We have collated Diwali picks from various stock brokers. The same are as follows with investment rationale:

Way2Wealth Research

1. Tata Steel: Buy above 470
Current Market Price (CMP): Rs 455
Target Price: Rs 705

2. Hindustan Petroleum Corporation: On dips to 450
Current Market Price (CMP): Rs 515
Target Price: Rs 725

3. BHEL: Buy Above 233
Current Market Price (CMP): Rs 225
Target Price: Rs 335

4. NTPC
Current Market Price (CMP): Rs 141
Target Price: Rs 210

5. LIC Housing Finance
Current Market Price (CMP): Rs 336
Target Price: Rs 450

6. Chennai Petroleum Corporation: Buy above 114
Current Market Price (CMP): Rs 103
Target Price: Rs 175

7. Reliance Capital
Current Market Price (CMP): Rs 460
Target Price: Rs 650-720

8. REC
Current Market Price (CMP): Rs 265
Target Price: Rs 345

9. Bank of India
Current Market Price (CMP): Rs 259
Target Price: Rs 350-400

10. Bharti Airtel
Current Market Price (CMP): Rs 400
Target Price: Rs 600

11. Wockhardt
Current Market Price (CMP): Rs 745
Target Price: Rs 1,250

ICICIdirect

12. State Bank of India
Target Price: Rs 3,234

"We expect the bank to post healthy 18% CAGR in profit to Rs 159.08 billion, over FY14-16E with return ratios of RoA at 0.7-0.8% and RoE of 11-12%+. We continue to recommend SBI led by comfort on scale and relatively lower headwinds on the asset quality."

13. UltraTech Cement
Target Price: Rs 3,180

"We believe the industry's capacity utilisation bottomed out at 69% in FY14. We think low capacity addition & demand recovery should lift utilisation levels from hereon given the cyclical upturn in the economy coupled with an expected policy push to drive investments in infrastructure sector. We forecast pan-India utilisation at 78% by FY16E that may offer pricing power."

14. Rallis India
Target Price: Rs 302

"Rallis has a lean balance sheet with minimal leverage and strong return ratios with FY14 RoCE & RoE at 21% & 28%, respectively. The company also possesses relatively better working capital cycle with net working capital days at 23 days in FY14 vis-à-vis industry average of ~44 days. We expect sales and PAT to grow at a CAGR of 16.8% and 21.6%, respectively, in FY14-17E."

15. Exide Industries
Target Price: Rs 220

"With strong replacement demand likely to continue and OEM demand also likely to pick up, Exide’s financial performance is likely to remain on an uptrend, with topline, bottomline growth of 17%, 30% CAGR in FY14-17E."

16. SKF India
Target Price: Rs 1,448

"Going ahead, with an anticipated recovery in end user industry, we expect revenues to bounce back at 13.4% CAGR over CY13-16E and margins to recover to 13.6% in CY16E vs. 11.5% in CY13, driving earnings growth at a CAGR of 24% in CY13-16E. A healthy balance sheet, robust cash flow generation, strong parentage & product profile/ strong distribution reach are other key positives."

17. Maharashtra Seamless
Target Price: Rs 430

"We expect an improvement in capacity utilisation levels and realisations. We have assumed blended EBITDA/tonne to increase from Rs 3,551/tonne in FY14 to Rs 6,350/tonne in FY15E and further to Rs 9,163/tonne in FY16E. We have valued the company at 6x FY16E EV/EBITDA and arrived at a target price of Rs 430 with a long term (18-24 months) investment horizon. Maharashtra Seamless has a strong balance sheet, healthy cash flow and net cash status, which augur well for the company."

18. Kansai Nerolac
Target Price: Rs 2,396

"Despite the company consciously increasing its decorative paints contribution to 55% of sales from 50%, we believe the stock is still trading at a discount to Asian Paints. With improving margins and better return ratios, we believe the discount to Asian Paints would shrink and the stock would command a premium to its historic average of 22x. Further, we expect industrial and decorative volume growth of 16% and 15% YoY, respectively, in FY17E resulting in revenue CAGR of 19.3% in FY14-17E."

Canara Bank Securities

19. Aban Offshore: Buy
Target Price: Rs 940-950

"It expects the company to post a reasonable growth rate of 20.% on top line in FY14. Company has provided a ROCE 9.46% which we expect to increase further going ahead. The company currently trades at 7.51 P/E which may see some further increase in current year upto 9.20 P/E FY15E and the following year going up to 9.57P/E FY15E; we are positive on the stock and maintain our outlook to accumulate on dips, for a price target of Rs 940-950 in the next Diwali time."

20. Alok Industries: Buy
Target Price: Rs 18-20

"It expects the company to post a reasonable growth rate of 25% on top line in FY15. Company may provide a ROCE 18% which we expect to increase further going ahead. The company currently trades at 6P/E which may see some further increase in current year up to 6 P/E FY15E and the following year going up to 8 P/E FY16E, we had covered this stock earlier and are still bullish on the stock with a long term view with a price target of Rs 18-20 in the medium term. We upgrade our views to hold and add on decline."

21. Cummins India: Buy
Target Price: Rs 910-920

"It expects the company to post a reasonable growth rate of 10% on top line in FY15. Company may provide a ROCE 24.23% which we expect to increase further going ahead. The company currently trades at 29.6P/E which may see some further increase in current year up to 26 P/E FY15E and the following year going up to 31.6 P/E FY16E, we had covered this stock earlier and are still positive on the stock with a medium to long term view with a price target of Rs 910-920 till next Diwali."

