Diwali 2025: Super-6 stock picks by SMIFS for up to 65% for Samvat 2082

Diwali is round the corner, the market might just be missing the plot twist in India’s growth story. Between the last Diwali and this upcoming one, several global and national economic developments shaped India’s economic trajectory. The combination of lower inflation, improved consumption backed by GST and tax cuts, coupled with rising capex and enhanced system liquidity, SMIFS believe the Indian economy is poised for a very strong bounce over the next 6-12 months, reflecting in the profitability numbers as well, resulting in a strong rerating for most stocks. Valuations at the current level also seem pretty reasonable. Here are top picks from SMIFS for the Samvat 2082:  

Bharat Heavy Electricals | Buy | Target Price: Rs 320 | Upside: 38%

BHEL is well positioned to benefit from India’s ambitious capacity-addition cycle across thermal, renewable, and transmission sectors, backed by scale, execution strength, and technology leadership. The company ended FY25 with a record order book, including 24.5 GW of thermal projects and marquee industry wins such as the 6,000 MW Khavda-Nagpur HVDC link, ensuring multi-year visibility. With 8.1 GW commissioned in FY25 and a global footprint of 13 GW installed across 91 countries, BHEL has proven execution credibility both domestically and overseas. Technology differentiation highlighted by the world’s first 800 MW AUSC plant, hydrogen fuel cell locomotives, and space-grade Li-ion cells for ISRO supports margins and future growth. Diversification into hydropower, nuclear, defence, and railways, alongside a JV with Coal India for coal gasification and ammonium nitrate, enhances long term prospects. While working capital intensity and exposure to weak state utilities remain risks, improving contract terms, pr and cost control should aid margin recovery. BHEL’s Maharatna status, dominant BTG market share, and expanding presence in HVDC, energy storage, and defence provide a strong foundation for sustainable value creation over the long term. In the next 12 months, we expect the company’s annualised EPS to be Rs 8 and should ideally trade at a P/E multiple of 40 times, implying a target of Rs 320.  

Cyient | Buy | Target Price: Rs 1,625 | Upside: 39%

Cyient’s recent reorganization enhances visibility across its businesses, with the Semiconductor carve out creating a standalone growth optionality while leaving DET and DLM as the stable, cash generating core. The DET business, despite wage related margin compression in Q1, remains resilient and is guided to a medium term EBIT margin of 15 per cent, supported by cost optimization and a richer order mix. DLM continues to build momentum through build to spec wins in aerospace, demonstrating synergies with DET’s design expertise, while the Semiconductor subsidiary, though currently in investment mode, is expected to reach $10 million quarterly run rate and normalize margins by Q3FY26. Early traction in semiconductor order intake, combined with marquee client wins such as Vodafone’s global adoption of the VISMON platform and large aerospace and healthcare deals, strengthens Cyient’s positioning as a differentiated ER&D partner with domain+digital focus. The current structure allows for greater investor clarity,  

Dabur India | Buy | Target Price: Rs 1,625 | Upside: 11%

Dabur delivered a resilient Q1 FY26 performance with consolidated sales rising 7 per cent excluding the seasonal beverages and glucose portfolio, supported by robust growth in HPC, Healthcare and International markets, while rural demand continued to outpace urban for the fifth straight quarter. Strong traction in core categories such as Toothpaste, Home Care, Hair Oils, Chyawanprash and Honey reinforced market share gains despite external headwinds, and profitability remained stable despite 7 per cent input inflation, with margins guided to expand through premiumization, cost efficiencies and healthcare scaling. The operating environment is also turning supportive, with recent RBI interest rate reductions expected to boost disposable incomes and consumption, particularly in rural markets, while the GST rate cut on select FMCG categories enhances affordability and volumes. With easing food inflation, normalized inventory levels, improving urban sentiment, and continued international strength, Dabur is well positioned to deliver high single-digit growth with margin expansion in FY26. In the next 12 months, we expect the company’s annualised EPS to be Rs 12.50 and should ideally trade at a P/E multiple of 45 times, implying a target of Rs 562.50.  

