Muhurat trading: NCC, PCBL among 10 smallcap stocks that could deliver 40% returns by next Diwali

Indian stock markets which are closed for normal trading on Friday on account of Diwali holiday, will open for Muhurat Trading, later today. Stock exchanges NSE and BSE will conduct their annual Diwali Muhurat trading session from 6 pm to 7 pm, marking the beginning of the Hindu calendar year Samvat 2081.

While the Samvat 2080 has been a great one for the investors with Nifty delivering 25% returns, experts are cautioning investors to temper their expectations in the new Samvat. Meanwhile, one year-returns of the broader Nifty Smallcap Index has been to the tune of 46%.

It is expected to be a stock pickers’ market and in view of this, top brokerages have identified their best smallcap picks that could do the trick for investors till next Diwali. Here are 10 smallcap stocks that could give up to 40% returns:

Nifty has witnessed a sizable correction of nearly 8–9 % in the last four weeks and the price correction is not over yet, Angel One said in a note. “In between we may see some rebounds or sideways consolidation, but the possibility of one more corrective leg is very much on the cards. As far as levels are concerned, 24,500/24,750/24,950 are to be treated as strong hurdles whereas on the flipside, 23700 followed by 23500 (200-DSMA) are the levels to watch out for. If globally things worsen, 22400 – 22000 levels can also be retested,” it said in a note.

Traders should avoid aggressive bets on either side and investors should start accumulating quality propositions in a staggered manner, this brokerage recommended.

Stocks to buy1) Buy Care Rating at Rs Rs 1,380-1,320 | Target: 1,660 | SL: Rs 1,250 | Upside: 14%
Stock has held its positive stature even in weak markets, indicating a very high relative strength. After retracing to nearly 38.2% of its prior upmove from the levels of 400, it has formed a good base and has broken out of the base, backed by bullish candlestick formations near its swing lows.

(Angel One)

2) Buy Snowman Logistics at Rs 64-60 | Target: Rs 91 | SL: Rs 47 | Upside: 38%
Snowman Logistics looks to have reversed its prior primary downtrend, indicated by a breakout above a falling trendline and a breakout from a double bottom formation on weekly charts. The reversal of trend is further supported by the formation of higher highs and higher lows.

(Angel One)

3) Buy NCC at Rs 275-300 | Target: Rs 400 | Upside: 40%
NCC, a leading construction company with presence across varied verticals such as buildings, roads, water and mining, is a fundamental call. Company’s standalone orderbook is at Rs 47,625 crore with 2.5x TTM book to bill. Healthy topline growth along with stable finance costs is likely to drive 25.9% earnings CAGR over FY24-27E.

(ICICI Direct)

4) Buy PCBL at Rs 435-470 | Target: Rs 600 | Upside: 34%
We have a positive view on PCBL and assign BUY rating amid profitable organic growth at its base carbon black business; turnaround in sight at Aquapharm and big opportunity in sight in Nano Silica. We expect Sales/PAT at PCBL to grow at a CAGR of 21%/27% over FY24-27E.

(ICICI Direct)

5) Buy PTC at Rs 180-182 | Target: Rs 237-241 | Stop Loss: Rs 165-170 | Upside: 32%
PTC India has recently made a notable rebound from its key support level around 165-170 with RSI also showing a positive reversal from the oversold zone. Long-term trend appears promising, as the stock has found support at its bullish trendline on the weekly chart. We recommend initiating a long position.

(Dr Ravi Singh, Senior Vice President, Retail Research at Religare Broking)

6) Buy PSB at Rs 50-51 | Target: Rs 65-67 | SL: 46 | Upside: 31%
Punjab & Sind Bank has demonstrated a strong rebound after forming a double bottom pattern on the daily chart. It presents an attractive opportunity for both short-term and long-term portfolio inclusion.

(Dr Ravi Singh, Senior Vice President, Retail Research at Religare Broking)

7) Buy BoI at Rs 102-104 | Target: Rs 137/141 | SL: Rs 95 | Upside: 36%
Bank of India is looking promising on the daily & weekly charts after a breakout from bearish trendline having tested its major support zone 95-98. It is trading above 20 Day EMA which can give further bullishness. We recommend initiating a long position.

(Dr Ravi Singh, Senior Vice President, Retail Research at Religare Broking)

8) Buy Gravita India at Rs 2,174 | Target: Rs 3,000 | Upside: 38%
Push towards the electrification of transport, the demand for electric batteries is expected to swell in Samvat 2081, which will, in turn, increase the demand for lead. Considering the strong industry tailwinds and the company’s growth plans, we estimate revenue/EBITDA/EPS growth of 26%/32%/32% CAGR over FY24-FY27E.

(Axis Securities)

9) Buy Arvind Smartspaces at Rs 789 | Target: Rs 1,085 | Upside 37%
We recommend a BUY rating on the stock with a TP at Rs 1,085/share (valuing the company at 8X FY26 EV/EBITDA), implying an upside of 37% from the CMP. Arvind SmartSpaces Limited is engaged in the development of real estate across residential, commercial, and industrial projects.

(Axis Securities)

10) Buy Chalet Hotels at Rs 873 | Target: 1,106 | Upside: 27%
Chalet Hotels is the hospitality arm of India’s leading real-estate developer K Raheja Corp Group. Its reasonable valuation, diversified asset portfolio, tie-up with high-end international hotels and healthy financial track record makes it a prized scalp for SBI Securities.

(SBI Securities)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)