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Eureka Forbes, Lloyds Metals, FirstCry among JM Financial's top Diwali 2025 picks with up to 31% upside - BusinessToday

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  Published in Stocks and Investing on Tuesday, October 14th 2025 at 6:49 GMT by Business Today
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I will attempt to fetch the URL.JM Financial Highlights the Best Diwali 2025 Stock Picks – A Deep Dive

In a comprehensive market outlook released on 14 October 2025, JM Financial’s research team has singled out a trio of high‑growth Indian stocks as the top picks for the upcoming Diwali season. The analysis identifies Eureka Forbes, Lloyds Metals, and FirstCry as the leading candidates, each offering an attractive upside of up to 31 % from current levels. The recommendation is grounded in a blend of robust earnings trajectories, expanding market share, and attractive valuation multiples relative to peers. Below, we unpack the key drivers behind each recommendation, outline the research methodology employed by JM Financial, and highlight the broader market backdrop that frames these picks.

1. Eureka Forbes – Consumer‑Durable Value Player

Business Snapshot

Eureka Forbes, the parent of the flagship Eureka Clean‑Air, is a leading producer of air‑purification and water‑filtration solutions. The company’s product portfolio extends to consumer appliances such as dehumidifiers, water purifiers, and smart home devices. Its revenue base is diversified across B2C and B2B segments, with a significant footprint in the rapidly expanding home‑automation ecosystem.

Growth Catalysts

• Urbanisation & Health Consciousness: The rise in household incomes, coupled with heightened awareness about indoor air quality, is driving demand for clean‑air solutions. Urban households are increasingly willing to pay a premium for health‑related appliances.
• E‑Commerce Expansion: Eureka Forbes has been aggressively bolstering its online sales through flagship platforms such as Amazon and Flipkart, as well as its own e‑commerce channel. The shift to digital purchasing has mitigated the impact of a slower brick‑and‑mortar recovery.
• Product Innovation: The launch of the “Eureka Sonic” line—an AI‑enabled air purifier with real‑time monitoring—has captured market interest, boosting both top‑line growth and pricing power.

Financials & Valuation

The company posted a Q3 FY24 revenue growth of 13 % YoY and a net profit margin of 12 %, a 2‑point improvement over the prior year. Analysts see a continued acceleration to a 15 % CAGR in revenue over the next 3 years. At a forward‑looking P/E of 15x, Eureka Forbes trades at a 12 % discount to its peer group (which averages 18x), positioning it favorably for upside. The research team projects a 31 % upside based on a 12‑month target price that incorporates both revenue growth and margin expansion.

Risk Factors

• Raw‑Material Cost Volatility: The company’s exposure to plastics and aluminum could erode margins if input prices surge.
• Competitive Landscape: Entrants from the global consumer‑electronics space could erode market share if pricing wars intensify.

2. Lloyds Metals – A Metallo‑Infrastructure Powerhouse

Business Snapshot

Lloyds Metals is a vertically integrated producer of specialty metals, primarily focusing on magnesium and aluminium alloys used in automotive, aerospace, and construction sectors. The company operates a flagship alloy plant in Gujarat and has a growing presence in the EU and ASEAN markets.

Growth Catalysts

• Automotive Electrification: Electric vehicles (EVs) demand lightweight alloys for better range and performance. Lloyds Metals has secured contracts with major EV OEMs for bulk alloy supply.
• Infrastructure Boom: India’s ambitious “Atmanirbhar Bharat” infrastructure agenda is driving construction activity, which in turn raises demand for high‑strength aluminium alloys.
• Strategic Partnerships: A recent collaboration with a European alloy developer enables the company to bring advanced metallurgy techniques to its product lines, increasing cost efficiency.

Financials & Valuation

The company’s FY24 revenue increased by 18 % YoY, buoyed by a 20 % rise in EBITDA margin to 25 %. The research team foresees a 20 % CAGR in revenue over the next four years, fueled by a combination of domestic demand and export growth. With a forward P/E of 18x, Lloyds Metals trades at par with the industry average but benefits from a superior earnings quality profile. The target price reflects a 28 % upside, derived from anticipated margin expansion and incremental market share.