22. Exide Industries: Buy
Target Price: Rs 235-240

"It expects the company to post a reasonable growth rate of 12.5% on top line in FY15. Company may provide a ROCE 24.5% which we expect to increase further going ahead. The Stock currently trades at 6P/E which may see some further increase in current year up to 26 P/E FY15E and the following year going up to 29P/E FY16E, We are positive on the stock and the industry, with a medium to long term view with a price target of Rs 235-240 by next Diwali. We upgrade our views to hold and add on decline for a medium term view."

23. HT Media: Buy
Target Price: Rs 135-140

"It expects the company to post a reasonable growth rate of 8% on top line in FY15. Company may provide a ROCE 13.29% which we expect to increase further going ahead. The company currently trades at 29.6P/E which may see some further increase in current year up to 26 P/E FY15E and the following year going up to ~31.6 P/E FY16E, we had covered this stock earlier and are still Positive on the stock with a medium to long term view with a price target of Rs 135-140 till next Diwali."

Microsec Research

24. Infosys: Buy
Current Market Price (CMP): Rs 3,865.60
Target Price: Rs 4,350
Upside Potential: 12.5%

"At the CMP of Rs 387.55 the stock is trading at a P/E multiple of FY16e13.3x. Considering company's robust product base, strong global presence and reliable management enable the company to grow in the times ahead we assign a P/E multiple of 14.5x to its FY16e EPS of Rs 35.59 to arrive a price target of Rs 516.05 having an upside potential of ~33%."

25. Bharat Petroleum Corporation: Buy
Current Market Price (CMP): Rs 666.60
Upside Potential: 20%

"At the CMP of Rs 666.60 the stock is trading at a P/Bv multiple of FY16e2.26x. Considering the de-regulation of the diesel coupled with favorable E&P portfolio we assign a P/Bv multiple of 2.71x to its FY16e BVPS of Rs 294.67 to arrive a price target of Rs 798.55 having an upside potential of 20%."

26. Tata Chemicals: Strong Buy
Current Market Price (CMP): Rs 387.55
Target Price: Rs 516.05
Upside Potential: 33%

"At the CMP of INR387.55 the stock is trading at a P/E multiple of FY16e13.3x. Considering company's robust product base, strong global presence and reliable management enable the company to grow in the times ahead we assign a P/E multiple of 14.5x to its FY16e EPS of Rs 35.59 to arrive a price target of Rs 516.05 having an upside potential of 33%."

27. State Bank of India (SBI): Strong Buy
Current Market Price (CMP): Rs 2,465.65
Upside Potential: 45.09%

"SBI's ubiquitous branches couple with hassle free services and strong trust of Indian citizen helped it to maintain its CASA ratio above the industry which has helped the Bank to improve its Net Interest Margin (NIM)."

28. Indian Bank: Strong Buy
Current Market Price (CMP): Rs 153.60
Upside Potential: 62%

"Indian Bank has reduced its exposure from riskier segment and increased focus towards secured retail business and MSME lending. As on Jun. 30, 2014, Bank's Retail and MSME loan contribution to total loan book stood at 27%. We believe focus on retail segment may improve its asset quality and also boost its non‐interest income due to processing and fees charges on retail products."

29. Coal India (CIL): Strong Buy
Current Market Price (CMP): Rs 349
Target Price: 440
Upside Potential: 26%

"CIL has a strong balance sheet with robust cash flows and the company has maintain a good payout ratio. In the near term government's proposed OFS could be an overhang on the stock but for the medium to longer term prospective, fundamentals of the company augurs well. In FY14-16E, we expect the topline, EBITDA and PAT to grow at a CAGR of 8.3%, 16.1% and 11.6%, respectively. The stock is currently trading at FY16E adjusted EV/EBITDA of 7.8x. We have valued the stock at 10x FY16E EV/EBITDA and arrived at a target price of Rs 440 with a ''Strong Buy'' rating.''

30. Indian Hotels Company: Strong Buy
Current Market Price (CMP): Rs 96
Target Price: 122
Upside Potential: 28%

"At the CMP of INR 95, the stock is trading at 18.3x and 14.4x its FY15E and FY16E EV/EBITDA, respectively. With no further major investment, we expect the balance sheet strength to improve coupled with pick-up in demand, going forward. We expect sales CAGR of 9.0% during FY14-16E with improved margins. We have valued the stock at 11.5x FY16E EBITDA and arrived at target price of Rs 122 a share with ''Strong Buy'' rating on the stock.

31. Lloyd Electric & Engineering: Strong Buy
Current Market Price (CMP): Rs 155
Target Price: 205
Upside Potential: 32%

"At the CMP of Rs 155.10, the stock is trading at a forward P/E of 5.38x its FY15E EPS of 28.82 and P/E of 3.75x its FY16E EPS of 41.31. Hence we have assigned a P/E multiple of 5x to FY16E EPS and arrived at a target price of Rs 205 a share; an upside of 32%."

32. Tata Motors: Buy
Current Market Price (CMP): Rs 484
Target Price: 543
Upside Potential: 12%

"The company has registered a strong financial growth in FY14. Net sales increased by 23.33% to Rs 232,834 crore. Profit after tax (PAT excl exl items) increased by 41.43% to Rs 139.91 billion. ROE of the company arrived at 27.1%. The company's total D/E ratio came down from 1.43 to 0.92. Tata Motors financial ratios are strong and are very much in line with its nearest competitor Daimler, BMWand Audi."

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