Samvat 2079: YES Securities lists 7 Diwali stock picks with up to 26% upside; Check list

Shree Cement: The brokerage has a target price of ₹25,450 on this cement stock, indicating a potential upside of 20 percent. It is bullish on the stock on the back of a strong industry outlook, robust balance sheet and its focus on ESG and cost improvement. Over the last decade, the firm has grown its capacity more than 4x to 46+ mtpa in FY22 at an industry-low capex cost, hence, it has sustained its industry-leading profitability despite lower realizations, noted the brokerage. It has established many cost‐saving practices to become the industry’s lowest‐cost cement producer, it added.

Greenply Industries: YES Securities expect this stock to potentially rise 24 percent to ₹220. The firm achieved a credible performance in a challenging environment, which came on the back of renewed demand in both residential and office segments, which is expected to continue for the next 2‐3 years, noted the brokerage. Government policies and initiatives like the promotion of furniture clusters are also aiding growth and would boost industry expansion going forward, it added. Yes strongly believes GIL has the capability to make the most of the opportunities and carve a niche as a value‐added industry player. With a healthy balance sheet and asset‐light approach to growth in certain product segments, it expects GIL to deliver measurable value to all its stakeholders.

ICICI Prudential Life: The brokerage sees a 26 percent upside in this life insurance stock to ₹650. IPRU is the third‐largest private life insurer in India for new business premiums. The brokerage stated that avenues. IPRU is steadily moving towards a balanced business profile through product diversification: reducing the share of low-margin ULIP and increasing focus on high-margin products like protection and NPAR. Within private insurers, the industry is getting more polarized in favor of large players backed by India’s largest private banks and financial institutions. They are better placed to make the most of the burgeoning sector opportunities, and the brokerage strongly believes IPRU enjoys a large runway for growth with all its levers in place.

Prestige Estates: The brokerage has a target price of ₹550 for this real estate stock, implying a potential upside of 25 percent. The brokerage is positive on the stock on the back of its broadening presence, focus on growth and strong balance sheet position. PEPL has substantially improved its liquidity position on the books by concluding the Blackstone deal during the year, said the brokerage. It is upbeat about PEPL’s continued high performance given the sustained pent‐up demand in the residential space, increased traction in leasing, and recovery in retail and hospitality.

V-Guard Industries: The brokerage expects this consumer durables stock to jump 23 percent to ₹301. The brokerage has a positive stance on the stock as it has been able to deliver revenue growth, focused on an increasing proportion of in‐house manufacturing and premiumization in its growing product portfolio. FY22 brought about challenges in terms of raw material prices surging which led to a contraction in its margins, however, the raw material price inflation appears to have cooled off from the peak and is likely to aid in gross margin improvement in FY23 and beyond, it explained.

SBI: The brokerage has a target price of ₹655 for this largest public sector lender, indicating an upside of 24 percent. SBI has protected its asset/liability market share in the past 5 years and with increasing signs of stronger corporate credit demand emerging, and the brokerage sees SBI as one of the best-placed banks to ride the upturn. With increasing signs of momentum continuing in corporate demand and a potential capex upturn in FY24, YES Securities believes SBI is one of the best‐placed participants in the sector. Another lever to credit growth sustaining is tightened liquidity which would urge corporates to turn towards banks for meeting their credit requirements, it added.

HCL Tech: YES Securities sees this IT stock rising 20 percent to ₹1,210. HCL is India’s third‐largest IT services exporter with a strong global presence. With a strong franchise and unflinching focus on momentum and growth, the brokerage strongly believes HCL will be able to deliver organic growth in capital‐efficient ways and ride the next phase of growth. At the same time, it would be able to harness key disruptions and seize evolving opportunities, it added. By 2025, management foresees more than 50% of tech spending in the IT Services market to be Cloud‐based. Having been the first movers in this space, HCL has tie‐ups with all the leading Hyperscalers, and is well positioned to leverage emerging opportunities, the brokerage pointed out.