Diwali Stock Picks 2026: 12 Large-Cap Shares To Watch As Arihant Capital Sees Up To 49% Upside

The festival of light is here, and Samvat 2083 will begin and it is a chance for investors to make some investments to get some decent returns.

Here is a list of 12 large-cap stocks from the sectors of banks and insurance, autos and consumer names, cement, capital goods and defence from Arihant Capital with a BUY rating, with an expected upside ranging from about 13% to 49% from CMP.

Financials: LIC, Bank of Baroda and Axis Bank

LIC is the brokerage's high-value pick. Its net VNB margin expanded 360 bps to 21.2% in FY26, lifting VNB 41.6% to Rs .141.8 bn, and the run continued in Q1FY27 with the margin at 22.9% and VNB up 61% YoY. PAT rose 23% YoY to Rs. 134.9 bn in the quarter. At Rs. 387, the stock trades at 0.47x FY29E embedded value and 6.0x FY29E EPS.

Arihant's target is Rs. 495, an upside of 27.9%. The company's Q2FY27 results are due on November 5.

Bank of Baroda enters H2 FY27 with credit growth of about 18%, well above its 12-14% guidance, with global advances up 18.27% YoY to Rs. 15,120 bn. At Rs. 232, the stock trades at 0.66x FY29E ABV. The target of Rs. 297 implies 28% upside.

Axis Bank's advances grew 23% YoY to Rs. 13,740 bn in Q2 FY27, while NIM slipped to 3.36%. About 11 bps of that was a temporary drag from FCNR(B) deposits, so NIM excluding the drag was 3.47%. The CASA ratio fell to 36.5% from 39.8% a year ago and the credit-deposit ratio rose to 94.6%, which could limit growth in coming quarters. Arihant sets a target of Rs. 1,497, valuing the stock at 1.5x FY29E ABV against 1.2x now, for 23.1% upside from Rs. 1,216.

Autos, Consumer and Building Materials: M&M, Marico, Astral and Ambuja

Mahindra & Mahindra offers the second-highest upside among the large caps after Ambuja and BEL. SUV volumes rose 15% in Q1FY27, EV penetration reached 12% against the industry's 9%, and farm volumes grew 18% with a market share of about 45%. Capacity is set to rise from about 64,500 units a month to 130,000 by FY31. Arihant values the stock on a sum-of-the-parts basis and sets a target of Rs. 4,008, a 40.6% upside from Rs. 2,851. It flags El Nino as a risk to farm volumes in H2 and FY28E.

Marico is expected to beat its near-term guidance. Its Q2FY27 update showed double-digit underlying India volume growth, with Parachute Coconut Oil up in the early teens and Value Added Hair Oils up in the twenties for a sixth straight quarter. Copra prices are about 35% below peak, which supports gross margins. Arihant builds in FY26-28E revenue/EBITDA/PAT CAGR of 13%/22%/23%. At Rs. 774, the stock trades at about 37x FY28E EPS, and the target of Rs. 950 implies roughly 23% upside.

Astral's plumbing volumes held flat in Q1 despite an industry decline of about 10%, and July volumes were up about 40% as demand rebounded. Adhesives, paints and the new DSS business add to growth. Arihant expects FY26-28E.revenue/EBITDA/PAT CAGR of 20%/23%/32%. The stock trades at about 39x FY28E EPS at ₹1,361, and the ₹1,808 target implies about 33% upside.

Ambuja Cements carries the highest upside on the list at 49.1%. The stock is down about 38% over the past year, and Q1 volumes of 17.3 mn tonnes fell 8% YoY as the company chose profitability over market share. Arihant expects EBITDA per tonne to rise from about ₹900 in FY27E to Rs. 1,050 in FY28E, with the company in a net cash position. At Rs. 352, it trades at about 9.4x FY28E EV/EBITDA against a target of Rs. 525.

Capital Goods and Defence: ABB India, CG Power and BEL

ABB India's Q2CY26 orders rose 50% YoY to ₹43.6 bn, and the Rs. 119 bn order book, up 22% YoY, gives about a year of revenue visibility. Margin is about 13% against 18-19% in CY24, and Arihant sees it recovering after two price hikes, with data centres already making up 15-17% of orders. At Rs. 6,550, the stock trades at about 46.7x CY29E EPS. The Rs. 7,720 target implies 17.9% upside.

CG Power is positioned as a key beneficiary of India's transmission and distribution capex cycle. Q2FY27 revenue rose 30.1% YoY to Rs. 38,015 mn, EBITDA jumped 43.2%, and the order book grew 58% YoY to Rs. 236.4 bn. The new Sehore transformer plant shipped its first unit in September, well ahead of schedule. At Rs. 832, the stock trades at 48.1x FY29E EPS, and the Rs. 1,020 target implies 22.6% upside.

Bharat Electronics reported Q1FY27 revenue up 25% YoY to Rs. 55,470 mn, though EBITDA margin contracted 286 bps YoY to 25% on product mix. The order book stands at Rs. 722.58 bn, about 2.6x FY26 revenue, and management has kept its FY27 order inflow guidance of ₹550 bn+. The company is debt-free with Rs. 85.7 bn in cash. At Rs. 369, it trades at about 31x FY28E EPS, and Arihant's Rs. 530 target implies 44% upside.

Energy and IT: Reliance and LTTS

For Reliance Industries, the Jio listing is the central trigger. Arihant estimates the listing could price Reliance's roughly 65% stake at ₹6.7-8.2 trn, or 41-51% of its Rs. 16.2 trn market cap, which would leave the rest of the group at a steep discount. Q1FY27 recurring EBITDA was a record Rs. 540.7 bn, up 10%. The stock is near its 52-week low and 26% below its high. The Rs. 1,425 target implies 19% upside from Rs. 1,196.

L&T Technology Services has the smallest upside at 12.8%. It reported $203 mn in deal wins, with over 50% AI-led, and management expects H2 to outperform H1. Arihant values it at 24x FY29E EPS for a target of ₹4,700 against Rs. 4,166 now.

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