Diwali Stock Picks 2023: The Indian stock market has posted strong performance since Diwali last year. While the Nifty 50 is up around 9 per cent, the broader markets have posted sharp outperformance since the last Samvat.
Ahead of Diwali 2023, Axis Securities has shared nine picks on a fundamental basis that could give investors returns of up to 34 percent in the coming year.
The domestic brokerage said in its report: “Samvat 2080 will be a very interesting year to watch for the global economy. We begin this new Samvat with a story characterized by ‘higher for longer’ interest rates, volatile bond yields, geopolitical conflicts in the Middle East and fluctuating oil prices. On the domestic front, however, the prospects for the Indian economy appear considerably brighter and more promising. Amid a volatile global landscape, India remains in a favorable growth position. According to International Monetary Fund (IMF) estimates, the Indian economy will be the fastest growing economy in the emerging market category in FY24 and FY25. This will be a major driver of Indian equities in the near future.”
Here are 9 stock picks from Axis Securities for Samvat 2080:
TVS Motor Company | CMP: 1,569 | Target: Rs 2,100 | Positive: 34%
Axis recommends a Buy rating on the stock with a target price of Rs 2,100, valuing it at a sustainable premium price-to-earnings ratio of 30x on December 2025 core EPS, other investments at 1x P/BV, and TVS Credit Services at 2x P/BV.
Bharti Airtel | CMP: 924 | Target: Rs 1,155 | Benefit: 25%
The company’s business fundamentals remain strong and continue to improve. Management sees enormous potential for continued strong revenue and profit growth, supported by expanding distribution in rural areas, investing in the network and increasing 4G coverage.
APL Apollo Tubes | CMP: 1,570 | Target: Rs 1,950 | Upside 24%
Increasing production from the Raipur plant will lead to higher EBITDA/ton. We value APL Apollo Tubes at 33x September 2025 price-earnings per share on continued demand visibility to arrive at our TP of Rs 1,950/share. We maintain our buy rating for the stock.
Jyothy Labs | CMP: Rs 358 | Target: Rs 440 | Benefit: 23%
We expect the company to deliver healthy revenue/EBITDA/PAT growth of 13%/25%/25% CAGR over FY23-26E respectively, which will improve the company’s overall return profile. At CMP, the company is currently trading at 32x/29x its FY25/26 EPS and with better earnings growth visibility and a better return profile, the stock looks attractive in the small to mid-market consumer sector.
KPIT Technologies | CMP: Rs 1,221 | Target: Rs 1,500 | Benefit: 23%
KPIT has a resilient business model and strong earnings visibility thanks to its multiple long-term contracts with world-leading brands. It is well positioned to capture the tremendous growth opportunities in the sector given robust demand for ER&D spend, focus on customer retention for long-term sustainable growth and margin tailwinds from cost efficiencies, lower input costs, rupee depreciation and lower travel costs. .
HDFC Bank | CMP: 1,476 | Target: Rs 1,800 | Upside 22%
Axis remains confident in the bank’s ability to maintain its growth momentum given the enormous post-merger opportunities in terms of a larger customer base, expanded distribution network and higher cross-sell opportunities to HDFC Ltd’s existing customers. Furthermore, we believe that current valuations are also reasonable and below the long-term average.
Astral | Rs 1,845 | Goal: 2,150 | Benefit: 17%
Axis notes management commentary expecting strong demand to continue and increase in FY24 volume guidance.
Ahluwalia Contracts India | CMP: Rs 664 | Target: Rs 770 | Benefit: 16%
With favorable features such as a strong and diversified order book position, a healthy bid pipeline, new order inflows, the asset-light model and emerging opportunities in the construction sector, we expect the company to generate healthy free cash flows and revenue growth going forward. /EBITDA/APAT growth of 23%/26%/27% CAGR over FY23-FY25E, Axis Securities said.
SBI Life Insurance | CMP: Rs 1,345 | Target: Rs 1,535 | Positive: Rs 14%
SBI Life continues to maintain its leading position with the best expense ratios in the industry. The company has been able to achieve strong APE growth in recent years and Axis Securities expects the momentum to continue with a more balanced product mix.
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