With Diwali 2024 approaching, investors are on the lookout for the best stock options to invest in. JM Financial has released its stock picks for Samvat 2081, providing insights into 10 stocks to buy for the upcoming year. These stocks span across various sectors, offering opportunities for those looking to invest in stocks during this festive season. Let’s explore the details of these recommended stocks and the potential they hold for the future.
Reliance Industries
JM Financial has highlighted Reliance Industries as a strong contender for investment. The stock has underperformed in 2024 so far, but JM Financial expects this trend to reverse soon. A faster-than-anticipated increase in telecom tariffs, a recovery in its retail business, and promising developments in its new energy segment are expected to fuel growth. With an anticipated 15% compounded annual growth rate (CAGR) in profit after tax (PAT) from FY24 to FY27, the brokerage firm has set a target price of ₹3,500 for the stock. Those planning to invest in stocks may find Reliance Industries to be a compelling option.
Power Grid Corporation of India
Another pick by JM Financial is Power Grid Corporation of India, valued at 3.6x FY26E price to book value (P/BV). The company is expected to benefit from a recovery in transmission capital expenditure (capex) and maintain a return on equity (ROE) of approximately 18% during FY24-26. With a stable dividend yield of around 4%, Power Grid Corporation stands out for its low earnings risk and regulated returns. The brokerage firm has given it a ‘Buy’ rating with a target price of ₹383. This makes it an interesting choice for investors looking to invest in stocks with solid fundamentals.
Bajaj Finance
Bajaj Finance has also made it to the list of top picks. Valued at ~4x FY26E book value (BV), which is slightly below its long-term average, Bajaj Finance still holds potential for upside re-rating. With strong return on equity (ROE) and return on assets (RoA), alongside healthy growth prospects, the brokerage firm has set a target price of ₹8,552 for Bajaj Finance. For those looking to invest in stocks with solid growth potential, Bajaj Finance could be worth considering this Diwali.
ICICI Lombard General Insurance
ICICI Lombard General Insurance is expected to deliver consistent growth, compounding at a 17%+ growth rate with 17%+ ROE. Despite trading at premium valuations, JM Financial believes that ICICI Lombard’s growth outlook justifies its current price levels. The firm has given it a ‘Buy’ rating with a target price of ₹2,450, valuing the company at approximately 41x FY26E earnings per share (EPS). Investors seeking to invest in stocks with reliable growth potential in the insurance sector may find ICICI Lombard a solid pick.
Jindal Steel & Power
Jindal Steel & Power (JSPL) has a strong focus on margin expansion, and JM Financial expects the company to achieve ₹15,000 in earnings before interest, taxes, depreciation, and amortisation (EBITDA) per tonne by FY26. With one of the strongest balance sheets among its domestic peers and a net debt-to-EBITDA ratio of 0.9x, JSPL presents a strong investment case. JM Financial has given JSPL a ‘Buy’ recommendation with a target price of ₹1,150 per share, valuing it at 8x FY26E enterprise value (EV) to EBITDA. Investors planning to invest in stocks with strong balance sheets should consider JSPL.
National Aluminium Company
JM Financial has also highlighted National Aluminium Company (NALCO), which is expected to see its Q2 FY25 EBITDA increase threefold year-on-year (YoY) to ₹1,200 crore. This growth is driven by rising aluminium prices, lower costs, and the benefits of captive coal mining. The brokerage firm has given NALCO a ‘Buy’ rating with a target price of ₹264 per share, based on an expected 7.5x FY26E EV/EBITDA and a healthy 3% dividend yield. Those interested in the metals sector and looking to invest in stocks may consider NALCO as a potential option.
Gravita India
Gravita India is expected to experience strong earnings growth over the next few years, driven by regulatory tailwinds in the lead recycling space and capacity expansion. JM Financial projects a 30% PAT CAGR over FY24-27, along with high ROE and return on capital employed (ROCE) of 32% and 28%, respectively, in FY27. The brokerage firm has set a target price of ₹3,068 for Gravita India. For investors looking to invest in stocks with long-term growth potential, Gravita India could be a solid pick.
Macrotech Developers
Macrotech Developers, also known as Lodha, is expected to generate robust operating cash flows in the next three years, with average collections of ₹70-80 billion. JM Financial anticipates surplus cash flow, even after accounting for business development investments, and has given the stock a ‘Buy’ rating with a target price of ₹1,480. Investors looking to invest in stocks in the real estate sector may find Macrotech Developers an attractive choice.
Olectra Greentech
JM Financial expects Olectra Greentech to see strong volume growth in the coming years, with robust ROE expected to exceed 25%. With pro-forma estimates indicating a 35x FY26E price-to-earnings (P/E) ratio, the stock is projected to re-rate to higher levels as volumes ramp up. The brokerage firm has assigned a target price of ₹2,200 per share to Olectra Greentech. Those looking to invest in stocks with growth potential in the electric vehicle space may find Olectra Greentech to be a promising option.
Ashoka Buildcon
Ashoka Buildcon is expected to achieve a 33% PAT CAGR over FY24-26, along with a robust ROE of 10% in FY26. Valued at 12x September-FY26E core earnings per share (EPS), Ashoka Buildcon’s engineering, procurement, and construction (EPC) business is projected to perform strongly. The brokerage firm has given the stock a target price of ₹290 per share. Investors looking to invest in stocks in the infrastructure sector may consider Ashoka Buildcon for potential growth.
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