The Indian stock exchanges BSE and NSE will conduct a one-hour special Muhurat trading session on the occasion of Diwali on Monday (October 24). The auspicious one-hour session will mark the beginning of Samvat 2079, new year according to the Hindu Calendar. In Samvat 2079, volatility is expected to continue, though at a slower pace. Analysts at HDFC Securities continue to favour domestic-oriented businesses and favour opportunities like Healthcare, Defence, Banking, Entertainment and Infrastructure for the next year. With a focus on these themes, the brokerage has announced 10 picks for Samvat 2079. “These stocks have robust fundamentals and some margin of safety in their valuation to offer superior returns to investors,” it said.
HDFC Securities Diwali 2022 Muhurat stock picks
Aster DM Healthcare
Analysts expect Revenue, EBITDA and PAT to grow at a CAGR of 9%, 7% and 10% respectively over FY22-24. The stock trades at an attractive valuation, which represents a significant discount to its Indian peers, they said. “We believe such a high discount is unwarranted, given the stable operating performance and increase in share from the India business, while being supported by a steady growth outlook in GCC,” they added. The brokerage recommends buying the stock at R242 and add more on dips at Rs 211 for a target price of Rs 278 till next Diwali.
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Bharat Dynamics
Analysts expect revenue, EBITDA, and PAT to grow at a CAGR of 26.7%, 18.8%, and 17.7% respectively over FY22-24. “We recommend investors to buy the stock at Rs 858 and add more on dips at Rs 774 for a target price of Rs 1022 till next Diwali,” they said.
Bharat Electronics
According to the brokerage, BEL’s financial profile remains strong because of healthy profitability and return indicators, zero net debt, superior liquidity and robust debt coverage metrics. It expects the company to report a revenue CAGR at 14% from FY22 to FY24. “We recommend investors to buy the stock at R101 and add more on dips at Rs 87 for a target price of Rs 123 till next Diwali,” the report said.
Birla Corporation
Analysts at HDFC Securities believe that various cost-saving initiatives taken by the company (such as waste heat recovery and solar power plants to replace high-cost grid power), increase in clinker capacity and coal extraction from captive mines would aid revenue and margin growth. “We recommend investors to buy the stock at Rs 896 and add more on dips at Rs 784 for a target price of Rs 1069 till next Diwali,” they said.
Cipla
HDFC Securities expects a single-digit CAGR in domestic formulation revenue on a high base of FY22. Overall, it estimates 9.5% and 19% CAGR in revenue and net profit respectively over FY22-24. “We recommend investors to buy the stock at Rs 1109 and add more on dips at Rs 992 for a target price of Rs 1283 till next Diwali,” the brokerage report said.
Deepak Fertilisers & Petrochemicals
Analysts project a 14% revenue CAGR, led by strong growth in both segments. EBITDA margin is estimated in the range of 18-20% over the next two years. Strong revenue and steady margin could drive a 17.5% CAGR in net profit over the same period, they said. “We recommend investors to buy the stock at Rs 895 and add more on dips at Rs 791 for a target price of Rs 1058 till next Diwali,” they added.
ICICI Bank
According to analysts, the Indian banking industry is at the cusp of a credit upcycle. ICICI Bank is one of the best-placed large private sector banks. Over the years, it has consistently focused on de-risking its loan book by reducing its corporate portfolio and focusing on the high margin, less risky retail segment, they noted. “We recommend investors to buy the stock at Rs 870 and add more on dips at Rs 773 for a target price of Rs 999 till next Diwali,” they added.
Rail Vikas Nigam
The brokerage noted that the company has a robust balance sheet and is available at an attractive dividend yield of around 5%. “Looking at the strong prospects, we believe the stock is available at a reasonable valuation. We recommend investors to buy the stock at Rs 36.8 and add more on dips at Rs 32.75 for a target price of Rs 42.25 till next Diwali,” it said, adding that a stake sale by the government, however, could prove to be an overhang for the stock in the near term.
Sun TV Network
Increasing interest in regional content among the Indian population across the borders results in higher overseas viewership, attracting foreign investment, according to analysts. “Taking into consideration future growth and healthy cash balance, we have a positive view on the stock. We recommend investors to buy the stock at Rs 536 and add more on dips at Rs 468 for a target price of Rs 624 till next Diwali,” they said.
TCI Express
Analysts at HDFC Securites expect the company to report 18%, 25% and 25% CAGR growth in sales, EBITDA and APAT over FY22-24. With improving profitability, RoE and RoCE are expected to to remain elevated. “We recommend investors to buy the stock at Rs 1890.4 and add more on dips at Rs 1,640 for a target price of Rs 2169 till next Diwali,” they said.
(The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)