Diwali Picks 2024: Asit C Mehta suggests these stocks to buy on Muhurat Trading for Samvat 2081

The domestic stock market witnessed a sharp rally in Samvat 2080, buoyed by a strong economic environment and liquidity from domestic investors. The growth momentum in corporate earnings, strong GST collection, capex cycle revival, favourable monsoon and robust domestic demand are positive factors.

However, the recent surge in crude oil prices, global economic slowdown worry and geopolitical concerns are potential near-term uncertain risks for the overall GDP growth of the economy. The benchmark equity index NSE Nifty gained around 25% since Diwali last year. On the other hand, the broader indices BSE Midcap and BSE Smallcap indices also rallied over 40% during the same period.

The stock exchanges, BSE and NSE, will conduct a special one-hour trading session known as ‘Muhurat Trading’ on Friday, November 1, 2024. So, which stock investor should this Diwali? Brokerage Asit C Mehta suggested the below stocks for you.

Ador Welding (Target price: Rs 1,806)

Ador Welding was established in 1951. Ador (formerly known as Advani Oerlikon) is one of the leading welding companies in India, manufacturing high-quality welding equipment, consumables, and welding automation solutions. The company is thriving with strong demand in both domestic and international markets, particularly in sectors like general infrastructure, railways, and shipbuilding. With a focus on capturing a larger market share in India, the company is investing in automation to enhance efficiency and improve margins. Ador Welding foresees that investments in various industries necessitate welding activities, providing exposure to diverse sectors and mitigating risks. Asit C Mehta estimates the company’s top line to grow at a CAGR of around 10.8% during FY23-FY26E, driven by an increase in volume.

Alicon Castalloy (Target price: Rs 1,765)

Alicon Castalloy is a leading global manufacturer and supplier of high-quality aluminium castings. The company operates as one of the largest aluminium foundries in India, supplying engineering solutions predominantly to the automobile sector. The company is poised for tremendous growth in its topline and margins due to its substantial focus on strategic initiatives, a robust order book, and opportunities in structural parts, technology-agnostic parts, and non-automotive sectors such as defence, energy, medical, infrastructure, carbon neutrality, and agriculture. Alicon is focused on diversifying its business to reduce dependence on a single vertical, thereby propelling growth. The company has a strong order book of Rs 9,150 crore, executable over six years up to 2028-29. It aims to increase revenue from high-value segments, improve EBITDA margins, and reduce interest costs. Considering the positive factors for Alicon Castalloy that will boost topline growth and EBITDA levels, the brokerage expects FY26 revenue to grow at CAGR of 16% on basis of FY24-FY26E.

CIE Automotive (Target price: Rs 698)

CIE Automotive is a large, diversified auto-components group with a presence across many processes, product lines, geographies and customers. The company’s unique combination of specialisation in high value-added products, usually delivered directly to OEMs, and presence across multiple production technologies also differentiates it from other component suppliers.

Asit C Mehta remains confident in the company’s growth story, driven by a healthy order book, diversification, capacity expansion, government support and a focus on building the EV portfolio. The brokerage expects revenue to grow at a CAGR of 6.2% for CY23-CY26.

Astral Limited (Target price: Rs 2,627)

Astral has established its market position with significant market share along with healthy demand prospects. Demand from building materials like pipe, paint, sanitary ware, faucets, ceramic and plywood are linked to various sectors like construction, real estate, infrastructure etc, which is expected to grow forward. Management is also confident to attain overall growth in the range of 15%-20% along with government initiatives such as the Pradhan Mantri Krishi Sinchayee Yojana (PMKS), the “Nal se Jal” scheme under Jal Jivan Mission, and the Pradhan Mantri Awas Yojana (PMAY) are also expected to drive the demand for plastic pipes. Asit C Mehta finds Astral attractive for its consistent focus on profitability and growth, driven by innovative product launches, vigorous brand building and successful product diversification. After establishing a leading position in plumbing pipes, it has now entered into new inorganically) to lever its brand and distribution network has enabled it to effectively capture growth opportunities. The brokerage estimates a revenue CAGR of 17% from FY23 to FY26E.

ITD Cementation India (Target price: Rs 758)

ITD Cementation has a diversified portfolio across all verticals with expertise for disciplined project execution. It has established itself as a leading name in the construction of offshore maritime structures, ports, mass rapid transit systems, including elevated corridors and underground metro stations, buildings and tunnels, industrial structures, including airport terminal buildings and technological buildings, hydroelectric power plants with dams, irrigation projects, and micro tunnelling works within cities, foundation and specialist engineering with reclamation and ground improvement. The increased thrust from the government towards the infrastructure industry, through a rise in the capital budget allocation, is likely to help with further order inflows for the company. Management is confident about revenue growth, order inflow, and gradual improvement in margins. Asit C Mehta is optimistic about the company’s growth story and recommends an ‘Accumulate’ rating with a revenue CAGR of 17% for FY24-FY26E.

J Kumar Infraprojects (Target price: Rs 950)

J Kumar Infraprojects is a well-established EPC contractor with a strong foothold in the infrastructure sector. The company is well-positioned to benefit from its robust order book, excellent execution capabilities, and solid financial foundation. The government's focus on infrastructure development, coupled with increased capital allocation to the sector, is expected to drive further order inflows for JKIL. The company's experienced management and sound financial health provide a competitive edge, enabling it to navigate long-term structural changes in the industry. JKIL’s consistent track record of completing complex projects on schedule, along with management’s confidence in revenue growth, improved margins, and strong order inflows, reinforces its promising growth trajectory.