Stocks That Market Experts Would Gift Parents, Spouse, Children, Friends This Diwali

This Diwali, when incomes are down, visits to family and friends are at a minimum, gifts need sanitisation and card parties are few and masked between...there’s only one thing looking up. The stock market.

After dipping to a three-year low in March as the Covid-19 pandemic shut down the world, India’s benchmark indices have not just recouped their losses they are now at record highs. The broader market also seems keen on catching up.

In a year when few movies released, audiences flocked to stocks. 63 lakh new demat accounts were opened between April and September this year as the Infosys Ltd. flowerpot, Reliance Industries Ltd. rocket and Bajaj Finserv Ltd. ground spinner provided thrills, and a side income too (hopefully).

As the year turns which of these stocks will continue to sparkle?

BloombergQuint asked these market experts to list stocks that they’d gift their loved ones—parents, spouse, children and best friend forever. Different ages, different risk appetites, different return requirements.

Because, the best gifts are the ones that keep on giving.

An archive photograph of a firework set off during Diwali celebrations in Delhi. This year many states have banned them or imposed time restrictions. (Photographer: Prashanth Vishwanathan/Bloomberg)

Amisha Vora, Joint Managing Director, Prabhudas Lilladher

Parents: Reliance Industries
The largest new economy play with zero debt and solid cash flow.

Spouse: HDFC Life
Best life insurance player in a large, underpenetrated market with a tremendous focus on product innovation.

Children: Pidilite Industries
Reliable and established DNA of seeding, nurturing, and building leadership in key segments. Very good return ratios, cash profile, brand stickiness, and proxy to housing /construction demand which is likely to boom.

BFF: Nippon Life India Asset Management
Owned by Japanese investor taking lead in ETF culture, generating huge cash every year.

Abhimanyu Sofat and his family. (Image: Abhimanyu Sofat)

Abhimanyu Sofat, Vice President Research, IIFL

Parents: Hindustan Zinc
Gift this cash-generating and dividend-paying pick to thank your parents, just the way Vedanta Group would thank HZL for helping repay some of the promoter-level debt.

Spouse: Titan
Gift this quality franchise to your wife, which can garner market share in the largely unorganised jewellery market. More importantly, it’s a nicer way of telling your wife to choose an investment which will make more returns than diamonds.

Children: Happiest Minds Technologies
This gift is suited for your young child as this $100 million company, much like your child, will go on to achieve much bigger things in life.

BFF: ITC
This gift is ideal for your friends as ITC may not make them phenomenally rich overnight but will keep them happy owing to steady dividends.

Chakri Lokapriya, Managing Director, TCG Asset Management

Parents: TCS
It’s a leader in IT services, and growing in new technology areas such as cloud. Very well run, globally diversified company capable of delivering 12-15% CAGR, with 3% dividend yield.

Spouse: SBI Life Insurance
It’s a business with a long runway of growth, with solid brand recognition, an important factor, and digitization will allow faster penetration. 15-20% CAGR returns over several years, makes valuation a less important factor.

Children: Reliance Industries
RIL is four companies - Reliance Retail, Telecom, Jio Platforms, and oil and gas. The oil and gas business provides the cash flow to grow the other businesses, which will eventually be spun off to unlock investment returns. Expect 20% CAGR over next few years.

BFF: ICICI Bank
This bank is well diversified across consumer and corporate lending, both growth areas and will reflect India’s economic potential. Expect it will deliver 15% CAGR over next several years.

Sudip Bandhyopadhyay (right) and his family. (Photo: Sudip Bandhyopadhyay)

Sudip Bandyopadhyay, Group Chairman, Inditrade Capital

Parents: HUL
Steady stable growth based on India growth.

Spouse: Mazagon Dock Shipbuilders
This is a low risk and high growth potential stock.

Children: HCL Technologies
It’s a product focused and geographically diversified technology business.

BFF: ITC
This is a dark horse with the ability to surprise.

Pankaj Murarka, Founder, Renaissance Investment Managers

Parents: ITC

Children: Info Edge

Spouse: Syngene International

BFF: Kotak Mahindra Bank

Siddhartha Khemka and his family. (Image: Siddhartha Khemka)

Siddhartha Khemka, Senior Vice President and Head-Retail Research, Motilal Oswal Financial Services

Parents: Dabur
This stock has been a steady compounder for more than 10 years and will keep performing steadily in the times to come. It is a safe investment bet with excellent management, good return ratios, healthy dividend yield and steady growth potential.

Wife: Titan
Titan has had a decent track record with excellent growth in last 10 years. This company is the perfect gift for my wife as it would cater to all her future needs with the growth expected in the stock. Titan’s medium-to-long term earnings growth opportunity is best-of-breed, which is reflected in the ~24% EPS CAGR over the past three years.

Children: HDFC Life
HDFC Life is one of India’s top three private sector life insurers and offers a wide range of insurance products. This company is well suited to a gift for children as it is a play on the insurance penetration in India which has a long runway and can be accumulated in the form of SIP for them for over next 10 years for wealth creation.

BFF: Tata Consumer Products
Tata Consumer Products is mainly into beverages (tea, coffee) and branded foods (salt, pulses, spices etc.) business. We associate friends with the special time spent with them over tea and coffee—hence this stock makes a perfect gift for them. The Tata Group is clearly focused on leveraging its brand and participating in India’s consumption story of Rs 30 trillion.

Dipan Mehta, Founder Director, Elixir Equities

Parents: HDFC Bank
A stock that represents low risk, high yield, stable business/management.

Spouse: Bharti Airtel
A stock that represents a longer investment timeline, moderate risk and growth potential.

Children: Apollo Hospitals
A stock that represents long term investment, high growth potential.

BFF: HCL Technologies
A stock that fits their personality or serves as surprise.

DISCLAIMER

The contents of this story do not constitute investment advice. For that, you must always consult an expert based on your individual needs. The views expressed here are that of the experts and do not represent the views of BloombergQuint.