A reality check on Diwali stock picks

The annual rush of ‘Diwali picks’ is here, with brokerages promising to light up your portfolio like a firecracker. But before you load upon their “shubh labh” (auspicious profit) stocks, remember that the gains are not certain.

- Mayur Bhalerao [e-mail]

Mint collated and analyzed these much-hyped festive recommendations from the last two Samvats (Hindu calendar years starting Diwali)—focusing on this timeframe due to limitations in collecting older data. The results for Samvat 2081 (2024-25) tell a story of dashed hopes.

Last year, nearly a dozen brokerages collectively recommended 58 diverse stocks—spanning banking, IT, and consumer goods—often with a 12-month holding period. But a staggering two-thirds (66%) of these picks actually declined, while only a third managed to outperform the Sensex's modest 3.2% return.

However, Muhurat picks for Samvat 2080 (2023-24) returned impressive gains. Of the 45 stocks recommended by a few leading brokerages, nearly half (49%) gained over 23%, decisively outpacing the Sensex’s 22% rise. Only nine stocks fell during this period. This performance was driven by optimism around India’s growth and expectations of political stability ahead of the 2024 Lok Sabha elections.