Diwali Muhurat Trading: IDFC First Bank, ITC Among Top Picks For Samvat 2079; Analysts See Up To 27% Upside

Diwali Muhurat Trading 2022: Domestic stock exchanges BSE and the National Stock Exchange will conduct the customary one-hour special ‘Muhurat’ trading between 6:15 pm and 7:15 pm on October 24, 2022. The block deal session will be held from 5.45 pm to 6 pm. The pre-open session will take place between 6 pm and 6:08 pm.

This year’s Diwali Muhurat Trading session would also mark the start of Samvat 2079 according to the Hindu calendar year that starts on Diwali. It is believed that Muhurat trading brings prosperity and wealth throughout the year.

Stocks to buy for Samvat 2079

In a note, Axis Securities said: “Since last Diwali, the Indian market has outperformed other global and emerging markets by a notable margin, thanks to the country’s robust economic outlook despite multiple headwinds such as volatile macroeconomic developments, faster regime changes, and volatile FII flows. Since Diwali, our benchmark index Nifty is down by only 5 per cent (till 11th Oct’22) while the S&P500 and the emerging market index are down by a whopping 22 per cent and 29 per cent respectively over the same period.”

The new Samvat 2079 looks much brighter and more promising, according to Axis Securities. It believes that the Indian economy stands in a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy.

IDFC First Bank

Target price: Rs 70| Upside 27 per cent

“The stock is poised for re-rating given the continuous improvement in the bank’s asset quality, its strategy to improve operating performance with expected operating leverage and superior return ratios over FY23-25.”

Westlife Development

Target price: Rs 870| Upside: 21 per cent

“The company is well-placed to capitalize on the growing QSR opportunity. Company’s EBITDA margin to be in the range of 14 per cent-15 per cent, driven by improving product mix, Operating leverage and cost rationalization, and Economies of scale from operating three categories in one store without incurring major Capex.”

ITC

Target price: Rs 380| Upside: 15 per cent

“The stock is currently trading at 18x FY25E EPS, 4-5 per cent dividend yield provides a huge margin of safety compared to its peers. Moreover, the recovery in the cigarette business and uptick in Agri, Hotels, and Paperboard in the near term makes ITC a better play in the entire FMCG pack where valuations are high.”

Sundaram Finance

Target price: Rs 2,490| Upside: 13 per cent

“Sundaram Finance’s well-diversified secured loan mix with strong underwriting practices and comfortable capital position (CAR +24.1 per cent) will support operating performance in the current broad-based recovery in the CV space.”

Ashok Leyland

Target price: Rs 175| Upside: 17 per cent

“The company is well-positioned to benefit from the cyclical recovery, especially in buses and higher tonnage trucks where it has a higher market share. Demand recovery and gradual price increases are expected to drive improvement in the longer run. The RM cost pressures are likely to subside leading to margin improvement in the upcoming quarters.”

Aptus Value Housing Finance India

Target price: Rs 350| Upside: 15 per cent

“Aptus remains well-placed in the high-growth market that exhibits lower competition due to the expertise required to cater to the un/underserved self-employed customers. While NIM compression over the medium term is imminent, stable Opex, and gradually improving credit costs with asset quality stress receding will support strong RoAs, thereby justifying premium valuations.”

Indian Hotels Company

Target price: Rs 375| Upside: 13 per cent

“Indian Hotel Industry is pegged to report ARR growth and occupancy improvement by 400 bps over the period CY22-24. Therefore, Axis Securities’ analysts expect significant improvement in the company’s realizations and occupancies, which in turn, would be further augmented by the strong operating leverage it enjoys among the industry peers.”

NOCIL

Target price: Rs 300| Upside: 16 per cent

“NOCIL stands to be the key beneficiary of the China alternative theme in the niche rubber chemical space in India. The company is witnessing strong demand tailwinds and reducing pressure from raw materials. Furthermore, the operational leverage will boost its margin profile in the coming quarters.”

Polycab India

Target price: Rs 2860| Upside: 11 per cent

“Polycab has maintained a leadership position in the organized C&W segment with a market share of over 24 per cent. Moreover, with superior financial strength, expansion of distribution network into tier-2, and tier-3 cities, and strong brand recall, it is poised to gain market share from unorganised players in both Wires and FMEG segments.”

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