Axis Securities has retained a constructive stance on Indian equities despite rising geopolitical risks and elevated crude oil prices, recommending 15 stock picks for June across largecap, midcap and smallcap segments with potential upside of up to 44%.
In its latest monthly strategy report, the brokerage said domestic macroeconomic fundamentals remain resilient even as global uncertainties linked to the West Asia conflict, higher crude prices, rupee weakness and foreign investor outflows continue to weigh on market sentiment.
The brokerage maintained its December 2026 Nifty target at 27,220 and said market corrections should be used selectively to accumulate quality businesses with strong earnings visibility.
Axis Securities refreshed its list of 15 top stock picks, booking profits in SBI and exiting Max Healthcare while adding Varun Beverages and ICICI Bank.
The brokerage's June list comprises nine largecap stocks, one midcap stock and five smallcap names. Among largecaps, Axis Securities recommended Eternal with the highest upside potential of 44%, followed by Bharti Airtel with 38% upside and ICICI Bank with 35% upside.
Other large-cap recommendations include Bajaj Finance Limited, Kotak Mahindra Bank Limited, Avenue Supermarts, Varun Beverages, LG Electronics India and Nestle India. In the mid-cap space, the brokerage selected Dalmia Bharat with a target price implying nearly 39% upside from current levels.
Among smallcap recommendations, Ujjivan Small Finance Bank emerged as the most preferred idea with a projected upside of 43%. Other smallcap picks include Chalet Hotels, Minda Corporation, Navin Fluorine and Kalpataru Projects.
The brokerage said it continues to favour sectors where earnings visibility remains strong despite macroeconomic challenges.
It remains overweight on banking and financial services, telecom, capital goods, healthcare, power and energy. It also maintains a positive view on selected consumption and retail businesses and continues to prefer certain capex-linked cyclical companies where valuations have become more attractive after the recent correction.
On the other hand, the brokerage remains cautious on the information technology sector due to uncertainties arising from artificial intelligence-driven disruption and concerns around global technology spending. It noted that the Indian market has undergone a meaningful valuation reset over the past several months.
According to the report, Indian equities are now trading at around 18 times one-year forward earnings, closer to long-term averages. The premium of Indian equities over emerging markets has also moderated sharply from nearly 97% in September 2024 to about 46% currently.
Axis Securities said the recent correction has improved the medium-term attractiveness of Indian equities, although further upside will increasingly depend on corporate earnings delivery and companies' ability to manage higher input costs, logistics expenses and inflationary pressures.
The brokerage expects India's GDP growth to remain in the 6.8%-6.9% range in FY27, supported by strong domestic demand, government capital expenditure and a gradual recovery in private investment.
However, it warned that sustained crude oil prices, currency depreciation, rising inflation and weak monsoon conditions linked to El Niño remain key risks for both economic growth and market valuations.
Also read: PSU bank stocks vs private banks in FY27: The valuation trap you need to avoid
Despite these concerns, the brokerage said India continues to offer one of the strongest structural growth stories among major economies and expects Nifty earnings to grow at a 13% compound annual growth rate over FY23-28.
For investors, Axis Securities recommended maintaining 10-15% liquidity to deploy during market corrections while focusing on high-quality companies with strong balance sheets and earnings visibility over the next 12-18 months.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
