Indian share markets, which remained resilient in Samvat 2078, are expected to continue outperformance in Samvat 2079 as well. India strengthened its position in the global economy as it stood strong amidst hot inflation, rising interest rates, monetary policy tightening, currency swings, geopolitical uncertainties, and heavy FII selling. Despite such global headwinds, Nifty dipped around 3% since last Diwali as compared to over 20-30% fall in most of the global indices. Going ahead too, Nifty earnings are expected to grow robustly at 16% CAGR over FY22-24, according to analysts at Motilal Oswal Financial Services. “We are positive on Indian equities from a mid to long-term perspective, although intermittent volatility is likely. Within broader market, action is expected in select niche segments,” they said.
Muhurat Trading: Motilal Oswal Diwali Fundamental stock picks
Also Read: Muhurat trading: Nifty likely to deliver 12-15% returns in Samvat 2079; SBI, ITC, M&M among top stock picks
Largecap stock picks
Infosys: Infosys continues to see traction in the large deal pipeline, despite an adverse demand environment. It is a long-term beneficiary of an acceleration in IT spends, given its capabilities around Cloud and Digital transformation.
SBI: It continues to strengthen its Balance Sheet and focuses on building a superior loan book. “Among PSU Banks, SBI remains the best play on a gradual recovery in the Indian economy, with a healthy PCR (~75%), Tier I of 11.2%, a strong liability franchise, and improved core operating profitability,” analysts said.
L&T: It is beneficiary of record high order book, improving health of the Hyderabad Metro project, and revival in private capex. Focus on asset monetization to further strengthen the balance sheet and improve return ratios
Maruti Suzuki: Strong demand and favorable product lifecycle for Maruti augurs well for market share and margin. “We expect a recovery in both market share and margin from 2HFY23, led by an improvement in supplies and mix, and operating leverage,” the brokerage said.
Apollo Hospitals: It is well placed to deliver improved occupancy in healthcare services, partly supported by international patients and higher share of insurance-linked patients. “Enhanced offerings to patients through Apollo 24/7 platform and better footfalls in Apollo Health and Lifestyle (AHLL) network to aid growth,” analysts at Motilal Oswal said.
Ashok Leyland: Ashok Leyland is a good play on a CV cycle recovery, coupled with a retrieval in market share and a bet on expansion in revenue and profit pools. Any fundraise in Switch Mobility (EV business) could serve as a re-rating catalyst
Jubilant FoodWorks: It is the brokerage’s top pick in the QSR space as it is well placed to capture the enhanced post-Covid opportunity presented to QSRs in India. It continues to build extensively on its three key moats of delivery expertise, supply chain efficiency and technological superiority to tap this opportunity.
IDFC First Bank: The lender is entering a phase of strong loan growth of 21% CAGR over FY22-25E, aided by improvement in profitability due to replacement of high-cost borrowings, better cost trends and controlled credit costs. Analysts expect RoA/RoE to touch 1.3%/13.9% in FY25E.
Zee Entertainment: Zee-Sony merger has received both the CCI as well as shareholder’s approval. With this, the merger process may conclude by 4QFY23. With the majority stake now being owned by Sony, the stock should also benefit from better capital allocation, improved corporate governance, and business synergies. “The combined entity has the potential to become a strong dominant player in the Broadcasting space and also capitalize on largescale digital opportunities,” analysts said.
Also Read: Samvat 2079: Nifty may scale 21000; buy ITC, Kotak Bank, among other stocks this Diwali to pocket gains
Midcap stock picks
Metro Brands: “A strong brand, healthy portfolio of in-house and third-party brands, and an efficient demand-pull supply chain model ensures product freshness in stores,” the brokerage noted. It enjoys high RoIC of 20%, led by efficient working capital, store economics, and healthy growth outlook.
Lemon Tree Hotels: It benefits from improving traction in corporate travel as ~86 of its rooms are located in business destinations, analysts noted. It is focusing on adding rooms under the ‘management contract’ model where it has a strong pipeline of 24 properties lined up.
Mahindra Lifespace: It is a leading residential developer with a strong presence in Mumbai and Pune and now expanding in Bengaluru. “Given the industry tailwinds and shift towards branded developers, Mahindra group is now gearing up to unlock the growth potential in its real estate vertical,” analysts said.
(The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
