Illuminate your Diwali portfolio: best investment picks for 2024
This Diwali many investors would want to enrich their portfolios with stocks anticipated to gain maximum returns amid this festival season. It is more than just a time for lights and festivities.
Traditionally, this festival is meant to represent a new beginning, making it the best time for investors to think of adding some stocks that may give them massive returns.
This article collates some of the best stocks you should have in your Diwali portfolio in 2024 as it goes through the prospects and sectors that will get a chance to flourish in this festive season.
What Does Diwali Mean for Investing
Diwali is known to be one of those periods where financial life appears to start with a clean page, so to speak. It is believed that investment in Diwali will bring prosperity. As the consumer spends more during this festival season, since corporate results turn out to be in the black and the investors are generally sanguine, the stock market, in particular, tends to be bullish. The Muhurat Trading on Diwali eve is an especially auspicious session which encourages many people to start fresh investments.
Bajaj Finance Ltd
Sector & Company Overview:
Bajaj Finance Ltd is a prominent NBFC in India with specialities in consumer finance, SME lending, and secured loans. Bajaj Finance possesses an outstanding portfolio of two- and three-wheeler loans, housing, gold loans, and MSME financing. Its strong growth model and digital expansion place it well within the financial services sector.
Financial Performance & Diwali Impact:
Bajaj Finance’s asset under management grows steadily with strong back support from the huge Rs 63,000-crore deposit base. Thus, the target price here is at Rs 8,552. JM Financial gives an upside of 18.6% in coming months for the investment and Bajaj Finance in this festive season will attract investment with the coming Diwali 2024, but this Diwali festival going to add further to that momentum.
Reliance Industries Ltd (RIL)
Sector & Company Overview:
Reliance Industries Ltd is a large conglomerate diversified portfolio of Oil to Chemicals (OTC), Digital Services, Retail, Media, and New Energy. With the increasing presence of RIL in these segments, its robust business model presents excellent stability and hence is a long-term investment opportunity.
Financial Performance & Diwali Impact:
JM Financial sees compound annual PAT growth of 15% from RIL between FY24 and FY27, mainly through Jio and retail growth. It has a target price of Rs 3,500 with a 28% potential upside within 6–12 months. Diwali is around the corner and retail sales will increase sharply; therefore, investors must take a strategic buy position on RIL.
Power Grid Corporation of India Ltd (PGCIL)
Industry & Company Overview:
Power Grid Corporation of India Ltd, abbreviated as PGCIL, is the country’s biggest transmission company that handles about 45% of the total power production of the nation. With significant control over major inter-regional and inter-state power transmission networks, the Power Grid assumes a highly essential position in the structure of energy for the nation.
Financial Performance & Diwali Impact:
With robust transmission growth prospects till 2032, PGCIL’s regulated business model and strong capital expenditure plans ensure good earnings visibility. JM Financial has a target price of Rs 383, which represents a 17% upside within 6–12 months. With stable performance on the cards, PGCIL offers a good opportunity to Diwali investors seeking stability and growth in the utility space.
ICICI Lombard General Insurance Ltd
Sector & Company Overview:
The firm is India’s second-biggest general insurer, capturing an 8.6% market share in the premiums of FY24. The company commands market leadership in the private motor insurance space, besides leading commercial segments in fire, engineering, marine, and liability. Health is a space where it is rapidly catching up.
Financial Performance & Diwali Impact:
With strong growth across multiple insurance lines, ICICI Lombard is well-positioned for continued expansion. JM Financial has set a target price of Rs 2,450, suggesting a 17% upside over the next 6–12 months. The festive season often drives insurance sales, making ICICI Lombard a promising Diwali 2024 investment for those seeking growth in the financial services sector.
National Aluminium Company Ltd (Nalco)
Sector & Company Overview:
National Aluminium Company Ltd (Nalco) is one of the major PSUs wherein the government equity stands at 51.3%. Nalco is the leading bauxite, alumina and aluminium producer in India. In FY24, Nalco could produce 0.46 million tons of aluminium and 2.12 million tons of alumina with 1.17 million tons of alumina exported.
Financial Performance & Diwali Impact:
The company is constantly expanding its alumina refinery. This coupled with higher alumina prices and captive coal mining providing cost efficiencies, supports its earnings outlook. The target price as assigned by JM Financial is Rs 264, providing an upside of 17% over 6–12 months. With the festive season setting in with increased industrial activity, Nalco is one of the attractive Diwali investment options in the metal space.
Gravita India Ltd
Sector & Company Overview:
Gravita India Ltd is the leading firm in the recycling industry in India, including lead, aluminium and plastic. In the future, it will specialize in steel, paper, and lithium-ion battery recycling. It is the largest lead recycler in India and generates 82% of its EBITDA through the business segment of lead recycling, which generates most of its revenue.
Financial Performance & Diwali Impact:
Capital expenditure initiatives and positive regulatory changes in the recycling sector are growth potential boosters. JM Financial has set a target price of Rs 3,068, with 21% upside in 6–12 months. With a focus on environmental sustainability, Gravita India is a strong Diwali investment option in an expanding recycling sector.
Macrotech Developers Ltd (Lodha)
Sector & Company Overview:
Macrotech Developers Ltd is better known as Lodha, one of India’s premier real estate companies dealing with a range of housing from premium, to mid-income, to affordable. Noted for their sound sales, Lodha also expanded into logistics parks, commercial spaces, and retail under mixed-use developments further anchoring their business in more than one segment.
Financial Performance & Diwali Impact:
Lodha’s asset-light expansion strategy and strong track record in residential townships are good positives for growth. The target price set at Rs 1,480 by JM Financial implies a 23% upside in the next 6–12 months. The real estate sales momentum due to the festive season makes Macrotech Developers a great investment in the property space for Diwali 2024.
Olectra Greentech Ltd
Sector & Company Overview:
Olectra Greentech Ltd leads the electric vehicle (EV) and electric buses market in India. The company has newly established a state-of-the-art manufacturing facility in Hyderabad that will have an initial annual production capacity of 5,000 units and scale up to 10,000 units. The facility has initiated partial operations as part of Olectra’s setup for future growth in electric buses.
Financial Performance & Diwali Impact:
Olectra has a strategic alliance with the emergent electric bus market and a strong order book that can be used as a significant basis for expansion. JM Financial has given a target price of Rs 2,200 with upside potential. With a greater focus on green transport, Olectra is a Diwali 2024 investment play in the green mobility space.
Ashoka Buildcon Ltd
Industry & Company Overview:
Ashoka Buildcon Ltd is one of the biggest construction players in India and has been catering to road, bridge, and power transmission projects. With good experience in the BOT model, it has also forayed into City Gas Distribution, creating a different stream of income for the diversified group.
Financial Performance & Diwali Impact:
A good order book and well-equipped execution capability give the company a good opportunity to grow. Expected growth from improvement in project execution and debt reduction will enhance financial prospects. The target price of JM Financial is Rs 290, indicating an upside in the stock. Picking up infrastructure development makes Ashoka Buildcon a good Diwali investment opportunity in the construction sector.
Conclusion
Investment on Diwali day is worthwhile and marks a new beginning. One must invest in sectors that would see an increase in consumer expenditure such as consumer goods, automobiles, and financial services hold great promise. The above stocks are a few of the best going forward into 2024 this Diwali.
It’s also advised to research before the investment or seek consultation with financial advisors. Nevertheless, these stocks indicate immense potential based on the ongoing trend in the market and their performances during previous festive seasons. However, an investment always carries risk. Therefore, one must look deeper into the risks before any form of investment.
