Stocks picks for 2025: The Indian stock market's performance in 2024 has been notably positive, with significant gains across major indices. On the benchmark front, Nifty 50 and Sensex rose for the ninth consecutive year and have surged nearly nine per cent. The upward trend reflects a broader rally, with both indices consistently reaching new highs, with the Nifty crossing multiple milestones, from 22,000 to 26,000, in a relatively short period.
However, in the second half of 2024, the market faced challenges such as weak corporate earnings, foreign outflows, elevated inflation, and sluggish economic growth. Despite these headwinds, steady buying by domestic investors and strong participation from retail investors have supported the markets.
As we move into 2025, several notable trends are expected to influence markets in India and globally. Shifts in US trade policies, including higher tariffs, could alter international trade patterns and supply chains, prompting countries like India to reassess trade agreements and may introduce market uncertainty.
Additionally, resolving ongoing geopolitical conflicts could stabilize global markets and improve economic sentiment. A recovery in corporate earnings is expected as businesses rebound from a period of slow growth, led by higher government capital expenditures and renewed private-sector investments.
If inflationary pressures ease, the demand environment could improve, boosting consumer spending and increasing purchasing power. According to D-Street brokerages, together, these factors will likely create a dynamic environment in the coming year, offering investors opportunities and challenges.
Analysts at domestic brokerage Religare Broking say investors should focus on accumulating fundamentally strong stocks during market dips, particularly those with solid balance sheets and growth potential, to navigate fluctuations.
In the current market scenario, Religare Broking has released its top six New Year stock picks for 2025 and recommends accumulating the stocks for long-term potential returns. The domestic brokerage has selected quality stocks for investors based on technical and fundamental parameters.
Let's take a look at the top six technical and fundamental stocks for the New Year by domestic brokerage Religare Broking:
1.HDFC Bank: Current market price (CMP): ₹1,797.65; Accumulation range: ₹1,720-1,810; Targets: ₹1,920-2,008
Following the merger with HDFC, the private bank's credit-to-deposit (CD) ratio experienced significant deterioration, reaching levels as high as 108.4 per cent. However, this trend has recently begun to reverse, with the CD ratio falling to 100.7 per cent in Q2 FY25, as the bank has increased its focus on deposit growth.
Asset quality continues to remain robust: Asset quality saw marginal deterioration during the quarter, but overall, the asset remains robust as Gross NPA (GNPA) and Net NPA remain at the lower end of their historical range and are expected to remain around current levels only.
Re-rating potential: The elevated CD ratio has been a significant challenge for HDFC Bank, adversely affecting its margins and growth and leading to a decline in its valuation multiple. However, as the bank gradually improves its CD ratio, we can expect to see a gradual margin enhancement over the next few quarters, and the potential for a re-rating should not be overlooked.
Also Read: Tech giants Nvidia, Tesla emerge top US-listed stock picks by Indians in 2024; ETFs gain momentum
2.Life Insurance Corp (LIC): CMP: ₹887.60; Accumulation range: ₹840-900; Targets: ₹1,045-1,160
Increasing share on non-par products: It has significantly boosted its share in non-participating (non-par) products, enhancing its VONB margins. Over the past year, the contribution of non-par products in individual APE rose from ₹967 crore to ₹3,164 crore, increasing their share from 11.1 per cent to 27.7 per cent. This focus on high-margin non-par products is expected to improve its margins.
Well positioned in evolving landscape: LIC of India, a leading life insurer showing strong growth from steady premium income and improved margins from high-margin non-participating products and non-par products. With a strategic focus on expanding its product mix and enhancing profitability, LIC is well-positioned for continued success in the evolving insurance landscape.
3.DLF: CMP: ₹835.05; Accumulation range: ₹800-850; Targets: ₹960-1,050
Strong launch pipeline: DLF has a robust launch pipeline with a projected sales potential of ₹41,000 crore for FY2025 and ₹63,500 crore in the medium term beyond FY2025, highlighting strong revenue growth potential. Some key upcoming projects include Dahlias (Phase 5), Downtown Gurugram, new developments in Goa, Mumbai, and the next phase of Privana. The management retained a pre-sales guidance of ₹17,000 crore for FY2025.
