INSUBCONTINENT EXCLUSIVE:
Diwali 2021 stock picks: Motilal Oswal has given buy call on SBIBrokerage firm Motilal Oswal has handpicked some major companies from across
sectors like banking, hospitality, information technology, auto and food - beverages as some of its top picks for Diwali and Samvat 2078.The
selections are based on overall macroeconomic trends like high frequency indicators doing well and exports pushing the growth cycle in the
second quarter of the current fiscal and the country managing to overcome.State Bank of IndiaInvestment rationale: Among public sector
banks, SBI remains the best play on a gradual recovery in the Indian economy, says the brokerage firm as it has a healthy Provisioning
Coverage Ratio (PCR), tier-I of 11.3 per cent, strong liability franchise and improved core operating profit
It appears well positioned to report strong uptick in earnings, led by normalisation in credit cost.Tata MotorsRecovery is underway in all
of the three businesses of Tata Motors
While India commercial vehicles business would see cyclical recovery, JLR is witnessing both cyclical and structural, supported by a
This could drive recovery in JLR's EBIT margins and leave scope for a surprise on profitability
The India personal vehicles business (34 per cent CAGR) would witness structural recovery aided by refreshed product portfolio and market
share gains.InfosysIt expects Infosys to deliver top quartile growth performance in 2021-22 on the back of its strong capabilities and ramp
up of large deal wins in 2020-21
Motilal Oswal expects Infosys to be able to sustain margin, led by strong top-line growth and resultant operating leverage, further
flattening of the pyramid and continued operating efficiency measures.Ultratech CementUltratech Cement enjoys leadership position across
regions, which helps it maintain its premium pricing in most markets
It is setting up cement capacities of 19.5 million tonnes per annum, which would drive sales volume CAGR of 10 per cent over 2020-21 and
2023-24.The brokerage firm expects Ultratech Cement to turn cash positive in 2023-24 and expect RoE to improve further to 15 per cent by
2023-24 on higher asset turnover, led by an enhancement in capacity utilisation, continued debt reduction, and improvement in EBIT
margin.United SpiritsRecovery post the second COVID wave has been faster than that in 2020-21 and continues to improve.The outlook appears
promising with on-trade channel returning to normalcy, increased occasions for home indulgence and the ongoing strategic review of half of
the popular portfolio to be concluded by December 21, which would offer further primacy to the Prestige - Above (P-A) segment
Also potential success in the P-A segment in terms of both growth and margin and also with the new CEO taking over recently, raise the
company's chances.Indian HotelsMotilal Oswal expects gradual recovery in the current fiscal and sharp recovery in 2022-23 on a low base,
improved occupancies, positivity in cost rationalisation efforts in 2020-21, an increase in food - beverage income as banqueting and
conferences resume and finally higher income from management contracts.The company is on the right track to grow its EBITDA as new
revenue-generating avenues are seeing higher EBITDA margins.VIPVIP industries is the largest luggage manufacturing company and would
immensely benefit from opening up of the economy and pick up in domestic leisure travel.
