10,900% Dividends YTD: TCS, HCL, Maruti Among Top 8 Dividend Stocks To Buy In 2024; 10-25% Rise In 8-10 Months

The year 2024 is expected to be yet another power-pack performance by the Indian stock market. As per SMC Global Securities, with the current government likely to retain power, businesses and investors have stability and predictability, accordingly, history shows confident investors react positively to strong mandates. In 2024, as per the brokerage, sectors such as Infrastructure, Manufacturing, Power Generation & Distribution and Metals are poised to benefit from growth and potential rate cuts.

Further, SMC's note added that consumer spending is expected to rise, especially due to the upcoming elections. Earnings growth will be led by BFSI, Information Technology and Autos sectors. The compelling economic growth showcased by India, currently leading among significant economies, plays a pivotal role in driving domestic stock markets. While there are some uncertainties, the strong economic fundamentals and expected policy measures suggest that the market could deliver positive returns. However, it is crucial to remain vigilant and diversify your portfolio to mitigate risks.

Following this, SMC Global has selected eight dividend-paying stocks for buying in 2024. A potential upside in the range of 10% to 25% in the next 8-10 months is seen in these stocks. From Tata to Hindalco, here's what SMC Global said about these 8 stocks:

1. TCS: (TP: Rs 4,308, CMP: Rs 3,825.30, Potential Upside: 13%).

Tata Group-backed flagship firm, Tata Consultancy Services (TCS) offers a comprehensive portfolio of generative AI services and solutions which indicates future growth visibility. The addition of new partners and robust order book and a good pipeline represent sustained business growth. In Q2FY2024, the margin of the company has improved due to cost efficiency and improved utilization besides the attrition rate has also declined close to the long-term average.

Thus, it is expected that the stock will see a price target of Rs.4308 in an 8 to 10-month time frame on 2 2-year average P/E of 30.89x and FY25 EPS of Rs.139.45.

The largest tech company in India in terms of market share, paid dividends up to a whopping 10900% valuing Rs 109 per share. Currently, it has a dividend yield of 3.01%.

2. HCL Tech: (TP: Rs 1,619, CMP: Rs 1,462, Potential Upside: 11%).

Based on the bookings and all the deals that it has signed, it expects very healthy growth in Q3 and Q4. For the entire year, it expects revenue to grow in the range of 4.5% to 5.5%. It expects operating margins for the full year to be around 18% to 19% on the back of some large deal wins and gaining shares on the cost optimization-led deals.

Thus, it is expected that the stock will see a price target of Rs.1619 in an 8 to 10-month time frame on current P/E of 24.98x and FY25 EPS of Rs.64.83.

During 2023 so far, another tech major HCL has declared dividends up to 2000% aggregating to Rs 40 per share. At present, HCL Tech's dividend yield is at 3.28%.

3. Maruti Suzuki: (TP: Rs 12,405, CMP: Rs 10,214.90, Potential Upside: 21.44%).

Auto giant Maruti is expected to maintain its leading market share in the PV industry despite fierce competition thanks to its strong brand appeal, robust product lineup, and capacity to release new models regularly. Its revenue growth is also driven by the fact that it has the best distribution network and the highest penetration in rural areas within the PV market.

Thus, it is expected that the stock will see a price target of Rs.12405 in an 8 to 10-month time frame on an expected P/Bv of 4.50x and FY25 BVPS of Rs.2756.56.

In 2023, Maruti paid dividends up to 1800% amounting to a massive Rs 90 per share. Its current dividend yield is at 0.88%.

4. Hindalco: (TP: Rs 690, CMP: Rs 570, Potential Upside: 21.05%).

According to the management of the company, it has maintained a strong balance sheet and robust cash flows with consolidated net debt to EBITDA ratio below 2 times. Moreover, Domestic demand is strong, especially from pent-up demand from auto (especially EV space), B&C, aerospace (post-resumption of international travel across the globe) and beverage cans. Stable macro conditions to support strong domestic demand. Demand from packaging both domestic as well as globally is immune to recessionary trends. The aluminium market in India will gradually evolve and extrusion and rolling products demand is expected to increase by 100kt in next 3-4 years.

