Diwali 2025: Super-6 stock picks by SMIFS for up to 65% for Samvat 2082

Macro and market backdrop

SMIFS begins by underlining that the upcoming year (Samvat 2082) comes at a moment when several favourable conditions converge. Their thesis is that India’s economy is at an inflection point, driven by the following:

• Lower inflation and a more benign monetary environment, which improve corporate margin-visibility and consumer demand.
• A revival in consumption (especially rural) and fiscal/monetary tailwinds (e.g., GST relief, tax cuts) that support growth.
• A resurgence of capital-expenditure (capex) and infrastructure spending, boosting demand for engineering, power, heavy equipment and renewables.
• Valuations of many quality stocks are described by SMIFS as “reasonable” (or “discounted”) given their growth prospects.

Against this backdrop, SMIFS identifies six names (“Super-6”) which they believe are positioned to deliver strong upside in the next 12 months (roughly the Samvat 2082 horizon). While the headline says “up to ~65%”, some picks show more modest upside and others the full 65%. It is important to emphasise that “up to” means the top of that range, not a guarantee.

The Six Picks

Below is a summary of each of the six stocks selected by SMIFS, their key justification, target, and upside estimate.

1. Bharat Heavy Electricals Limited (BHEL) – Buy, Target ≈ ₹320, Upside ~38% SMIFS argues that BHEL is strategically placed to benefit from India’s ambitious capacity-addition cycle in thermal, renewable and transmission sectors.
   Key points include:
   • A strong order-book ending FY25, including 24.5 GW of thermal projects and marquee contracts (e.g., a 6,000 MW Khavda-Nagpur HVDC link) giving multi-year visibility.Global footprint (13 GW installed across 91 countries) supporting execution credibility.Technology differentiation (800 MW AUSC plant, hydrogen fuel cell locomotives, space-grade Li-ion cells for ISRO) which may support margin improvement.Diversification into hydropower, nuclear, defence and railways, along with a JV with Coal India Ltd. for coal-gasification and ammonium nitrate.
     Risks: Working-capital intensity, exposure to weak state utilities, margin pressure until contract terms improve. SMIFS expects annualised EPS ~₹8 and P/E of ~40× to hit target.
   Assessment: This is a capex-/infrastructure-play, and the ~38% upside is modest relative to the headline “65%” but comes with structural tailwinds. The key variable will be execution and timely conversion of order-book into revenue.
2. Cyient Limited – Buy, Target ≈ ₹1,625, Upside ~39% SMIFS highlights the recent re-organisation (carving out the semiconductor business as standalone growth option) which enhances clarity for investors.
   Other drivers:
   • DET (Design, Engineering & Technology) business targeted to medium-term EBIT margin ~15%.DLM (Design-to-Manufacture) business gaining build-to-spec wins in aerospace, synergistic with DET.Early traction in semiconductor order-intake (though currently investment mode) with a ~$10 million quarterly run-rate target and margins normalising by Q3FY26.Large client wins (e.g., Vodafone Group’s global adoption of VISMON platform) and global footprint strengthening etc.
   Assessment: This is more of a service/engineering/tech play, with exposure to semiconductors and aerospace. The ~39% upside is reasonable. Execution and commercialisation of the semiconductor business will be the key risk.
3. Dabur India Ltd. – Buy, Target ≈ ₹562.50, Upside ~11% A more conservative choice compared to others. SMIFS argues that Dabur delivered a resilient Q1 FY26, with ~7% sales growth (ex-seasonal beverages & glucose) supported by strong HPC (Health & Personal Care), Healthcare and International markets, plus out-performance in rural.
   Further supports:
   • Input-inflation (~7%) being managed, margin stability and guidance for margin expansion via premiumisation, cost efficiency, Healthcare scaling.Festive tailwinds: reducing interest rates (RBI cuts) may help disposable income, GST rate cuts on select FMCG categories supporting affordability/volume.
     SMIFS expects annualised EPS ~₹12.50 and P/E of ~45× for target.
   Assessment: While upside is smaller (11%), this is a defensive/steady growth stock with less risk. If the aim is more stable returns versus high-flyers, this fits. But it doesn’t chase the “up to 65%” headline.
4. Petronet LNG Ltd. – Buy, Target ≈ ₹390, Upside ~42% SMIFS views Petronet as entering a strong expansion phase to capture India’s next wave of natural-gas demand. Key elements:
   • Expansion of Dahej terminal capacity to 22.5 MMTPA by CY25, new 5 MMTPA Gopalpur terminal (East Coast) and Kochi terminal ramp-up with pipeline connectivity.PDH-PP pet-chem initiative and LNG bunkering opportunities diversify beyond simple regasification.Long-term deals with Qatar, Gorgon, Deepak Fertilisers give base-load volumes, while oversupply of future LNG liquefaction capacity globally could lead to structurally lower LNG prices enabling demand growth in India.
     SMIFS expects annualised EPS ~₹30 and P/E of ~13× for target.
   Assessment: A structural energy/infrastructure play with double-digit upside (~42%). The risk is execution/delay of terminal expansions and global LNG price volatility.
5. Praj Industries Ltd. – Buy, Target ≈ ₹560, Upside ~65% This is the marquee pick with the maximum upside (~65%) of the six. SMIFS places high conviction here based on multiple structural trends:
   • Q1 FY26 results were weak (execution delays, customer liquidity issues, underutilised GenX), but SMIFS views these as transitory. Margins expected to normalise to high single digits from H2FY26 as execution rates pick up.Strong order-backlog of ~₹4,450 crore and fresh inflows ~₹795 crore in Q1 with cash reserve ~₹450 crore. Export revenue already ~39% and expected to increase.Growth levers beyond ethanol: compressed bio-gas (via BPCL JV), sustainable aviation fuel (first US commercial-scale order, domestic policy push in 2025), bioplastics (PLA tie-up with Thyssenkrupp), value-added modules such as distillers corn oil, rice-protein, CO₂ capture. These support high-margin annuity streams and global footprint expansion.Vision 2030: ambition to triple turnover while expanding profitability. Thus, Praj is positioned at the intersection of energy transition, bio-economy and domestic policy tailwinds.
   Assessment: This is the highest conviction/highest upside candidate in the list. But with that comes higher execution risk: transitioning into new business segments (bio-fuels, bioplastics) means higher uncertainty. Investors must accept more volatility.
6. PVR Inox Ltd. – Buy, Target ≈ ₹1,600, Upside ~48% SMIFS identifies PVR Inox (one of India’s leading multiplex cinema chains) as a strong recovery and growth theme in the entertainment/leisure sector. Highlights:
   • Expected strong multi-year growth backed by a robust film pipeline (Hindi, Hollywood, regional) and structural shift to premium cinema formats. Admissions were up ~12% YoY in Q1 FY26; average ticket price rose ~8% (to ~₹254) and F&B spend per head ~₹148.Advertising revenue recovered (~₹110 crore) and is expected to benefit disproportionately from large-budget releases and premium audience segments.Asset-light expansion: 127 new screens (55 FOCO format, 72 asset-light model) over 18-24 months. Capex guidance ~₹400-425 crore for FY26; net-debt reduced to ~₹892 crore, supporting free-cash-flow generation and deleveraging.
     SMIFS expects annualised EPS ~₹40 and a P/E of ~40× for the target.
   Assessment: This is a consumption/discretionary recovery play. Upside ~48% is substantial, though risks include film-pipeline variance, macro headwinds to discretionary spend, and execution of the screen expansion plan.

