The 'Anti-Muhurat' Watchlist: Uncovering Hidden Value in Overlooked Stocks

It's that time of year again. As Diwali approaches, your feed is inevitably filled with stock recommendations.

Yet, for all the noise, these lists often feel the same, circling the same popular blue-chip stocks and well-trodden sectors.

This leads to a simple but powerful question: What if the traditional approach is the one carrying the most risk? What if following the crowd only causes us to overlook the most compelling opportunities?

In this editorial, I invite you to slow down and consider a different path. I'm exploring what I call the "Anti-Muhurat" Watchlist.

This is not about the crowded, expensive names everyone is discussing. Instead, I will turn my attention to the quieter corners of the market-to the overlooked, the unloved, and the potentially undervalued. My goal is simply to provide a fresh perspective for your own research.

The first stock on this watchlist is Praj Industries, which has seen its share price decline by more than 50% over the past year.

This downturn is primarily due to a sharp deterioration in its financial performance and a noticeable slowdown in the ethanol sector it relies on. The company reported a decline of over 90% in net profit for a recent quarter, a result that deeply disappointed the market.

This weakness stems from a cautious pause in the domestic ethanol market, where India's early achievement of its 20% blending target has led to a temporary halt in new orders as the industry awaits fresh government mandates.

Further complicating matters, the company has faced project execution delays and international uncertainty, which have stalled some of its export-oriented business.

However, looking beyond these short-term headwinds, a longer-term perspective reveals several reasons for optimism.

The company is steadily diversifying into new, high-growth areas like Sustainable Aviation Fuel and Compressed Biogas. It also maintains a strong order backlog, which offers clear revenue visibility once execution improves. Any new policy push on ethanol blending could also revive its core business.

In terms of valuation, the stock trades at a premium today, but if it can return to its previous earnings levels, it would appear much more reasonably priced. For these reasons, it is a stock worth watching closely as its story evolves.

Another contrarian idea is IndusInd Bank, a stock that has fallen 45% and now trades below its book value. This decline is rooted not in its lending business, but in governance and accounting concerns that have shaken investor confidence.

The key moment came when the bank disclosed a significant accounting issue in its derivatives portfolio, forcing a large financial write-off and raising serious questions about its internal controls.

This was compounded by leadership uncertainty, as the CEO received a shorter-than-expected term extension from the Reserve Bank of India.

The way forward for IndusInd Bank now hinges entirely on its ability to rebuild trust. This will require demonstrating absolute transparency, strengthening its internal governance, and establishing a clear plan for future leadership.

While its core business remains stable, the stock's recovery is tied to resolving these fundamental issues of confidence. Any positive development on this front could mark a turning point.

The third stock on our watchlist is Natco Pharma, which is also down more than 40%. A sharp decline in a recent quarter's results triggered the sell-off, but the larger concern lies in the future.

The company faces a significant patent expiry for its blockbuster product, gRevlimid, in early 2026. This event is expected to lead to a substantial decline in revenue and profits from FY27 onward.

Natco's path forward, therefore, depends on its success in launching new products to fill this impending gap.

Its potential launch of a generic version of Ozempic, along with strategic moves like its planned acquisition of a stake in an African company, are critical steps in this diversification effort. While the challenge is considerable, the company's pipeline and strategic actions make it a compelling story to monitor.

These three companies are our Anti-Muhurat watchlist - stocks where the downside may be limited, but where a change in fortune can potentially reverse the tide.

And before we conclude, we have two bonus names for you. These are not contrarian picks, but companies with steady momentum.

The first is Motilal Oswal Financial Services, a direct beneficiary of the growing financialisation of savings in India.

The second is Gillette India, which stands to gain from the long-term trend of premiumisation, as rising incomes lead consumers to more expensive products.

Both are worth keeping on your radar.

That brings us to the end of this special Diwali edition of Profit Hunter.

From everyone at Equitymaster, we wish you a very Happy Diwali and a Prosperous New Year.

Happy investing.

Warm regards,


Rahul Shah
Editor and Research Analyst, Profit Hunter
Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)