1 / 11Associated Alcohols & Breweries, Bharti Airtel, Happy Forgings, IDFC First Bank, JSW Energy, L&T, Pidilite, MSTC, Northern Arc Capital, and Sheela Foam are the 10 stocks that HDFC Securities has picked for Samvat 2082 for upside potential of up to 27%. Here is a look at these names in greater detail:
2 / 11Bharti Airtel | HDFC Securities recommends buying this stock in the ₹1,935 – ₹1,985 range, add on dips till levels of ₹1,787 for an upside target of ₹2,244 until the next Diwali. It recommends investors to draw a red line on positions at levels of ₹1,643. The price target indicates a potential upside of 15% from current levels. Expectations of tariff hikes could boost the Average Revenue Per User (ARPU) in the future and help generate a higher incremental EBITDA margin and free cash flow, HDFC Securities said. Delays in tariff hikes, slower rate of client conversion into 5G, difficulty in servicing substantial debt and elevated capex and regulatory payouts are some key risks.
3 / 11Happy Forgings | HDFC Securities recommends buying Happy Forgings in the ₹910 – ₹944 range, add on dips until ₹848 and draw a red line on positions at ₹729. The upside target of ₹1,083 implies a potential upside of close to 18%. Wider product range, orders worth ₹1,600 crore received in FY25, capex plans worth ₹650 crore and capacity addition are some key triggers for the stock. Slowdown in the automobile industry, tariffs imposed by other countries and economic slowdown are some key concerns and risks.
4 / 11IDFC First Bank | HDFC Securities has a price target of ₹88.5 on the private lender, indicating an upside potential of 20% until the next Diwali. Strong liability franchise, aim to reduce cost-to-income ratio, stable asset quality excluding MFI stress, better collection efficiency are some key triggers. A higher cost-to-income ratio, slowing credit growth and intense competition from large national banks, regional banks and fintech companies are some key risks. The brokerage recommends buying the stock between ₹73 – ₹75, add on dips until ₹65, but draw a red line on positions at ₹59.
5 / 11JSW Energy | Timely execution of announced projects, robust financial profile despite higher debt trajectory, healthy cash flow visibility and margin stability are some of the key triggers why JSW Energy finds a mention in HDFC Securities list of Diwali picks. The brokerage recommends buying the stock in the ₹538 to ₹555 range, add on dips till ₹487 but draw a red line on positions at ₹428. Its price target of ₹639 implies an upside potential of 17% until next Diwali. Muted power demand due to economic slowdown, delay in project execution and commissioning and counterparty credit risk from state discoms are some key risks.
6 / 11Associated Alcohols & Breweries | HDFC Securities recommends buying the stock in the ₹1,008 – ₹1,035 range, add on dips till ₹918 but draw a red line if the stock falls to levels of ₹807. The upside target of ₹1,182 until next Diwali implies a potential upside of 17% from current levels. Continued market expansion, operational efficiencies via backward integration, aim to create a pan-India presence and strong consumption trends of premium alcohol are some of the key triggers for the company. Regulatory challenges, concentration of revenue in certain states and elevated raw material prices are some key risks.
7 / 11Larsen & Toubro | India’s largest infrastructure conglomerate is also part of the Diwali stock picks list from HDFC Securities, who recommends buying the stock in the ₹3,760 – ₹3,818 range, add on dips till ₹3,484, but draw a red line if the stock falls to levels of ₹3,190. The upside target of ₹4,243 implies a potential upside of 12.5% over the next 12 months. Ramp up in execution, robust order book, strategic entry into green hydrogen, semiconductor design and data centers are key triggers and will add to future growth, as per the brokerage. Geopolitical disruptions, labour shortages, a sharp rise in commodity prices, delay or slowdown in new order inflows, crude price volatility and working capital remaining elevated are some key risks.
8 / 11Pidilite Industries | Quasi-monopoly market share in mainstay adhesives, strong balance sheet and a track record of brand creation provides ample medium-to-long-term earnings visibility and should sustain Pidilite’s premium valuations, HDFC Securities wrote in its note. The strategy to make Pidilite an innovative Indian MNC augurs well for long-term growth, the brokerage added, recommending investors to buy between the ₹1,500 – ₹1,550 range, add on dips till ₹1,401 and trigger a red flag if the stock falls to levels of ₹1,289. Its price target of ₹1,717 implies a potential upside of 13.4%. Volatility in raw material prices, economic slowdown in cyclical construction sector and geopolitical headwinds are key risks.
9 / 11Sheela Foam | Sheela Foam shares have an upside potential of 23.5% based on HDFC Securities’ price target of ₹837 on the stock. Calling it a play on changing lifestyle, urbanization and rising per capita income of Indian households, HDFC Securities believes that the management remains optimistic on integration, cost savings, and visible synergy benefits in the medium-term. Increasing competitiveness and higher fluctuations in raw material prices are key risks. It recommends buying the stock in the ₹678 – ₹698 range, add on dips to ₹608, and draw a red line if the stock falls to levels of ₹539.
10 / 11Northern ARC Capital | A recent listing, Northern Arc shares can be bought between ₹265 to ₹277, add on dips until ₹244.5 but draw a red flag if the stock falls to ₹209.5, HDFC Securities wrote in its note. Its price target of ₹333.5, implies a potential upside of 23.5% from current levels. Conservative credit policy, robust asset quality, better macros, RBI rate cuts and a favourable monsoon are acting as tailwinds for the second half of the current financial year. High unsecured book and competition from banks, NBFC and Fintech companies are key risks.
11 / 11MSTC | The stock with the highest upside potential in this list of 10 names, MSTC shares can go up to levels of ₹673, according to HDFC Securities. The brokerage recommends buying the stock between ₹525 to ₹548, add on dips to ₹463, and draw a red line if the stock falls to ₹418. MSTC has established a dominant position in India’s e-auction and e-procurement landscape, serving a wide range of government departments, PSUs, and private sector clients, HDFC Securities said, adding that asset-light business model, service-based focus, low capex and operating leverage are some key triggers. However, high dependence on government contracts, volatility in scrap and commodity markets, technology and cybersecurity risks and limited diversification are key risks.
