Diwali stock picks: ICICI Bank, Zomato, L&T among MOFSL's top bets for Samvat 2081
Stocks to Buy this Diwali: Zomato, Five Star Business Finance, L&T, Amber Enterprises are among the top 10 picks from Motilal Oswal Financial Services for Samvat 2081.
ICICI Bank | The lender reported a steady quarter, unlike many of its large peers with 15% YoY growth in net earnings. A stable mix of high-yielding portfolio and ongoing growth in Business Banking, SME, and secured retail segments are driving broad-based growth, helping the bank maintain healthy business diversification, said Motilal Oswal.
Five Star Business Finance | The company is well-positioned for growth, with a projected ~35% AUM growth for FY25 and a lending rate cut enhancing its competitive edge, according to MOFSL. The company is expected to maintain premium valuations due to stable asset quality and strong return metrics, supported by management's focus on operational efficiency and digital collections for sustained profitability and growth.
Angel One | The brokerage has successfully diversified into credit products and expanded its wealth management services, enhancing its growth potential. The company reported a 39% YoY increase in PAT to INR 4.2bn, driven by a 45% rise in order volume and effective cost management, maintaining a CI ratio of 50.1%.
HCL Technologies | The IT major has revised its FY25 growth guidance to 3.5%-5% YoY, supported by strong deal wins and its leading position in data/SAP modernization. Its investments in next-gen platforms position it well for the GenAI revolution and future recovery in client spending.
Zomato | The online food delivery giant's vision of creating strong brands across food delivery, grocery, and going-out could make it a formidable platform that could command a high wallet share from urban consumers, said MOFSL. With Blinkit’s growth, Zomato is positioned for robust long-term growth. The brokerage's estimates imply FY24-27 revenue CAGR of 55%.
Titan Company: The Tata group firm continues to outperform other brands due to its strong competitive positioning. Tanishq's unique brand recall and business moat provide a solid edge, according to analysts. It plans to open 40-50 Tanishq stores and 70-80 Mia/Caratlane stores, along with transforming 20-30 stores into larger formats.
IPCA Laboratories | The 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. Key drivers include better USFDA compliance, synergies from the Unichem acquisition, and improved operational efficiency.
L&T | The construction major is eyeing opportunities in new areas such as offshore wind projects, where it has already made its foray with an order win of USD100m. It is also looking for opportunities in green hydrogen and nuclear projects construction. LT’s RoE stands at 14.7% and it has maintained its long-term target of 18% RoE.
Amber Enterprises | The company is well-positioned for strong growth across multiple segments, driven by a robust RAC market and expanding opportunities in electronics. The company’s strategic focus on diversifying its client base in consumer durables and enhancing its electronics division is set to yield significant revenue increases, projected at a 21% CAGR over FY24-FY27, said MOFSL.
Zen Technologies | The company stands out in the anti-drone market with over 40 indigenously developed products, including training systems & counter-drone solutions. The company benefits from backward integration & offers comprehensive services such as after-sales support, warranty, & AMC. With 150+ filed patents and nearly 70 granted, ZEN is well-equipped to innovate and capture market opportunities, the brokerage said.
