New Delhi [India], November 4 : Kotak Securities has picked up eight potential stocks ahead of the Diwali festival, noting that the brokerage is bullish on the Indian market during the Hindu calendar year 'Samvat 2080'.
Noting that the broader market valuations are rich, the brokerage in a report titled 'Samvat 2080: Fundamental Muhurat Picks' said opportunities arising from market correction (especially recent ones) can be used to add quality stocks from a long-term investment perspective.
The brokerage firm gave fresh 'Buy' and 'Add' calls for eight stocks, revising its previously put out recommendations. The fresh stock ideas are Canara Bank, Cipla, Cyient, Dalmia Bharat, Godrej Consumer, Macrotech Developers, PCBL, and Reliance Industries.
It sees a possible return on investments in these recommended stocks in a range of about 10-25 per cent over the course of the next 12 months.
The recent sharp correction in stock prices may reflect growing recognition of short-term and medium-term challenges or a 'natural' correction in the market from 'high' levels, Kotak Securities said.
"In our view, large-cap stocks offer better reward-risk balance given more reasonable valuations versus lofty valuations of most mid-and small-cap stocks," it added.
For global digital engineering and technology solutions company Cyient, Kotak Securities expects sustained demand in aerospace, sustainability and automotive. The brokerage sees about 26 per cent returns, with a target price of Rs 2,000 versus the current market price of Rs 1,659.
For Dalmia Bharat, the brokerage sees about 12 per cent returns. The company's volumes are expected to see strong growth led by a combination of organic and inorganic expansions over FY2023-26.
The company's key markets, east and south India, both have seen strong price hikes in recent months, and it should result in strong margin expansion in the second half of FY24.
"Lower coal prices and cost savings from renewable energy should aid margins in coming quarters," Kotak Securities said about Dalmia Bharat.
For Reliance Industries, the brokerage pegged the target price at Rs 2,725 versus the current share price of Rs 2,319.
"Outlook for each of RIL's (Reliance Industries Ltd) key segments remains robust," it said. Also, with a rising subscriber base and consumer engagement on 5G, it added tariff hike is expected soon.
"We believe focus will shift to 5G monetization, given R-Jio's 5G rollout is nearing completion. Recent Jio AirFiber (FWA) launch is the first step."
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