## Religare Brokerage’s Diwali Picks 2024: Top 5 Stocks for Potential Gains
As Diwali approaches, investors are looking for promising opportunities to enhance their portfolios. Religare Brokerage has stepped in with its Diwali Picks 2024 report, offering a curated selection of five stocks across various sectors. The firm has meticulously evaluated each company’s performance, industry trends, and future prospects to arrive at these recommendations.
1. State Bank of India (SBI): BUY (Target Price: Rs 941)
SBI stands out with its robust financial position and strategic advantages. Its low loan-to-deposit ratio provides flexibility despite softer deposit growth. SBI’s stable retail deposits and dominant market share in credit (22-23%) enable it to capture market share as competitors face challenges. Furthermore, investments in technology have optimized cost efficiency, resulting in a cost-to-income ratio below 50% and enhancing long-term profitability. Religare projects NII/PPOP/PAT growth at a CAGR of 14.2%/7.6%/7% over FY24-26E, solidifying their Buy rating.
2. ITC Ltd: BUY (Target Price: Rs 594)
ITC Limited is a diversified powerhouse in India, excelling in cigarettes, FMCG, hotels, agri-business, and paperboards. Its ITC Next strategy is driving future growth through innovation, agile supply chains, and sustainability initiatives. The company’s focus on launching new products and enhancing distribution strengthens its core businesses. ITC’s vast portfolio of brands and extensive market presence mitigate risks through diversification while leveraging brand equity to capture market share. This ensures sustained revenue and reinforces its leadership position. Religare estimates revenue/EBITDA/PAT growth at a CAGR of 12.7%/13.5%/13.8% over FY24-26E, supporting their Buy rating.
3. Titan Company Ltd: BUY (Target Price: Rs 4,270)
Titan dominates the Jewellery industry through brands like Tanishq, Mia, Zoya, and Caratlane, holding an impressive market share of ~8%. The downward revision of custom duty on gold imports offers long-term benefits, despite short-term implications on profitability and gold on lease. Beyond jewellery, Titan is an emerging lifestyle player with a presence in Watches, Eye-Care, and Emerging businesses. The company strategically expands its footprint through store expansion and focuses on margin improvement. Its new business continues to demonstrate consistent growth. Religare anticipates revenue/EBITDA/PAT growth at a CAGR of 21.5%/28.0%/28.9% over FY24-26E, maintaining their Buy rating.
4. Berger Paints India Ltd: BUY (Target Price: Rs 655)
Berger Paints consistently surpasses industry growth rates and maintains the highest market share among listed competitors. The management remains optimistic about future growth, driven by double-digit volume growth in the decorative segment. Steady demand, innovative products, and expanded distribution, including rural areas, contribute to this growth trajectory. Religare projects revenue/EBITDA growth at a CAGR of 13%/15.9%/16.3% over FY24-26E, reaffirming their Buy rating.
5. Jyothy Labs Ltd: BUY (Target Price: Rs 624)
Jyothy Labs has made significant progress by innovating products across categories, investing in advertising and promotional activities, and gaining market share. The management is focused on volume-led growth while maintaining margins. Their commitment to brand building, manufacturing, and strengthening distribution reach, including rural areas and digital channels, fuels their growth prospects. Religare is optimistic about the company’s future and estimates Revenue/EBITDA growth at a CAGR of 15.7%/17.3% over FY24-26E, resulting in a Buy rating.