M&M, Chambal Fertilisers, Jubilant Ingrevia & More - Stock Picks For Diwali, Samvat 2079: Prabhudas Lilladher

Prabhudas Lilladher Report

Samvat 2078 will go down in the history as one of the most volatile years where in exuberance around tech stocks and IPO boom was followed by Russia-Ukraine war, multi decade high global inflation and fastest interest rate hikes in recent times.

Amongst this hazy global scenario, India is today looking like a pearl in the ocean with benefits from food security, domestic demand driven economy, PLI scheme across manufacturing and defence, strong banking system with decade low non-performing asset, strong infra capex and rising investments in Unicorns.

Even as high inflation has impacted demand in lower and lower middle sections, festive demand is buoyant with waned Covid impact, good monsoons, pick up in infra and real estate development (boosts employment) and strong hiring demand across sectors. Although uncertain global environment and expected slowdown in U.S. and Europe remain a concern, we believe India will successfully navigate this period and emerge stronger.

We continue to prefer companies with presence in emerging segments, strong balance sheets and business moats.

Mahindra and Mahindra Ltd. - M&M is our preferred picks in the autos space given-

1. visible benefits from management aggression,

2. growth revival in automotive segment from robust product launches, strong order book and semiconductor supply issues easing out,

3. 200 basis points market share gain in tractor segment (market leader with 40% share) plus strong leadership in high growth farm implements segment and

4. more than 300 bps margin expansion over FY22-25E, led by fading commodity inflation and operating leverage.

Chambal Fertilizers and Chemicals Ltd. - Chambal Fertilizers remains a preferred play given-

1. company’s impeccable execution in Gadepan-3 urea plant,

2. aggressively exploring opportunities in non-urea fertiliser business (organic/inorganic route) and

3. foraying into industrial chemicals segment (technical ammonium nitrate and nitric acid as forward integration of through urea manufacturing process).

Jubilant Ingrevia Ltd. - Jubilant Ingrevia is well placed to capitalize on long term growth opportunities given-

1. 60 new products pipeline,

2. strong traction in contract development and manufacturing organisation,

3. import substitution,

4. China plus one policy and

5. commensurate capex outlay of Rs 20.5 billion over FY22-25.

Click on the attachment for full list of Prabhudas Lilladher's Diwali & Samvat 2079 stock picks:

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