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The BSE MidCap and SmallCap indices outperformed, with 44% and 43% gains, respectively during the year
Domestic equity markets made history in Samvat 2080
Choice Equity Broking has released its annual Muhurat Picks 2024 report, offering investors a comprehensive guide to making informed investment decisions this Diwali.
Domestic equity markets made history in Samvat 2080. The Nifty 50 index crossed the 26,250 mark, while the BSE Sensex surged past 85,900 for the first time in September, both registering gains of approximately 25% during the year.
The BSE MidCap and SmallCap indices outperformed, with 44% and 43% gains, respectively. This rally occurred despite geopolitical tensions, global economic challenges and elevated interest rates. Looking ahead to Samvat 2081, Choice Equity Broking has recommended 10 stocks for Diwali investments.
Bajaj Auto (Target price: Rs 12,483)
Choice Broking is positive on Bajaj Auto’s growth trajectory in the medium to long term, supported by several key factors such as growing focus on exports to drive sales, increasing demand for the 125cc 2W “Freedom”, strong demand for the 2W EV “Chetak” and an aggressive marketing push for CNG-based 2-wheelers and electric variants. With the rising contribution of premium products like Triumph, solid growth in the EV portfolio (2W+3W), and improving profitability from “Chetak,” the brokerage recommend ‘Buy’ rating on the stock.
Bharat Dynamics (Target price: Rs 1,501)
Choice Broking has a positive outlook on Bharat Dynamics (BDL), as it is catering for the strategic needs of the MoD Indian defence forces, supported by a sole supplier of offensive, as well as defensive systems domestically. Upcoming big-ticket projects are in the pipeline it is expected to materialise from FY25 onwards. In addition to this, increasing export opportunities, talks are underway with 4-5 friendly countries, diversified product portfolio across armed forces, the company’s humongous order book, which stood at Rs 19,500 crore as on April 1, 2024, stands at 8.2x of FY24 revenue will support the growth story of the company.
ACC (Target price: Rs 2,795)
India’s cement demand is expected to maintain a growth rate of 7-8%, largely propelled by investments in infrastructure and extensive residential housing projects. The company is targeting to double its capacity to 140 million tonne (mnt) by FY28E, a significant increase from its current capacity of 89 mnt. The company’s strategy revolves around cost optimisation, with a concerted effort to reduce costs to fuel its growth trajectory. As per FY26E estimates, Choice Broking expects revenue and EBITDA to grow at a CAGR of 5.7% and 13.1%, respectively, over FY24-FY26E.
Somany Ceramics (Target price: Rs 965)
Choice Broking expects Somany Ceramics to registered a healthy revenue, EBIDTA and PAT growth of 11%, 13% and 23%, respectively, CAGR over FY24-27E and RoCE expansion from around 14.2% in FY24 to 17.4% in FY27E.
TCS (Target price: Rs 4,664)
The company is investing significantly to create a large footprint in emerging growth markets. A near all-time high TCV and client interest in GenAI shall provide growth. Choice Broking has introduced FY27E and expect revenue, EBIT and PAT to grow at a CAGR of 10.3%, 12.3% and 12.2%, respectively over FY24-FY27E.
HCL Technologies (Target price: Rs 2,105)
The company remains committed to achieving business growth in a sustainable and responsible manner. Their deal pipeline is robust, featuring opportunities in Data & AI, Digital Engineering, SAP migration and efficiency-driven programs. The brokerage expects revenue, EBIT and PAT to grow at a CAGR of 10.5%, 13.5% and 13.7%, respectively, over FY24-FY27E.
EFC (I) Ltd (Target price: Rs 855)
EFC Ltd is a real estate management company headquartered in Pune. Its principal business is to provide managed office spaces for startups, small and medium-sized businesses and large corporations. EFC operates through 3 major verticals: office rentals, interior and furniture and fixture trade. It has recently forayed into furniture manufacturing, in which will complement its existing managed office business and also supply to third parties.
EFC’s plan to scale up all 3 business verticals – managed office space, design and build and furniture manufacturing will establish itself as an integrated player with diverse revenue streams and also able to capitalise on the cross synergies from these 3 verticals. The furniture manufacturing division starts contributing meaningfully from Q2FY25 as the large capacities go live and will be scaled up in FY26. With the market already for EFC as 60-70% capacity utilisation will be met from internal furniture requirement only and then will start pursuing the B2B model.
Granules India (Target price: Rs 723)
Granules is expected to benefit from its strategic shift towards the FD segment, stabilising Paracetamol API sales in Europe, backward integration efforts, the operationalisation of its new FD facility and new product launches, particularly in North America. Choice Broking projects the company’s revenue, EBITDA and PAT to grow at a CAGR of 15%, 22% and 27%, respectively, from FY24-27E.
Global Health (Target price: Rs 1,246)
Global Health is one of the biggest private multispecialty tertiary care providers in the North and East regions of India in terms of bed capacity and operating revenues with key specialties in cardiology and cardiac science, neurosciences, oncology, digestive and hepatobiliary sciences, orthopaedics, liver transplant, kidney, and urology. The organisation operates a network of numerous hospitals under the “Medanta” brand, including ones in Gurgaon, Indore, Ranchi, Lucknow and Patna, as well as one hospital that is currently being built in Noida.
Choice Broking forecasts that Medanta’s revenue and EBITDA will grow at a CAGR of 21.6% and 23.0%, respectively, for FY24-26E. The company is in a capex phase, planning to invest Rs 1,000-1,200 crore over the next two years, which may impact margins when the Noida facility begins operations.
Ugro Capital (Target price: Rs 345)
UGRO Capital is well-positioned to capture the growing demand for MSME credit, with its scalable and tech-driven business model driving sustainable growth. The company’s diversified revenue streams, combined with its strong focus on capital efficiency through co-lending partnerships, provide a solid foundation for long-term profitability. Choice Broking projects UGRO to achieve an earnings per share (EPS) CAGR of 42% from FY24-26E.