused on tech investments and digital initiatives to ready itself for the next leg of growth in the retail and SME segments. Its subsidiaries, which are leaders in their respective fields, add good value to the overall valuation." (TP: ₹999)
Rail Vikas Nigam: The company has a robust balance sheet and is available at an attractive dividend yield of ~5% and the execution of larger projects on a low base could propel growth higher in coming years, it added (TP: ₹42.25)
Sun TV: “Sun TV has reported strong profit margins/accruals in the last several years, aided by its scale of operations, strong vertical integration with a presence across the value chain, high bargaining power and negligible finance costs.” (TP: ₹624)
TCI Express: “We expect the company to report 18%/25%/25% CAGR growth in sales/EBITDA/APAT over FY22-24E, though our margin expectation remains lower than the management’s guidance.” (TP: ₹2,169)
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
