Samvat 2076 proved to be a year of high volatility due to the COVID-19 pandemic. Indian share market benchmark Nifty 50 hit an all-time high of 12,431 in January and then a 3-year low of 7511 in March 2020. As we enter Samvat 2077, markets have once again scaled to a new high, surpassing the previous all-time highs after nearly 10 months. Nifty has gained 4.6 per cent since last Diwali while Midcaps outperformed the Nifty and are up 9.3 per cent. Nifty Smallcap managed to gain 4 per cent. Research and brokerage firm Motilal Oswal Financial Services has picked up 10 stocks as Diwali picks for Samvat 2077. From next 12 months perspective, the brokerage firm is positive IT, healthcare, rural-Agri, telecom, consumer along with select financials. It believes that another round of fiscal stimulus could help elevate sentiment further.
Bharti Airtel: The brokerage firm noted that Bharti Airtel’s execution has been top-notch in the last few quarters, evident from strong 16 per cent India Mobile EBITDA growth cumulatively in the last two quarters. With a target price of Rs 650, Bharti Airtel will have to jump 44.4 per cent from the previous close.
SBI: Analysts at Motilal Oswal believe that earnings normalization cycle for State Bank of India has begun and it remains the best play among the PSU banks, on gradual recovery in the Indian economy, robust capitalization, a strong liability franchise, and improved core operating profitability. Motilal Oswal sees an upside of 37 per cent with a price target of Rs 300.
Hero MotoCorp: The two-wheeler major is poised for faster recovery over other 2W peers due to its rural-focused portfolio and market leadership in the entry and executive segments. The brokerage firm has given a target price of Rs 3,700, implying a rally of 26 per cent.
Infosys: The brokerage firm in its Diwali Picks Samvat 2077 report noted that it expects Infosys to be a key beneficiary in terms of recovery in IT spends in FY22. Infosys remains its top pick with a target of Rs 1,355, upside of 21.6 per cent.
UltraTech Cement: The cement major company has a strong pan-India distribution network and preferred supplier status for key infrastructure projects. Motilal Oswal said that this places UltraTech Cement in a good position to tap into expected growth in both retail and institutional cement demand in India. According to Motilal Oswal, SBI is set to hit Rs 5,600 in next 12 months, a 23 per cent rally.
ICICI Bank: The private lender continues to see strong growth in retail deposits and has succeeded in building a robust liability franchise over the past few years which continues to improve. It has a target price of Rs 525, an 18.5 per cent return till next year’s Diwali.
Crompton Greaves Consumer Electricals Ltd: The brokerage firm sees a 15.6 per cent gain in the stock price with a target price of Rs 360. “Despite strong elements of pent-up demand playing out recently, we believe underlying demand to be in positive territory, which should sustain/improve going forward,” Motilal Oswal said.
Dabur India: The brokerage firm sees Dabur’s investment case strong, on the back of dedicated focus on the herbal segment, power brand strategy, a spate of new launches, an increasing direct distribution reach and cost savings which would be ploughed back into the business. Motilal Oswal pegged a price target of Rs 600, nearly 14 per cent rise in the stock price.
PI Industries: The brokerage firm believes PI has levers in place to sustain the growth momentum, led by a ramp-up in operations of two multi-purpose plants, revenue from the Isagro acquisition, sustained growth momentum in the CSM business, and product launches in the domestic market providing earnings visibility. The brokerage firm has given a target price of Rs 2,611, implying a gain of over 13 per cent.
Divi’s Lab: Motilal Oswal is positive on Divis Laboratories given favourable demand for its APIs, margin enhancement owing to an increase in the in-house manufacturing of intermediates, and additional revenue from new capex. The target price is Rs 3,520, a gain of nearly 9 per cent.
(The stock recommendations in this story are by the respective research and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)