Diwali Top Picks - Nine Stocks For Samvat 2080 By Axis Securities

Axis Securities Report

As we conclude the last chapter of Samvat 2079, we usher in Samvat 2080 with boundless enthusiasm and extend our heartfelt wishes to all our cherished readers.

The Indian economy currently finds itself in a sweet spot of growth and is well-poised for continued resilience in the face of global challenges. We trust that this festival will illuminate your wealth and financial well-being.

At this juncture, we take great pleasure in unveiling our Diwali Muhurat picks for this year, with the hope that they will further illuminate your investments.

We have handpicked a few stocks ideas for buying this Diwali and Samvat 2080.

TVS Motor Company Ltd. (The upside potential is 34% from current market price.)

Why TVS Motor Company

• New EV product profile.

• Encouraging export opportunities.

• Market share gains.

Outlook

We continue to like TVS Motor Company considering its strong focus on the electric vehicle product pipeline ahead of incumbent two-wheeler original equipment manufactures, product premiumisation in the ICE category, and growth in export markets.

Being well-placed among listed players, we expect the company’s revenue/Ebitda/profit after tax to grow by ~16%/21%/23% compound annual growth rate over FY24E-26E. FY24/FY25 to be critical for the company as it executes its EV strategy for the domestic and export markets.

Valuation and recommendation:

We recommend a 'Buy' rating on the stock with a target price at Rs 2,100/share, valuing it at a sustainable premium price/earning multiple of 30 times on December 2025 core EPS, other investments at one time price/book value, and TVS Credit Services at two times P/BV.

Bharti Airtel Ltd. (The upside potential is 25% from current market price.)

Why Bharti Airtel

• Best average revenue per user in the industry.

• Strong digital portfolio.

• Improvement in home segment.

Outlook

Bharti Airtel has the leading ARPU in the industry. The management expects ARPU to improve from the current level of 203 due to a richer customer mix.

Aided by strong customer conversion from 2G to 4G/5G and other services, it continues with its ARPU trajectory and expects it to reach Rs 300 going ahead.

The company has strong focus on customers will continue to gain further increase in the realisation. Increase in the data conversion also help to gain the ARPU, average data usage per customer stands healthy at 21.7 GB/month.

We recommend a 'Buy' rating on the stock with a target price at Rs 1,155/share,

APL Apollo Tubes Ltd. (The upside potential is 24% from current market price.)

Why APL Apollo Tubes

• Improving Ebitda/tonne trajectory.

• Favorable Demand environment.

Outlook and valuation:

Incremental production from the Raipur plant will drive higher Ebitda/tonne. We value APL Apollo Tubes at 33 times price-to-earning of September-25 earnings per share on continued demand visibility to arrive at our target price of Rs 1,950/share.

We maintain our 'Buy' rating on the stock.

HDFC Bank Ltd. (The upside potential is 22% from current market price.)

Why HDFC Bank

• Huge growth opportunity post merger.

• Normalising return ratios to ~2%/17-18%.

• Reasonable valuations, below long-term average.

Outlook and valuation:

We remain confident in the HDFC Bank’s ability to sustain its growth momentum given the enormous opportunity post the merger in terms of a larger customer base, larger distribution network, and higher cross-sell opportunities to existing customers of HDFC Ltd.

Moreover, we believe the current valuations, too, are reasonable and below the long-term average.

Recommendation:

We recommend a 'Buy' on the stock with a target price of Rs 1,800/share, implying an upside of 22% from the current market price.

Click on the attachment for full list of Axis Securities' Diwali stock picks:

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