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Every year stock exchanges in India arrange for a special trading session on the eve of 'Diwali' called ‘Muhurat Trading’. Traders welcome the new year with a traditional ceremony of 'Laxmi Puja'. Older books of account are closed and new books are opened with ‘Puja’. Customary small trades are placed by traders as 'Shagun', a symbolic start of new session on holy 'Muhurat', believing that the whole session will continue to bring prosperity and create wealth for them.

This year, investors can also participate in the ‘Muhurat Trading’ on the auspicious occasion of Diwali Laxmi Pujan on Wednesday, November 07, 2018. Muhurat Trading Session for Equity will start at 5.15pm and will be live for trades till 6.30pm.

To help investors partake their ‘Shagun’ on this auspicious occasion, we bring to them a set of well researched stocks, seven in all, that can help them generate good returns called the ‘Diwali Picks’. The stocks come with individual target prices and investors can opt to exit the stocks on its achievement. Investors can invest in any or all the stocks in the quantum that an investor is comfortable with.


Diwali Picks are not mere symbolic stocks meant for the auspicious occasion of Diwali but also are selected with a view to generate above average returns relative to the markets and other peer stocks.

Diwali is the time when customary small trades are placed by stock traders as ‘shagun’, a symbolic start of new session on holy 'Muhurat', believing that the whole year ahead will continue to bring prosperity and create wealth for them. Traditional belief apart, wealth creation is possible through a disciplined approach of stock selection using sound financial principles. These companies possess a strong balance sheet and have a good management with a proven track record of delivering sustainable profits and are available at reasonable valuations

Past performance

Our Diwali Picks of 2017, amidst high market volatility, managed to perform well with 70% of success ratio.

We have also highlighted our past performance of alongside other leading broking houses. Brokerage 1 had recommended 7 stocks while Brokerage 2 had recommended 9 stocks. Brokerage 3 and Brokerage 4 came up with recommendations for 5 and 10 stocks respectively.

Chart 1 : Returns of last year’s (2017) Diwali Picks. Includes dividends

Due to recent macro and global economic events the equity markets did not perform well because of which the average and mid-average returns have been negative for all the Brokerage stocks. The average returns generated by SBICap Securities' Diwali Picks from 12th Oct 2017 to 31st Oct 2018 was -20.6%. SBICap Securitites’ Diwali picks managed to -20.6% amongst the peers with the lowest returns being of Brokerage 3 with -29.1 returns. Mid-average returns are computed in a similar fashion by excluding the highest return and lowest return stocks. Excluding the highest return (Whirlpool of India @ 1.5%) and lowest return stocks (NBCC India @ -50.8%), the mid-average returns of SBICap Securities Diwali Picks too managed to stay at -19.6% amongst the peers with lowest mid-average returns being -25.5% of Brokerage 4.


Chart 2 : The average days-to-target and target achievement %

SBICap Securities' Diwali Picks had 70% achievement ratio with 7 out of 10 stocks hitting targets. While Brokerage 2 having 89% achievement ratio, had 8 out of 9 stocks recommended by them hitting targets. Likewise Brokerage 1's achievement was for 5 out of 7 recommendations and Brokerages 3 & 4 achievement was 3 out of 5 and 6 out of 10 recommendations respectively. The average time taken to reach the target was 172 days for SBICap Securities due to slow uptick in stocks like Persistent Systems and Whirlpool of India (333 days).


Chart 3 : Stocks reaching targets within 90 days and after 90 days

SBICap Securities’ Diwali Picks had most of the stocks reaching target within 90 days amongst the peers. It had 4 stocks reaching targets within 90 days and 3 stocks reaching targets after 90 days. With Brokerages 2 & 4 having most of the stocks reaching target after 90 days, SBICap Securities was the third amongst its peers to had stocks reaching target after 90 days.


Chart 4 : The offered returns versus actual returns generated
(for target hitting stocks only)

The actual average annualized returns for those stocks that hit target is measured as the average of the returns earned on exiting the stock at its target price. The earlier the target gets hit, the higher is the annualized returns. In that respect SBICap Securities gave 288.2% returns. However, one must note that 288.2% is computed only for 7 of the recommended 10 stocks even as its other 3 are yet to hit their targets. Likewise Brokerage 4 is for 6 out of 10, Brokerage 1 is 5 out of 7, Brokerage 2 is 8 out of 9 and Brokerage 3 is 3 out of 5. The offered average returns are the average of all the target returns prescribed by the brokerages while making their recommendations.

faq’s & answers
- What are Diwali Muhurat picks?

Diwali Muhurat picks, this year, are a set of 7 stocks that have been chosen carefully through a bottoms-up approach by the Research team at Sbicap Securities. These are stocks having a good return potential over the next one year meant for investment during the auspicious period of Diwali.

- Why should one invest in Diwali Muhurat picks?

Diwali is the time when customary small trades are placed by stock traders as ‘shagun’, a symbolic start of new session on holy 'Muhurat', believing that the whole year ahead will continue to bring prosperity and create wealth for them. Traditional belief apart, wealth creation is possible through a disciplined approach of stock selection using sound financial principles. These companies possess a strong balance sheet and have a good management with a proven track record of delivering sustainable profits and are available at reasonable valuations.

- When should one invest in Diwali Muhurat picks?

One can invest in Diwali Muhurat picks any trading day commencing Monday 5th November until the end of the week i.e. Friday 9th November with Thursday being a holiday. Stock exchanges in India arrange for a special trading session called Muhurat Trading on the eve of Diwali between 5.15pm to 6.30pm on Wednesday 7th November.

- How can I invest in Diwali Muhurat picks?

One can invest by logging into our website or through our mobile app and putting one’s order through the order entry screen. Alternately, one can call us and trade. One can also walk in to our branches and request for a trade. All trades must be appropriately authorised by the client themselves.

- How much should I invest in each stock?

One can invest as much amount as is possible in any, some or all of the 7 stocks. However, one should follow prudent investment principles and have adequate diversification in one’s portfolio to minimise risks. Stock markets, like any other financial market, are exposed to investment risks.

- Should I invest in all the 7 stocks suggested as Diwali Muhurat picks?

One can invest in as many of the 7 stocks as is possible. There is no limit prescribed by us.

- Can I invest in stages?

The window for investment is open until 9th November after which the risks of investments are likely to alter given the movement in stock prices. Therefore, it is advisable to complete the entire investment by 9th November.

- What are the charges for investing in Diwali Muhurat picks?

Apart from standard transaction charges like brokerage, STT, GST, exchange fees and demat charges on regular stock purchases, there is no extra charge levied by us for investing in the Diwali Muhurat picks.

- How long does one hold the stocks?

The target price against each of the 7 stocks is indicated. One is expected to hold the stocks till they achieve target and thereafter exit. One can also continue to hold the stocks irrespective of the target being achieved depending on one’s own investment horizon, risk appetite and investment objective of wealth creation. However, prudence demands that one should exit the stocks when risks from depreciating prices outweigh one’s financial buffers.

key highlights

7Well researched Stocks

Span of 6-12 monthsTo achieve target prices

Above
average
Expected returns

You can
choose
Invest in any or all the stocks

Toll Free: 1800-2099-345 (MTNL/BSNL Users) | E-mail: helpdesk@sbicapsec.com | www.sbismart.com
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