Diwali Investment Ideas 2023 | Globe Capital Market LTD.
Diwali Investment Ideas 2023

Wishing everyone Happy and Prosperous Diwali (SAMVAT 2080)

Report Overview

The benchmark indices has given return of around 7% last Diwali to till today and Midcap & Smallcap indices have given 25% & 28% respectively in the same period. After almost flat to positive return in benchmark indices, we expect gain of 20% to 25% return till next Diwali. On the basis of positive growth scenario, we have identified 6 stocks at current level to garner better profits.

Company Name Industry Market Cap (Cr.) LTP TTM PE Expected Target
Avantel Limited Elect & Defence 2,540 313 58 405
Canara Bank Limited PSU Banks 69,708 384 5 515
CDSL Limited Depositories services 16,759 1604 52.3 1995
Finolex Cable Limited Cable 13,860 906 25.8 1150
Mrs. Bectors Food Spl Limited Consumer Food 6,745 1147 60 1450
Shyam Metalik & Energy Ltd. Metal 11,314 444 16.9 565


Note: Investment period – 12 Months Stock’s Price as on Nov 06, 2023

Performance - SAMVAT 2079
Company Name Rec Price as 17 Oct 2022 Latest Price (%) Return HIGH after Released Date (%) Return at High
ACC Ltd. 2,270 1,868 -18% 2678 18.0%
BSE Ltd. 589 1,792 204% 1945 230.4%
HDFC Bank Ltd. 1,447 1,485 3% 1757 21.5%
Hero MotoCorp Ltd. 2,554 3,162 24% 3275 28.2%
LTIMindtree Ltd. 4,642 5,130 11% 5590 20.4%
REC Ltd. 92 302 230% 307 235.0%
Tata Steel Ltd. 100 119 20% 135.5 36.1%
Zensar Technologies Ltd. 214 504 135% 576 168.7%
    Average Return 76% 94.8%


Note: Investment period – 12 Months Stock’s Price as on October 17, 2022

Avantel Limited
Avantel Limited is engaged in the business of designing, developing and maintaining wireless and satellite communication products, defence electronics, radar systems and development of network management software applications for its customers majorly from the aerospace and defence sectors.

Key Triggers:

  • Government’s focus on Defence: The Union Budget for F.Y.2024 envisages a total outlay of US$ 550 billion (Rs.45,03,097 Crores).The Ministry of Defence has been allocated a total Budget of US$ 72 billion (Rs.5,93,537.64 Crores), which is 13.18 % of the total budget. The total Defence Budget represents an enhancement of US$ 8.35 billion (Rs. 68,371.49 crores),which is 13% more than the Budget for 2022-23. Avantel Limited mainly offers fully indigenous solutions and caters to the emerging needs of MoD under the “Atmanirbhartha” – self-reliance mission of Govt of India. In F.Y. 2023-24, it focus would be around development of HF / VHF /UHF SDRs for ship borne as well as landbased platforms and design & development of Air Defence Radar systems for Indian Army.
  • Bonus shares announced: Avantel Ltd announced bonus shares in the proportion of 2:1 implying shareholder will get 2 bonus shares for every 1 share held as on the record date. The Company has not reported Recorded date & Ex date for Bonus issue.

Valuation & View:
At the current price of Rs. 313, the stock is trading at ttm P/E multiple of 58x. Hence, we recommend a ‘BUY’ rating for the target price of Rs. 405 in 12 months perspective.

Valuation Metrics
CMP (Rs.) 313
Target Price (Rs.) 405
NIFTY 50 19411
52 Week H/L 343/66
Market Cap (Cr.) 2540
P/E (ttm) 58
EPS (ttm) 4.99
P/BV (ttm) 19
Book Value (ttm) 16.7
Industry Electronics & Defence

Chart comparison with Sensex

Source: Ace Equity

Canara Bank Limited
Canara Bank was founded in 1906 in Mangalore. Its segments include Treasury Operations, Retail Banking Operations, Wholesale Banking Operations and Other Banking Operations. It has completed over a century in the industry and occupies a premier position in the comity of Indian banks.

