Diwali 2023 Stock Picks: Religare Broking lists TCS, Axis Bank among 5 other top picks for Samvat 2080

Diwali 2023 Stock Picks: The Indian domestic equity market reached all-time highs in 2023 and ended Samvat 2079 on a strong note. Frontline index Nifty 50 breached the 20,000 mark and 20,000 mark gained 10 per cent in this period, while broader indices Nifty mid- and smallcap outperformed with gains of 30 per cent and 36 per cent, respectively.

Going ahead, for Samvat 2080, the global geopolitical situation will remain grim as the Israel-Palestine war has added to the already crippled global order due to the Russia-Ukraine war. Analysts expect that in light of mounting fundamental tailwinds, the Indian market is poised to sustain its prevailing bullish momentum into Vikram Samvat 2080. 

Global banks and financial institutions have also expressed optimism towards the Indian market. In the current market scenario, domestic brokerage firm Religare Broking has released its top five Diwali 2023 stock picks for Samvat 2080. The brokerage has selected quality stocks on technical as well as fundamental parameters. 

Also Read: Diwali 2023: How should you trade stocks, gold, commodities during special Muhurat session?

Diwali 2023 Stock Picks by Religare Broking

Let's take a look at the top five technical and fundamental stocks for Diwali by brokerage Religare Broking:

1. Tata Consultancy Services (TCS): Target Price: ₹4,089; Upside: 20.9 per cent

Amongst the large-cap IT pack, the TCS topline has been growing at a steady pace of 12.9 per cent CAGR or compound annual growth rate over the last five years driven by strong demand for transformation towards digital and cloud technology. On the financial front, the brokerage has estimated its revenue/EBIT to grow at 16.5/19.8 per cent CAGR over FY23-25E. 

‘’The stock price has seen decent correction post its Q2FY24 results, thus making its valuation attractive for investment. Thus, we have revised our rating to Buy from Accumulate while maintaining our target price of ₹4,089,'' said Religare Broking.
 

2.ITC: Target Price: ₹535; Upside: 22.4 per cent

ITC will continue its focus on the ITC Next strategy which would aid in building a future-ready portfolio as well as scaling up the non-cigarette business especially FMCG by innovating, renovating, and premiumizing products. Besides, the demerging hotel business is moving as per the company’s plan which is positive. 

‘’Overall, the growth prospects remain optimistic and financially we have estimated its Revenue/ PAT to grow at 15 per cent/19.2 per cent CAGR over FY23-25E and assign a Buy rating with a target price of ₹535,'' said the brokerage.
 

3.Axis Bank: Target Price: ₹1,167; Upside: 14.2 per cent

Retail assets continue to be the main driver of growth for the bank which has grown at a CAGR of 17 per cent over FY20-23. Deposits of the bank have grown at 15 per cent CAGR over FY20-23. 

The brokerage is positive on the stock over the bank's growing assets book, premiumization of deposits, wealth management business, and its market position in the credit card segment. 

‘’We expect NII/ PPOP/PAT growth of 11 per cent/15 per cent/9 per cent over FY23-25E. We have a Buy rating on the bank with a target price of ₹1,167,'' said Religare Broking.
 

4.Maruti Suzuki India: Target Price: ₹12,714 ;Upside: 23.2 per cent

With a superior product mix and favorable commodity prices, we anticipate, that Maruti Suzuki India will continue to gain market share in its key pockets which will eventually aid in revenue growth. 

Financially, the brokerage estimates its revenue/EBITDA/PAT to grow at a CAGR of 18.2 per cent/34.9 per cent/33.5 per cent over FY23-25E. From a valuation perspective, it is currently available at an attractive valuation, with a favorable risk-to-reward ratio. 

‘’Hence, we recommend a Buy with a target price of ₹12,714, assigning a PE of 27x on its FY25E EPS,'' said Religare Broking.
 

5.SBI Life Insurance: Target Price: ₹1,644; Upside: 22.2 per cent

SBI Life Insurance’s annualized premium equivalent (APE) has grown at a CAGR of 16 per cent from FY20-23 while gross written premium (GWP) has grown at 18.3 per cent during the same period.

The brokerage remains positive on SBI Life Insurance on the back of strong growth in its core operations which enables the company to increase its market share. The company is rightly placed in the resurgence of ULIP products due to its higher proportions of such products in its overall product mix. 

‘’We expect APE/NBP/VNB to grow at a CAGR of 19 per cent/21 per cent/23 per cent over FY23-25E. We have a Buy rating on the company with a target price of ₹1,644,'' said Religare Broking.

 Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.