Themes & Why These Picks Make Sense

From the six names selected, several overarching themes emerge which help explain SMIFS’s selection logic:

• Capex / Infrastructure / Heavy E&M: BHEL and Petronet emphasise infrastructure, energy, transmission, LNG — sectors with large structural tailwinds in India.
• Technology / Engineering / Global Footprint: Cyient and Praj tap into niche global engineering, bio-economy, and energy transition segments — areas of differentiation.
• Domestic Consumption Recovery: Dabur and PVR Inox reflect SMIFS’s view of a revival in consumption (both basics and discretionary) post lower interest rates and stronger rural demand.
• Reasonable Valuations + Growth Visibility: The picks reflect companies with decent growth visibility (order books, backlog, backlog conversions) and valuations that SMIFS deems acceptable relative to their potential (e.g., P/E targets cited).
• Festive Timing: The launch coincides with Diwali/​Samvat 2082 — a symbolic time for investors to “reset” portfolios in India. SMIFS uses this timing as a marketing/psychological anchor but aligns it with their fundamental view.

Risks & Caveats

While the “Super-6” list is compelling, the report (and any investor) must remain cognizant of key risks:

• Execution risk: Many of these companies depend on project wins, order-book execution, commissioning and margin improvement (BHEL, Praj, Petronet). Delays or cost overruns could derail upside.
• Macro risk: While SMIFS assumes a favourable macro scenario (lower inflation, higher consumption, capex surge), any moderation (higher inflation, interest-rate shock, global slowdown) could undermine these plays.
• Industry/segment risk: For example, PVR’s growth depends on film releases, consumer willingness to spend on entertainment, and competition from OTT/streaming. Dabur faces commodity inflation and rural demand risk.
• Valuation risk: Some targets imply generous multiples (e.g., P/E of ~40× for BHEL and PVR). If growth falls short, the valuation could be compressed.
• Time-horizon risk: While the picks are for the next ~12 months (Samvat 2082), markets may require longer for structural themes (eg bio-fuels for Praj) to play out fully.

Overall Investment View

The “Super-6” list from SMIFS offers a diversified set of opportunities spanning infrastructure, growth engineering, consumer staples and discretionary. Among them, the standout for highest upside is Praj (~65% upside) — but that also carries the most execution / structural risk. The more conservative element is via Dabur (only ~11% upside) which may appeal to lower-risk investors.

If I were to summarise:

• For investors willing to accept higher risk for higher reward, Praj and PVR Inox look like the “go-for-growth” picks.
• For those seeking structural growth with moderate risk, Petronet, Cyient, and BHEL are attractive.
• For the more risk-averse, Dabur offers steady‐growth though lower upside.

I would caution that while the Diwali timing is appealing, one should not treat these as short‐term “Diwali picks” only for a few weeks. The thrust is for the Samvat 2082 year horizon (12 months). It might make sense to scale in stocks rather than go full allocation immediately, monitor quarterly performance, and treat this as one part of a broader diversified portfolio.

Conclusion

As India enters Samvat 2082, SMIFS’s “Super-6” list offers a thoughtful set of stock ideas aligned with economic revival, structural industry shifts and consumption bounce-back. While none of the picks are risk-free, each carries a credible growth story and reasonable upside according to the brokerage. Investors should weigh the themes, the risks and their own time-horizon and risk-tolerance. If the macro plays out as SMIFS expects, the next 12 months could be rewarding — but vigilance and selective position-sizing remain important.