Diwali stock picks 2024: Ambuja Cement, ICICI Bank, RIL among PL Capital's top bets for Samvat 2081
Stocks to buy this Diwali: Analysts at Prabhudas Lilladher chose stocks like ICICI Bank, Reliance Industries and Bharat Electronics among others as their preferred bets for Samvat 2081
Ambuja Cement | The Adani-owned firm is pursuing ambitious growth by enhancing throughput at current facilities and targeting a 140mtpa production capacity by FY28 through both inorganic (17.6mtpa over the past 2 years) and organic (39mtpa by FY27) expansions. Cost savings of ~Rs500/t are planned via green power expansion, captive coal mines, long-term raw material procurement, and logistical improvements through new railway wagons and an expanded plant network. With a robust balance sheet and exceptional execution, PL Capital projects a 25%/21% EBITDA/PAT CAGR for FY24-27.
2/10
Bharat Electronics | Positioned as a leader in defense indigenization, BEL has a Rs 500bn order pipeline over the next 2 years, with projects such as the LORA missile system, MRSAM, sonar for P75I submarines, and Su-30 upgrades. Analysts expect BEL’s backlog to grow from ~Rs767bn to ~Rs900bn by FY27, supported by rising opportunities in non-defense sectors like rail, civil aviation, and smart cities. BEL’s revenue and adjusted PAT are forecasted to grow at a 16.0% and 15.9% CAGR, respectively, for FY24-27.
3/10
Cipla | PL Capital maintains a positive outlook on Cipla’s growth in India and the U.S., driven by demand in respiratory and other segments, along with potential double-digit growth in domestic formulations. Although delays in key launches like gAdvair could affect projections, strong performance in gRevlimid and upcoming launches such as gLanreotide are expected to sustain U.S. revenue. Forecasted EPS growth is at a 10% CAGR for FY24-26, with stock currently valued at 23.5x FY27 EPS. Risks include FDA scrutiny at the Indore unit and price erosion in U.S. markets.
4/10
ICICI Bank | ICICI has a strong balance sheet backed by a CET-1 ratio of 16%, robust provisioning (1% of loans), and a solid loan-to-deposit ratio (83-86%). Despite projected NIM compression, analysts expect core earnings growth to stabilize by FY27, with a 17% YoY growth outlook delivering RoA/RoE of 2.16%/16.8%. ICICI currently trades at P/ABV of 2.46 for FY27.
LTI Mindtree | The firm’s BFS segment (33% of revenue) has shown healthy growth, indicating broad-based recovery across business units. Analysts see LTIM capturing both discretionary and non-discretionary spending through a strong sales engine and front-end. Although margins may be temporarily impacted due to investments in sales and marketing, growth is anticipated to drive margin recovery. USD revenue and earnings CAGR are projected at 9.7% and 13.7%, respectively, over FY24-27.
6/10
Max Healthcare Institute | Max’s growth is set to accelerate with planned expansions (3,500 additional beds by FY28) and recent acquisitions in key locations like Lucknow and Nagpur. Analysts highlight operational efficiencies, especially in the competitive NCR market, expecting a 25% EBITDA CAGR for FY24-27 as expansion projects unfold.
7/10
Reliance Industries | Although core segments like refining and petrochemicals face near-term challenges, steady gas production (~28-30 mmscmd at ~US$10/mmBtu) and Jio's rising ARPU (up 7% QoQ) support Reliance's performance. The brokerage estimates EBITDA of Rs 1,538/1,700/1,836bn for FY25-27 with a 12% EPS CAGR. The ongoing Rs 750bn investment in new energy, along with potential retail and Jio demergers, is expected to improve Reliance’s outlook.
8/10
DOMS Industries | DOMS is capitalizing on its strong brand and R&D capabilities, with 125,000+ retail touchpoints and competitive cost structures. The company’s diversification into diapers, footwear, and other categories expands its market potential. It plans Rs 4.5bn capex over the next 2 years to boost production capacity. DOMS is expected to post a revenue/PAT CAGR of 26%/28% for FY24-27, with the stock trading at 50.9x FY27 EPS.
Praj Industries | With a 50%+ share in India’s ethanol plant market, Praj is well-positioned to benefit from mandates like India’s 20% ethanol blending target by FY26. Expanding opportunities in sustainable aviation fuel (SAF) and CBG also provide growth avenues. Analysts expect a 21.2%/26.5% revenue/adj. PAT CAGR for FY24-27. The stock trades at 24.8x FY27 earnings.
10/10
Safari Industries | Safari has achieved impressive market share growth (26% in FY24, up from 10% in FY15), backed by a larger distribution network and new product categories. A new plant in Jaipur will double its hard luggage capacity, meeting growing demand and reducing costs, with gross margins projected to reach 46.2%-47.0% by FY26. Analysts expect EPS growth of 23% CAGR over FY24-27, with Safari currently trading at 42.2x FY26 and 34.8x FY27 EPS.
