Diwali has a special place in the hearts of Indians. The festival of lights is considered to bring prosperity and good luck to our homes. In keeping with tradition, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) open for one hour in the evening on Diwali so that people can buy stocks to celebrate the occasion.
Here are some top BSE and NSE stocks recommended by brokerages to brighten up your portfolio this Diwali.
Axis Bank
The bank focuses more on the retail segment, with a share of 60 per cent, primarily mortgage loans. More than 80 per cent of unsecured loans are given to the salaried segment. Analysts at ICICI Direct believe that pedalling business growth with a higher share of unsecured loans in incremental business will continue to aid margin uptick. "With strong capitalisation levels at 17.8 per cent (tier I at 15.7 per cent), Axis Bank is poised to pedal higher business growth, going ahead," writes the report.
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HDFC Bank
According to JM Financial analysts, HDFC bank is at a crucial flex point on both its monthly and weekly time frames. The analysts point out that HDFC bank, in June 2022, experienced a price correction that hovers around its 200 days weighted moving average (WMA). However, since October 12, HDFC bank has been trading near its 50-day WMA price level for the last three weeks. Analysts are also optimistic about a possible bounce back of the price of HDFC bank from its present level since the trading volume levels have been lower in the recent price correction that the stock experienced. As a result, the analysts give a price target range for HDFC at Rs 1600 to Rs 1740 and expect the stock to outperform and HDFC bank to continue to maintain its leadership position.
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ITC
According to analysts at JM Financial, ITC has consistently outperformed in the fast-moving consumer goods (FMCG) sector and is now in a "strong uptrend." Hence, they are suggesting that, in all probability, ITC is likely to outperform going forward too. The analysts give a target price of ITC at Rs 395 to Rs 455.
Avenue Supermarts
Avenue Supermarts Ltd (DMART) owns and manages D-Mart outlets in India. The national supermarket chain sells a variety of goods, focusing on foods, non-foods (FMCG), and general merchandise and apparel. The company has 302 stores.
According to IDBI Capital Markets and Securities report, "Revenue increased at a 15 per cent in three years, from FY19 to FY22. The company strives to gain higher revenue share from private labels (margin accretive) and private labels to be at par in quality compared to branded products. It also adds that FMCG products will likely drive private labels growth in Dmart vs. general merchandise products. "We expect a better revenue mix from modern large-size stores going forward. We forecast revenue to grow 35% 2-year CAGR (Compound Annual Growth Rate) (FY22-24E) and PAT (Profit After-Tax) to grow 44% 2-year CAGR (FY22-24E). Dmart is our high conviction BUY idea in the retail sector," writes IDBI Capital in its report.
IDFC Bank
The research analysts of the broking company Axis Securities said post the merger, the bank focused on building a strong retail franchise by putting together a strategy to realize a loan book with an objective to de-risk, diversify, and enhance margins. This helped the bank to reduce its Infrastructure financing portfolio to 5.2% Mar’22 of total funded assets from 37% in Mar’18. “We expect the loan book to report healthy growth of 20-25% over FY23-25E with a key focus on the retail segment, albeit with a slightly stable-to-lower growth in the corporate segment," said Axis Securities.
Moreover, the bank had a very low retail deposit of Rs 10,400 crore against a loan book of Rs 104,660 crore, resulting in a high cost of borrowing (13.5 per cent in FY18). However, with the new management at the helm led by V. Vaidyanathan, the bank focused on building a strong retail deposit base with a high proportion of CASA (Current Account Savings Account). Consequently, the bank's cost of borrowing was reduced to 5.1 per cent in FY22. Currently, with a strong CASA ratio of 50.04 per cent (Q1FY23), "we believe IDFCFB is in a good position to grow with a reasonably sustainable level of cost of borrowing," said Axis Securities.
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Polycab India Ltd
Polycab has maintained a leadership position in the organized C&W segment with a market share of over 24 per cent. Moreover, with superior financial strength, expansion of distribution network into tier-2 and tier-3 cities, and strong brand recall, it is poised to gain market share from unorganised players in both Wires and FMEG segments. "We believe the growth will be driven by demand recovery, new product launches, product premiumization, and increasing contribution of exports over the long run," said Axis Securities.
Research analysts of the broking company Axis Securities have recommended a buy rating on the stock with a target price of Rs 2,860/share, implying an upside of 12 per cent from the current market price.
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Blue Dart
Blue Dart is South Asia's leading courier and integrated express package distribution firm. The organisation has the most comprehensive domestic network in India, with over 35,000 sites, and covers more than 220 countries and territories internationally through group company DHL, the world's leading express distribution services provider.
E-commerce now accounts for around 20 per cent of total sales and is expanding at a 20 to 25 per cent CAGR for the company. Blue Dart maintains its fleet of six Boeing 757-200 cargo aircraft, with a payload of 500 plus tonnes per night, and a flotilla of 22,336 vehicles and 2173 facilities and hubs spread across 35,000 plus locations. With such a network, the firm can reach even the most remote corners of India.