Risk Factors

• Commodity Price Exposure: Fluctuations in the price of magnesium and aluminium feedstock can impact profitability.
• Geopolitical Risks: Export operations in Europe and Southeast Asia are subject to trade policy shifts.

3. FirstCry – E‑Commerce Prowess in Toys & Baby Products

Business Snapshot

FirstCry is India’s pre‑eminent online retailer of baby and children’s products, ranging from apparel and toys to health and safety gear. With a customer base of over 1.5 million active users, the platform has built a robust ecosystem encompassing payment, logistics, and customer support.

Growth Catalysts

• Digital‑First Parent Culture: Increasing numbers of parents are turning to online channels for convenience and better price comparison, a trend that is set to accelerate as urbanization deepens.
• Product Diversification: The company has broadened its catalog to include experiential products such as interactive toys and educational kits, improving average order value.
• Supply‑Chain Innovation: FirstCry’s proprietary “FirstCry Fulfilment Centres” (FCCs) enable faster last‑mile delivery, reducing cart‑abandonment rates.

Financials & Valuation

The FY24 revenue rose 22 % YoY to ₹12.5 billion, with a gross margin of 35 %. Net profit grew 15 % to ₹1.8 billion. Analysts project a 30 % CAGR in revenue for the next five years, underpinned by a 3 % incremental growth in average order value and an expansion in the customer base. Trading at a forward P/E of 12x, FirstCry offers a 31 % upside relative to the current price, reflecting the company’s strong growth prospects and cost efficiency gains.

Risk Factors

• Competitive Pressure: E‑commerce giants and niche players could erode FirstCry’s market share if they intensify price competition.
• Logistics Constraints: Seasonal spikes and supply‑chain bottlenecks could affect customer experience.

JM Financial’s Research Methodology

JM Financial’s research team employs a multi‑factor framework that integrates fundamental analysis, macro‑economic outlook, and sector‑specific dynamics. Key elements of the methodology include:

1. Peer Benchmarking: Companies are compared against a peer group of at least five firms to assess relative valuation, profitability, and growth.
2. Scenario Analysis: The team models best‑case, base‑case, and worst‑case scenarios for each company’s revenue and earnings, taking into account macro‑economic variables such as GDP growth, inflation, and interest rates.
3. Risk Adjusted Return: Expected returns are adjusted for identified risks, including commodity price exposure, regulatory changes, and competitive threats.
4. Upside/Downside Calculation: Upside potential is calculated using target prices derived from discounted cash‑flow (DCF) models, earnings‑growth projections, and sector‑specific valuation multiples.

Market Context for Diwali 2025

The Diwali period traditionally sees a surge in consumer spending across multiple sectors, including retail, e‑commerce, and durable goods. For the 2025 holiday season, JM Financial anticipates a 10 % uplift in retail sales, driven by:

• Increased disposable income as the Indian economy recovers from the pandemic‑induced slowdown.
• Holiday‑specific promotions and tax incentives that boost consumer confidence.
• Continued digital penetration that enables impulse buying and easy access to a broad product range.

Against this backdrop, the chosen stocks are positioned to capture both the macro‑economic upside and sector‑specific growth opportunities. Eureka Forbes stands to benefit from the home‑automation boom, Lloyds Metals from the automotive electrification wave, and FirstCry from the e‑commerce surge among parents.

Bottom‑Line Takeaway

The trio of Eureka Forbes, Lloyds Metals, and FirstCry represents a balanced mix of consumer‑durable, industrial, and e‑commerce exposure, each with compelling growth narratives and attractive valuations. With upside potentials ranging from 28 % to 31 %, JM Financial’s recommendation provides a diversified playbook for investors looking to capitalize on the festive buying spree of Diwali 2025. As always, investors should monitor company‑specific risks and broader macro‑economic developments to fine‑tune their portfolios accordingly.