Diwali Muhurat Trading: IDBI Capital lists its top 7 Samvat 2079 picks

Avenue Supermarts: The brokerage has a target price of ₹5,148 for the stock indicating a potential upside of 19 percent. Avenue Supermarts Ltd (DMART) owns and operates D-Mart stores across India. The brokerage is bullish on the stock on the back of strong revenue growth coupled with robust retail expansion. Revenue growth stood at 15% 3-year CAGR (FY19-FY22) while retail expansion at 17% 3-year CAGR (FY19-FY22). The retail expansion has been faster due to the increase in the size of new stores in the last 3+ years to 50,000 sq ft, it noted. Value retailers such as Dmart will outperform during inflationary times as customers choose to spend money more wisely, IDBI added. It forecasts revenue to grow 35% 2-year CAGR (FY22-24E) and APAT to grow 44% 2-year CAGR (FY22-24E). Dmart is IDBI's high-conviction BUY idea in the retail sector.

Blue Dart: IDBI sees the stock potentially rising 28 percent to ₹11,500. Bluedart is South Asia’s premier courier and integrated express package distribution company. Impressive growth in the E-commerce segment, healthy recovery in the B2B segment, and a strong fleet is its key positives, said IDBI. In the B2B segment Bluedart caters to companies in sectors like BFSI, Pharma, electronics, Auto and Consumer Durables and the management indicated that the segment contributes almost 75% to the revenues, said IDBI. Post opening of the economy, this segment has started to deliver for Bluedart and the company claims a market share of 54% (increased from 49% in FY21) in organized air express and 17% in organized ground express, added the brokerage.

City Union Bank: The brokerage has a target of ₹230 for the stock, implying a potential upside of 18 percent. City Union Bank is among one of the oldest private sectors having 700+ branches and 1700+ ATMs/ spread across different states in India. Historically, Bank’s loan book growth has not only outperformed the overall banking industry but is also in the top quartile among other its peers reporting loan growth at 16% CAGR (FY15-19), noted the brokerage. Credit growth was impacted due to Covid-19, however, going forward it expects credit growth to improve from FY23 onwards to pre-Covid levels. It also believes that going forward, the lender's asset quality is going to improve as GNPA will decline further as the management has guided for upgrades/recoveries to be higher than fresh slippages. It expects RoA to improve towards 1.5% backed by 15% CAGR (FY23-24) loan growth and a decline in credit cost.

Jubilant Foodworks: the brokerage has a price target of ₹767 for the stock, this implies a potential upside of 27 percent. Jubilant Foodworks Ltd (JUBI) is India’s largest food service company incorporated in 1995 and holds exclusive master franchise rights from Domino’s Pizza. Robust store expansion plans over the medium term, building a new brand portfolio and new management are key triggers for the firm, noted IDBI. The firm targets 3,000 Domino’s restaurants across India in the medium term, added the brokerage. The appointment of new CEO Sameer Khetarpal is also positive given his background in the B2C tech sector, said IDBI. It forecasts Jubilant's revenue to grow 26% 2-year CAGR during FY22-24E and EPS to grow 42% 2-year CAGR during FY22-24E. It also sees ROE improving to 29% in FY24E (vs 25% in FY22).

Kotle Patil Developers: The brokerage sees the stock rising 34 percent to ₹460. Kolte-Patil Developers Limited (KPDL) is a leading residential real estate player based in Pune with an experience of over 3 decades in homebuilding. As per the brokerage, the firm has a strong project pipeline, and a declining debt profile and is well-positioned to benefit from the real estate upcycle. The residential real estate sector is placed in a structural upcycle and demand momentum is expected to continue in the next 3-5 years despite headwinds of rising property prices and rising interest rates and KPDL will be a beneficiary of this uptrend with its growth trajectory and declining debt levels, said IDBI. The company is tied up with institutions such as JP Morgan, KKR, ICICI Ventures, Planet smart city, etc which has benefitted the company’s growth trajectory, internal processes and corporate governance practices, IDBI added.

Mahindra CIE Automotive: IDBI expects a potential upside of 25 percent for the stock and has a target price of ₹381. Mahindra CIE Automotive Ltd. earlier the Mahindra Forgings company was incorporated under the name Mahindra Automotive Steels Limited on 13th August 1999. The product range consists of Forging products, Castings, Magnetic products, Composites, and Stamping products. MHCIE is a most diversified India-based auto ancillary and only auto component manufacturer in India, noted the brokerage, adding that it has consolidated its business model by improving its plant operations, adding new business segments and strengthening its balance sheet post its alliance with CIE in 2014. In the medium term, MHCIE is likely to be a major beneficiary of the cyclical upturn in the Indian PV, CV and tractor market along with its strategy of penetrating into new customers and product technologies, predicted the brokerage.

Tata Power: The brokerage has a target of ₹260 for the stock, implying a potential upside of 19 percent. Established in 1915, Tata Power (TPWR) is today one of the country’s largest integrated power companies which has a wide presence across India. As per the brokerage, the company is aiming to triple its revenue from FY22 levels, aiming to achieve PAT growth of 4x. Its ROE profile is also expected to improve to 13% by FY27 from 8.5% in FY22 and debt levels are likely to reduce. It added that the firm has offloaded considerable debt through divesting non-core investments and assets, deploying strategies for input price management and undertaking mergers for better tax efficiency. It will also be a beneficiary of India’s green energy play which is a huge untapped renewable resource market in India and offers great potential for the company to invest further into the segment, said IDBI.