Month: December 2024

2025 is set to kick off in a couple of sessions and 2024 is likely to deliver about 10 per cent gains for the investors. Domestic brokerage firm Motilal Oswal Financial services believe that 2025 can unfold the tale of two halves with first one signaling market consolidation, while second one for recovery. The brokerage firm has suggested 10 stock picks for the upcoming calendar year.

The brokerage believes that domestic factors like Union Budget, government spending, FIIs trend and rate cut cycle by RBI, along with global triggers including Trump’s economic policy, US rate cut cycle and geopolitical concerns will guide the market, beside earnings and valuations of India Inc. Here are the top picks from Motilal Oswal for 2025 for up to 36 per cent upside:

ICICI Bank | Target Price: Rs 1,550 | Upside Potential: 19%

ICICI Bank is poised for strong growth, driven by healthy loan growth, robust asset quality, and operating leverage. With solid deposit inflows, a favorable CD ratio, and strong underwriting standards, the bank is well-positioned for profitable growth. We project a 15 per cent PPoP CAGR and 12 per cent PAT CAGR over FY25-27E, with RoA/RoE of 2.1 per cent/16.7 per cent by FY27.

HCLTechnologies | Target Price: Rs 2,300 | Upside Potential: 22%

HCLTech revised its FY25 growth guidance to 3.5%-5.0% YoY, supported by strong deal wins and its leading position in data/SAP modernization. Its investments in next-gen platforms position it well for the GenAI revolution and future recovery in client spending, with expected margin improvements to 18.9 per cent by FY26 and an 8.4 per cent CAGR in USD revenue over FY25-27.
 

Larsen & Toubro | Target Price: Rs 4,300 | Upside Potential: 19%

L&T is poised to secure large domestic orders in H2, alongside recent international wins, boosting execution growth and margins. L&T’s strategic initiatives in electrolyzers, semiconductors, data centers, nuclear tech and real estate are expected to drive steady revenue growth and improve RoE in the coming years.

Zomato | Target Price: Rs 330 | Upside Potential: 21%

Zomato raised Rs 8500 crore via QIP to invest in Blinkit for marketing, scaling operations, and expanding its dark store network, targeting 1,000 stores by FY25. While the food delivery business is stable, Blinkit continues to lead the quick commerce market with GOV up 25 per cent QoQ/120 per cent YoY. We expect Zomato to report a PAT margin of 4.7 per cent, 8.6 per cent and 12.9 per cent in FY25, FY26 and FY27, respectively.

Polycab India | Target Price: Rs 8,330 | Upside Potential: 17%

Polycab’s cables & wire segment will benefit from strong demand from power T&D, private capex growth, & real estate sector. It is expanding its Gujarat EHV plant by FY26-end and also secured Rs 5,650 crore BharatNet initiative Phase-III contracts for an initial period of 3 years. We project 15 per cent earnings CAGR over FY24-27.

Godrej Properties| Target Price: Rs 3,725 | Upside Potential: 32%

Godrej Properties (GPL) launches spanned 5.6 msf, with significant sales in MMR, NCR, and Bangalore. GPL invested Rs 1,680 crore in land, ensuring future development potential project pipeline strength. It is expected to achieve Rs 30,000 crore in launches & sustained growth through FY26. GPL is on track to exceed its FY25 pre-sales target of Rs 27,000 crore by H2FY25.

Nippon Life India Asset Management | Target Price: Rs 900 | Upside Potential: 23%

NAM India has improved its equity market share by 60 bps in October 2024 from Apr 2022 through sustained fund performance & focused granular SIP additions from lower-tier towns. Its growth will be driven by incremental AUM from the non-EPFO segment, where NAM is a market leader, and fundraising from large offshore funds in the medium term. We expect 28 per cent PAT CAGR for FY24-27E.

IPCA Laboratories | Target Price: Rs 1,930 | Upside Potential: 18%

IPCA Labs specializes in domestic formulations and exports, with a strong presence in the pharmaceutical industry. The company aims to outperform in domestic formulations and ROW markets, driven by Unichem’s improving performance and new product offerings. We forecast a 26 per cent earnings CAGR over FY25-27.

Lemon Tree Hotels | Target Price: Rs 190 | Upside Potential: 28%

Lemon Tree is set for strong 2H growth, driven by Aurika Mumbai’s stabilization and robust wedding season demand. As of September 30, 2024, the total operational inventory comprised 112 hotels with 10,318 rooms and the pipeline comprised 75 hotels with 5,220 rooms. We estimate Lemon Tree’s PAT to grow at a 33 per cent CAGR over FY24-27.

