Samvat 2081: Corporate earnings to be key driver
Demat accounts grew to 175 million by September 2024. Since last Diwali, the Nifty has rallied 25%, while the midcap and smallcap indices surged 37% and 36%, respectively.
As we enter Samvat 2081 on November 1, market sentiment is challenged by global uncertainties, including the upcoming US elections, Middle Eastern tensions, and signifi cant foreign outfl ows from Indian equities due to a rebound in Chinese markets.
With high valuations, corporate earnings are set to be the main drivers of future returns, emphasising the importance of bottom-up stock selection. Here are top stocks recommended by brokers for potential returns over the next 12 months
Anand RathiInterGlobe Aviation
Target Price Rs 5,300
CMP Rs 4,374
Upside Potential 21.18%
Huge investments by the government in construction of airports, UDAN scheme and increase in number of passengers are some of the growth triggers for the aviation industry going forward.
Tejas Networks
Target Price Rs 1,650
CMP Rs 1,259
Upside Potential 31.08%
Indian railways-Kavach, Bharatnet for phase 3, expansion of BSNL’s 4G network and 5G upgrades are some of the opportunities which will help Tejas show strong revenue growth going forward.
KRN Heat Exchanger
Target Price Rs 550
CMP Rs 436
Upside Potential 26.15%
KRN a manufacturer of n and tube-type heat exchangers and the industry is expanding its capacity which would generate increased growth in revenues from existing as well as new products like bar and plate heat exchanger, with improved margins from the export markets
Angel One
Cummins India
Target Price Rs 4,840
CMP Rs 3,370
Upside Potential 43.62%
The rising importance of alternative fuels (natural gas) provides strong growth avenues. It is also likely to benefit from an increase in spending on infrastructure development.
Mahanagar Gas
Target Price Rs 2,310
CMP Rs 1,504
Upside Potential 53.6%
While rising input costs affected current performance, the company is wellpositioned to meet the growing CNG demand and boost revenue.
NCC
Target Price Rs 400
CMP Rs 278
Upside Potential 44.14%
Growth is supported by robust order book and superior execution of building division and electrical T&D business. Government focus on infrastructure development and transportation is likely to support revenue
Axis Securities Lupin Pharma Target Price `2,600 CMP `2,157 Upside Potential 20.55% With a strong foothold in the stable US generics market and no expected competition for Spiriva until FY27, Lupin presents a compelling opportunity for investors looking to capitalise on the pharmaceutical sector’s growth. Gravita India Target Price `3,000 CMP `1,980 Upside Potential 51.52% The company expects volume growth of approximately 25% during FY25, in line with its three-year target. With planned capacity expansions and diversi cation into newer verticals, the company is positioned to bene t from favourable industry dynamics and rising demand for sustainable solutions. Arvind SmartSpaces Target Price `1,085 CMP `784 Upside Potential 38.32% The company adheres to a build-to-sell approach, aiming to sell 30% of a project in its rst phase, which shortens the monetisation cycle and enhances cost ef ciency during execution.
HDFC Securities Reliance Industries Target Price `3,243 CMP `2,656 Upside Potential 22.09% Given the large technological advancements and ambitious growth targets, Reliance’s retail, telecom, and new energy segments are poised to become the upcoming growth drivers over the next two to three years. L&T Finance Target Price `219 CMP `141 Upside Potential 55.65% The stock is available at reasonable valuations for a reason of possible asset quality hiccups in wholesale lending though the focus on this business has been falling. JK Lakshmi Cement Target Price `936 CMP `776 Upside Potential 20.63% We expect the cement demand to pick up pace by H2FY25. Taking into consideration the capacity expansion and strengthening operational performance, we expect the company to report a healthy performance in the coming years.
