India is a land of festivals. The emotions of Indians are so aligned with their culture that usually its effect is evident in their investment behaviour. The festivals are all lined up in the pious Hindu months of ‘Chaturmas’.
Festivals energise the country in terms of demand for products, their consumption, optimism and wealth. It may also have an economic impact on the country’s overall markets.
The upcoming Ganesh Chaturthi 2024 on September 7 is the most anticipated for Indians. Festival season has started and Indians are now bracing to welcome their beloved Bappa! However, the stock market, and Ganesh Chaturthi have an interesting relationship.
We have a present for investors. This Ganesh Chaturthi, investors can grab the opportunity to invest in these top 3 stocks to brighten their portfolios! Let’s analyse them in detail.
How does Ganesh Chaturthi affect the share market?
Ganapati, Vinayak, Lambodar, Vighnaharta, Vakratund, Ekdant, and the list goes on – Known by so many different names, our beloved Bappa is all set to visit us!
Ganesha is the god of knowledge, wisdom, prosperity, and wealth. Hindu traditions always advise worshipping Ganesh before any other pooja, new venture or for luck. The faith is that Lord Ganesh provides us with strength, courage and opportunities to progress.
Ganesh sthapana is done on the pious day of Ganesh Chaturthi, and then he is our guest for the next 10 days. The final, tenth day is Anant Chaturdashi.
The stock market in these 10 days is magical. Usually, prosperity lurks all over the market during this period. In the past 3 out of 5 years, the stock market has delivered positive returns on the day of Ganesh Chaturthi. The markets also show positivity after the 10th day.
More than just spiritual reasons, the rationale behind this growth is increased spending. During the festive season, Indians strongly believe that asset investments are auspicious. Moreover, the increased spending on consumer goods may also be the market highlight.
An interesting read: Everything you need to know about Diwali Muhurat Trading 2023
Ganesh Chaturthi 2024: 3 stocks to pick today
We have curated this list of Ganesh Chaturthi 2024 top 3 stocks to pick on NSE, with the help of research analysts. This detailed analysis would help investors understand the company, its functions, fundamentals and stock technicals, easily.
1. ICICI Securities Ltd
It is one of the leading financial services companies in India that offers a wide range of services like brokerage, investment banking, advisory services, financial product distribution, etc. ICICI Direct (online) provides service to retail and institutional investors.
The company is a known name in the Indian banking and financial services space. Investments may be a profitable space to invest during the festive season.
Stock snapshot
| Current market price (CMP) | ₹823 |
| Market Capitalisation | ₹26,703 crores |
| 52-week high/low | ₹883/₹606 |
| Stock P/E ratio (Price-to-earning)Industry P/E Price-to-Book Value (P/BV) ratio | 13.715.66.7 |
| Book Value | ₹121 |
| Dividend Yield | 3.55% |
| Earnings per share (EPS) | ₹60.4 |
| P/E to growth (PEG) ratio | 0.48 |
| Market cap to sales ratio | 4.61 |
Key financial metrics
The company has strong fundamentals and attracts investors with its steady return on equity of nearly 50%. Moreover, a 55.4% dividend payout is an additional advantage. High leverages are common in the financial services industry. So, the 4.3 D/E ratio is sound but needs close monitoring.
| Period | Compounded sales growth | Compounded profit growth |
| 10 years | 20% | 34% |
| 5 years | 24% | 28% |
| 3 years | 25% | 17% |
| TTM* | 62% | 75% |
(*TTM = Trailing Twelve Months)
- Return on capital employed (ROCE)= 19.7%
- Return on equity (ROE) = 50.1%
- Debt to Equity ratio (D/E)= 4.3
- Net worth = ₹3,923 crores
- Steady rise in sales of nearly 75% from June 2023 to June 2024. Moreover, it reached the mark of ₹5,756 crores TTM in June 2024, due to customer base expansion and robust product offerings.
