Festive cheer is all around Dalal Street as markets approach Diwali with a positive frame of mind. Indian markets have been resilient so far and the bounce has been much stronger than the correction.
Ahead of Diwali 2023, Religare Broking has shared its five Diwali recommendation picks with an upside potential of 23 per cent to the investors in the next one year.
Here's what Religare Broking said about these stocks while picking them as Diwali picks:
TCS | Buy | Target Price: Rs 4,089 | Upside: 21%
The brokerage believes from a medium to long term perspective factors such as strong demand for newer technology, record order inflows, client willingness to commit for long term deals and investment towards development of technology as well as up skilling of employees will play out.
"Besides, improving margins and managing cost as well as the company’s focus continues on translating deals to revenue gives us confidence of revival. On the financial front, we have estimated its revenue/EBIT to grow at 16.5/19.8 per cent CAGR over FY23-25. The stock price has seen decent correction post its second quarter results, thus making its valuation attractive for investment," it added.
Over the next 2 years, it expects topline to grow by 15-16 per cent CAGR and maintain margin between 24-26 per cent led by better topline, improving efficiency and increased utilization.
ITC | Buy | Target Price: Rs 535 | Upside: 23%
The brokerage believes that ITC will continue its focus on ITC Next strategy which would aid in building future ready portfolio as well as scaling up non-cigarettes business specially FMCG by innovating, renovating and premiumizing products.
"Besides, the demerging hotel business is moving as per company’s plan which is positive. Overall, the growth prospects remain optimistic and financially we have estimated its revenue/ profit to grow at 15/19.2 per cent CAGR over FY23-25," it said.
Axis Bank | Buy | Target Price: Rs 1,167 | Upside: 14%
Religare Broking remains positive on Axis Bank on the back of growing assets book, premiumization of deposits, growing wealth management business and its market position in the credit card segment.
"The asset quality of the bank continues to remain robust. Also, the acquisition of the premium customers presents an opportunity for the bank to cross sell its other products," it said.
It added that Axis Bank has consistently outgrown the industry and the management expects to grow 300bps-400bps higher than the industry.
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Maruti Suzuki | Buy | Target Price: Rs 12,714 | Upside: 23%
"With superior product mix and favorable commodity prices we anticipate, Maruti will continue to gain market share in its key pockets which will eventually aid in revenue growth. From a valuation perspective it is currently available at an attractive valuation, with favorable risk to reward ratio," Religare Broking said.
"The supply of electronic chips seems to have stabilized which has enabled the company a swift turnaround time of its orders. Besides that, the prices of precious metals have declined shall reflect well in its margins which shall improve the overall profitability of the company for FY24," it added.
SBI Life Insurance | Buy | Target Price: Rs 1,644 | Upside: 22%
The brokerage remains positive on SBI Life Insurance on the back of strong growth in its core operations which enables the company to increase its market share. The company is rightly placed in the resurgence of ULIP products due to its higher proportions of such products in its overall product mix, it said.
"SBI Life Insurance’s Annualized Premium Equivalent (APE) has grown at a CAGR of 16 per cent from FY20-23 while Gross Written Premium (GWP) has grown at 18.3 per cent during the same period," it noted.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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