In Samvat 2079, volatility may continue, albeit at a slower pace, as the rate hike cycle nears its peak. Brokerage and research firm HDFC Securities said in a note that resumption of growth globally and especially on the domestic front is essential to overcome the sluggish mood and get the markets back on a sustained bullish path.
As part of Diwali Stock Picks for Samvat 2079, the brokerage house has recommended ten stocks that investors may want to buy with a time till next Diwali.
HDFC Securities’ Top Diwali Stock Picks,
Aster DM Healthcare: The note added that better case mix, hike in prices and expansion in Tier 1 cities are likely to improve the company’s ARPOB and may gain traction due to its special focus on medical value tourism. The brokerage has a buy tag on the stock with a target price of 278.
Bharat Dynamics: “BDL intends to leverage its experience to develop new products such as new generation SAMs, ATGMs and heavyweight torpedoes, which will improve its topline. Strong revenue visibility, backed by a robust pipeline, large projects being awarded (Akash and next generation ATGMs are expected to be delivered soon) and a focus on indigenization and in-house efficiencies are expected to drive earnings growth, The brokerage said (Target Price): 1,022).
Bharat Electronics: According to HDFC Securities, BEL’s financial profile remains strong owing to healthy profitability and return indicators, zero net debt, superior liquidity and strong debt coverage metrics (Target Price: 123).
Birla Corporation: The brokerage believes that various cost saving initiatives undertaken by the company, increase in clinker capacity and extraction of coal from captive mines will help in revenue and margin growth. (Target Price: 1,069)
Cipla: “Cipla generated 45% of revenue from One India (branded generics, trade generics and consumer health), 20% from US, 17% from South Africa, Sub-Saharan Africa, Global Access (SAGA), 13% from ROW and 3 % from API segment. Such diversity in geography as well as product base protects the company from significant adverse fluctuations in revenue and profitability.” (Target Price: 1,283)
Deepak Fertilizers: The company’s long-term growth is expected to stem from changes in its product mix, head room availability of additional capabilities emerging from better operations management and de-bottling along with greenfield expansion, it said (Target Prices: 1,058)
ICICI Bank: “The bank is focused on technology investments and digital initiatives to prepare itself for the next phase of growth in the retail and SME sectors. Its subsidiaries, which are leaders in their respective sectors, add good value to the overall valuation.” (TP: 999)
Rail Development Corporation: The company has a strong balance sheet and is available at an attractive dividend yield of ~5% and execution of large projects on a low basis may further drive the growth in the coming years, it added (TP: 42.25)
Sun Television: “Sun TV has reported strong profit margin/accumulation over the past several years, thanks to its scale of operations, presence across the value chain with strong vertical integration, high bargaining power and negligible finance costs.” (TP: 624
TCI Express: “We expect the Company to post 18%/25%/25% CAGR growth in Sales/EBITDA/APAT in FY 2012-24E, though our margin expectation is lower than the management’s guidance.” (TP: 2,169)
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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