Key Triggers:

  • Large Branch Network: Presently, the bank operates ~10,500 branches and ~13,000 ATMs across India. It also operates 5 international branches in overseas countries. ~45% of its branches are located in southern region of India and ~60% of its branches are located in rural and semi-urban parts of India.
  • Excellent profit growth in last 5 years: Canara Bank has delivered good profit growth of 37.0% CAGR over last 5 years.
  • Low price to book value ratio: The Stock is trading at 0.90 times its book value of Rs. 430.
  • Strong NIM(%): The bank has reported consistently NIM above 3% from last 2 quarters.
  • Improve Asset Quality: The gross non-performing assets ratio improved to 4.76%, down by 161 bps year-on-year. The net NPA ratio stood 78 bps lower at 1.41%. The provision coverage ratio also improved by 337 bps to 88.73% at the end of September.

Valuation & View:
At the current price of Rs. 384, the stock is trading at ttm P/BV multiple of 0.9x with ttm book value of Rs. 430. Hence, we recommend a “BUY” rating for the target price of Rs. 515 in 12 months perspective.

Key Risk

  • The Company has a low return on equity of 10.4% over last 3 years.
Valuation Metrics
CMP (Rs.) 384
Target Price (Rs.) 515
NIFTY 50 19411
52 Week H/L 393/269
Market Cap (Cr.) 69,708
P/E (ttm) 5
EPS (ttm) 76.65
P/BV (ttm) 0.9
Book Value (ttm) 430
Industry PSU Banks

Chart comparison with Sensex

Source: Ace Equity

CDSL Limited
CDSL is a pioneering Market Infrastructure Institution (MII) acting as a facilitator for holding securities in dematerialised (demat) form and enabling seamless securities transactions. Our comprehensive services cater to all Market Participants, including exchanges, clearing corporations, Depository Participants (DPs), issuers, Registrar & Share Transfer Agent (RTAs) and investors.

Key Triggers:

  • Govt asks all private companies to demat shares by September 2024: The government has mandated all private companies, other than small companies, to dematerialise their shares by September 30, 2024. The move is expected to boost transparency and oversight of the financial system. The move to demat private company shares is seen boosting the business prospects of the country’s two depositories — Central Depository Services (CDSL) and National Securities Depository (NSDL).
  • Growing financial products awareness in Urban areas: India’s urban population stands at approximately 35% of its population and it is projected to grow to 50% by 2050. Urbanisation, aspirations, and rising household savings will foster the financialisation of savings and greater investor participation in capital markets. The transformative trio of Aadhaar, UPI, and smart phones is already reshaping India’s financial landscape, driven by massive drive for financial inclusion.

Valuation & View:
At the current price of Rs. 1604, the stock is trading at ttm P/E multiple of 52x, which always commands premium valuation. Hence, we recommend a ‘BUY’ rating for the target price of Rs. 1995 in 12 months perspective.

Target Price (Rs.)NIFTY 5052 Week H/LMarket Cap (Cr.)P/E (ttm)EPS (ttm)P/BV (ttm)Book Value (ttm)Industry

Target Price (Rs.)NIFTY 5052 Week H/LMarket Cap (Cr.)P/E (ttm)EPS (ttm)P/BV (ttm)Book Value (ttm)Industry

Valuation Metrics
CMP (Rs.) 1604
Target Price (Rs.) 1995
NIFTY 50 19411
52 Week H/L 1607/881
Market Cap (Cr.) 16,759
P/E (ttm) 52.3
EPS (ttm) 30.64
P/BV (ttm) 11.6
Book Value (ttm) 133.62
Industry Depositories Services

Chart comparison with Sensex

Source: Ace Equity

Finolex Cables Limited
Finolex Cables Limited is a leading manufacturer of electrical and telecommunication cables in India. Operating for more than 50 years, Finolex has been able to maintain its leadership position as one of the most diversified wires and cables companies in the country. Besides manufacturing a wide variety of wires and cables, Finolex has also forayed into the manufacturing of Fast-Moving Electrical Goods (FMEG) and home appliances. Over the years, the Company has established itself as a preferred electrical solutions provider for retail and institutional markets in India and created a strong brand name.

Key Triggers:

  • Market Share: As of Q1FY24, company enjoys 22% market share in the organised wire industry.
  • Robust Distribution Network: The company is supported by 5,000+ Channel Partners and 175,000+ retailers. In addition, company has 8 exclusive retail stores, named “Finolex House” at Bengaluru, Ghaziabad, Ranchi, Vadodara, Raipur, Bhubaneshwar and Secunderabad.
  • Positive Government Initiatives: Cabinet approved a spend of Rs. 1.4 lakh crores on broadband under the BharatNet program, expected to contribute to company’s top line.
  • Management Turnover Guidance: Aspirational turnover target of Rs. 10,000-11,000 crores in the next 2-3 years with planned expansions, acquisitions, and growth in FMEG segment.