ICICI Securities HDFC Asset Mgmt Target Price `5,500 CMP `4,352 Upside Potential 26.38% The stock remains a play on structural growth in Indian asset management domain with superior operational matrix. Considering relatively higher business growth without any b/s risk, we remain positive on the stock. PCBL Target Price `600 CMP `429 Upside Potential 40.02% We have positive view on PCBL and assign BUY rating amid pro table organic growth at its base carbon black business, turnaround in sight at Aquapharm and big opportunity in sight in Nano Silica. Sansera Engineering Target Price `2,000 CMP `1,510 Upside Potential 32.44% With fresh capital infused, new tie-ups in non-auto space including plans for new green eld facility, we bake in 18.5% revenue CAGR over FY24-27E
JM FINANCIAL Macrotech Developers Target Price `1,480 CMP `1,071 Upside Potential 38.18% Macrotech’s strong track record in developing residential townships and generating annuity-like cash ows and its focus on higher intensity of asset-light portfolio additions is likely to drive growth. National Aluminium Target Price `264 CMP `219 Upside Potential 20.55% NALCO’s expansion of its alumina re nery, rising alumina prices, and costsaving through captive coal mining are expected to drive earnings growth. Ashoka Buildcon Target Price `290 CMP `216 Upside Potential 34.18% The company also recently forayed into the CGD (City Gas Distribution) segment. Going forward, company’s performance is expected to improve given a diversi ed order book, respectable execution capabilities, an anticipated acceleration in execution, and a reduction in debt.
Kotak Insti. Equities Axis Bank Target Price `1,500 CMP `1,189 Upside Potential 26.16% The asset quality ratio was stable, with slippages stable at ~2%. The bank is trading at valuations, which largely address most key concerns. Axis has one of the best upsides, among large private banks at these levels. Aadhar Housing Fin Target Price `550 CMP `418 Upside Potential 31.58% Stable margins and improving leverage will accelerate RoEs back to highteens.Company stands out versus most peers due to a larger balance sheet, longer vintage and seasoning. FIEM Industries Target Price `2,140 CMP `1,510 Upside Potential 41.75% Rising LED lighting adoption in the automotive segment to aid revenue growth for FIEM. The company is looking at leveraging its LED automotive lighting expertise and strong R&D in the four-wheeler segment
Motilal Oswal Financial Services Zomato Target Price `330 CMP `252 Upside Potential 30.98% Zomato’s vision of creating strong brands across food delivery, grocery, and goingout could make it a formidable platform that could command a high wallet share from urban consumers. With Blinkit’s growth, Zomato is positioned for robust long-term growth. IPCA Laboratories Target Price `1,950 CMP `1,588 Upside Potential 22.83% IPCA Laboratories, a leading Indian pharmaceutical company, focuses on APIs and formulations and expects strong earnings growth from FY24-27, supported by a 14% CAGR in the domestic formulation market and a revival of its US generics business. Zen Technologies Target Price `1,900 CMP `1,699 Upside Potential 11.83% Zen Technologies stands out in the anti-drone market with over 40 indigenously developed products, including training systems & counter-drone solutions. The company bene ts from backward integration & offers comprehensive services such as after-sales support, warranty & AMC.
Prabhudas Lilladher Institutional Equities Ambuja Cement Target Price `756 CMP `552 Upside Potential 36.87% ACEM is focused on led by 1) maximising throughput from existing facilities 2) 17.6mtpa addition via inorganic route in past 2 years and 3) organic capacity addition of 6mtpa by end FY25 and another 33mtpa by end FY27 to achieve targeted 140mtpa by FY28E. Praj Industries Target Price `804 CMP `713 Upside Potential 12.79% Praj’s market leadership (50%+ share) in building ethanol plants in India positions it well to capture opportunities arising out of global mandates to blend ethanol in petrol & diesel, such as India’s ethanol blending target of 20% by FY26 (vs ~15% currently). Safari Industries Target Price `3,005 CMP `2,226 Upside Potential 34.99% Safari is set to double its hard luggage capacity from ~650,000 to ~1,300,000 pieces a month with a green eld expansion in Jaipur, expected to start by 3QFY25E. We believe the new plant will enhance cost competitiveness and help Safari compete in the price-sensitive mass segment
SBI Securities Coal India Target Price `593 CMP `460 Upside Potential 28.93% During FY24, CIL achieved highest ever production/ offtake of 773.6 mnt/753.5 mnt. The company expects favourable demand from key sectors such as power and steel. CIL’s dividend yield is 5.2%, which offers cushion during signi cant correction in the stock price. Chalet Hotels Target Price `1,106 CMP `843 Upside Potential 31.23% Healthy cash ows from the commercial real estate space helps in sustaining overall cash position of the company. The company has strong tie-ups with renowned international hospitality brands such as Marriott International Inc. and Accor Hotels. Kilburn Engineering Target Price `532 CMP `405 Upside Potential 31.36% The company has recently acquired ME Energy, a leading provider of custom-built Energy saving, heating, and cooling systems, specialising in thermal engineering. The acquisition will help to offer wider product suites to clients and further enhance the value chain,
