After a challenging period where it lagged behind global and emerging market peers for the first time since the COVID-19 pandemic, the Indian equity market is poised for a robust comeback, according to analysts at Axis Securities. The brokerage firm believes the worst is over, with most significant negative events already reflected in stock prices, setting the stage for a promising multi-year growth phase.
A Bullish Long-Term Vision for Indian Markets
Axis Securities has maintained its base case target for the Nifty index at 28,100 points by December 2026. This projection is based on valuing the index at 20 times its estimated earnings for December 2027. The firm identifies a potential upside risk to this target, which could come from earnings upgrades starting from the third quarter of the financial year 2025-26 (Q3FY26) onwards.
The foundation of this optimistic outlook is India's resilient macroeconomic environment, which analysts view as a stable sanctuary amid worldwide economic fluctuations. "We remain confident in India’s long-term growth story," stated Axis Securities. This confidence stems from the country's favourable economic structure, increasing capital expenditure (capex), and a consumption boost expected from recent Union Budget measures and anticipated GST 2.0 reforms. These factors are projected to drive credit growth for banks and support double-digit corporate earnings growth, enabling Indian equities to deliver strong double-digit returns over the next two to three years.
Top Stock Recommendations for Substantial Returns
Backing its positive market view, Axis Securities has identified a portfolio of 15 stocks across sectors that it believes offer significant upside potential. The recommended stocks and their respective target prices are:
- HDFC Bank | Target: ₹1,170 | Upside: 18%
- Bajaj Finance | Target: ₹1,200 | Upside: 22%
- State Bank of India (SBI) | Target: ₹1,135 | Upside: 16%
- Bharti Airtel | Target: ₹2,530 | Upside: 20%
- Avenue Supermarts (D-Mart) | Target: ₹4,960 | Upside: 31%
- Max Healthcare | Target: ₹1,400 | Upside: 34%
- Prestige Estates | Target: ₹2,000 | Upside: 25%
- APL Apollo Tubes | Target: ₹2,100 | Upside: 10%
- Mahanagar Gas | Target: ₹1,540 | Upside: 36%
- Ujjivan Small Finance Bank | Target: ₹65 | Upside: 23%
- Chalet Hotels | Target: ