Market experts have identified several stocks as promising buys for the next year, including Dabur, LIC Housing, and Coforge. These companies are noted for their growth potential in areas like revenue, market expansion, and IT services. Despite recent market corrections, experts view this as an opportunity to invest in quality stocks.

The Union Budget 2024 did not significantly boost market sentiment, which remains cautious due to concerns over high valuations, mixed Q1 earnings, and uncertainty surrounding the US rate cut cycle. The Nifty 50 has declined by about 2% from its all-time high last Friday, marking its fifth consecutive session in the red.

Expert Recommendations

Sneha Poddar, VP-Research, Motilal Oswal Financial Services

Dabur (Target Price: ₹700):

Dabur has shown higher growth in rural areas compared to urban regions. With a positive volume trajectory and no significant price cuts impacting revenue, Dabur is expected to sustain its revenue growth. The forecast of a strong monsoon (La Nina) for FY25 is likely to boost agricultural income and the rural economy, aiding Dabur’s growth. Additionally, the company’s initiatives in distribution, new product launches, and marketing efforts are expected to support revenue and PAT growth at a CAGR of 9% and 13%, respectively, over FY24-26.

LIC Housing Finance (Target Price: ₹930):

LIC Housing Finance is focusing on accelerating its loan disbursement to achieve stronger growth over FY25-26. The company has invested in technology, marketing, and underwriting to enhance its sourcing capabilities, aiming for better loan growth. Efforts are also being made to resolve stressed assets through auctions and sales to Asset Reconstruction Companies.

Sandeep Raina, EVP-Research, Nuvama Professional Clients Group

Sky Gold (Target Price: ₹3,000):

Sky Gold has expanded its addressable market from 30% to 70% of total jewelry sales in India with the acquisition of two companies. The company, which supplies to major retailers like Malabar Gold and Kalyan Jewellers, has established a large manufacturing hub in Navi-Mumbai. Revenue, EBITDA, and PAT are projected to grow by 53%, 56%, and 67%, respectively, over FY24–27.

Coforge (Target Price: ₹7,000):

Coforge, a promising mid-cap IT services company, is working towards becoming one of the top 10 global IT services providers. Through strategic acquisitions and strong management, the company aims to achieve $2 billion in revenue. A solid 20% EPS CAGR is expected, driven by expansion in existing verticals and geographies.

V2 Retail (Target Price: ₹1,002):

V2 Retail, a value fashion retailer, increased its store count to 127 by opening 10 new stores in Q1FY25. Revenue per square foot rose by 30% YoY in FY24, and same-store sales growth was 37% for Q1FY25. The company is expected to benefit from budget allocations to tier 3 cities, which will facilitate business growth through improved transport and facilities.

Market Outlook

Despite recent corrections, experts view the situation as a healthy adjustment, providing an opportunity to buy quality stocks. Key structural positives, such as strong economic growth prospects, robust retail investor participation, and easing inflation, support this optimistic outlook.

Disclaimer: The views and recommendations expressed are those of individual analysts and brokerage firms. Investors are advised to consult certified experts before making any investment decisions.