Five reasons to buy Reliance Industries this Diwali

The BSE Sensex is trading at a record high and despite serious concerns about the quality of this rally, some investors bet markets to gain further momentum.

Deven Choksey, managing director of domestic brokerage KR Choksey told NDTV that the outcome of elections and a rate cut by the Reserve Bank of India are two triggers that can drive Indian markets to a new high.

As far as stocks are concerned, Reliance Industries is the one to bet on, Mr Choksey said. Foreign investors have pared their holding in RIL because of the recent underperformance in the stock.

Mr Choksey listed out five reasons why RIL might do well over the next few months. (Watch the full interview)

1) Petrochemical, the segment that generates the largest revenue for RIL, will start growing from 2014-15, once the new capacity comes in to play.

2) Shale gas contribution from the US will rise going forward.

3) Rollout of 4G and the resultant revenue growth.

4) Retail business has turned profitable.

5) RIL has huge amount of cash on its books, which could result in inorganic growth (acquisitions).

RIL traded flat at Rs 907.70 as of 7.23 p.m. on the NSE. However, the stock underperformed the broader energy index on the BSE that traded up 0.4 per cent. (Track stock)

Mr Choksey said PSU lender State Bank of India, commercial vehicles maker Tata Motors and metal and mining major Sesa Sterlite are other must-buy stocks.

SBI is India's biggest lender, while Tata Motors has been riding the success of Jaguar Land Rover. Sesa Sterlite is a Vedanta group company.