Indian equity markets have demonstrated remarkable resilience in 2024. Navigating through significant volatility, geopolitical tensions, US tariff concerns, currency fluctuations, and substantial foreign capital outflows, the benchmark Nifty 50 index is poised to conclude the year with respectable gains. The index has already advanced by 10% year-to-date, powered by strong performances from stocks such as Bajaj Finance, Eicher Motors, and Maruti Suzuki.
Robust Fundamentals Fuel Optimism for 2027
Even at record-high levels, the domestic market outlook remains positive for a healthy upward trajectory towards 2027. This optimism is anchored in several key factors: anticipated robust corporate earnings growth, the potential for a favourable India-US trade deal, comfortable valuations, and a supportive growth-inflation dynamic. Market experts point to ongoing policy reforms, lower crude oil prices, vigorous government capital expenditure, recent free trade agreements (FTAs), and encouraging developments on the US-India trade front as primary catalysts brightening the long-term prospects for Indian equities.
Expert's Selection: 10 Stocks for Sustainable Wealth Creation
While the medium-term outlook is bright, analysts emphasise the importance of investing in quality companies to maximise returns. Rahul Ghose, Founder and CEO of Octanom Tech and Hedged.in, has identified ten stocks with strong long-term potential. His analysis focuses on fundamentals, valuation comfort, and growth visibility.
ITC: The conglomerate continues to trade at a significant discount to most FMCG rivals on standard valuation metrics, despite its solid, cash-rich balance sheet and improving business mix across FMCG, hotels, and agri-business. Its cigarettes division remains a powerful cash generator, while FMCG and hotels are expanding at double-digit rates. Ghose notes that while regulatory concerns persist, much of this risk is already priced in. He suggests a technical entry point around ₹370-360, with brokerages projecting a one-year target of ₹580.
Bank of Baroda (BoB): This large public sector bank trades below its book value, with a Price-to-Book (P/B) ratio under 1. Its increased focus on retail, MSME, and agriculture loans—now over 60% of its book—has strengthened deposits and credit growth. The digital platform 'Bob World' is enhancing reach and efficiency. With reviving credit demand, BoB is well-placed for steady growth. Ghose recommends a breakout entry above ₹300, targeting ₹400.
ICICI Bank: A leader in India's credit growth story across retail, corporate, and wealth management. Improving macros, lower interest rates, and rising credit demand should benefit its loan growth, margins, and asset quality. Its scale and diversified model support sustained growth, with valuations offering a margin of safety. Brokerages project a price target of ₹1,641.
Indian Hotels: A premium play on the structural rise in domestic and inbound travel. Its brand strength and portfolio ensure multi-year revenue visibility, though it trades at rich multiples. Upside will depend on sustained high growth and margin delivery. Institutional brokerages set a target of ₹980.
Lupin: The pharma major has executed a strong turnaround, driven by key US launches and margin recovery, showing robust revenue and EBITDA growth. Its US pipeline and healthier India portfolio offer visibility. If it sustains double-digit earnings growth, compounding is possible. Average price targets range from ₹2,300 to ₹2,600.
ABB India: A pure play on industrial capex, automation, electrification, and data-centre infrastructure. It runs an asset-light, high-ROCE model with a strong order book, ensuring robust visibility. The flip side is its premium valuation, making it a growth compounder.
Birlasoft: Positioned well in ER&D and digital transformation for manufacturing, BFSI, and hi-tech clients. Discretionary spending is normalising, with recent quarters showing better margins and steady growth. Trading at a discount to tier-1 IT peers, it has potential for earnings growth and multiple catch-ups. Brokerages forecast a target of ₹506.
Tata Consultancy Services (TCS): A core compounding play in global IT, offering sensible risk-reward after recent correction. Large-deal wins (approx. $10 billion TCV in Q2 FY26) provide medium-term visibility. At current levels near ₹3,150–3,200, it trades at a discount to peak multiples. A one-year fair-value band is ₹3,600-3,800.
Bajaj Auto: Balances strong cash generation, a profitable premium bike portfolio, and growing EV/export opportunities. Valuations remain reasonable versus history. New launches, export recovery, and a richer product mix support strong earnings visibility. The cash-heavy balance sheet supports shareholder payouts. One-year target is ₹10,200.
Lemon Tree Hotels: Has clear growth visibility from its pipeline of rooms across key markets. Occupancy and average room rates are structurally above pre-COVID levels. A shift to asset-light contracts should improve ROCE. Valuations align with improving earnings quality. Brokerages project a target of ₹182-193.
Navigating the Path Ahead
The confluence of supportive domestic policies, expected earnings acceleration, and potential external trade tailwinds creates a constructive backdrop for long-term investors in the Indian stock market. The expert picks highlighted focus on sectors and companies poised to benefit from these structural trends, emphasizing the importance of quality, valuation, and entry points. As always, investors are advised to conduct their own research or consult with certified financial experts before making any investment decisions, considering that market conditions are dynamic and individual circumstances vary.