Petronet LNG | Buy | Target Price: Rs 390 | Upside: 42%

Petronet LNG is entering a strong expansion phase that positions it to capture the next wave of India’s natural gas demand. With major projects underway including the Dahej capacity expansion to 22.5 MMTPA by CY25, the 5 MMTPA Gopalpur terminal on the East Coast, and Kochi terminal ramp-up with pipeline connectivity, the company is set to expand its regasification capacity significantly over the next three years. These projects, coupled with the PDH-PP petchem initiative and LNG bunkering opportunities, diversify revenue streams beyond regasification, thereby boosting the topline potential. The recent long-term agreements with Qatar, Gorgon, and Deepak Fertilisers ensure steady base-load volumes, while additional capacity creates room for higher spot and short-term cargo handling, directly translating into topline growth. Global LNG dynamics also strongly favor PLL’s outlook. Nearly 180 MMTPA of new liquefaction capacity is scheduled to come online over the next 3-4 years, leading to oversupply and structura lower LNG prices. For a price-sensitive market like India, lower LNG prices are expected to stimulate demand from industrial, fertilizer, and city gas segments. As the country’s largest LNG importer with pan-India terminal presence, PLL is uniquely positioned to be the primary beneficiary of this demand surge. We believe this structural tailwind, combined with expansion-led capacity and strong contractual visibility, will drive a sustained increase in topline and earnings over the medium to long term, making PLL an attractive play on India’s LNG growth story. In the next 12 months, we expect the company’s annualised EPS to be Rs 30 and should ideally trade at a P/E multiple of 13 times, implying a target of Rs 390.  

Praj Industries| Buy | Target Price: Rs 560 | Upside: 65%

Praj’s Q1 FY26 results were weak, impacted by execution delays, customer liquidity issues, and GenX underutilization, we see this as transient with margins expected to normalize to high single digits from H2FY26 as execution accelerates and international contributions rise. The company’s strong order backlog of Rs 4,450 crore, steady inflows of Rs 795 crore in Q1, and a cash reserve of Rs 450 crore provide both earnings visibility and balance sheet strength. Export revenues already form 39 per cent of sales and are poised to increase, reducing reliance on the domestic ethanol program and cushioning against regulatory uncertainties. Beyond ethanol, diversified growth levers in Compressed Bio Gas (with the BPCL JV), Sustainable Aviation Fuel (first US commercial-scale order, domestic policy push in 2025), bioplastics (PLA tie-up with Thyssenkrupp), and value-added modules such as distillers corn oil, rice protein, and CO₂ capture create high-margin annuity streams and expand Praj’s global footprint. The GenX facility, though currently underutilized, is strategically positioned to benefit once tariff clarity emerges in the US and EU, with diversification into non-energy transition sectors offering additional upside. Anchored by industry tailwinds from global decarbonization, supportive domestic policies, and its Vision 2030 roadmap to triple turnover while expanding profitability, Praj Industries offers a compelling long-term investment case with improving near-term earnings trajectory and significant structural growth opportunities. In the next 12 months, we expect the company’s annualised EPS to be Rs 14 and should ideally trade at a P/E multiple of ~40x, implying a target of Rs 560.  

PVR Inox | Buy | Target Price: Rs 1,600 | Upside: 48%

PVR INOX is positioned for a strong multi-year growth cycle, supported by a robust film pipeline, higher monetization per consumer, and the structural pivot to asset-light expansion. Management expects to exceed FY24 footfalls of 150 million in FY26, aided by marquee Hindi releases, large-scale Hollywood tentpoles, and steady regional contributions. With admissions already up 12 per cent YoY in Q1FY26, this momentum is expected to accelerate, driving consistent revenue growth. Average Ticket Price, which rose 8 per cent YoY to Rs 254, should remain resilient given premium format traction, while F&B spend per head, now at Rs 148, is expected to scale further through product innovation, menu expansion, and cross-selling initiatives. Advertising revenues, which recovered to Rs 110 crore, are expected to benefit disproportionately from big-budget film releases and premium audiences. On profitability, Ebitda has already swung to Rs 1140 crore from a loss YoY, and management expects operating leverage to strengthen margins as footfalls rise, with further support from variable cost controls and rental renegotiations. The strategic rollout of 127 new screens (55 FOCO, 72 asset-light) over 18-24 months will accelerate topline growth while improving return ratios, since the capex burden is largely absorbed by developers. With capex guidance of Rs 400-425 crore for FY26 and net debt already reduced to R 892 crore, free cash flow generation and deleveraging will remain central themes, creating a stronger balance sheet. Together, these levers provide clear visibility of rising revenues, expanding EBITDA margins, and improving bottom-line performance in FY26-27, cementing PVR INOX’s position as the dominant, capital-efficient leader in India’s exhibition industry. In the next 12 months, we expect the company’s annualised EPS to be Rs 40 and should ideally trade at a P/E multiple of 40 times, implying a target of Rs 1,600.