- Robust growth of nearly 94% in the net profit from June 2023 to June 2024. Since 2017, net profit has seen a substantial rise to reach the levels of ₹1,953 crores TTM in June 2024. Operating profit margin (OPM) up by 60%-70%.
- Value creation for shareholders due to EPS growth to ₹16.28 in June 2024.
- Stable promoter holding and growing Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) indicate confidence and institutional interest.
| Shareholders | % of total holdings |
| Promoters | 74.65% |
| FIIs | 9.31% |
| DIIs | 10.02% |
| Public | 6.02% |
ICICI Securities Ltd – Green flags & red flags
| Green Flag | Red Flag |
| Reliable dividend yield, along with satisfaction of high ROE of 50.1%.Consistent profit and sales growth.Focus on digital adoption to expand its customer base and operational efficiency.Rise of retail investor’s participation. | High leverage may impact profitability in case of a financial market downturn.Stock trading in premium at P/BV of 6.74 limiting the upside potential in the short term.The threat of market volatility heavily lurks in its business. |
Technical analysis
| Stop-loss | ₹750 |
| Target 1 | ₹950 |
| Target 2 | ₹1,030 |
- A well-formed cup and handle pattern in the weekly chart signifies a bullish outlook. Moreover, the 200 Simple Moving Averages (SMAs) give strong support levels.
- Trading above 20, 50, 100 and 200 SMAs shows bullish signals in the daily chart frame. The 200 SMA support would be a key level to watch for.
Takeaway
ICICI Securities Ltd can be a strong pick on a fundamental and technical basis. Its solid track record of profitability, sales, high ROE, dividend payouts, etc., can make it an attractive investment for investors. However, high debt levels and premium valuation. If it suits the risk appetite of investors then this stock can be a potential pick.
2. Ujjivan Small Finance Bank Ltd
Established in 2005, the company aims to mass untapped markets and provide financial assistance to an unserved class of investors. It is involved in the retail banking, wholesale banking and treasury functions. The bank has a current account to savings account (CASA) ratio of 26% as of March 2024. Microfinance is the main focus of the bank.
Stock snapshot
| CMP | ₹43.9 |
| Market Cap | ₹8,486 crores |
| 52-week high/low | ₹63/40 |
| Stock P/E ratioIndustry P/E P/BV ratio | 6.7511.91.53 |
| Book Value | ₹28.7 |
| Dividend Yield | 3.42% |
| EPS | ₹6.45 |
Key financial metrics
- The strong revenue growth compounded over three years is 26%, and for five years, it is 25%. The revenue stands at ₹5,967 crore TTM for June 2024.
- The company has turned profitable in FY23 from ₹415 crores loss in FY22. The net profit in FY24 was ₹1,259 crores.
- The EPS has observed consistent growth to reach the levels of ₹6.45 TTM in June 2024.
- The borrowing has also increased significantly. It stands at nearly double the FY21 levels. The current borrowing is ₹33,633 crores in FY24.
- Reserves have increased substantially to ₹5,095 in FY24. It can potentially help companies grow consistently despite their debt level.
- ROCE = 11.1%
- ROE = 26.7%
- D/E = 5.9
- The promoter holding was reduced in June 2024. The other three categories have seen a rise in shareholding.
| Shareholders | % of total holdings |
| Promoters | 0.00% |
| FIIs | 24.68% |
| DIIs | 7.33% |
| Public | 67.99% |
Ujjivan Small Finance Bank – Green flags & red flags
| Green Flag | Red Flag |
| Robust profit growth of 45% CAGR in the past five years. Impressive dividend yield of 3.42%.The focus area for the company is very little tapped. | At high leverage levels, the D/E ratio is 5.9.The stock price has declined by 10% over the past year. |
Technical analysis
| Stop-loss | ₹40 |
| Target 1 | ₹50 |
| Target 2 | ₹55 |
- The stock is not overbought or oversold territory and has bullish upward momentum. The Relative Strength Index (RSI) is 44.
