Stocks to buy, Diwali 2025: 4 mega caps, 6 emerging investment opportunities

HDFC Securities, in its special report for Money Fest 2025, has highlighted ten stocks it believes could deliver solid returns in Samvat 2082, emphasizing four established mega-caps and six emerging companies. The brokerage said markets this year are likely to track the US-India trade deal progress and earnings growth trends, with double-digit FY27 earnings growth potentially driving strong returns. While near-term volatility persists amid global uncertainty and trade tensions, HDFC Securities noted that current market weakness, largely driven by global factors, offers long-term investors opportunities to accumulate quality stocks at attractive valuations ahead of Diwali.

The brokerage expects selective, stock-specific returns as valuations remain stretched in pockets despite broader market corrections. It favors domestic consumption-oriented businesses, financials, and the power and engineering sectors. HDFC Securities’ portfolio included a mix of mega-caps and emerging opportunities underpinned by robust fundamentals and attractive valuations, positioned to generate superior returns in the coming year.

Bharti Airtel Ltd | Buy range: Rs 1,935-1,985 | Target: Rs 2,244
Bharti Airtel is expected to deliver revenue CAGR of 15 per cent over FY25–27E, supported by improvements in the Indian wireless market, rising ARPU, and strong growth in Africa. Consolidated revenue, EBITDA, and PAT are projected to grow at 15 per cent, 14 per cent, and 17 per cent CAGR, with a target price of Rs 2,244.

Larsen & Toubro Ltd | Buy range: Rs 3,760-3,818 | Target: Rs 4,243
L&T benefits from a strong order book of Rs 6.1 lakh crore and a growing international presence, particularly in the Middle East. Consolidated revenue, EBITDA, and PAT are expected to grow 17 per cent, 21 per cent, and 26 per cent CAGR, with a target price of Rs 4,243.

JSW Energy | Buy range: Rs 538-555 | Target: Rs 639
JSW Energy is focused on meeting Ebitda targets and timely commissioning of projects while maintaining prudent net debt. Revenue, Ebitda, and PAT are expected to grow 49.3 per cent, 62.3 per cent, and 26.4 per cent, with a target price of Rs 639.

Pidilite Industries Ltd | Buy range: Rs 1,500-1,550 | Target: Rs 1,717
Pidilite has achieved a 12.5 per cent CAGR in volume growth over the last four years, driven by strong domestic demand, retail expansion, and rising construction activity. Revenue and PAT are projected to grow 11.2 per cent and 13.5 per cent CAGR, with a target price of Rs 1,717.

Happy Forgings Ltd | Buy range: Rs 910-944 | Target: Rs 1,083
Happy Forgings has broadened its offerings across commercial vehicles, farm equipment, industrials, and passenger vehicles. With FY25 orders of Rs 1,600 crore and peak annual sales potential exceeding Rs 250 crore, the stock has significant growth potential, with a target price of Rs 1,083.

IDFC First Bank | Buy range: Rs 73-75 | Target: Rs 88.50

IDFC First Bank continued to strengthen its performance through a retailisation strategy, reducing wholesale book share to 19 per cent. New retail products are expected to support NIMs and PAT growth, with a target price of Rs 88.50.

Associated Alcohols and Beverages | Buy range: Rs 1,008-1,035 | Target: Rs 1,182
AABL is positioned to benefit from growing alcohol consumption, expansion into new geographies, and a shift toward premium products, with mid-double-digit margins and attractive valuations.

MSTC Ltd | Buy range: Rs 525-548 | Target: Rs 673

MSTC’s near-monopolistic position in the emerging vehicle scrapping sector positions it for growth. Revenue, Ebitda and PAT are expected to grow 14 per cent, 12 per cent, and 20 per cent CAGR.

Northern Arc Capital Ltd | Buy range: Rs 265-277| Target: Rs 333.50

Northern Arc follows a conservative credit policy with strong asset quality. Tailwinds from RBI rate cuts and favorable monsoon conditions, along with growing D2C lending, are expected to enhance fee income.

Sheela Foam Ltd | Buy range: Rs 678-698 | Target: Rs 837
Sheela Foam is expected to deliver revenue, Ebitda and PAT CAGR of 9 per cent, 26 per cent and 39 per cent over FY25–28E, supported by acquisition synergies, improved business mix, and stable raw material prices.