Strategic growth, earnings per share forecast, and robust performances make Cipla, Cyient, Reliance and Godrej Consumer Products into Kotak Securities’ top picks for Diwali 2023
As the Indian stock market achieved historic milestones with both the Nifty and the BSE Sensex gaining around 6 per cent, stock broking platform Kotak Securities has released its list of Diwali stock picks that investors should look forward to in Samvat 2080.
In Samvat 2079, despite global challenges, the Nifty Midcap and Smallcap Indices outperformed, rising 24 per cent and 31 per cent, while Nifty sectors, such as real estate, public sector banks, central public sector enterprises (CPSE), auto, fast-moving consumer goods (FMCG), and pharmaceuticals flourished, Kotak Securities said in a press release.
According to Kotak Securities, the market will scale new heights the coming year.
So, here are the top-five picks by Kotak Securities for Samvat 2080.
(Current Market Price: Rs 384, Target: Rs 425)
The bank has showcased robust results, with a 43 per cent year-on-year (y-o-y) growth in earnings, a 10 per cent y-o-y growth in operating profit, and a 28 per cent y-o-y decline in provisions. The growth in net interest income (NII) was healthy, and now the improved asset quality position has put Canara Bank in a position for continued positive growth, Kotak Securities said.
(Current Market Price: Rs 2,288, Target: Rs 2,725)
The focus on 5G monetisation, active participation in 5G, and growth in retail are key factors to choose this stock, Kotak Securities said. With a surge in subscriber base in Q2FY24 and the launch of Jio AirFiber, tariff rates are expected to increase. The output increase in the Krishna Godavari Dhirubhai 6 (KG-D6) natural gas block, reduced net debt, and strategic RRVL stake sale add to the positive outlook of this stock.
(Current Market Price: Rs 1,200, Target: Rs 1,320)
A robust 20 per cent earnings per share (EPS) on a compounded annualised growth rate (CAGR) is forecast from FY23 to FY26. Further, the pharmaceutical company has also scored a hat-trick with a strong performance in Q2FY24 for the third consecutive quarter. Strategic focus on domestic prescription drugs and US generic drugs, coupled with potential promoter group divestment, contributes to a positive outlook on this stock, Kotak Securities said.
(Current Market Price: Rs 1,589, Target: Rs 2,000)
Strategic emphasis on high-growth services, restructuring for efficiency, and a 40 per cent increase in order intake y-o-y in Q2FY24 contributes to the positive outlook on this stock. The company will continue to return 50 per cent of net profit as dividends, the press release said.
(Current Market Price: Rs 992, Target: Rs 1,135)
The main reason for a positive outlook on Godrej Consumer Products is that Q1FY24 was a well-rounded quarter for this company, with a 10 per cent organic growth in volume in its India business. Double-digit volume growth, and expansion plans with a gross margin of 53.7 per cent further contributes to a positive outlook, Kotak Securities said. The company also plans to invest Rs 900 crore in capex over three years.
Disclaimer: All stock recommendations in the article are from Kotak Securities. Outlook Money’s editorial team is not responsible for any inaccuracies in the content. Readers should exercise caution when looking at the data, and they should do their own research before investing and not blindly pick up the recommendations.