Therefore, investors put a lot of emphasis on making changes to their portfolio on the ‘auspicious’ day of Diwali by betting on stocks that they hope will offer outsized returns. Brokerages make recommendations based on their analysis on what the ‘lucky’ bets could be.
Business Insider went through 10 such reports to cull out the common themes. Not surprisingly, the private banks, telecom, and technology services sector have been featured more often than others in these ‘Diwali picks’. The recent earnings performance have been factored in by those recommending the following stocks:
Here’s a quick look at the popular stocks in brokerage recommendation report for Samvat 2077:
More than 5 top brokerages have set a target price of over ₹500 for ICICI Bank. The JM Financials report highlighted that the strength of ICICI bank lies in its highly efficient large liability franchise, strong capital ratios and value upsides through its strong subsidiaries.
Bharti Airtel was among one of the top choices by brokerages for Samvat 2077. According to HDFC Securities, Bharti Airtel has cash and equivalents of over ₹22,700 crore as on September 30. And, improving cash accrual could sufficiently cover maturing debt of ₹13,900 crore in FY21. “We expect capex to be moderate at ₹20,000-22,000 crore per fiscal over the medium term. Furthermore, relief towards payment timelines on AGR dues could help to maintain liquidity at current levels.” the report said.
The IT major Infosys was another top choice among the brokerages. According to HDFC Securities, Infosys financial profile has been robust, led by a debt-free balance sheet and healthy cash-generating ability over the past. The company’s financial flexibility is strong, supported by robust liquidity in the form of cash and cash equivalent of ₹26,011 crore as on September 30.
|HDFC Securities||₹ 1,205|
Pepsi maker Varun Beverages is also expected to hit the target price of over ₹800.According to Axis Securities, Varun Beverages will grow at a steady rate driven by consolidation in newly acquired territories and distribution led market share gains.
Can Fin Homes
Axis Securities and JM Financials recommended a target price of over ₹500 for the housing finance major Can Fin Homes.
“The resilience and strength of Can Fin Homes’ business model is best depicted by our ROE forecast of 17% for FY21E. Even a crisis such as COVID 19 has not been able to lower Can Fin Homes’ ROE below its cost of equity Minimal disruption to asset quality, negligible impact on long term ROEs and a swift bounce back in growth are key reasons to BUY Can Fin Homes,” said a JM Financial report.
State Bank of India
While pecking a target price of ₹ 300, Motilal Oswal said, “We believe the earnings normalization cycle for SBI has begun and it remains the best play among the PSU banks, on gradual recovery in the Indian economy, with a healthy PCR of 71%, robust capitalization, a strong liability franchise, and improved core operating profitability.”
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