Nirmal Bang has come out with its Diwali Picks which includes names across automobiles, banking, manufacturing, engineering, technology, and consumer sectors that are poised to benefit from India’s improving macroeconomic landscape.
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Nirmal Bang Report
Nirmal Bang has come out with its top 10 Diwali picks which includes names across automobiles, hotel industry, banking, manufacturing, engineering and consumer sectors that are poised to benefit from India’s improving macroeconomic landscape.
The brokerage expects these stocks to deliver potential upsides ranging from 15% to 35%, making them attractive bets for investors looking to capitalise on festive momentum.
ASK Automotive – potential upside: 35%; Rating: ‘Buy’
We remain bullish on ASK Automotive Ltd. with a ‘Buy’ rating and valuing company at target multiple of 27x on Sept27E EPS to arrive at a target price of Rs 632 implying ~33% upside from the current market price.
ASK Automotive is the market leader in advanced braking systems for two-wheelers and also supplies drivetrain-agnostic, safety-critical engineering solutions across automotive and non-auto segments.
Between FY25 and FY27E, ASK Auto is expected to deliver a revenue and Ebitda CAGR of ~16% and ~28% respectively, driving Ebitda margin expansion of 270bps.
This sharp margin uplift is anchored by three levers:
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a rising share of the higher-margin ALPS segment, which is scaling rapidly and structurally enjoys 200– 300bps higher Ebitdam than the consolidated business,
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the strategic phase-out of the low-margin wheel assembly vertical that historically diluted profitability, and
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incremental content gains and wallet share from diversification into new products such as sunroof cables in the Indian passenger vehicle market.
Chalet Hotels – potential upside: 32%; Rating: ‘Buy’
Chalet Hotels Ltd., the hospitality arm of K Raheja Group is an owner, developer, asset manager and operator of hotels and resorts (3,351 operational keys across 11 hotels) under leading global brands (Marriott and Accor Group) in MMR, NCR, Hyderabad, Bangalore and Pune in the premium segment.
Chalet’s strategy of growth is via the ownership route this strategy augurs well in an industry upcycle like the current one as one can reap the benefits of operating leverage. Commercial Real Estate leasing and residential projects offer diversification to the base business.
We are positive on Chalet with a Buy (target price of Rs 1,198 based on Hospitality business EV/Ebitda of 23x on June FY27E).
HAL – potential Upside: 29.4%; Rating: ‘Buy’
As a key beneficiary of India’s ‘Atmanirbhar Bharat’ defense push, Hindustan Aeronautics Ltd. is strategically positioned for long-term growth and export opportunities across fighters, helicopters, and engines. Revenue, Ebitda, and PAT are projected to clock a CAGR of 15%, 15%, and 19%, respectively, over FY25-FY27E, outpacing the management guidance.
The stock is trading at a 1-year forward P/E of 26.6x, above its 5-year average of 17x.
We maintain our Buy rating at a target price of Rs 6,142, valuing the stock at 35x Jun-27E EPS (+2 SD above the long-term average).
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