Motilal Oswal picked 10 stocks including SBI and titan for the next Samvat

Motilal Oswal anticipates potential upside ranging between 16% to 40% over the next 12 months for its Diwali picks

 

Based on this rationale, Motilal Oswal has picked 10 stocks for Samvat 2080, which include stocks like India’s largest lender State Bank of India, M&M, Cipla among other broader market names.

The brokerage anticipates potential upside ranging between 16% to 40% over the next 12 months for its Diwali picks.

 

State Bank of India

 

India’s largest lender has strengthened its balance sheet by creating higher provisions. It has a Provision Coverage Ratio of 92% in the September quarter and a higher (99.5%) provision coverage on corporate NPAs.

Motilal Oswal said that SBI remains the best play among the PSU banks with a healthy Provision Coverage Ratio, Tier-I ratio of nearly 12%, a strong liability franchise and improved operating profitability.

The brokerage expects the stock to rise 22% over the next 12 months.

 

Titan

 

With a 7% maket share in the jewellery industry, Titan is at the forefront in terms of growth among organised players, Motilal Oswal said.

The brokerage expects emerging businesses, fragrances and fashion accessories and Indian dress wear to record double-digit growth.

Shares of Titan are trading near a record high and are likely to rise 19% over the next 12 months, according to Motilal Oswal.

 

Mahindra & Mahindra

 

The SUV and tractor manufacturer has one of the highest exposures to the rural market (nearly 65% of the volumes), which Motilal Oswal expects to recover considering the rural cash flows.

M&M’s reorientation of its SUV business to maintain its DNA and brand positioning has led to a robust demand momentum for its SUVs, the brokerage said.

Motilal Oswal is anticipating a 16% volume CAGR in passenger UVs over financial year 2023-2025.

 

Cipla

 

Cipla’s robust ANDA pipeline with complex products should drive consistent growth in the US generics segment, Motilal Oswal’s note said.

This, along with a steady outperformance in the branded generics market would enable 19% earnings CAGR over financial year 2023 – 2025.

Cipla shares are likely to rise 21% over the next 12 months, according to Motilal Oswal.

 

Motilal Oswal picked 10 stocks including SBI and titan for the next Samvat

 

Indian Hotels

 

Revenue generated per available room (RevPAR) for Indian Hotels has been strong in October 2023, said Motilal Oswal and it is displaying healthy demand visibility for November 2023.

The management has already guided for a double-digit RevPAR growth in financial year 2024.

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

Indian Hotles shares are also expected to rise 22% over the next 12 months, according to Motilal Oswal.

 

Dalmia Bharat

 

The cement company is benefitting from a robust increase in cement prices, particularly in the eastern market, where prices have risen by ₹40 to ₹50 per bag and an improvement in demand, Motilal Oswal said.

It is anticipating a 11% volume CAGR for Dalmia Bharat over financial year 2023 – 2026 and estimates an operating profit per tonne of ₹1,045, ₹1,150 and ₹1,250 over financial year 2024, 2025 and 2026 respectively, driven by a reduction in operating expenditure.

A potential upside of 33% in the next 12 months is the second-highest in the Motilal Oswal’s Diwali picks.

 

Kaynes Tech

 

The company is a prominent end-to-end and IoT-enabled integrated electronics manufacturer with strong order book growth and a higher share of box build.

Kaynes has reported a 96% CAGR in its order book over financial year 2020-2023.

Motilal Oswal is anticipating a 41% and 56% CAGR in revenue and adjusted net profit over financial year 2023 – 2026, driven by a healthy order book and a better margin profile. It also sees a potential upside of 26% on the stock.

 

Raymond

 

The company has strengthened its leadership team over the last 2-3 years and restructured its group. The demerger and promoter’s capital infusion has also strengthened its balance sheet.

It also has a collection of established brands like Raymond, Park Avenue, ColorPlus, Ethnix, which it plans to grow via the capex-light franchisee mode.

Motilal Oswal has the highest potential upside of 38% for Raymond among its 10 Diwali picks.

 

Spandana Sphoorty

 

The company has pivoted from consolidation to the growth phase and pursue customer acquisition-led growth, with an addition of 3.5 lakh borrowers in the September quarter.

With reinforced processes, it is now ready to capitalise on the strong opportunity in the MFI sector, the brokerage said.

Motilal Oswal is anticipating a 34% CAGR in its Assets Under Management over financial year 2023 – 2026 and an RoA and RoE of 4.4% and 17% in financial year 2026.

 

Restaurant Brands Asia

 

Restaurant Brands Asia has worked on its products, new categories and value segment to attract traffic in the last few years.

Motilal Oswal said that the business well on track to see a turnaround over the next 2-3 years.

With an aggressive store addition, the company is well placed to deliver a strong 26% and 45% CAGR in revenue and EBITDA over financial year 2023-2026 for its India business.

The brokerage expects the stock to rise 16% over the next 12 months.

 

 

2023-10-13 (4)

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