As we step into Samvat 2081, the Indian stock market has made history in September 2024, with the Nifty 50 crossing 26,250 and the BSE Sensex soaring past 85,900.
Both indices gained around 25% in Samvat 2080, driven by a broader market rally. The BSE MidCap and SmallCap indices surged even higher, posting gains of 44% and 43%, respectively.
This momentum comes despite global geopolitical tensions, economic challenges, and rising interest rates.
Also, Read | Global Economic Challenges: Navigating High Debt and Slowing Growth
As we prepare for the new trading year, brokerages have released their top stock picks for Diwali 2024, carefully selecting companies poised for growth.
Here’s a breakdown of key recommendations from Choice Broking and Bajaj Broking, offering insights into the sectors and stocks expected to lead the way.
Key Recommendations for Diwali 2024
- Bajaj Auto (Target: ₹12,483)
- Sector: Automotive
- Outlook: Bajaj Auto remains a strong contender for long-term growth, with a focus on expanding its exports and electric vehicle (EV) portfolio. With increasing demand for the 125cc segment and rising contributions from premium products like Triumph, the company’s trajectory appears robust. The electric two-wheeler ‘Chetak’ also plays a key role in profitability.
- Bharat Dynamics (Target: ₹1,501)
- Sector: Defense
- Outlook: Bharat Dynamics continues to dominate the defense sector, supported by its sole supplier status for critical defense systems. The company’s strong order book and international export opportunities signal significant growth, particularly as upcoming big-ticket projects start materializing from FY25.
- Tech Mahindra (Target: ₹2,120)
- Sector: IT
- Outlook: Tech Mahindra is making strides in generative AI, enhancing its large-deal capabilities and improving margins. Its long-term focus on growth through digital transformation initiatives positions it well for strong returns.
- Bharat Electronics (BEL) (Target: ₹358)
- Sector: Defense Electronics
- Outlook: BEL’s strong order pipeline, especially in air defense and electronic warfare systems, coupled with its long-term revenue growth outlook, makes it a solid pick. With new contracts expected in FY25, this stock is positioned for sustained upward movement.
- Somany Ceramics (Target: ₹965)
- Sector: Construction Materials
- Outlook: A leader in the ceramics market, Somany Ceramics is expected to deliver healthy revenue and profit growth over the next few years, driven by strong demand for construction materials, infrastructure projects, and operational improvements.
Emerging Opportunities Across Sectors
While tech and defense dominate several top picks, other sectors also present compelling opportunities:
- ACC (Target: ₹2,795): The cement giant aims to double its production capacity to 140 million tonnes by FY28, capitalizing on strong infrastructure demand in India. ACC’s focus on cost optimization will support its growth trajectory, particularly as infrastructure projects gain momentum.
- EFC (I) Ltd (Target: ₹855): EFC Ltd is scaling its managed office spaces, furniture manufacturing, and interior services, providing a diversified revenue stream. The company’s growth in the office space rental market, particularly for startups and SMEs, is expected to see strong traction by FY25.
- Granules India (Target: ₹723): A pharmaceutical player, Granules India is benefiting from backward integration efforts and the operationalization of new manufacturing facilities. The company is focusing on high-margin finished dosage products, especially in the North American market, driving impressive growth projections.
Healthcare and Real Estate Gaining Traction
- Global Health (Target: ₹1,246): As one of India’s largest private healthcare providers under the ‘Medanta’ brand, Global Health is expanding its footprint with a new hospital under construction in Noida. The company is expected to maintain strong revenue and EBITDA growth in the coming years, despite the capital expenditure required for its new facilities.
- Ugro Capital (Target: ₹345): A player in MSME financing, Ugro Capital’s tech-driven lending platform and partnerships provide a scalable business model. The company’s focus on efficient capital use and diversification offers long-term profitability.
Renewable Energy and Waste Management
- CESC (Target: ₹248): This utility company’s aggressive renewable energy expansion positions it to capitalize on the growing push for cleaner energy in India. Investments in wind turbines and green hydrogen production align with broader ESG trends, which are becoming more significant for long-term investors.
- Antony Waste Handling Cell (Target: ₹990): A leader in municipal solid waste management, Antony Waste is expanding its processing capabilities, including waste-to-energy projects. With growing demand for sustainable waste solutions, the company is well-positioned for future growth.
- Agro Tech Foods (Target: ₹1,230): Agro Tech Foods, known for its popcorn and edible oil products, is breaking out of its two-year downtrend. Strong brand recognition and increasing product demand make this stock an attractive long-term investment.
Bottom Line
As we look ahead to Samvat 2081, the Indian stock market is filled with opportunities across a range of sectors, from tech and defense to healthcare, real estate, and renewable energy.
Investors are encouraged to keep an eye on these sectors as the market momentum builds. With easing inflation and global economic recovery in sight, the outlook for 2024-2025 appears promising for both large-cap stalwarts and mid- to small-cap rising stars.
Investors are advised to consult with certified financial experts to ensure that investment decisions align with their individual risk tolerance and financial goals.