Strategic expansion and market leadership: DLF holds a leading position in the Delhi-NCR real estate, supported by extensive land reserves with a development potential of 187 msf. The company is strategically expanding its footprint into other key markets, including the Chandigarh Tri-city region, Mumbai, and Goa.
To benefit from India's growing residential demand: DLF is expected to benefit from the strong growth potential of the real estate industry. The residential segment in India is experiencing a resurgence, with demand exceeding supply in major cities. Urbanization, increasing household incomes, and a desire for homeownership are fueling demand in the residential sector.
4.Samvardhana Motherson International Ltd: CMP: ₹157.10; Accumulation range: ₹145-160; Targets: ₹175-195
Robust growth outlook: Revenue is expected to grow at a healthy rate, driven by a robust order book, expansion into non-automotive segments, and the full-year impact of recent acquisitions. As of September 2024, the company has an order book of $88 billion, with approximately 24 per cent attributed to electric vehicles
Also Read: Experts stay optimistic despite Q2 GDP shock, recommend THESE key sectors and stocks to buy
Diversification strategy (3CX10): The company is focused on diversifying its revenue streams through its “3CX10” strategy, ensuring no single customer, component, or country contributes more than 10 per cent to its overall revenue. This strategy mitigates concentration risk and enhances business stability.
Strategic growth approach: The company follows a customer-centric acquisition strategy to enhance capabilities and expand product offerings in line with customer needs. With 43 strategic acquisitions completed between 2002- March 2024, it emphasizes disciplined capital expenditure and prudent financial governance. It will continue its OEM-guided acquisitions, driven by customer requirements and focus on organic expansion.
5.Amara Raja Energy and Mobility Ltd: CMP: ₹1,219.70; Accumulation range: ₹1,080-1,200; Targets: ₹1,350-1,440
Preferred Supplier among customers: In India, it is the preferred supplier for major telecom service providers, telecom equipment manufacturers, the UPS sector, Indian Railways, and the power, oil, and gas industries, among others.
Focus on all high-growth areas like data centers, EV batteries, and 5G capex: The products are utilized across high-growth themes, including data centers, EV batteries, and 5G capital expenditures. To capitalize on the sectoral tailwinds, it is establishing a giga cell plant and an EV battery pack facility. It is leveraging its existing distribution network for OEM products in the aftermarket to introduce new offerings, increasing its overall market share.
Capitalizing on emerging market trends: One of India's largest battery manufacturers, it is recognized for its technological leadership in lead-acid batteries and serves prestigious OEMs while exporting to 50 countries. The company is a preferred supplier for key sectors in India, including telecom and railways. With a strategic focus on high-growth areas like data centres, EV batteries, and 5G capex, it is positioned to capitalize on emerging market trends.
6.Senco Gold Ltd: CMP: ₹1,065.20; Accumulation range: ₹1,010-1,080; Targets: ₹1,200-1,330
Accelerating growth across new markets: Senco Gold is pursuing a strategic expansion plan, aiming to increase its store count to penetrate new markets. The company's expansion is driven by a calibrated approach that balances company-owned and franchise stores, particularly in eastern and northern India.
Management has provided guidance to open 18–20 new jewellery showrooms in FY25, with eight stores already launched in H1 FY25. Looking ahead, company aims to expand its store network at a CAGR of 12 per cent between FY24 and FY27.
Customs duty cut on gold imports to fuel long term growth: Further, the recent cut in customs duty on gold imports is expected to boost demand over the long term. Management is optimistic that this move will support their revenue growth target of 18–20 per cent for FY25, helping drive sustained growth for the company.
Ventures into lab grown diamond market: Senco Gold is expanding its presence in the lab-grown diamond jewellery market through its sub-brand, Sennes. This brand targets the "aspirational upper middle class," offering luxury lifestyle products including jewellery, leather bags, and lab-grown diamonds. They plan to have 8-10 Sennes stores by the end of FY25.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.