FMCG major ITC and private sector lender Axis Bank emerged as the top Nifty stocks to buy this Diwali Muhurat Trading on October 24. In a Diwali survey conducted by BT Digital with 10 brokerages, as many as three analysts from Reliance Securities, Hem Securities and Axis Securities voted in favour of ITC. Likewise, a similar number of analysts from Kotak Securities, Reliance Securites and Swastika Investmart suggested Axis Bank.
ITC
Shares of ITC have surged 54 per cent since Diwali 2021. In contrast, the benchmark NSE Nifty declined nearly 2 per cent during the same period. Overall, Samvat 2078 turned out to be a challenging year for global equities, given the many headwinds, including rate hikes, energy crisis, Russia-Ukraine conflict, continued supply disruptions, FPI outflows, and heightened inflation, among others.
While setting a one-year target price at Rs 380 for ITC, Neeraj Chadawar, Head – Quantitative Equity Research, Axis Securities said, “The stock is currently trading at 18 times FY25E EPS, 4-5 per cent dividend yield provides a huge margin of safety compared to its peers. Moreover, the recovery in the cigarette business and uptick in agri, hotels, and paperboard in the near term makes ITC a better play in the entire FMCG pack where valuations are high.” Shares of the company traded 0.77 per cent down at Rs 347 in the afternoon trade on October 21.
The company on October 20 reported a 24.08 per cent growth in its consolidated net profit at Rs 4,670.32 crore for the second quarter that ended September 30, 2022.
Also read: India may continue to outperform global markets in Samvat 2079: BT Digital Diwali Survey
Axis Bank
Shares of the private sector lender also witnessed a rise of 10 per cent in Samvat 2078. Commenting on Axis Bank, Deepak Singh, Chief Business Officer, Reliance Securities said, “The asset quality is bound to improve with cumulative provisions at 134 per cent of gross non-performing assets (GNPAs).”
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities added that Axis Bank is among the good business to own among the large banks. “The bank has adequate buffer to manage any unexpected shocks.
Other top stocks
The survey further revealed that at least 2 analysts each voted in favour of IT major HCL Technologies, private sector lender HDFC Bank and telecom player Bharti Airtel.
Mohit Nigam, Fund Manager & Head – PMS, Hem Securities said, “After a good correction, HCL Technologies finally rebound after Q2FY23 results. Company’s deal pipeline is healthy and management raised the FY23 revenue guidance. The company is currently trading at attractive valuations.”
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Shares of HCL Technologies and HDFC Bank have retreated 14 per cent and 9 per cent, respectively, since Diwali last year. On the other hand, Bharti Airtel jumped 13 per cent during the same period.
Sharing his views on HDFC Bank, Mohit Nigam, Fund Manager & Head – PMS, Hem Securities said, “The bank’s credit growth is improving continuously and asset quality is stable. SME business is present in around 90 per cent of the country districts and management is positive on credit demand. Amalgamation with HDFC Limited is moving on a fast track.”
Sunil Nyati, Managing Director, Swastika Investmart on Bharti Airtel said that reasonable valuations, strong standing in the near 2 player-industry, rising ARPUs, robust balance sheet, and 5G gaining traction are some of the reasons that make us positive about the stock.
Adani Enterprises, Bajaj Finance, UltraTech Cement, Asian Paints, Mahindra & Mahindra (M&M), Cipla, ICICI Bank, State Bank of India (SBI), Tech Mahindra and Hindustan Unilever stood among other major Nifty stocks on which at least one analyst gave his ‘Buy’ call for the next one year.
