04 Nov , 2021 By : Kanchan Joshi
As part of its Diwali 2021 stock picks, domestic brokerage and research firm Motilal Oswal has recommended fifteen stocks that one can look to buy. Its top picks includes public lender State Bank of India (SBI), Tata Motors, United Sprits, Indian Hotels, VIP Industries, UltraTech Cement, Infosys, SBI Life.
The brokerage's top stock picks for Diwali also includes Tata Power, Varun Beverages, Jubilant Food, Trident, APL Apollo, Orient Electric, and Macrotech Developers.
Motilal believes SBI appears well positioned to report strong uptick in earnings, led by normalization in credit cost. For Tata Motors, it said that while India CV business would see cyclical recovery, JLR is witnessing both cyclical and structural, supported by a favorable product mix. This could drive recovery in JLR's EBIT margins and leave scope for a surprise on profitability.
The outlook appears promising for United Spirits, as per Motilal Oswal with on-trade channel returning to normalcy, increased occasions for home indulgence, the new CEO taking over recently, and faster-than-expected deleveraging.
It expects VIP industries to immensely benefit from opening up of the economy and pick up in domestic leisure travel. Meanwhile, Indian Hotels is on the right track to grow its EBITDA as new revenue-generating avenues are seeing higher EBITDA margins, the note stated.
With demand scaling back gradually and the upcoming festive season ahead, Motilal believes Orient Electric is best placed to capture this trend, with its strong manufacturing and distribution capabilities, whereas it expects strong volume growth and improved profitability for APL Apollo.
“Varun Beverages is expected to deliver strong volume growth across all the three product segments, with an increase in consumption patterns to pre-COVID levels," the note pointed.
For SBI Life, Motilal said that the company witnessed strong traction in premium growth across all product segments, with both agency and bancachannel contributing to overall growth.