Stocks for Diwali Muhurat Trading 2022

The festival spirit also helped the auto industry.

The retail car sales during this Navratri jumped by 57% to around 5,30,000 units from just over 3,40,000 units during the Covid-hit 2021–22 season, according to the Federation of Automobile Dealers Associations, or FADA.

Sales of all types of automobiles, including tractors, commercial vehicles, and two- and three-wheelers, were brisk during this year's Navratri [FADA].
The car sector saw substantial growth as overall sales increased by 16% over the pre-pandemic 2019 season and by 27% over Navratri sales from the previous year.

1. Mahindra & Mahindra Ltd.

Being prepared for the future and pushing the EV front

M&M is a conglomerate having operations in a variety of industries, including real estate, transportation, logistics, and financial services. At the standalone level, it is India's top tractor producer (40% FY22 market share), second-largest CV manufacturer, and fourth-largest PV maker (respectively, 24.7% and 7.4% FY22 market share).

The following are some important catalysts for an uptick in the business:

● M&M has target to sell 20-30% of its SUV portfolio as  electric vehicles (EVs) by 2027 i.e. ~2 lakh units.

● Entire EV capex outlay pegged at INR 9,000-10,000 crore, which includes INGLO platform shared by all upcoming born electric cars, manufacturing set-up, cost of developing products including XUV 400 (specific spend at INR ~600 crore).

● Upcoming collaborations in the charging infra space. 

● Born electric vehicles supporting all new age tech features including ADAS(advanced driving assistance systems) level 2+ with battery size pegged at 60-80 Kwhr with targeted certified range of 652-675 km.

Recommendation: With a target price of INR 1475 (~16%), investors should include this company in their portfolio.

2. Aditya Birla Fashion & Retail Ltd.

Smart reversal across all areas; lifestyle brands keep performing better

Pantaloons' strength as the largest value apparel retailer and Madura's portfolio of top power brands are combined by Aditya Birla Fashion & Retail (ABFRL) (Allen Solly, Van Heusen, Louis Philippe, and Peter England). With 3112 brand retailers and 375 Pantaloons outlets, the company has a robust distribution network.

The following are some important catalysts for an uptick in the business:

● For FY23E, ABFRL has ambitious retail expansion goals, with over 400 (franchisee) lifestyle brand stores and 75+ Pantaloons sites.

● A number of strategic initiatives, including the establishment of a separate platform to build a portfolio of D2C brands to add value over the medium to long term, the launch of the premium menswear ethnic brand Tasva, the purchase of Reebok's India operations, the majority stake purchase of Masaba to enter the beauty market, and more.

● ABFRL would concentrate on aggressive expansion while preserving good financial standing.

Recommendation: With a target price of INR 385  (~17%), investors should include this company in their portfolio.

3. Havells India Ltd.

With the diversified product portfolio, HAVL’s is among the best plays on the Indian consumer and electronic. HAVL’s India Limited is a well-known manufacturer of power distribution equipment, a leader in the fast-moving electrical and consumer goods industries, and it has a significant global presence.

The following are some important catalysts for an uptick in the business:

● The total number of new homes built under PMAY—1.7 crore—along with urbanization and increased aspirations will significantly increase demand for home appliances.

● Revive of the Lloyd company through new product introductions and increased segment margin.

● In the next five years, it wants to raise the number of retail touch points from 1.6 lakh to 2.5 lakh and town penetration from the present 1150 to 2000.

Recommendation: With a target price of INR 1500 (21%), investors should include this company in their portfolio.

Related Article: