If you are looking to add sparkle to your portfolio this Diwali, here are ten stocks for Samvat 2079

• Analysts remain positive of India’s growth prospect due to rising consumer spending and fall in prices of essential commodities like crude oil.
• Benchmark index Sensex has lost 227 points in 2022, which is about 0.4% and has still outperformed its global peers.
• Here are the most common stocks from Nifty50 recommended by broking firms including ICICIdirect, Kotak Securities, HDFC Securities, Angel One, Axis Securities and several others to invest in this Diwali.

Samvat 2078 has been a year of some highs and many lows. Despite all odds, Indian equities have fared better than other emerging markets. Since last Diwali, the Nifty50 is down by a modest 2%, while the S&P500 and the EM index are down by more than 20%. The reason for this outperformance is the maturity Indian investors have shown during the course of this year by steadfastly investing in equities, which counterbalanced the heavy selling by foreign institutional investors.

Markets have been very resilient despite the ₹1.81 lakh crore foreign institutional investors (FIIs) outflow in 2022 so far. All thanks to domestic investors including mutual funds and retail investors who continued to buy throughout the year.

So what’s in store for Indian investors in Samvat 2079? The year ahead is expected to be better, believe analysts, despite the looming risk of recession across developed countries in Europe and North America. The Indian economy, says Axis Securities, stands in a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. Driving this optimism are India’s relatively stable macros and healthy corporate balance sheets. India Inc is now better placed in terms of profitability and leverage. Normal monsoons, lower commodity prices and return of demand should drive corporate profitability in the year ahead.

According to strategists at Axis Securities, “Profitability across the board has improved significantly. The cumulative and rolling net profit of the NSE 500 universe for the last 4 quarters (till Q1FY23) touched an all-time high of ₹10 lakh crore and loss-making sectors, too, have turned positive and contributed notably to the net profitability. Moreover, after a muted performance for several years, ROE (return on equity) for the broader market is improving as well.”

Business Insider India has examined most analysis done by brokerages across India to figure some of the broad sectors and stocks that are expected to shine in Samvat 2079. Given that banks have cleaned their books in the last few years, banking and finance stocks top the preferred list of buys for most brokerages. With revenge buying continuing through the festive season, consumer companies, quick service restaurants, listed hotel stocks and home improvement stocks, following robust real estate demand could do well.

“In Samvat 2079, volatility could continue, though at a slower pace. We may be close to a peak in the rate hike cycle. The domestic investment cycle is exhibiting signs of a revival and, with normal monsoons, the foundation has been laid for the economy to regain its earlier rates of growth. Indian conglomerates have pared debt and improved their balance sheets and now look ready to expand,” said analysts at HDFC Securities.

Analysts remain positive of India’s growth prospect due to rising consumer spending, fall in essential commodities like crude oil prices.

“We remain optimistic on India's growth prospect in the near term on the back of likely normalisation of discretionary services spending, easing supply chain, weakening of international commodity prices including crude and supportive fiscal policies,” said analysts at Kotak Securities.

“However, tightening monetary conditions and capital outflows could act as headwinds. Trade deficit in FY23E will likely be at a record high,” added a report by Kotak Securities.

Here are the most common stocks from Nifty50 recommended by brokerages including ICICIdirect, Kotak Securities, HDFC Securities, Angel One, Sharekhan, YES Securities, IDBI Capital and Axis Securities to invest in this Diwali.

The 50-stock index covers major sectors of the Indian economy and tracks the behaviour of a portfolio of blue chip companies.

Shares of New Delhi-based motorcycles and commercial vehicles company Eicher Motors has delivered 32% returns this year. Analysts believe shares of the company are expected to do well because of the company’s dominant market position in the premium motorcycle space, positive cash flow and robust export opportunities.

“Eicher Motors is market leader in the >250 cc premium motorcycle segment (market share ~85%+) through its aspirational models under the Royal Enfield (RE) brand, such as Classic, Meteor, etc. It has a strong net cash positive balance sheet with healthy return ratios metrics,” said a report by brokerage firm ICICIdirect.

Adding to it analysts at Sharekhan say that,”Promising launch of Hunter 350, focus on core brands through refreshed launches, better customisation, robust export opportunities and expected recovery in premiumisation trend in two-wheeler industry would widen Eicher Motor Ltd’s (EML’s) addressable market and boost performance going forward.”

ICICI Bank, one of the largest private lenders in the country, has become more valued than ever before as its market capitalisation crossed ₹6 lakh crore this year. The lender has witnessed a strong growth journey in the last couple of years with healthy growth and is likely to mark the same going ahead.

“ICICI Bank is likely to deliver sustainable earnings growth over the medium term driven by strong loan growth, margin expansion, credit cost moderation and healthy operating profitability aided by its strong liability franchise, higher capital ratios, better asset quality metrics and healthy provision buffers,” said analysts at Sharekhan.

Kolkata-based FMCG-to-cigarette conglomerate ITC has rewarded investors with strong 55% returns this year. “The recovery in the cigarette business and uptick in agri, hotels, and paperboard in the near term makes ITC a better play in the entire FMCG pack where valuations are high,” said a report by Axis Securities.

Meanwhile, private sector lender Axis Bank has given 17% returns to investors in 2022 and is further expected to report strong business growth.

“Robust business growth, improving operational efficiency and synergy benefits from the Citi acquisition would reflect positively on the earnings trajectory and price performance,” said analysts at ICICIdirect.

Although the Indian IT sector has gone through a rough phase this year due to recession fears, the fundamentals of top IT companies are still strong. Noida‐based HCL Technologies Ltd. (HCL) is India’s third‐largest IT services exporter with a strong global presence.

“At current market price, the stock is relatively trading at a discount to the other large-cap IT companies like Infosys and TCS and offers tremendous value at current levels given market leader status in Infrastructure management,” said analysts at Angel One.

Lastly, Mumbai-based pharmaceutical company Cipla is another company in analysts' favourite list, which is expected to deliver strong revenue from its US business.


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