Diwali Picks: Religare Broking Finds 5 Stocks Attractive To Buy; TCS, ITC, Maruti In List

The day of Laxmi Pujan is considered auspicious for investing in equity shares to create wealth. On Sunday, BSE and NSE will be holding a one-hour muhurat trading between 6.00 to 7.15 pm, notably, the last 15 minutes will be used for settling the trade. On this day, a large number of traders and investors will be placing their bets for future gains. Hence, on this occasion, Religare Broking has selected five stocks as attractive to invest in for Samvat 2080.

These stocks are -- Tata Consultancy Services (TCS), ITC, Axis Bank, Maruti Suzuki, and SBI Life Insurance.

1. Tata Consultancy Service (TCS): (TP: Rs 4,089)

Religare believes believe from a medium to long-term perspective factors such as strong demand for newer technology, record order inflows, client willingness to commit to long-term deals and investment towards the development of technology as well as up-skilling of employees will play out. Besides, improving margins and managing costs as well as the company's focus on translating deals to revenue gives us confidence in revival.

On the financial front, it said, "We have estimated its revenue/EBIT to grow at 16.5/19.8% CAGR over FY23-25E. The stock price has seen decent correction post its Q2FY24 results, thus making its valuation attractive for investment. Thus, we have revised our rating to Buy from Accumulate while maintaining our target price of Rs 4,089."

2. ITC: (TP: Rs 535)

ITC will continue its focus on the ITC Next strategy which would aid in building a future-ready portfolio as well as scaling up the non-cigarette business especially FMCG by innovating, renovating and premiumizing products. Besides, the demerging hotel business is moving as per the company's plan which is positive.

Overall, Religare's note said, "The growth prospects remain optimistic and financially we have estimated its Revenue/ PAT to grow at 15%/19.2% CAGR over FY23-25E and assign a Buy rating with a target price of Rs 535."

3. Axis Bank: (TP: Rs 1,167)

The brokerage remains positive on Axis Bank on the back of its growing assets book, premiumization of deposits, growing wealth management business and its market position in the credit card segment. The asset quality of the bank continues to remain robust. Also, the acquisition of premium customers presents an opportunity for the bank to cross-sell its other products.

It added, "We expect NII/ PPOP/PAT growth of 11%/15%/9% over FY23-25E. We have a Buy rating on the bank with a target price of Rs 1,167."

4. Maruti Suzuki: (TP: Rs 12,714)

With a superior product mix and favourable commodity prices, the brokerage anticipates, that MSIL will continue to gain market share in its key pockets which will eventually aid in revenue growth.

Financially, it said, "We estimate its revenue/EBITDA/PAT to grow at a CAGR of 18.2%/34.9%/33.5% over FY23-25E. From a valuation perspective, it is currently available at an attractive valuation, with a favorable risk-to-reward ratio. Hence, we recommend a Buy with a target price of Rs 12,714, assigning a PE of 27x on its FY25E EPS."

5. SBI Life Insurance: (TP: Rs 1,644)

Brokerage added, "We remain positive on SBI Life Insurance on the back of strong growth in its core operations which enables the company to increase its market share. The company is rightly placed in the resurgence of ULIP products due to its higher proportions of such products in its overall product mix. We expect APE/NBP/VNB to grow at a CAGR of 19%/21%/23% over FY23-25E. We have a Buy rating on the company with a target price of Rs 1,644."