PN Gadgil | Target Price: Rs 950 | Upside Potential: 36%

PN Gadgil (PNG), the second-largest retailer in Maharashtra, has 48 stores across 21 cities. It aims to expand further within Maharashtra and into other states. The company aims to reach 80 stores by FY27, funded by IPO proceeds for expansion and debt reduction. We project 23 per cent and 36 per cent CAGR for revenue and PAT during FY24-27, respectively.

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India’s foreign exchange reserves fell for a third consecutive week and stood at a more-than-seven-month low of $644.39 billion as of Dec. 20, data from the Reserve Bank of India (RBI) showed on Friday. 

The reserves declined by $8.5 billion in the reporting week, logging their biggest weekly fall in over a month. They had declined by a total of $5.2 billion in the prior two weeks. 

Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves. 

The RBI intervenes on both sides of the forex market to curb undue volatility in the rupee.

Last week, the rupee declined 0.2 per cent and also hit a then all-time low of 85.10 per US dollar.

Since slipping below the 84 handle in mid-October, the rupee has been on a downward spiral amid concerns over India’s growth slowdown, foreign outflows, US President-elect Donald Trump’s trade policies and a hawkish Federal Reserve. 

Regular interventions from the RBI have, however, kept the rupee’s decline in check. 

The domestic unit settled at 85.5325, down 0.3 per cent on the day, its worst single-day fall since June 4. The rupee was down nearly 0.3 per cent on the week, its eighth consecutive weekly fall.

The forex reserves also include India’s reserve tranche position in the International Monetary Fund.

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The Indian stock market registered significant growth, with equity indices Nifty 50 and Sensex posting gains between 8-10 per cent. Global economic trends, domestic policy reforms and sector-specific growth drove this positive performance. Domestic institutional investors (DIIs) played a crucial role, highlighting the growing confidence in India’s economic story. 

Domestic retail participation also surged, driven by increasing financial literacy and greater access to digital trading platforms, making equities a preferred asset class for many investors. Looking ahead to 2025, India’s economy is expected to maintain its upward trajectory, with GDP growth projected at 6.3 per cent for FY25.

Outlook for 2025

According to domestic brokerage SMC Global Securities, global monetary conditions are expected to ease, particularly as the US Federal Reserve adjusts its policies. India is well-positioned to attract foreign capital, supporting market stability and growth. On the global front, the economic outlook is stabilizing. 

Financials stood out in 2024 in sectors, supported by a 15 per cent annual increase in credit growth and improved asset quality across banks and financial institutions. This trend will likely continue into 2025 as the emphasis on digitization, financial inclusion, and regulatory reforms strengthen the sector. 

The technology sector rebounded in the latter half of 2024, driven by increased demand for digital transformation services, cybersecurity solutions, and generative AI. This sector is expected to remain a key growth driver in 2025. The healthcare and pharmaceutical sectors performed steadily, bolstered by strong domestic demand and export opportunities. 

While the outlook for 2025 remains positive, investors should remain cautious of risks such as geopolitical tensions, trade conflicts, and economic slowdowns in regions like China and Europe. “Despite these challenges, India’s long-term growth potential, supported by diversified sectors, presents significant investment opportunities,” said the brokerage.

In the current market scenario, SMC Global Securities has released its top 10 New Year stock picks for 2025 and sees a potential upside of 15-30 per cent from the current levels. The domestic brokerage has selected quality stocks based on technical and fundamental parameters.

Stocks to buy in 2025 by SMC Global Securities

Let’s take a look at the top 10 technical and fundamental stocks for the New Year by domestic brokerage SMC Global Securities:

1.ICICI Bank: Target: ₹1,527; Upside: 18 per cent

ICICI Bank shows strong business growth and improved asset quality. It is leveraging digital and technology across businesses to grow the risk-calibrated core operating profit. It sees increasing customer adoption and usage of its digital platforms. The brokerage expects the stock to see a price target of Rs. 1,527 in 8 to 10 months on two years’ average P/BV of 3.37x and FY26 (E) BVPS of Rs. 453.03.
 

2.Larsen & Toubro (L&T): Target: ₹4,270; Upside: 17 per cent

L&T retains the focus on the profitable execution of its robust order book despite a relatively stable environment. It is well-positioned to exploit emerging opportunities across the diversified business portfolio and limit exposure to non-core businesses. The brokerage expects the stock to see a price target of Rs. 4,270 in 8 to 10 months on a target P/E of 30.40x and FY26 EPS of Rs.140.46. 