Thus, it is expected that the stock will see a price target of Rs.690 in an 8 to 10-month time frame on an expected P/Bv of 1.40x and FY25 BVPS of Rs.492.75.

This metal giant paid dividends up to 300% valuing to Rs 3 per share in 2023. It has a dividend yield of 0.53%.

5. Havells India: (TP: Rs 1,668, CMP: Rs 1,352.15, Potential Upside: 23.35%).

Havells has a strong balance sheet and timely price hikes and a revival in Lloyd's margins would be key to earnings upside. Commodity price normalization and product cost-led initiatives would drive further margin improvement. In the last few years the company has expanded its presence in modern format retail, regional retailers and online which gives it a complete presence and helps in new product launches.

Thus, it is expected that the stock will see a price target of Rs.1668 in 8 to 10 months time frame on a one-year average P/BV of 12.29x and FY25 (E) BVPS of Rs.135.73.

Home appliances company, Havells has paid up to 750% dividends amounting to Rs 7.5 per share in 2023 so far. Its dividend yield is at 0.55%.

6. Amara Raja Batteries: (TP: Rs 904, CMP: Rs 761.60, Potential Upside: 18.7%).

As per Amara Raja's management, the demand signals are positive across all product segments and it will continue to focus on cost optimization and work towards improving the operating margins. Moreover, it is expected to register healthy revenue growth, supported by steady growth in automotive and telecom segments, as well as strong traction witnessed in the new energy business with increasing demand for EV chargers and battery packs.

Thus, it is expected that the stock will see a price target of Rs.904 in 8 to 10 months' time frame on current P/BV of 2.30x and FY25 BVPS of Rs.393.11.

In 2023 so far, Amara Raja declared dividends up to a massive 800% amounting to Rs 8 per share. Currently, its dividend yield is at 0.8%.

7. JSW Energy: (TP: Rs 473, CMP: Rs 409.55, Potential Upside: 15.5%).

JSW Energy's management of the company has an ambitious target of reaching 20 GW of installed generation capacity and 40 GWh / 5 GW of energy storage by 2030 along with 1 GW of solar module manufacturing by April 2025. This growth will result in balance sheet size to grow at 22% CAGR from FY 2023-30. These targets are in line with its mission to become carbon neutral by 2050. The Company is well on track to achieve its capacity growth target of 10 GW much ahead of the stated timeline of FY 2025 and being future-ready with an increased share of renewables and new energy solutions.

Thus, it is expected that the stock will see a price target of Rs.473 in an 8 to 10-month time frame on a current P/BV of 3.45x and FY25 BVPS of Rs.137.20.

The energy giant of JSW Group has declared dividends up to 20% valuing to Rs 2 per share in 2023 so far. Currently, it has a dividend yield of 0.49%.

8. Kalpataru Projects International: (TP: Rs 761, CMP: Rs 631.40, Potential Upside: 20.52%).

Leading EPC firm, Kalpataru Project continues to drive growth and create differentiation by strengthening capabilities organically and through strategic business development in newer areas like data centres, airports, heavy civil, design-build B&F projects, industrial projects and manufacturing expansion. It has established a strong diversified order book, expanded global reach and robust execution capabilities, which makes it well poised to deliver profitable growth while maintaining a strong balance sheet.

Thus, it is expected that the stock will see a price target of Rs. 761 in an 8 to 10-month time frame on a 1-year average P/BVx of 2.05x and FY25 BVPS of Rs.371.26.

About 350% dividend aggregating to Rs 7 per share has been paid by Kalpataru in 2023 so far. At present, its dividend yield is at 1.11%.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.