Even as the stock market posted a robust rally in the last one week amid the ongoing festive season, various brokerages have come out with their top stock picks for this Diwali.
Even as the stock market posted a robust rally in the last one week amid the ongoing festive season, various brokerages have come out with their top stock picks for this Diwali. Notably, the 30-share Sensex has returned about 11% since last Diwali, while the broader Nifty has returned about about 10.40% in the same period. Accortding to brokerage firm Anand Rathi, the recent steps taken by the government suggest that rather than taking shortcuts or populist measures, the government is taking administrative and structural measures, which would improve the long-term performance of the economy. “Such an approach coupled with the improving outlook of the economy and Indian corporate sector make us more positive about the outlook of the Indian equity market,” said the firm. We bring to you you top Sensex picks from the firm.
Billionaire Mukesh Ambani-led RIL is one of the top stock picks for this Diwali, according to Anand Rathi. Notably, RIL on Friday achieved a major feat to cross Rs 9 lakh crore in market capitalisation. Reliance Industries shares touched a fresh record high on Friday, propelling the firm’s market capitalisation to hit the crucial Rs 9 lakh crore mark. The firm has also recorded record quarterly profit in the Jul-Sep period. RIL’s net profit surged 18.3 per cent to Rs 11,262 crore, compared to Rs 9,516 crore in the same quarter last year. RIL also achieved revenue of Rs 1.63 lakh crore, an increase of 4.8 per cent, compared to Rs 1.56 lakh crore in the corresponding period of the previous year. According to Anand Rathi, the stock is trading at 18.1x FY16E earnings and 14.7x FY17E earnings respectively. “We recommend a BUY on the stock with a target price of Rs 1610 per share,” Anand Rathi said. The target stock price implies an upside of about 15% from the current price levels.
FMCG giant HUL is the other Sensex stock in the list. While the current macro trend remains subdeued, amid the ongoing slowdown, Anand Rathi is optimistci that the company will outgrow the industry. “HUL being the largest FMCG company with one of the largest footprints in terms of products and distribution network and its strategy to target volume growth, should drive healthy growth in medium to long term,” noted the research firm. At its current price, the stock is trading at 69.0x FY20E EPS and 60.0x FY21E EPS. “We recommend BUY on the stock with a target price of Rs 2,422 per share,” said the firm.
(Please consult your financial advisor before taking any investment related decision)