JM Financial's Diwali picks: Top 10 stocks to watch, with Gravita and BEL offering highest upside

JM Financial Services has picked 10 stocks across sectors for its Diwali 2026 portfolio, with Gravita India and Bharat Electronics leading the list with projected upside of 34% and 33%, respectively, from their October 28 closing prices. The brokerage has assigned Buy ratings to all 10 stocks, with price targets implying potential upside of 15-34% over a six-to-12-month timeframe. Its selections span banking, defence, power transmission, telecom equipment, recycling, pharmaceuticals, new-age businesses, telecom, capital goods and steel. Here are the brokerage's key investment arguments for each pick: Gravita India Target price: Rs 1,800 | Implied upside: 34%JM Financial's positive view on Gravita rests on the opportunity created by the formalisation of the recycling industry and the company's expansion across metals.

The brokerage sees its lead recycling business benefiting from a shift towards organised players, while its acquisition of Rashtriya Metal gives it an entry into copper recycling. The company's Vision 2030 plan targets a 20-25% compound annual growth rate in volumes and 30-35% growth in profitability, with a targeted return on invested capital of around 25%, according to the report. Bharat Electronics Target price: Rs 485 | Implied upside: 33%JM Financial's thesis on Bharat Electronics is anchored in its strong order visibility and the defence sector's expanding domestic procurement pipeline. The company had an order backlog of Rs 72,258 crore, equivalent to 2.6 times its FY26 revenue, while its FY27 order inflow target is above Rs 55,000 crore.

The brokerage also sees opportunities from programmes such as the Quick Reaction Surface-to-Air Missile (QRSAM), Project Kusha and the Advanced Medium Combat Aircraft (AMCA). BEL has guided for revenue growth of at least 15% and an EBITDA margin of 28% or more in FY27. Emcure Pharmaceuticals Target price: Rs 2,362 | Implied upside: 26%Emcure's domestic growth opportunity lies in higher-margin chronic therapies, particularly central nervous system, cardiology and women's health, while its international business is benefiting from growth in markets such as Europe and Canada. JM Financial highlighted growth of 33% in Europe and 25% in Canada, along with 15 product approvals across key global markets in the first quarter of FY27.

It also cited the company's pipeline of complex generics and management's guidance for low-to-mid-teen revenue growth and 70-100 basis points of EBITDA margin expansion in FY27. ICICI Bank Target price: Rs 1,710 | Implied upside: 24%JM Financial expects ICICI Bank to sustain healthy loan growth, supported by demand from business banking and domestic corporate customers. The bank reported 30% year-on-year loan growth and 27% deposit growth in the September quarter, although the figures were aided by FCNR(B) mobilisation. Excluding this impact, underlying loan growth stood at 24%. Management's FY26-28 loan and deposit growth expectations of around 21% and 19%, respectively, provide visibility on expansion.

The brokerage expects pressure on net interest margins from FCNR(B) deposits to ease as surplus liquidity is deployed, with a recovery expected from the fourth quarter of FY27. Bharti Airtel Target price: Rs 2,400 | Implied upside: 23%JM Financial's positive view on Bharti Airtel is supported by its premiumisation strategy, rising average revenue per user (ARPU) and the potential for further tariff increases. The brokerage highlighted Airtel's ARPU of Rs 264 and sees scope for a 10-15% tariff hike after Jio's listing. It also expects the company's capital expenditure on 5G to decline, which could support cash generation as investments moderate.

Eternal Target price: Rs 400 | Implied upside: 22%The brokerage's thesis on Eternal is closely linked to the growth of its quick-commerce business, Blinkit. Blinkit accounted for around 59% of the company's consumer order value, with the company targeting more than 3,500 stores by March 2027 and around 5,000 by March 2028. JM Financial also pointed to continued growth in the food-delivery business, where net order value increased 21.5% year on year in the September quarter. The brokerage expects the expansion of Blinkit's store network to remain a key growth driver. Larsen & Toubro Target price: Rs 4,615 | Implied upside: 21%JM Financial's positive outlook on L&T is underpinned by its sizeable order book and a strong pipeline of opportunities across infrastructure and engineering projects.

The company reported order inflows of Rs 1.48 lakh crore in the September quarter, taking its order book to Rs 8.54 lakh crore. The brokerage cited an H2FY27 opportunity pipeline of Rs 10.3 lakh crore and the company's guidance for 10-12% growth in order inflows and revenue. Sterlite Technologies Target price: Rs 1,020 | Implied upside: 16%JM Financial sees Sterlite Technologies benefiting from demand for optical fibre and connectivity infrastructure, including from hyperscalers and data-centre operators. The company reported sequential growth of 32% in revenue, 69% in adjusted EBITDA and 100% in profit after tax in the September quarter.

Its order backlog stood at Rs 35,274 crore. The brokerage also highlighted the company's FY29 targets of Rs 20,000 crore in revenue and an EBITDA margin of around 30%. Power Grid Corporation Target price: Rs 290 | Implied upside: 15%Power Grid's investment case is centred on its regulated transmission business and the expansion of India's power transmission infrastructure. JM Financial cited the company's FY27 capital expenditure target of Rs 37,000 crore and capitalisation target of Rs 30,000 crore, alongside an order backlog of Rs 1.75 lakh crore. The brokerage also highlighted Power Grid's participation in the expansion of inter-state transmission systems and green energy corridors.

Its regulated business model provides visibility on returns, with the report citing a post-tax return on equity of 15.5% under CERC norms. Tata Steel Target price: Rs 195 | Implied upside: 15%JM Financial expects domestic steel prices and safeguard measures to support Tata Steel's margins, alongside an improvement in volumes and profitability across its operations. It expects volume growth of 6-7% over FY27 and FY28. The brokerage also sees scope for an improvement in European operations following the restart of an idled blast furnace in the Netherlands, better spreads in the UK and tighter European safeguard quotas.

It estimates that the company could deliver annual EBITDA of Rs 38,000-40,000 crore. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.