ICICI Bank, LTIMindtree, Dixon, PNB Housing: 10 Diwali stock picks for up to 48% upsides

Nirmal Bang Institutional Equities (NBIE) has come out with a lost of 10 stocks including ICICI Bank Ltd, LTIMindtree Ltd, Ambuja Cements Ltd, United Spirits Ltd, Dixon Technologies (India) Ltd and PNB Housing Finance that it believes can deliver up to 48 per cent returns by next Diwali. Other stocks included Chalet Hotels Ltd, Mahanagar Gas Ltd, Galaxy Surfactants and Suprajit Engineering. Here's what the brokerage said on each of these stocks: 

ICICI Bank | Target price | Upside 20%
NBIE remained positive on ICICI Bank, given its healthy growth outlook and earnings trajectory with return ratios expected to remain healthy. While the momentum in balance sheet growth is expected to remain strong, the bank has guided that the NIM will remain under pressure in the near term. NBIE has anticipated ICICI Bank's earnings to grow at a CAGR of 12.8 per cent over FY24-FY27E on the back of 15.1 per cent CAGR in the loan book, 4.2 per cent average NIM, 39.1 per cent average C/I ratio and 58 bps average credit cost during the same period. This, the brokerage said, should result into a RoA/RoE of 2.2 per cent/17.3 per cent in FY27E. It suggested a ‘Buy’ rating on ICICI Bank with a target price of Rs 1,545.

LTIMindtree | target Rs 7,542 | Upside: 28%
Nirmal Bang said LTIMindtree combines the strengths of both Tier-1 (capability) and Tier-2 (agility) IT companies. It offers a broad range of capabilities, a scalable portfolio of 65 global Fortune 500 clients, and platforms and IP as key differentiators. NBIE likes the company’s strengths in ERP modernisation, data analytics and strong UI/UX capabilities, which is likely to capture spent towards app modernisation, data analytics and UI/UX upgrades. Normal furloughs in Q3, the robust large deal pipeline ($5 billion-plus) and focus on operational efficiencies should enable LTIM to continue its growth trajectory in H2FY25, it said.

"We anticipate US$ revenue/ Margin/ EPS CAGR over FY24-27E at 12.8 per cent/15.8 per cent/16.3 per cent, respectively. We assign a target multiple of 33.2x, 3-year mean on Sep’26E EPS of Rs227. We reiterate BUY on LTIM with an increased TP of Rs 7,542 as we roll forward to Sep’26 EPS," it said.

Ambuja Cements | Target price: Rs 683 | Upside: 19%
A favourable trade mix of the acquired assets and quality standards at par with Ambuja Cements will reduce the price gap in Ambuja Cements' primary markets. Nirmal Bang expects an improvement of Rs 85 per tonne in realisation/tonnein FY26.

"We expect revenue/Ebitda CAGR to be 30 per cent/58 per cent during FY25E-FY27E. The stock is trading at 13.8 times FY26E EV/Ebitda, above the 5-year average of 8.5x. We have maintained "Buy" on ACEM and value it at 12 times September 2026E EV/Ebitda with a revised target price of Rs 683," NBIE said.

United Spirits | Target price: Rs 1,735 | Upside: 18%
NBIE said there has been an increase in the premiumisation trend in recent years as consumers are uptrading even if frequency of consumption has not increased massively. With strategic sale of its Popular segments in two phases over the last decade, United Spirits has a comprehensive portfolio of products laddered across price points to capitalize this trend. In the recent past, United Spirits has forayed into new categories like Tequila, invested in their own local brands & start-ups and introduced products from the Diageo global stable. The company’s focus on innovation, renovation, category creation and exploration of new growth engines is likely to bolster long term sales, it said.

"The stock is trading at 79 times/61 times FY25E/FY26E EPS and we value the company at 60 times September 2026E EPS as we are positive about the structural growth potential of United Spirits, underpinned by ongoing premiumization in the Spirits market and the fact that 87-88 per cent of the company’s sales now comes from the P&A category. We have a Buy rating with target price (TP) of Rs 1,735," it said. 

Dixon Technologies | Target price: Rs 15,920 | Upside: 11.8%

NBIE said it remains structurally positive on Dixon Technologies' long term business prospects and maintained a 'Hold' on the stock with a revised target price of Rs 15,920. This implies a PE of 77 times on September 2026E EPS and it is at par with the 5-year historical average PE multiple on 1-year forward basis. 

