The growth story of the Indian stock market is expected to continue in the long-term. However, with current valuations offering a limited scope for further expansion, an increase in corporate earnings will be the primary driver of the market returns moving forward, analysts said.
Hence, according to Axis Securities, bottom-up stock picking with a focus on ‘growth at a reasonable price’ and ‘Quality’ would be keys to generating satisfactory returns in the next one year.
In its base case, Axis Securities maintained its Nifty 50 target of 24,600 for March 2025. It foresees Nifty earnings to post growth of 16% CAGR over FY23-26. Financials are expected to remain the biggest contributors for FY25/26 earnings.
“While the medium to long-term outlook for the overall market remains positive, we may see volatility in the short run with the market responding in either direction. Keeping this in view, the current setup is a ‘Buy on Dips’ market. Hence, any market correction on account of global challenges will be an opportunity to add to the equity investment,” Axis Securities said.
It recommends investors to remain invested in the market and maintain good liquidity (10%) to use any dips in a phased manner and build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months.
In its bull case, Axis Securities values Nifty at 22x, which translates into a March 2025 target of 27,000. While its bear case target for Nifty is 19,700.
In its top picks, Axis Securities has recommended 10 largecap stocks to buy, 3 midcap stocks and 3 smallcap stocks. Below are Axis Securities’ top stock picks:
Largecap stocks recommendations
ICICI Bank | Target Price: ₹1,325
Coal India | Target Price: ₹550
Nestle India | Target Price: ₹2,880
State Bank of India | Target Price: ₹1,010
Varun Beverages | Target Price: ₹1,830
Bharti Airtel | Target Price: ₹1,650
TVS Motor Company | Target Price: ₹2,700
Cholamandalam Investment & Finance Company | Target Price: ₹1,575
HCL Technologies | Target Price: ₹1,650
Midcap stocks recommendations
Aurobindo Pharma | Target Price: ₹1,330
Lupin | Target Price: ₹1,785
Federal Bank | Target Price: ₹205
Smallcap stocks recommendations
CIE Automotive India | Target Price: ₹630
Westlife Foodworld | Target Price: ₹980
J Kumar Infraprojects | Target Price: ₹920
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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