The Diwali picks for Samvat 2081 featured companies from sectors like telecom, finance, FMCG, real estate, and capital goods.

Stock picks for Diwali 2024.

1. Dabur India

Dabur, a leading FMCG company with over ₹12,000 crore in FY2024 revenue, is poised for recovery due to rising rural demand and a strong product lineup. With plans for market share expansion and new launches, it aims for mid-teens earnings growth from FY24 to FY26. The stock has dropped about 16% from its recent high, offering a good entry point.

2. Dee Development Engineers

Dee Development specializes in process piping solutions for the oil, gas, and power sectors. The company is expanding its manufacturing capacity to take advantage of the capex revival in these industries. Strong order inflows are expected from Q4 FY25, supported by government energy initiatives. Its established customer relationships give it a competitive advantage.

3. Hi-Tech Pipes

Hi-Tech Pipes aims to reach a capacity of 1 MTPA by FY2025 and plans to expand to 2 MTPA in the next 3-4 years. The company has early access to solar projects and is poised to benefit from rising steel prices. The stock is currently trading at attractive P/E multiples, indicating a strong projected PAT CAGR from FY2024 to FY2027.

4. HUDCO

HUDCO is expected to achieve a healthy book value CAGR of around 17%, driven by strong earnings growth and government support for affordable housing. Its recent transition to an NBFC – Infrastructure Finance Company enables financing for a broader range of projects, boosting growth potential. Most of HUDCO’s exposure is government-guaranteed, reducing risk.

5. Larsen & Toubro (L&T)

L&T aims for 10% order inflow growth and a 15% revenue increase in FY2025. With an all-time high order book, the company is well-positioned to capitalize on opportunities in both domestic and international markets. The stock is currently trading at a P/E of 28.5x based on FY2026 estimated earnings.

6. Reliance Industries

Reliance Industries has stable gross revenue, supported by increased Oil to Chemicals (O2C) sales and improved domestic product placements. Jio Platforms saw a 17.8% EBITDA rise, thanks to a better subscriber mix and expanded services. Reliance Retail enhanced its EBITDA margin by 30 bps through improved operations. Despite challenges in the O2C segment, innovative ethane cracking helped offset some negative impacts.

7. State Bank of India

SBI is well-positioned in India’s growing economy, boasting a strong balance sheet and improved operating metrics. The bank is expected to maintain a return on assets (RoA) of around 1% in the near term, supported by broad-based credit growth. The stock is trading at attractive valuations, with a Buy rating and a target price of ₹975 according to the brokerage.

8. Sunteck Realty

Sunteck aims for 30-35% pre-sales growth in FY2025, backed by a ₹5,000 crore project pipeline. With a gross development value (GDV) of ₹37,480 crore, the company plans to increase this to ₹60,000 crore within 2-3 years. Additionally, it seeks to boost average rental income from ₹35 crore in FY2023 to ₹320 crore by FY2028.

9. Tata Motors

JLR continues to maintain healthy EBITDA margins and positive cash flow, targeting an EBIT margin of over 8.5% for FY2025. The commercial vehicle (CV) segment is shifting towards profitable growth, aiming for double-digit margins. Tata Motors has also boosted its domestic passenger vehicle (PV) market share from 5% to 13.3% in H1 FY2025.

10. Mastek

Mastek specializes in enterprise digital and cloud transformation, assisting businesses in leveraging data and modernizing applications. The company is targeting opportunities in the UK public sector, especially as many departments adopt cloud solutions, which may lead to partnerships with Salesforce and Snowflake. The report states that Mastek is gaining traction in North America’s healthcare sector, while the new Labour government is bolstering growth in the UK with clearer strategies.

11. Allied Blenders & Distillers

The company has successfully repaid around ₹800 crore of its gross debt using IPO proceeds and now has ₹325 crore in working capital debt at a lower interest rate of 8.5%, down from 10-10.5%. This reduction is expected to cut interest costs in half in FY2025. Additionally, ABDL is strategically focusing on premiumization, which currently accounts for 35% of its sales volume

12. Bajaj Finserv

Bajaj Finserv’s newer businesses—AMC, Securities, and Health—offer significant long-term growth potential. Its lending business consistently outpaces industry growth and maintains strong profitability. The general insurance sector is growing healthily, while the life insurance division is adapting to regulatory changes for market share gains. A Buy rating is maintained, with a target price of ₹2,350.

13. Bharti Airtel

Bharti Airtel is a leading telecom operator in India and Africa, offering mobile voice, data, and money services. It benefits from rising smartphone penetration and increasing data consumption. The company is investing in 5G infrastructure and has industry-leading average revenue per user (ARPU) in India. Recent tariff hikes and improving cash flows will aid in profitability and debt reduction.

14. Caplin Point Laboratories

Caplin Point is actively expanding into larger markets like Mexico, Colombia, and Chile, planning a significant capital expenditure of ₹650-700 crore, of which it has already spent approximately ₹500 crore. The stock trades at around 27x and 23x its FY25E and FY26E EPS estimates, positioning it for potential upside as the capex cycle concludes and productivity improves.

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