New Delhi: Brokerage firm Religare has released its Diwali Picks 2024 report, recommending top picks for stocks across sectors. Below are 5 stocks recommended by Religare Brokerage.
State Bank of India: Buy
SBI is well positioned with a low loan-to-deposit ratio and flexibility despite weak deposit growth. Its stable retail deposits and sustained 22-23% credit market share allow it to gain market share while competitors struggle. In addition, technology investments have improved cost efficiency and reduced the cost-to-income ratio below 50%, enhancing long-term profitability. Based on these factors, we expect the compound annual growth rate of NII/PPOP/PAT to reach 14.2%/7.6%/7% in fiscal 2024-26. We have a buy rating on the bank with a target price of Rs 941.
ITC Ltd.: Buy
ITC Limited is India’s diversified leader with strong presence in cigarettes, FMCG, hospitality, agribusiness and paperboard sectors. Its ITC Next strategy drives future growth through innovation, agile supply chain and sustainability initiatives. ITC is strengthening its core business by launching new products in different categories and strengthening distribution. With a strong brand portfolio and broad market presence, ITC mitigates risks through diversification while leveraging its brand equity to capture market share, ensure sustained revenue and strengthen its leadership position. In terms of financials, we expect its revenue/EBITDA/PAT compound annual growth rate to reach 12.7%/13.5%/13.8% in FY24-26. Hence, maintain our Buy rating and target price of Rs 594.
Titan Limited: Buy
Titan has a large presence in the jewelry industry through its brands such as Tanishq, Mia, Zoya and Caratlane, with an overall market share of approximately 8%. is a positive factor. The company is also an emerging lifestyle business with interests in watches, eye care and emerging businesses. The company is focused on expanding its footprint through store expansion while working to improve profit margins. Its new business continues to grow. In terms of finance, we expect its revenue/EBITDA/PAT compound annual growth rate to reach 21.5%/28.0%/28.9% in fiscal 2024-26. Hence, maintain our Buy rating and target price of Rs 4,270.
Berger Paints India Ltd: Buy
Berger Paint has demonstrated resilient performance, continuing to outpace industry growth rates and gain the highest market share among publicly traded competitors. In addition, management remains optimistic about growth prospects, which will be driven by double-digit sales growth in the decorative segment, and will be helped by stable demand, innovation and distribution expansion, as well as catch-up in rural areas. On the financial front, we expect its FY24-FY26 revenue/EBITDA CAGR to reach 13%/15.9%/16.3% and maintain a Buy rating with a target price of Rs. 655.
Jyothy Labs Ltd: Buy
We believe Jyothy labs has made significant progress through product innovation across categories, investing in advertising and promotions, and gaining market share. Going forward, management aims to achieve sales-led growth while maintaining margins. Additionally, they want to invest in brand building initiatives, manufacturing and strengthening distribution reach in rural areas and digital growth. We are optimistic about the company’s growth prospects and expect its revenue/EBITDA compound annual growth rate to be 15.7%/17.3% in FY24-26. Hence, we have a buy rating on the stock with a target price of Rs 624.
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