Diwali 2023 Stock Picks: In this year i.e. 2023, the Indian stock market reached a new high. The frontline index Nifty 50 also crossed the 20,000 mark and gained 10 percent during the period. The Nifty Mid Cap and Small Cap indices fared well with gains of 30 percent and 36 percent respectively.
To reach this position, resilient economic conditions, healthy corporate income, foreign capital inflows and retail investor participation drove the market. Additionally, moderation in inflation and expectations that global interest rates may peak in the past few months also supported equity markets.
Focusing on these factors, local brokerage firm Motilal Oswal presents its 8 Diwali Stock Picks for Samvat 2080. The brokerage has selected quality stocks that have strong fundamentals and are well positioned to deliver good returns for investors over the next one year time frame.
Diwali 2023 Stocks: Target Price and Other Details
1. State Bank of India (SBI): Gain: 22 percent, target price: ₹700
Why buy: SBI has strengthened its balance sheet. It increased its PCR to 92 percent in Q2 and maintained a high (~99.5 percent) provision coverage on corporate NPAs. SBI is the best bank among PSU banks with good operating profitability.
2. Titan: Increase: 19 percent; Target price: ₹3,900
Why buy: Titan has a market share of 7 percent in the jewelery industry. Titan leads in terms of growth among organized market players. Emerging businesses, fragrances and fashion accessories and Indian apparel are expected to register double-digit growth.
3.M&M: Growth: 19 percent; Target Price: ₹1,770
Why to buy: M&M has the highest exposure in the rural market (around 65% volume), which is likely to improve given rural cash flows. M&M’s restructuring of its SUV business to preserve its DNA and brand positioning has led to strong growth in demand for its SUVs.
4. Cipla: Growth: 21 percent; Target Price: ₹1,450
Why to buy: Cipla’s strong pipeline with complex products (inhalers, peptides, injectables etc.) is expected to drive continued growth in the US generics segment. With continued strong performance in the branded generics market (India/South Africa), it will be able to generate 19% CAGR earnings in FY 2023-25.
5. Indian Hotel: Growth: 22 percent; Target Price: ₹480
Why to buy: RevPAR (Revenue per Available Room) growth for Indian hotels has remained strong in October 2023 and shows healthy demand visibility for November 2023. A favorable demand-supply outlook and increasing foreign tourist arrivals are expected to boost business going forward.
6. Dalmatia India: Increase: 33 percent; Target price: ₹2,800
Why to buy: Dalmia India is benefiting from a strong rise in cement prices, especially in the east, where prices have increased by ₹40-50/bag and demand has improved. “We expect ~11 percent volume CAGR over FY20-26,” the brokerage said.
7. Keynes Technology: Growth: 26 percent; Target price: ₹3,100
Why buy: Kynes is a leading end-to-end and IoT-enabled integrated electronics manufacturer with strong order book growth (96% CAGR in FY20-23) and high share of box builds (~40% in 1HFY24).
8. Raymond: Lead: 38 percent; Target price: ₹2,600
Why buy: Over the last 2-3 years Raymond has strengthened his leadership team and restructured his group. The balance sheet was strengthened through demergers and capital infusions by the promoters. It has a portfolio of established brands like Raymond, Park Avenue, Colorplus, Ethnics, which it plans to grow through a capex-light franchise mode.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own and not those of Live Hindustan. The information provided here is only about stock performance and is not investment advice. Investing in stock market is. Subject to risks and advice of your advisor before investing. take.)