Muhurat Trading 2024: HDFC Bank, ITC, Tata Tech among top 11 bets for Samvat 2081 with 15-20% upside

Muhurat Trading 2024: Samvat 2080 was a remarkable year for the Indian stock market, with the Nifty 50 hitting an all-time high of 26,277 and the Sensex reaching 85,978 in September 2024 led by continued optimism about the economy, healthy earnings growth by India Inc., foreign capital flow. Over the last 12 months, the Nifty 50, Nifty Midcap 100, and the Nifty Smallcap 100 indices have rallied 27 per cent, 45 per cent, and 42 per cent, respectively.

The emergence of external factors, especially geopolitical tensions worldwide, affected the market’s performance, and strong domestic flows and retail investor participation kept it buoyant.  The total demat count surpassed the 171 million mark in August ’24, resulting in SIP inflows touching an all-time high trajectory. 

Also Read: Expert View | India will be festive for years to come; allow stocks to grow over time: Deepak Shenoy of Capitalmind

Although an eventful Samvat 2080 is behind, an exciting Samvat 2081 awaits, with plenty of key events to watch out for, such as the US Presidential Elections in November 2024. While the US Fed has announced its rate cut decision, anticipating two more cuts in 2024, all eyes are on the Reserve Bank of India (RBI) rate cut announcement, which can relieve the banking and the non-banking financial company (NBFC) sector’s tight liquidity situation. 

Domestic benchmark indices posted flattish performance in October, primarily due to foreign fund outflows and the divergence to Chinese markets, given the attractive valuations and strong stimulus announcements. However, investors are taking this healthy correction as an opportunity to build diverse portfolios at better valuations and play on India’s long-term structural growth story.

According to Way2Wealth Brokers, a subsidiary of Shriram Credit Company Ltd and part of the ‘Shriram’ Group, investors increase their exposure to several players associated with the industry-specific themes, largely falling under mid-cap and small-cap indices, leading to a run-up in their valuations. “As a result, the relative underperformance of the frontline indices offers good entry opportunities in some large-cap companies, providing multiple growth levers and fair revenue visibility at current valuations,” said the brokerage.

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In the current market scenario, Way2Wealth Brokers of the Shriram Group have crafted 11 stock picks for the upcoming festive session that offer potential returns in the next 12 months. The brokerage has selected quality stocks based on fundamental and technical parameters expected to offer returns of up to 15-20 per cent at target levels.
 

Diwali Muhurat Trading 2024: Muhurat Trading Stock Picks by Shriram Group
 

Let's take a look at the top 11 stock stocks for Diwali's Muhurat Trading session by Way2Wealth Brokers of the Shriram Group:
 

1.BEML: Target: ₹4,400; Upside: 18 per cent

BEML remains a key player with a proven track record in Defence, Metro, Vande Bharat and Mining equipment with proven capabilities. The brokerage expects improving margins on the back of better utilization of its resources to execute its orders more efficiently and effectively, in addition to a declining employee-cost ratio. 

“However, a large part of the revenue growth rests on its ability to win future orders as all its segments face strong competition from large domestic OEMs. At the CMP, we find BEML an attractive BUY as it trades at 34x FY-26E P/E,” said Way2Wealth Brokers.

2.Computer Age Management Services (CAMS): Target: ₹4,900; Upside: 14 per cent

Revenue, EBITDA, and net profit are expected to grow at CAGRs of 15 per cent, 19 per cent, and 20 per cent, respectively, from FY24 to FY26, highlighting solid long-term growth potential. The company is leveraging innovative technologies to enhance operational efficiency and customer service, positioning itself for future market demands. 

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With plans to further penetrate non-MF segments and expand its digital services, CAMS is well-positioned to capture additional market share and drive sustainable growth. CAMS presents a compelling investment opportunity backed by strong fundamentals, market leadership, and positive growth prospects. The scrip is trading at P/E 41x FY26E.

3.DLF Ltd: Target: ₹920; Upside: 18 per cent

DLF has increased its capital expenditure commitments in response to these encouraging trends to enhance its rental portfolio. It has begun developing subsequent phases of Downtown projects in Chennai and Gurugram, totalling approximately 11 million square feet, which includes a retail destination of around two million square feet in Gurugram. Projects such as Atrium Place in Gurugram and three retail malls are on track to begin generating rental income in the upcoming quarters. The scrip is trading at a P/E of 48.8x FY26E.