Valuation & View:
At the current price of Rs. 906, the stock is trading at ttm P/E multiple of 25.8x with the ttm EPS of 35.64. Hence, we recommend a ‘BUY’ rating for the target price of Rs. 1150 in 12 months perspective.

Key Risk:

  • Slowdown in economy may dent growth in profitability.

Target Price (Rs.)1150

Valuation Metrics
CMP (Rs.) 906
NIFTY 50 19411
52 Week H/L 1219/491
Market Cap (Cr.) 13,860
P/E (ttm) 25.8
EPS (ttm) 35.64
P/BV (ttm) 3.09
Book Value (ttm) 293
Industry Cable

Chart comparison with Sensex

Source: Ace Equity

Mrs. Bectors Food Specialities Ltd
Mrs. Bector’s Food Specialities Ltd. specializes in biscuits and bakery products, offering premium and mid-premium options including a variety of cookies, creams, crackers, digestives, and glucose under Mrs. Bector’s Cremica (Market share in India- 4.5% and Exports- 12%). The bakery products segment offers savory and sweets, including breads, buns, pizza bases, and cakes under the ‘English Oven’ brand (Market share in India- 5% and 11% market share in semi processed and dough-based offerings). It equipped with advanced modern technology and automated systems Invested Rs. 340 crores between FY19 to FY23 to build capacities with superior capabilities.

Key Triggers:

  • Immense Industry Potential in the Biscuit Market: Per capita consumption of biscuits in India has significantly increased in the last 5 years. However, it is far behind developed economies like the US, UK and other developing countries like China and Sri Lanka.
  • Expansion Completed: Addition of 2 new Biscuits Lines at Rajpura to meet the growing demand and total Estimated cost is Rs. 75 crores and estimated timeline of completion is Q1FY24. Addition of Bakery Plant in NCR to meet the growing demand and total Estimated cost is Rs. 32.7 crores and estimated timeline of completion is Q2FY24.
  • New Capex: The Expansion of Bakery Plant in Khopoli (Maharashtra)- Company has purchased land in Khopoli, Mumbai adjacent to the factory for expansion of the Bakery business. Plant will be ready by FY24-25.

Valuation & View:
At the current price of Rs 1147, the stock is trading at ttm PE multiple of 60 times. Hence, we recommend a “BUY” rating for the target price of Rs 1450 in 12 months perspective.

Target Price (Rs.)1450

Valuation Metrics
CMP (Rs.) 1147
NIFTY 50 19411
52 Week H/L 1196/387
Market Cap (Cr.) 6745
P/E (ttm) 60
EPS (ttm) 19.07
P/BV (ttm) 11.5
Book Value (ttm) 98.47
Industry Consumer Food

Chart comparison with Sensex

Source: Ace Equity

Shyam Metalics & Energy Ltd
Shyam Metalics is a leading integrated metal producing company based in India with a focus on long steel products and ferro alloys. The Company is 4th largest Sponge Iron player in India, 6th largest Integrated Long Steel player and amongst the largest Ferro Alloys Producer in East India and Leading player in terms of Pellet Capacity in India.

Key Triggers:

  • Strong Financial Result: EBITDA remained stable at 12.2% despite a 4% decline in realization and PAT Positive since commencement of operations in 2005. The company expects margin improvement due to lower raw material prices and cost-efficient operations.
  • The company expects to deploy around 2,000 crores in CAPEX in FY24.
  • The company is developing battery foil for EV batteries and plans to enter the domestic and international markets.
  • Shyam Metalics has forayed into stainless steel through acquisition of Mittal Corp. Company is focussed on increasing its capacity and thereby market share in margin accretive.

Valuation & View:
At the CMP of Rs 444, the stock is trading at P/BV of 1.63 times with the ttm book value of Rs 281. Indian steel consumption is expected to grow strong @9% to 142mt over FY23-25E which is beneficial for the company. Hence, we recommend a “BUY” rating for the target price of Rs. 565 in 12 months perspective.

Key Triggers:

  • Any govt policy change or future plan change may effect company performance.
Valuation Metrics
CMP (Rs.) 444
Target Price (Rs.) 565
NIFTY 50 19411
52 Week H/L 495/253
Market Cap (Cr.) 11,314
P/E (ttm) 16.9
EPS (ttm) 26.66
P/BV (ttm) 1.63
Book Value (ttm) 281
Industry Metal

Chart comparison with Sensex

Source: Ace Equity


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