11 Stocks to buy for Diwali 2018 – Samvat 2075

In Indian customs, Diwali also marks the new financial year. It is believed that trading on this day brings in wealth and prosperity throughout the year. Muhurat (Muhurtham) is an auspicious time of the day which gives good results for your effort without influence of evil forces. Indian capital markets will hold “muhurat trading” this year between  5:30 p.m. to 6:30 p.m on Wednesday, 7th November 2018. In this blog, I have listed out 11 stocks that I would buy during muhurat trading and stay invested  for next 1 year (or till I achieve the target price)

Reliance IndustriesLtd

  • Current Market Price – 1074
    • Potential Upside – 16%

Reliance Industries is a share that everyone needs to have in their portfolio for all weather conditions. I personally expect a strong performance due to demand in polyester, commissioning of Jamnagar for petrochemical coupled with immense focus on jio wireless and giga fiber.  Jio currently holds 20% of wireless market which could extend up to 25% this year. I also see jio to increase the plan’s prices going forward which would increase the ARPU.  Also they are all set to make a breakthrough via giga fiber which is expected to bring disruption in wired internet, Cable television and DTH business. All these could easily drive the stock price to set new highs before2019 Diwali.

ITC

  • Current Market Price – 282.35
    • Potential Upside – 20%

Cigarettes business is growing at a steady phase of around 10%. FMCG is growing by 13%. Paperboards and hotels are also growing at excellent phase. All these growth levers will help the stock to move higher backed by demand in future. Also  I don’t expect any further tax on cigarettes in the interim budget. Hence I am adding this stock to my Diwali pick with upside target of 340.


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Infosys

  • Current Market Price – 663
    • Potential Upside – 15%

Infosys being the second largest IT company (in terms of revenue)has a solid roadmap for next 3 years. Infosys had signed around $2 billion dollar deals in Q2, 2018 which would increase its revenue growth. I also see a strong growth opportunity in digital/ agile space. Any depreciation in rupee will further help Infosys to increase their margins. All these factors made me choose Infosys in my portfolio.

MarutiSuzuki   

  • Current Market Price – 7136
    • Potential Upside – 19%

Maruti has been underperforming until October due to slow car sales numbers in last 4 months which would continue for next couple of months. I expect the sales to pick up from Q4 2019. The market leader is currently trading at 20 times its FY20 earnings estimates. The capacity addition on phase 2 in Gujarat plant is expected to start from Jan 2019. All these factors to push stock prices up.

Bajaj Auto

  • Current Market Price – 2656
    • Potential Upside – 17%

Bajaj Auto has been outperforming the industry in terms of sales numbers for last few months.I expect the exports to grow at a steady pace with weak rupee in place can further aide margin improvements. I firmly believe Bajaj auto would outperform other companies in 2 wheeler and 3 wheeler segment due to its aggressive pricing.

Yes bank

  • Current Market Price – 209
    • Potential Upside – 30%

Yes bank one of the fastest growing bank in large-cap space got hit recently due to RBI’s action on its leadership. Since the fundamentals are intact and there is an out of court settlement arrangement is in progress between the founder and co-founder for succession plans I expect the stock resume to its normal trading range soon.

AurobindoPharma

  • Current Market Price – 781
    • Potential Upside – 18%

Nifty pharma index is outperforming in recent days after several days of underperformance. After Aurobindo pharma’s bull run in September till 825 levels the stock is trading sideways for last couple of months. The robust growth pipeline in generic medicine space would take the stock to new highs and lead the pharma space in coming days.I expect stock to touch 900+ levels in coming days.

AmbujaCements

  • Current Market Price – 203
    • Potential Upside – 28%

The company has a strong revenue growth consistently however the input cost has made the margin growth flat.  Being one of the top 3 cement companies in India it trades at a discount when compared to its peer making this stock attractive in cement sector. I expect a strong demand from infra and housing segment which would help to improve the fundamentals of the company. I would be accumulating this tock and average it at lower levels if available for good returns.

Zee entertainment

  • Current Market Price – 441
    • Potential Upside – 20%

Zee Entertainment has a robust ad growth predominantly from FMCG space and I expect it to continue going forward as well. Zee’s focus on regional market would drive the ad revenues. We also saw Zee originals (on zee5 app)  gathered viewership and they have a good line up of programs for originals with 6 major regional languages apart from Hindi. I expect the stock price to hit 530 after elections.

NALCO

  • Current Market Price – 69.3
    • Potential Upside – 24%

NALCO is a fundamentally strong company with low P/E in comparison to industry. The company has almost zero debt to equity ratio. Nalco being an integrated manufacturer of aluminum has edge over other companies to have better margins. At this price point I would bet on NALCO for a target of 86.

Carborundum Universal Ltd

  • Current Market Price – 362
    • Potential Upside – 18%

CUMI’s Q2 results were good and in line with expectation. We see volume growth across most of the business categories.  Stock has all its fundamental parameters intact and expect to improve further.  I expect stock to touch 428 levels in Q4 2019 or Q1 2020.

DISCLAIMER: The post is for educational and information purpose only and should not be construed to be investment advice. You are requested to consult a qualified financial advisor prior to making any actual investment or trading decisions. The author/ Blog owner accepts no liability for any interpretation of articles or comments being used for actual investments.

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