4.HDFC Bank: Target: ₹1,940; Upside: 11 per cent

With merger-related impact largely behind, several long-term initiatives undertaken by management will start showing results going forward. While value unlocking from synergies, loan growth pick-up, reduction in borrowing costs, and improvement in NIM profile are some of the fundamental key drivers, listing HDB Financial Serv. would provide the capital cushioning. Thus, the brokerage selected HDFCB trading at 2.4x FY26e P/B.

Also Read: Bears grip D-Street: Nifty logs worst weekly run in 14 months ahead of Diwali; 5 key triggers for Samvat 2081
 

5.Hindustan Aeronautics Ltd (HAL): Target: ₹4,700; Upside: 13 per cent

Over the last few months, international geo-political tensions have strongly impacted raw material supplies, causing delayed order fulfilment and revenue booking. This has been emphatically brought out for the recent GE-414 engine order, which will power the new LCA-Mk1A fighter jets. The recent fall in stock prices reflects this bearish sentiment. 

“However, we believe this to be a blip in the larger scheme of things, and as supplies improve, we expect the trend to reverse strongly. Given the large order book, IAF’s mandate to refresh the fleet, and the large number of civilian Airbus aircraft in use – we believe that HAL is firing on all engines and will continue to grow from strength to strength,” said the brokerage.

6.ITC: Target: ₹530; Upside: 10 per cent

Expectations of good crop output, anticipated moderation in inflation, improving agri terms of trade, and the Government's thrust on public Infrastructure & the rural sector augur well for a pick-up in consumption demand. ITC is trading at a P/E 25 to FY26 EPS of ₹19.1. “We remain positive on ITC’s performance, and investors should use the recent correction as an opportunity to buy the stock in the long term,” said the brokerage.

Also Read: Muhurat Trading 2024: Nifty to open flat, consolidation may continue; HDFC Bank, DLF among top picks
 

7.Reliance Industries: Target: ₹1,500; Upside: 13 per cent

Jio has accomplished the fastest rollout of a 5G network witnessed worldwide and is now available across India. JioAirFiber has seen strong demand and customer engagement, especially in underserved segments. Reliance aims to double its EBITDA in the next five years, leveraging opportunities in 5G technology.

“We are confident that Reliance Industries Limited presents a compelling investment opportunity, driven by strong growth prospects across its diverse business segments and the potential for significant value creation in its retail, digital services, and financial services portfolios,” said the brokerage.

8.State Bank of India (SBI): Target: ₹900; Upside: 15 per cent

Healthy loan book growth, supported by a strong liability franchise and the lowest cost of funds, remains the key driver for the company's future performance. Healthy asset quality makes the balance sheet well-positioned to absorb externalities, while controlled OPEX and lower credit costs enable it to maintain its return ratios. “Anticipating the bank will benefit from the likely pick-up in rural demand, we include SBI trading at P/B 1.4x FY26E,” said the brokerage.

Also Read: Diwali 2024 Stock Picks: Tech Mahindra to BEL—Bajaj Broking lists top 5 stocks to buy for Samvat 2081
 

9.Tata Investment Corp: Target: ₹7,580; Upside: 16 per cent

In line with SEBI’s initiative to improve the price discovery of Investment Companies and Investment Holding Companies, a special call auction was conducted on October 28. This may act as a sentiment booster for investors and unlock value for holding companies with better liquidity. “While any positive development on the listing of Tata Sons Ltd. can be a good trigger, fair value change in the portfolio of listed and unlisted companies will drive its earnings performance. Thus, we include Tata Investment,” said the brokerage.

10.Tata Technologies: Target: ₹1,180; Upside: 17 per cent

Given the core industries' need to revolutionize cutting-edge and innovative digital engineering solutions, Tata Tech is at the centre of this evolution. By expanding its client base and capabilities into aerospace, automotive, battery tech, software-based solutions and heavy machine engineering, Tata Tech has built a robust business model that can operate independently outside the parent group. “Given the strong fundamentals and outlook, we believe the stock will continue to demonstrate a significant uptick,” said the brokerage.

11.Yatharth Hospital & Trauma Care Services: Target: ₹750; Upside: 15 per cent

Over FY21-FY24, the company's revenue, EBITDA, and PAT grew at a CAGR of 43 per cent, 39 per cent, and 85 per cent, respectively, driven by improved occupancy and a focus on super-speciality treatments.  We estimate a CAGR of 19 per cent, 20 per cent, and 22 per cent in Revenue, EBITDA, and PAT over FY24-26E, with EBITDA and PAT margins improving to 27 per cent and 18 per cent, respectively. The stock trades at a P/E of 33x FY26E EPS of ₹20 and 21x EV/EBITDA on FY26E. Thus, the brokerage has a positive view of the stock.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.