Diwali Muhurta Trading 2022: Samvat 2079 – Hindu New Year starting October 24 – could be a test of nerves as investors brace for more uncertainty in markets with the prospect of a recession in the West. Domestic brokerage house Prabhudas Lilladher said in a note that Samvat 2078 will go down in history as one of the most volatile years, with excitement around tech stocks and IPO followed by Russia Ukraine War, multi-decade high global inflation, and the sharpest interest rate hikes in recent times.
“Amidst this hazy global landscape, India Today looks like a pearl in the sea with benefits from food security, domestic demand-driven economy, PLI scheme in manufacturing and defence, strong banking system with decade low NPAs, strong infra capex and rising investments in unicorns.” Brokerage and research firm Prabhudas Lilladher said in a note sharing his top stock picks for Diwali 2022.
“While the uncertain global environment and the expected slowdown in the US and Europe are a cause for concern, we are confident that India will successfully navigate this period and emerge stronger. We continue to prioritize companies that have a presence in emerging segments, strong balance sheets and business momentum.
Top Diwali Stock Picks of Prabhudas Lilladher –
Large cap stock picks
Apollo Hospitals Enterprise, with a target price of Rs 5,000, continues to be the leader in the healthcare sector; Avenue Supermart (TP: Rs 5,121) continues to be its top choice for the transition from unorganized to organized market in food and grocery; Bharti Airtel (TP: Rs 1,032), ICICI Bank (TP: Rs 950) and Mahindra & Mahindra or M&M (TP: Rs 1,500) are its preferred picks in the auto space.
Mid-cap stock picks
With a target price of Rs 200 as brokerage, Ashok Leyland believes that the company will continue to recover its lost share on back model launches and revival in the bus segment; Chambal Fertilizers & Chemicals (TP: Rs 480) and Federal Bank (TP: Rs 165).
small cap stock picks
Brokerage Prabhudas Lilladher (PL) says it prefers companies with presence in emerging segments, strong balance sheets and business momentum. While the uncertain global environment and the expected slowdown in the US and Europe are a cause for concern, the broking firm believes that India will successfully navigate the volatile period and emerge stronger. For Diwali, the domestic brokerage has recommended three smallcap stocks, with price targets suggesting a potential upside of 60 per cent.
Jubilant Ingravia with target price of Rs 860, VIP Industries (TP: Rs 1,020) and Westlife Development (TP: Rs 847).
PL said Jubilant Ingravia is well positioned to capitalize on long-term growth opportunities given its new product pipeline, traction in CDMOs, import substitution, China+1 policy and capital expenditure outlay of Rs 2,050 crore during FY22-25. well placed.
The broking firm said Jubilant Ingravia’s Specialty Chemicals (SPCM) segment will see growth in earnings, aided by higher capital allocation.
“This vertical integration across the value chain drives cost and market leadership (pyridine-beta, global top 2 in Vitamin B3), furthermore enabling it to move up the value chain. Ebitda from the Higher Value Segment (SPCM + NHS) The contribution is expected to increase to 67 per cent in FY12, from 53 per cent in FY12,” PL said.
The brokerage said a strong balance sheet despite cash outflows of around Rs 1,800 crore on capital expenditure in FY 2013-25E; And improving earnings mix, led by higher value and structural growth segments, will fuel a revaluation in the stock.
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