The journey since last Diwali began with benchmark indices hitting lifetime highs in December 2022, then plunging to 52-week lows in March and scaling back to record highs in September.
Even after such a tumultuous ride, the benchmark Nifty50 gave nearly 10% returns to investors in Samvat 2079, while at least 238 NSE-listed stocks turned multibaggers.
A look at the performance of the top 10 stocks that were recommended by market experts for Samvat 2079 shows that 50% of them have managed to give double-digit returns to investors.
The top 10 recommended stocks of last Diwali were Lemon Tree Hotels, Coforge, Bharat Electronics, HCLTech, Axis Bank, Federal Bank, ICICI Bank, Marico, Infosys, and Jubilant Ingrevia.
Of these, Axis Bank, HCLTech, Bharat Electronics, Coforge, and Lemon Tree Hotels have given returns of over 13-38% since the last Diwali.
Bharat Electronics, Axis Bank, ICICI Bank, Federal Bank, and Lemon Tree Hotels also scaled lifetime highs during this period.
Shares of the private sector lender have given over 13% returns since the last Diwali and scaled a record high on September 20. Foreign investors have steadily increased their holding in the stock over the last 3-4 quarters.
Nomura Financial continues to find the bank’s valuations attractive at 1.8 times 1-year forward book value, given that RoE is expected to be 18% over FY24-26. It has a “buy” rating on the stock with a price target of Rs 1,150, implying an upside potential of about 13% from the current levels.
While the IT sector is having a rough time because of the economic slowdown in the US and Europe and the environment continues to look a bit uncertain, some stocks in this space have still managed to reward investors well and HCLTech is one among them.
The stock has gained over 23% since last Diwali and is the only one among the largecaps to give double-digit returns.
Even though the company slashed its FY24 growth guidance citing tough business environment, the stock remains a “buy” for many analysts.
“We see a strong FY24 exit positioning HCLTech well for a solid performance in FY25,” said Kumar Rakesh of BNP Paribas, who has a target price of Rs 1,410 for the stock.
This is another IT stock that has given impressive returns of nearly 32% since last Diwali. The stock found favour among both mutual funds and foreign investors, who have steadily increased their holding in the last 3 quarters. As of September end, MFs held over 42% stake in the company, compared to about 20% in December last year, while that of FIIs went up to 34.4% from 21.3%.
Jefferies India remains bullish on the prospects of Coforge and retains a “buy” rating on the stock with a price target of Rs 6,250.
“With promoter stake sale overhang behind us and growth momentum remaining strong, Coforge’s premium multiples are likely to sustain,” the brokerage said.
Lemon Tree Hotels
Thanks to the strong recovery in leisure and business travel post the pandemic, the hotels and hospitality sector saw tremendous growth in business, and the same also reflected in the share price. Shares of Lemon Tree Hotels, which was among the top stocks recommended by analysts last Diwali, have given returns of more than 38%.
Given the positive outlook for the industry for the rest of FY24 due to big events such as the Cricket World Cup and the ongoing festival season, the stock looks poised to add more gains into investors’ kitty.
Samvat 2080 Bets
According to Reliance Securities, the 3E’s – Economy, Elections, Earnings and geopolitical crisis outcomes over the next few quarters, are what will drive the returns for the next Samvat year.
However, every decline in the market presents a good buying opportunity given the strong earnings outlook.
For the next Samvat, stocks that have made it to the recommendation list of most brokerages are Reliance Industries, Larsen & Toubro, Hindustan Aeronautics, State Bank of India, and Mahindra & Mahindra.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)