Diwali Stock Picks 2025: Axis Capital recommends nine names for up to 23% gains

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Brokerage firm Axis Capital has listed nine stocks as part of their Diwali stock picks for Samvat 2082, majority of which are part of the midcap and smallcap space. The nine stocks have an average upside potential of up to 23% for the next 12 months. Here is a look at that list:

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Rainbow Children's Medicare | The brokerage has a price target of ₹1,625, implies a potential upside of 23%. It said that the company has built a strong competitive moat through its expertise across complex paediatric specialities such as neonatology, paediatric cardiology, oncology, and orthopaedics, which together contribute significantly to its overall revenue. It also expects double-digit revenue growth with sustained margins between 32% to 33% over the medium-term backed by disciplined execution and favourable industry tailwinds.

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DOMS Industries | Axis Capital has a price target of ₹3,110 on the stock, which implies a potential upside of 22% from current levels. The brokerage said that DOMS' growth is supported by its 44-acre greenfield facility, expansion into pens, bags, diapers, toys and a distribution push towards 3.5 lakh outlets. The FILA partnership also adds global reach and R&D strength. It expects the company's revenue, EBITDA and Profit After Tax to grow at a Compounded Annual Growth Rate (CAGR) of 23%, 22% and 25% over financial year 2025-2028.

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KEC | The stock could rise up to levels of ₹1,030 in the next 12 months, according to Axis Capital, which implies a potential upside of 20% from current levels. With a well-diversified and robust order book, along with an L1 position, KEC has healthy revenue visibility for the next 18-24 months, Axis Capital said, adding that the government's emphasis on T&D, focus on civil and urban infrastructure, bodes well for the company going forward.

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Chalet Hotels | Axis Capital projects a 19% upside for the stock in the next 12 months, as implied by its price target of ₹1,120 per share. It said that Chalet Hotels is well-positioned for sustained growth, supported by a diversified portfolio and healthy cash flows from its commercial assets. It also expects to generate around ₹300 crore from the sale of its remaining residential units, and the deployment of that will enhance returns, Axis Capital said. "With strong brand partnerships, strategic locations, and favourable industry tailwinds, it is expected to deliver robust occupancy, ARR Growth and long-term value creation.

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Minda Corp | Axis Capital has a 19% upside projection for this auto component manufacturer. The outlook, according to the brokerage, remains positive for the company, supported by robust new order wins, a strong order book, and management's confidence in outperforming industry growth through both organic and inorganic activities. It expects a revenue, EBITDA and PAT CAGR of 13%, 16% and 22% respectively over financial year 2025-2028.

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Kotak Mahindra Bank | The only Nifty 50 constituent part of Axis Capital's Diwali picks for 2025 can go up to levels of ₹2,500 in the next 12 months, indicating an upside potential of 17%. The brokerage likes the lender due to its improving growth trajectory with a pick-up in unsecured segments, improvement in asset quality, outperformance on Net Interest Margins (NIMs) in a declining interest rate cycle, and a healthy profile on its Return on Assets (RoA). Axis Capital expects deposit growth for Kotak Bank to mirror credit growth, enabling it to maintain a steady loan-to-deposit ratio between 85% to 86%.

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Federal Bank | The second private lender that is part of this list has an upside potential of 16%, according to Axis Capital, who has a target of ₹240 on the stock. It believes that the asset quality stress for the lender is manageable, and that growth recovery will be visible from the second half of the year. Steady asset quality metrics, prospects of improving NIMs and present levers to improve its RoA are some of the other factors that drives Axis Capital's bullishness on the stock. It expects Federal Bank to report a 16% credit growth CAGR over financial year 2025-2028.

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JSW Energy | Axis Capital has a price target of ₹625 on the stock, which implies a potential upside of 15% from current levels. The company's inorganic growth focus, good execution track record, focus on energy storage and strategy 3.0 targets, are some key factors as to why Axis Capital is bullish on the stock.

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Coforge | Coforge is well positioned for growth, given its multiple long-term contracts with leading global brands, Axis Capital wrote in its note. It also said that the company remains on track to meet its long-term guidance and expects a CAGR of 25%, 39% and 40% for its revenue, EBIT and PAT over financial year 2025-2027. Strong presence in niche segments, key acquisitions to enhance operational capabilities, strong deal momentum leading to revenue visibility are some of the other key points. Axis Capital has a target of ₹1,980 on the stock, implying an upside potential of 15%.