3.Indian Bank: Target: ₹641; Upside: 18 per cent

The bank has introduced a range of digital products to enhance customers’ banking experience and ensure seamless and convenient services. Business growth, improved asset quality, and sufficient liquidity bode well for the bank’s future prospects. The brokerage expects the stock may see a price target of Rs. 641 in 8 to 10 months on a two-year average P/BV of 1.19x and FY26 (E) BVPS of Rs. 538.26.

4.SJVN Ltd: Target: ₹134; Upside: 22 per cent

SJVN plans to float tenders for an additional 18.6 GW, with an awarded capacity of 8.1 GW. Expected capacity additions of 1,800 MW in FY24-25, with a significant ramp-up in subsequent years (6,357 MW in FY25-26 and 3,000 MW in FY26-27). SJVN plans to incur a capex of Rs.9,000 crore in FY25, most of which is expected to be incurred for renewable capacity addition through SJVN Green Energy. 

A capex of Rs.13,000 crore is expected during FY26-27. The management is optimistic about achieving growth targets and expanding the renewable energy portfolio. The stock is expected to see a price target of Rs. 134 in 8 to 10 months on one-year average P/BV of 3.46x and FY26 BVPS of Rs.38.63. 

5.Radico Khaitan Ltd: Target: ₹3,196; Upside: 26 per cent

Radico Khaitan is focusing on innovation and strengthening its premium brands. It expects 15-18 per cent volume growth in the P&A segment for FY25 on strong demand for flagship brands like Magic Moments Vodka, Royal Ranthambore, and After Dark Premium Whisky. It aims to deliver steady growth with input cost pressure easing. The brokerage expects the stock to see a price target of Rs. 3,196 in 8 to 10 months on current P/BV of 13.22x and FY26 BVPS of Rs.241.78.

6.Natco Pharma: Target: ₹1,641; Upside: 20 per cent

Natco Pharma has effectively established a local presence through its partners, ensuring sustained business growth. The management plans to focus more on markets like Canada and Brazil, which offer robust growth opportunities. The company continues to lay a good foundation for business growth in the Asia-Pacific region. 

The management expects a 20 per cent growth in revenue for Q3 FY25 compared to the previous year. It also anticipated strong year-on-year growth, although Q3 may be weaker sequentially due to seasonality. Revlimid market share is performing well, with expectations to capture 1/3 of the market by January.The brokerage expects the stock to see a price target of Rs. 1,641 in 8 to 10 months on a two-year average P/BV of 3.13x and FY26 BVPS of Rs.524.20. 

7.Welspun Corp Ltd: Target: ₹901; Upside: 14 per cent

Welspun Corp boasts a strong order book and pipeline driven by rising oil and gas production in the US, India, and Saudi Arabia. The acquisition of Sintex, a manufacturer of water tanks and home-building products, supports the company’s diversification strategy. A ₹2,500 crore capex plan to expand Sintex’s pipes and building materials offerings bodes well for the company. 

It sees a robust demand of almost 2.7 million tonnes of line price projects in the next 2 to 3 years with major demand coming from the large PSUs like GAIL, IOCL, ONGC, HPCL and BPCL. It expects strong demand from U.S market as it has an order book until the quarter 3 of FY25. The brokerage expects the stock to see a price target of Rs. 901 in 8 to 10 months on a one-year average P/BV of 3.03x and an FY26 BVPS of Rs. 297.30.

8.Lemon Tree Hotels Ltd: Target: ₹203; Upside: 34 per cent

India’s growing demand for branded rooms and rising discretionary consumption are expected to outpace supply growth. Lemon Tree’s investment in hotel renovations will enable the company to capitalize on this trend, commanding premium pricing and solidifying its position as a preferred mid-market brand. The brokerage expects the stock to see a price target of Rs. 203 in 8 to 10 months on two year average P/BV of 10.24x and FY26 BVPS of Rs.19.84. 

9.Metropolis Healthcare: Target: ₹2,661; Upside: 32 per cent

Metropolis Healthcare has outpaced the industry volume growth for eight consecutive quarters. The healthcare major’s management remains optimistic about sustaining this trend. The company aims to balance volume growth with price realization for hitting the long-term profitability. 

In FY2026, it plans to continue renovation activities, with an investment of Rs. 250-300 crore planned over three years. Renovation expenses anticipated to stabilize at 1.5-1.6 per cent of revenue post-renovation. Anticipated EBITDA from renovated properties to reach approximately Rs. 125 crore annually, with an expectation of 15-20 per cent revenue growth post-renovation stabilization.

