Diwali 2020: These are top Muhurat stock picks by ICICI Direct

ICICI Direct continues to advise investors to utilise equities as a key asset class for long-term wealth generation by investing in quality companies with strong earnings growth and visibility, stable cash flows, RoE, and RoCE. Here are top Muhurat stock picks by ICICI Direct:

Cipla | TP: Rs 900 | Cipla is focusing on the front-end model, especially for the US, along with a gradual shift from loss-making HIV and other tenders to more lucrative respiratory and other opportunities in the US and EU, ICICI Direct noted. Key drivers will be the launch of inhalers (drug-device) and other products in developed markets, it said.

SBI Life Insurance | TP: Rs 1,000 | The brokerage remains structurally positive on the stock given long term growth potential and lower balance sheet risk. The strong distribution network, diversified product profile, and improving digital footprint are seen propelling business growth, it said.

The Ramco Cements | TP: Rs 1,000 | With a strong business profile and healthy market share, the company’s volumes have grown faster than the respective regional growth in the past three years. Post expansion, ICICI Direct expects the company to generate an EBITDA of Rs 2,141 crore in FY23E, implying an inexpensive EV/EBITDA multiple of 9.9x on FY23E earnings.

Mahindra Logistics | TP: 430 | The company has strengthened its already strong liquidity position on the balance sheet and further improved its cash conversion cycle in H1FY21. With its asset-light structure, Mahindra Logistics is well placed to face the volatile situation, the brokerage said. It is positive on the stock due to a quicker-than-expected recovery in the core segment.

Zydus Wellness | TP: Rs 2,300 | Post consolidation of the Heinz business, the company would be able to cut costs by reducing redundancies at various stages. This would result in faster decision making and give scale benefits to the company. It would be increasing its direct distribution network to reduce the dependency on the wholesales network. Further, the company would reduce distributors from 1,500 to 800 and implement warehouse optimisation, which would reduce the overall cost of logistics. ICICI Direct expects revenue and earnings CAGR of 9.1 percent and 35.4 percent, respectively, during FY20-23E. (Image: Reuters)

KPR Mill | TP: Rs 850 | ICICI Direct expects the company’s garments division to be the next growth engine and register revenue CAGR of 15 percent, with a share of garments in overall revenues inching up from 42 percent in FY20 to 51 percent in FY23E. It likes KPR as a structural long term story to play the apparel export space.

Syngene International | TP: Rs 635 | With elite client additions like Amgen, Zoetis, Herbalife, GSK, etc, and multiple year extension of BMS, Baxter contracts, the company remains well poised to capture opportunities in the global contract research organization (CRO) space, the brokerage said.