Diwali Muhurat Trading Picks: Indian stock market is all set to welcome the Samvat 2081, and it noteworthy that the year 2080 was prosperous where both Sensex and Nifty created history with all-time gains of 85,978.25 and 26,277.35 respectively. However, the stock market has corrected sharply from its all-time highs, and volatility continues to persist with foreign outflows ahead of the Diwali season of the current year.Jaipur Investment
Diwali festival will commence from October 28 and will continue till November 3Jaipur Wealth Management. The 1-hour auspicious Muhurat trading will take place on November 1, 2024.
Brokerage Kotak Securities is cautiously optimistic in India for Samvat 2081.
Giving outlook for Samvat 2081, Kotak’s note said, “FY25 will likely see more broad-based growth across sectors. However, the OMCs will likely drag down overall profits, as we expect their profits to normalize in FY25.”
The brokerage finds most sectors and stocks quite overvalued with the degree of overvaluation ranging from (1) low for most large-cap consumers, IT services and pharmaceuticals to (2) medium in the investment space to (3) high in the case of several low-quality companies. As the broader market valuations are rich, opportunities arising from market correction can be used to add quality stocks (with attractive valuations) from a long-term investment perspective.
Based on our assessment of markets, sectors and stocks, Kotak has identified eight potential stock ideas that are expected to do well in Samvat 2081.
The key investment rationale for buying Aadhaar Housing Finance is that the company has a large affordable HFC. (Rs21,100 cr of AUM in FY24). Also, the company has a 7% market share in the affordable segment.
Furthermore, Aadhaar housing has a long track record, well-diversified geographical presence and customer profile. While its multipronged expansion and appraisal strategy will drive 21% AUM CAGR (FY24-27E). Additionally, stable margins and improving leverage will accelerate RoEs back to the high teens.Chennai Stock
On the back of strong assets quality, Kotak’s note said, “We maintain BUY rating and RGM-based FV of Rs550; at our FV, the stock will trade 3.1X book and 20X earnings June 2026E.”
The lender’s business execution is on expected lines, with a focus on the GPS strategy to build a solid franchise. On the deposits front, Kotak pointed out that the bank’s management held its view that the initiatives taken are granular and focused, but they would deliver the desired outcomes to grow faster than industry average over time.
In the case of loan mix, the brokerage stated that the bank would continue to build a profitable portfolio and was comfortable delivering better risk-adjusted growth.
That being said, Kotak believes, Axis Bank has one of the best upsides, among large private banks at these levels. It said, “We maintain BUY with a FV of Rs1,500 (unchanged), valuing the bank at ~2.2X book and ~15X FY2026E EPS for RoEs of ~15%.”
Emerging as a leading tier-1 manufacturer of automotive lighting and rearview mirrors, catering primarily to the two-wheeler OEMs, FIEM is well-placed to benefit from a two-wheeler industry recovery.
Also, the company has a strong presence with key players in the two-wheeler segment. The company also
has a strong presence with two-wheeler EV players. Notably, FIEM is looking at leveraging its LED automotive lighting expertise and strong R&D in the four-wheeler segment.
Kotak is expecting FIEM’s revenue to witness healthy growth over FY24-25E, while FIEM’s earnings to grow at a healthy 19% CAGR over FY24-FY27E.
Being a market leader in India’s emerging recycling industry with a focus on lead recycling, Gravita is on best place to capture this opportunity. The company’s organized segment’s market share to expand significantly with a regulatory tailwind.
Gravita is foraying into new recycling segments – rubber/paper/steel/copper and lithium which would drive the revenue growth going ahead. Hence, Kotak said, “We expect earnings per share to grow by 31.8% in FY25E & 31.6% in FY26E.”
Although the company’s near term is a mixed bag, its long-term outlook is promising. Kotak believes there is strength in Astec’s product pipeline-which we find promising, while its palm oil duty benefit is likely from Q3FY25. Also, Godrej’s ability to attract talent should help Astec continue to grow rapidly in CDMO.
Kotak considers the acquisition of the 49% minority stake in GTFL an incremental positive. It also expects healthy earnings growth in FY26. Lastly, it said, “We roll forward, build in stake purchase at GTFL & assign EV/EBITDA multiple of 15X to standalone crop protection; We maintain ADD rating after the recent rally.”
JB Chemicals is a domestic formulations-focused company, coupled with a significant presence in export formulations and a burgeoning CMO business.
Kotak said, “We expect JB to deliver 14%, 19% and 22% revenue, EBITDA and PAT CAGRs, respectively, over FY24-27E.”
The company is well-placed to drive double-digit revenue growth, while its growth drivers are – secular growth in the F&F market along with market share gains.
Kotak sees a long runway for growth, given its established and sticky relationships. High entry barriers in the F&F industry make for an attractive industry structure.
Hence, it said, “We reinstate coverage with a BUY rating & FV Rs400 (24X September 2026E P/E).”
Zomato is one of India’s largest food services platforms that connects customers, restaurant partners and delivery partners. While its quick services app, Blinkit is a rapidly evolving business given high growth rates, expansion to new cities and continuous new category addition.
Hyderabad Wealth Management