2 Tata Stocks Are Motilal Oswal's Top Picks This Diwali; Potential To Rise 17% To 19%

Despite global uncertainties, India remains a shining star and is expected to maintain its outperformance, brokerage Motilal Oswal said in its Diwali picks report. For Samvat 2080, the brokerage is optimistic about two Tata stocks and recommended buying with a potential upside between 17-18% ahead. The two Tata companies have declared their Q2 results as well.

These two Tata firms are Titan Company and Indian Hotels and both hold leadship positions in their respective segments. Here's what Motilal Oswal said:

1. Titan:

Titan, with a 7% market share in the jewellery industry, is at the forefront in terms of growth among organized players.

Emerging businesses, fragrances & fashion accessories, and Indian dresswear are expected to record double-digit growth.

Motilal Oswal has recommended buying with a target price of Rs 3,900 on Titan:

On Thursday, Titan shares traded in red at Rs 3,300.20 apiece, down by Rs 0.33% on BSE with nearly Rs 2.93 lakh crore of market cap. Titan stock has also touched an intraday low of Rs 3,291.95 apiece.

On the previous day, the share price stood at Rs 3,311.20 apiece.

Taking into consideration the latest price level and Motilal's target price, Titan has the potential for nearly 18% upside ahead.

During Q2FY24, the Tata Group-backed company earned a net profit of Rs 916 crore on a consolidated basis in Q2FY24, rising by 10% from Rs 835 crore in the same quarter a year ago. Consolidated revenue from operations which includes sales of products and services along with other operating revenues, came in at Rs 12,529 crore in Q2FY24, rising by a whopping 36.73% from Rs 9,163 crore in Q2 of the previous fiscal. Consolidated EBIT climbed by 16% YoY to Rs 1,392 crore in the quarter under review.

Titan is the largest jewellery maker in India in terms of market share.

2. Indian Hotels:

RevPAR growth for Indian Hotels has been strong in Oct'23 and is displaying a healthy demand visibility for Nov'23. Management has guided for a double-digit RevPAR growth in FY24.

A favourable demand-supply scenario and a rebound in foreign tourist arrivals should boost occupancy going forward.

The brokerage has recommended buying for a target price of Rs 480.

Indian Hotels' share price at the time of writing traded at Rs 406.35 apiece on BSE during the early trade of Thursday. The stock was marginally up and near its intraday high of Rs 408.65 apiece. Its market cap is nearly Rs 57,720 crore.

On the previous day, Indian Hotels' share price stood at Rs 405.25 apiece.

If Indian Hotels achieves Motilal's target price, then it would have a potential upside of 18.5% from the current price level in the future.

In the second quarter of FY24, Indian Hotels reported a PAT of Rs 167 crore, up 37% YoY. While EBITDA stood at Rs 402 crore higher by 26% YoY and EBITDA margin expanded at 27.2%. Revenue came in at Rs 1,481 crore, up by 18% YoY.

IHCL opened 3 new hotels in Q2 taking the total operating hotels to 192 across brands. It added two Taj branded hotels, Taj The Trees Mumbai and Taj Guras Kutir Resort & Spa, Gangtok and SeleQtions brand forayed into Indore with a 125-room hotels