Diwali Picks 2020 – Samvat 2077

Share This :

Diwali is the festival of lights, also known as the festival that brings prosperity to our lives. Goddess Lakshmi is worshiped across homes during this festival being the goddess of wealth and prosperity. The Indian Stock Exchanges considers it auspicious to invest during this time as the beginning of a new Samvat or Hindu calendar year.

Nestle India Ltd.

Nestle India Limited Is one of the strongest players in the Indian FMCG industry with 108 years of presence, enjoying market leadership position in 85% of its product portfolio. We initiate our coverage on Nestle India Limited (NESTIN) with a BUY rating and a target price of ₹20,302 per share. Know more

Polycab India Limited

India’s largest manufacturer and seller of an extensive range of cables and wires, and a fast-growing player in the fast-moving electrical goods (FMEG) industry, along with an established export presence. We initiate our coverage on Polycab India Limited (POLYCAB) with a BUY rating and a target price of ₹1120 per share. Know more

Abbott India Limited

Abbott India Ltd (AIL) – a 50.44% subsidiary of Abbott Laboratories, USA – is engaged in the manufacture and marketing of pharmaceutical products. It offers high-quality trusted medicines across multiple therapeutic categories including Women’s Health, Gastroenterology, Neurology, Thyroid, Diabetes, Pain Management, General Care, Vitamins and Vaccines. We initiate our coverage on Abbott India Limited (ABBOTINDIA) with a BUY rating and a target price of ₹19200 per share. Know more

Eicher Motors

RE offers one of the most differentiated products in Indian autos, and will be the key beneficiary of premiumization in the maturing 2W industry. We initiate our coverage on Eicher Motors Limited (EICHERMOT) with a BUY rating and a target price of ₹2520 per share. Know more

Bajaj Finserv

Bajaj Finserv is the holding company under which there were three key financial sector business. Bajaj Finserv participates in the financing business through its 52.82% holding in Bajaj Finance and in the protection business through its 74% holding in two unlisted subsidiaries, Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company. Bajaj Housing Finance, which does mortgage business, is a wholly-owned subsidiary of Bajaj Finance. We initiate our coverage on Bajaj Finserv Limited (BAJAJFINSV) with a BUY rating and a target price of ₹7680 per share. Know more

Closing price as on 9th Nov 2020 close. Source: Ace Equity, Bloomberg Estimates

Market Outlook

The most historical year 2020 of 21st century with the outbreak of COVID-19 and resultant lockdowns across the globe and India, which saw several lockdowns since March’20, which resulted 1) Supply chain disruption, 2) Various industries grounded to a halt, such as travel and manufacturing, 3) Plunge in oil prices, and stress in Financial markets. This disruption led to significant contraction in economic output and volatility in capital markets.

But Now, India is attempting to go back to the new normal Post relaxation in lockdown, which resulted in the fastest recovery in capital markets after the fastest bear market of all time high. Markets being forward looking- a significant global policy response including from RBI and that coupled with global and Indian governments’ economic relief initiatives further supported in economic recovery since April’20 onwards.  A reduction in extreme downside risk following bold policy support-cutting interest rate, providing funding to businesses and financial support for individuals. The goal to limit an inevitable recession and try to stimulate fasted recovery.

Diwali Samvat 2077 Market outlook looks promising, our expectations on India’s further journey is backed by

  1. Thrust on domestic manufacturing with incremental policy initiatives for businesses on this front to spur economic growth
  2. Revamp of health policy and medical infrastructure
  3. Strengthening of the digital ecosystem and infrastructure-For efficient 7 targeted policy delivery and growth of the new age businesses
  4. Growth oriented agenda of government and RBI
  5. Privatisation and improving the productivity of state entities

Market Drivers: Gains or stability in pharma & healthcare, technology, telecom, chemical, cement, FMCG and Auto vs. weakness in BFSI, oil & gas, energy, real-estate, hospitality, and travel & transportation.

Change in Markets after Last Diwali

SectorReturn
Bank Nifty-9.50%
Auto-1.10%
Fin Services-5.80%
FMCG-4.20%
IT4.60%
Media-18.60%
Metal-2.50%
Pharma50.00%
PSU Bank-43.60%
Pvt Bank-10.70%
Realty-18.70%
IndexReturn
NASDAQ40.50%
FTSE-18.20%
Nikkei6.50%
SSE15.80%
NSE4.60%
Crude-35.80%
Currency (USDINR)-3.90%

Returns are from Nov 09, 2019 to Nov 09, 2020. Closing price as on 9th Nov 2020 close. Source: Ace Equity, Bloomberg Estimates

One Reply to “Diwali Picks 2020 – Samvat 2077”

Leave a Reply

Your email address will not be published. Required fields are marked *