BDL, SAIL, Federal Bank among top 5 stock picks for Diwali 2025; Choice Broking expects 'robust market recovery'

As investors gear up for Diwali 2025, Choice Equity Broking has identified five stocks poised for strong performance, expecting a "robust market recovery" as economic fundamentals remain supportive of growth. The brokerage believes the current consolidation phase in the equity market presents a strategic buying opportunity ahead of the next upward leg.

"As we approach Diwali 2025, Nifty has been trading in a sideways range after witnessing a strong bounce from its demand zone. This ongoing consolidation can be viewed as a healthy pause within the broader uptrend," Choice Equity Broking said in a note. The brokerage expects Nifty to target 26,500 and 28,000 by Diwali 2026, offering substantial upside potential.

The broking firm has shared five stock recommendations for investors looking to build a resilient portfolio this festive season -- Federal Bank, Cipla, Bharat Dynamics Ltd (BDL), Ashok Leyland and Steel Authority of India Ltd (SAIL).

Federal Bank: Choice Broking recommends buying Federal Bank at Rs 213 and on dips up to Rs 207, with targets of Rs 245 and Rs 255. The brokerage highlighted improving momentum indicators, including a rising RSI and a near-positive MACD crossover. A breakout above Rs 220 could trigger a fresh rally, while support lies at Rs 195.

Cipla: The brokerage suggests accumulating Cipla in the Rs 1,545-Rs 1,500 range for targets of Rs 1,770 and Rs 1,850. The RSI at 52.25 indicates scope for further upside. Support is placed at Rs 1,410, below which the trend may turn cautious.

Bharat Dynamics Ltd (BDL): A buy is advised at Rs 1,485-1,440 levels for targets of Rs 1,700 and Rs 1,785. The stock's technical setup indicates a constructive bias, with strong support near Rs 1,380.

Ashok Leyland: Investors may consider buying at Rs 135 and on dips near Rs 131, aiming for Rs 151 and Rs 158. Support is seen at Rs 126. Choice noted that as long as the stock sustains above this zone, the broader trend remains positive.

Steel Authority of India Ltd (SAIL): The brokerage recommends initiating positions in the Rs 129-125 zone, with price targets of Rs 147 and Rs 153. The stock's positional support lies at Rs 116 and the outlook remains positive above this level.