- The 20-day SMA and 50-day SMA indicate a positive trend.
Takeaway
The stock has strong technical indications of growth, and fundamentally, it may need one good earning quarter. It further would catalyse the price action. However, short-term traders need to monitor the breakout level. High leverage and price volatility need strong vigilance from investors.
Must read: Small finance banks: Bridging the gap in India’s banking sector
3. Birlasoft Ltd
The Pune-based company has a strong presence in consulting and software services. The company has customers predominantly in the banking, financial services, life science, etc., space. It is a crucial part of the C.K. Birla group. Stock market Ganesh Chaturthi occasion may favour investment in this futuristic stock.
Stock snapshot
| CMP | ₹671 |
| Market Cap | ₹18,543 crores |
| 52-week high/low | ₹862/₹472 |
| Stock P/E ratio P/BV ratio | 296 |
| Book Value | ₹110 |
| Dividend Yield | 1% |
| EPS | ₹23.1 |
| PEG ratio | 1.6 |
| Market cap to sales ratio | 3.47 |
Key financial metrics
- The company’s quarterly sales have seen consistent growth, in the past few years. It has increased to ₹1,327 crores in June 2024.
- The OPM is staying constant at around 15% levels.
- Net profit has increased by nearly 8% in the past year and stands at ₹150 crores in June 2024.
- 33% EPS (June 2024) rise compared to June 2021.
- Increase in FII stake in the company’s shareholding indicates foreign exposure. However, promotor’s shareholding is in constant decline.
| Shareholders | % of total holdings |
| Promoters | 40.9% |
| FIIs | 18.82% |
| DIIs | 20.89% |
| Public | 19.87% |
- ROCE = 29.8%
- ROE = 22.5%
- D/E ratio = 0.03
- Net worth = ₹3,044 crores
- In FY24, the dividend payout stands at 29%, which is nearly three times its level in FY13.
| Period | Compounded sales growth | Compounded profit growth | Stock price CAGR | Return on Equity |
| 10-year | 7% | 10% | 21% | 17% |
| 5-year | 16% | 18% | 59% | 17% |
| 3-year | 14% | 24% | 17% | 18% |
| TTM | 9% | 83% | 32% | 22% |
Birlasoft Ltd – Green flags & red flags
| Green Flag | Red Flag |
| Healthy dividend payouts of 28.3%.Debt-free status of the company provides a moat.Strong profit growth indicates a sound financial position.Digitalisation can potentially benefit the company. | P/E is high, which may indicate overvaluation.Declining shareholding of promoters is a concern. |
Technical analysis
| Stop-loss | ₹560 |
| Target 1 | ₹790 |
| Target 2 | ₹860 |
- Stock is trading above parabolic Stop and Reverse (SAR). It can help with a potential reversal and shows a strong uptrend. Moreover, the RSI is 45.
- The 200 SMA resistance level is crucial. Above this, breakout is expected. However, it is not guaranteed. Higher highs and lower lows formation may drive the bullish trend.
Takeaway
Technical analysis indicates a bullish sentiment for the company’s performance. Moreover, the profit and sales growth is also positive. So, the fundamental and technical factors favour the stock. However, personal risk appetite should be checked.
Summary
In this Ganesh Chaturthi 2024, 3 stocks to pick today have a strong amalgamation of fundamental and technical strengths. Moreover, the festive season may help investors attain their financial objectives for 2024. However, investors should check their risk capability and investment aspirations before investing.
Also, read about: Beat the market: Your ultimate guide for fundamental analysis tools.
*The tradeview is as of 6th Sept, 2024
The tradeview is provided by Ashish Kumar, a SEBI-registered analyst with over 12 years of experience (SEBI Registration No: INH100008939). He has had the privilege of working as a research analyst with renowned companies throughout India. As the Founder of @stoxbazar, Ashish continues to share valuable market insights on StockGro. Follow him on StockGro for more detailed trade views. Link – https://bit.ly/3Xu19UD
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