It expects revenue growth from existing and new networks and operational efficiencies to maintain current margins in FY25 and further improve them beyond FY25. The brokerage expects the stock to see a price target of Rs.2,661 in 8 to 10 months on a two-year average P/BV of 8.17x and FY26 BVPS of Rs.325.73.

10.Mastek Ltd: Target: ₹3,423; Upside: 16 per cent

Mastek’s performance in the Americas, UK, and Europe remained strong. New customer acquisitions and a robust deal backlog continue to fuel momentum. A healthy order book of Rs. 2,195 crore provides visibility into future growth prospects. The brokerage expects the stock to see a price target of Rs. 3,423 in 8 to 10 months on current P/E of 24.90x and FY26 EPS of Rs. 137.48.

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Southern India is outpacing the rest of the country in monthly per capita consumption expenditure (MPCE), according to the Household Consumption Expenditure Survey 2023-24 released Friday. Five southern states—Kerala, Tamil Nadu, Telangana, Andhra Pradesh, and Karnataka—reported MPCE levels significantly above the national average.

In Kerala, rural households spend Rs 6,611 per month, while urban households spend Rs 7,834—compared to the national averages of Rs 4,122 and Rs 6,996, respectively. Tamil Nadu follows with Rs 5,872 in rural areas and Rs 8,325 in urban areas. Telangana’s figures are Rs 5,675 and Rs 9,131, respectively.

Andhra Pradesh reported the highest MPCE in the South, with rural households spending Rs 6,107 and urban households at Rs 9,877. Karnataka, with Rs 5,068 in rural areas and Rs 8,169 in urban zones, rounds out the top five.

Interestingly, industrialized states like Gujarat and Maharashtra hover around the national average, while populous northern states like Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan lag behind. West Bengal also falls below the average in both rural and urban spending.

The survey identified stark contrasts nationwide. The highest MPCE was recorded in Sikkim—rural households spend Rs 9,377, and urban households spend Rs 13,927. At the other end, Chhattisgarh reported the lowest MPCE at Rs 2,739 in rural areas and Rs 4,927 in urban regions.

The survey also revealed significant rural-urban disparities. Meghalaya leads with a 104% rural-urban gap, followed by Jharkhand at 83% and Chhattisgarh at 80%. Across all 28 states, nine reported MPCE levels above the national average in both rural and urban categories.

Conducted from August 2023 to July 2024, the Household Consumption Expenditure Survey provides critical insights into spending trends, helping measure poverty, inequality, and economic well-being.

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Shares of Sanathan Textiles Ltd. listed on the stock exchanges at ₹422 per share, a 31% premium compared to its IPO price of ₹319 on Friday, December 27.

The Sanathan Textiles IPO saw healthy subscription of 36.9 times the total shares on offer. The three-day issue received bids worth over ₹14,000 crore, compared to the initial plan of raising ₹550 crore.

Sanathan Textiles’ IPO was a combination of a fresh issue of shares worth ₹400 crore and an Offer for Sale (OFS) component of ₹150 crore.

Sanathan Textiles intends to use ₹160 crore out of the ₹400 crore proceeds to repay its existing dues in part or full, while ₹140 crore will be used to invest in its subsidiary, Sanathan Polycot Pvt. Ltd. The other ₹100 crore will be used for general corporate purposes.

The Sanathan Textiles IPO was open between December 19 and 24. The allotment for the IPO was finalised on December 24 after the three-day issue received healthy subscription.

The Sanathan Textiles IPO was subscribed 35.05 times, led by qualified institutional buyers (QIBs). Overall, investors placed bets for 44.26 crore shares, compared to the 1.26 crore shares that were on offer for them.

The portion for institutional investors was subscribed 75.62 times, while that for non-institutional investors was subscribed 42.18 times.

Retail investors too placed bids that were 8.84 times higher than the shares reserved for them in the IPO.

The manufacturing company has three business verticals — polyester yarn products, cotton yarn products and yarns for technical textiles and industrial uses. It sells its products to a diverse customer base, including both multinational and local companies.

For the first quarter of this fiscal, the company reported a revenue of ₹781 crore, with a profit after tax of ₹50 crore. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at 76.4 crore, with a margin of 9.7%.

In FY24, the company reported a revenue of 2,957 crore, with a PAT of ₹134 crore, EBITDA of 226.5 crore and margin of 7.6%. Whereas, in FY23, it reported a revenue of ₹3,329 crore, PAT of 152.7 crore, EBITDA of 259.5 crore and margin of 7.8%.

The polyester yarn product contributed 76.8% to its first quarter in FY25 revenue, while the cotton yarn products and industrial and technical textiles yarns contributed 18.7% and 4.4%, respectively.

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