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Muhurat trading: Three multibagger stocks are hot picks this Diwali; gains over 130-235% in 2 years

Muhurat trading:-Investors across India are keenly waiting for the auspicious one-hour trading on Monday due to the occasion of Lakshmi Pujan aka Main Diwali. Bets on key stocks will be placed for future gains. Investment during the Diwali festival is believed to be a good luck charm for savings and investments. That being said, three multibagger stocks are Muhurat picks. Among these three stocks, two are from the banking basket while the other is from the heavy electrical equipment industry. These stocks have the potential to give between 22-38% gains going forward.

On the evening of October 24, investors will be allowed to trade in the capital market, equity derivatives, currency derivatives, commodities, and other securities for an hour as part of Muhurat trading.

Muhurat trading

As per the circular, tomorrow, the block deal session will begin from 5.45 pm to 6 pm. Further, the pre-market opening will take place from 6 pm to 6.08 pm, followed by normal trading in the market from 6.15 pm to 7.15 pm.

This week, markets will be closed on October 24 and 26. While trading will resume on October 25, and further on October 27 and 28.

Here’s a list of three stocks which are muhurat picks of LKP Securities. 

Bank of Baroda

The second largest public sector bank in terms of business has a strong consumer franchise post its merger with Dena Bank & Vijaya Bank and has been posting consistent profits since many quarters.

In its research note, LKP expects Bank of Baroda to record 12% growth in net advances by end of FY23, while further rise to 14% in FY24. The brokerage sees the bank’s net advances and deposits around ₹9,923 billion and ₹13,048 billion by FY24-end. Further, ROE is expected to be 10.75% for FY23 and over 11.5% for FY24. Gross NPA is seen to be below 6% by end of the next fiscal.

The stock brokerage has set a ‘buy’ recommendation for a target price of ₹175 on Bank of Baroda.

Last week, on Friday, Bank of Baroda ended at ₹143.55 apiece up by 1.95% on BSE. The stock also touched a new 52-week high of ₹144.90 apiece yesterday.

Taking into consideration the current market price and LKP’s target price, then there is a potential of nearly 22% upside in the bank.

Bank of Baroda is a multi-bagger stock. In the last two years, the stock has skyrocketed by nearly 237% as of now. The stock was below ₹43 levels on October 21, 2020.

In the current year, so far, Bank of Baroda shares have jumped by more than 71%.

Federal Bank

LKP’s note said, “With several key metrics at a multi quarter high, Federal Bank having posted its highest ever net profit this quarter has seen its stock price rise 40% in the last one year and we expect the Bank to continue that trajectory during the next one year as well.”

The stock brokerage expects Federal Bank to post 15% growth in advances by FY23 and 16% growth by FY24-end. ROE is seen to rise by over 13% by FY23 and 14% by FY24-end. Its asset quality is expected to continue to improve and reach near 2% by FY24-end.

On Federal Bank, LKP has set a target price of ₹180 and recommended as ‘Buy’. This would be a nearly 36% potential upside from the current market price.

On BSE, the stock closed at ₹132.60 apiece up by 1.77% on Friday. On this day, the bank touched an all-time high of ₹134.80 apiece.

Late Rakesh Jhunjhunwala was one of the biggest investors of the Federal Bank. Together, he and his wife Rekha Jhunjhunwala hold 75,721,060 equity shares or 3.6% in the bank.

Federal Bank’s performance has been robust this year. So far in 2022, the shares have climbed a little over 52% on Dalal Street. In the past two years, the shares recorded a massive upside of nearly 133%. On October 21, 2020, the shares were near ₹57 level.

Federal Bank has announced its Q2 results with PAT rising by 53% yoy to ₹703.7 crore, and net income interest (NII) increasing by 19% yoy to ₹1,762 crore. As of September 30, 2022, the bank’s gross NPA stood at 2.46%.

Schneider Electric Infrastructure

According to LKP, power sector reforms along with initiatives like grid modernization, investments in sustainable energy and Make in India have resulted in favorable business environment for Schneider.

Further, the LKP note added that its strong presence in Infrastructure, Power, Building, Industry and IT segments, coupled with its ability to offer services cutting across these segments, provides a distinctive advantage to serve its customers, further supported by strong parental support.

LKP has set a buy recommendation for a target price of ₹236 apiece for Schneider. This would be a potential upside of over 38% compared to the current market price.

On Friday, Schneider shares closed at ₹170.75 apiece lower by 1.36% on BSE.

So far in 2022, the shares have surged by over 56% on D-Street. While in 2 years, the shares have emerged as a multibagger with upside of over 135% on BSE. On October 21, 2020, the shares were below ₹73 levels.

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