"We believe that the multiple is fair and it adequately captures: (1) 80 per cent EPS CAGR over FY24-FY26E (albeit a low base; mobile assembly ramp-up began sharply from the past 12-18 months), and (2) post-tax RoCE of 35 per cent in FY26E. We believe it is a long-term compounder and should be accumulated at dips," it said.

PNB Housing Finance | Target price: Rs 1,100 | Upside: 19%
PNB Housing Finance has identified three verticals within its retail business (Prime, Emerging Markets and Affordable Housing/Roshini). The company reiterated its strategy of focusing on the Affordable Housing (Roshini) and Emerging Market segments and expects them to contribute 40-45 per cent of incremental disbursements by FY25-end (vs 31 per cent currently). It plans to open 40-50 new branches in FY25 and is targeting a growth of 17 per cent in retail loans in FY25. NBIE expects a growth of 17 per cent in FY25, driven by Affordable Housing and EM businesses.

"The stock currently trades at 1.3 times FY26E P/ABV. We believe the focus on growth in the affordable/ emerging markets segment is likely to aid growth and support margins. Strong delivery on asset quality provides confidence on execution. We reiterate Buy with a target price of Rs 1,100 (1.5x Sep ’26E ABVPS)," NBIE said.

Chalet Hotels | Target price: Rs 954 | Upside: 13%
Chalet Hotels, the hospitality arm of K Raheja Group is an owner, developer, asset manager and operator of hotels and resorts (3,052 operational keys across 10 hotels as on FY24) under leading global brands (Marriott and Accor Group) in MMR, NCR, Hyderabad, Bangalore and Pune in the premium segment. Chalet's strategy of growth is via the ownership route. NBIE said this strategy augurs well in an industry upcycle like the current one as one can reap the benefits of operating leverage. 

"Commercial Real Estate (CRE) leasing and residential projects offer diversification to the base business. We are positive on Chalet with a Buy (target price of Rs 980 based on SoTP; Hospitality 25 times EV/Ebitda on Sep’26E). Our implied blended multiple of 19x EV/EBITDA and last 3-yr adj median of 19x factors in the sector tailwinds and superior financial performance as compared to the previous upcycle," it said.

Mahanagar Gas | Target price: Rs 1,784 | Upside: 25%

NBIE has a 'Buy' rating on MGL as the stock offers positive risk-reward as thge brokerage rolled over its estimated to September 2026 earnings. It cited a healthy EPS and volume CAGR of 19.8 per cent and 9.5 per cent in FY25E-27. It noted that the company plans to add 80-85 CNG stations in MGL and subsidiary Unison Enviro Pvt Ltd. 

"Growth in small trucks/LCV CNG vehicles, MSRTC bus conversion to CNG (MGL scheme to finance 50 per cent of cost for – OEM CNG model) are positives. Raigadh GA switching to online CNG stations will aid higher blended margins," it said.

Galaxy Surfactants | Target price: Rs 3,500 | Upside: 21%
Galaxy Surfactants is one of the leading players in the surfactants and specialty care ingredients market and it is focused on only Home and Personal Care (HPC) industry across the globe, unlike peers that are having presence across various end-user industries. It concentrates on green technology, innovation, and marketing in its Performance Surfactants and Specialty Care segments. 

"We believe that Galaxy Surfactants  would be a key beneficiary of the broader trends like growing urbanization, rising disposable incomes, improving standards of living and premiumisation. It has large headroom for growth in the Developed Markets (DM), led by premiumisation . We believe GALSURF acts as perfect proxy to the Global HPC market considering its diversified geographical presence, sharp focus on premiumisation and green chemistry. Green shoots in Developed markets is encouraging and the management also expects demand volume growth in AMET portfolio," NBIE said.

The broking firm said India portfolio continues to outperform with 11 per cent volume growth in FY24. It believes FY25 could be the only year post IPO where all regions should contribute to growth. 

Suprajit Engineering | Target price: Rs 711 | Upside: 48%

NBIE is positive on Suprajit Engineering due to the recovery in the underlying industry. It said synergies through acquisition may help add new clients and products to its portfolio. New products may help drive content per vehicle.  NBIE said the advantages of scale and low cost production helps SEL maintain cost leadership vis-a-vis its peers on the global platform. 

"SEL maintains a strong free cash flow generating model with nominal capex requirements. We are building in revenue/Ebitda CAGR of 16 per cent/ 29 per cent over FY24–26E along with RoE/ RoCE of 20 per cent/ 23 per cent for FY27E. We value SEL at 27 times Sept’26E EPS to arrive at a target price of Rs 711. In line with the 5-year mean multiple," it said.