As Indian equities look to extend their bull run in the new Hindu calendar year that began Thursday, analysts expect gains in stocks that will benefit from the economic recovery in Asia’s third-biggest economy as well as the ongoing regulatory crackdown on neighboring China.
The festival of Diwali, celebrated in India and many parts of Asia, is considered auspicious for purchases of everything from automobiles to apartments and even stocks. Indian brokerages, which traditionally release picks for the new year in this seasons, are bullish this time on mid-sized names that are focused on reopening of business and travel activity in India.
Here are some of analysts’ top picks for the festival season:
Edelweiss Wealth Research
- Indo Count Industries Ltd.
The fabrics company exports 12% of all bed sheets imported by the U.S. and has benefited from increased retail demand, fueled by more people working from home
Disruption in China’s Xinjiang region, which accounts for 20% of the world’s cotton production, is a big opportunity for India’s textile exporters
- Inox Leisure Ltd.
India’s second-largest movie screen operator benefits from an oligopoly in the business
The company is well-placed to capitalize on strong pent-up demand
The Hindi language cop drama “Sooryavanshi” collected 500 million rupees ($6.7 million) in two days since its release on November 5
SBICAP Securities
- KNR Constructions Ltd.
The has healthy revenue visibility over the medium term as about half of its orders come from irrigation projects
The company also owns construction equipment worth 12 billion rupees, which allows it to bid competitively for projects
- EID Parry India Ltd.
The Murugappa Group unit is one of the largest sugar companies in India
The global sugar deficit strengthens the outlook for India’s sweetener producers, while EID Parry also benefits from its focus on expanding retail products such as Sweet Care
Cholamandal Securities
- Tatva Chintan Pharma Chem Ltd.
The company is India’s sole distributor of chemicals used in zeolite crystals for the manufacturing of detergents, air purifiers and dietary supplements
China’s crackdown on the chemical industry and the Indian government’s push to expand via production-linked incentive plans are favorable for the company
- ABB India Ltd.
The company is setting up an ecosystem of charging stations for electric vehicles in India, which is estimated to be a $3 billion per year opportunity
Some of India’s state governments have announced dedicated policies to support EV adoption and initiated tendering for charging stations
Reliance Securities
- Kalpataru Power Transmission Ltd.
The company is seen as a key beneficiary of power transmission capex in India as well as global markets including the U.S., where the Biden administration’s $550 billion infrastructure spending will involve power grid upgrades and new transmission lines for renewable energy
Kalpataru Power intends to monetize its four transmission line projects in India and make its balance sheet healthier
- Ramkrishna Forgings Ltd.
The company is a major supplier of forged products for medium and heavy commercial vehicles, which are expected to witness a strong rebound in fiscal years 2022 and 2023 after sharp volume declines in the preceding two years
It also plans to diversify into passenger, light commercial vehicles and non-auto engineering segments
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU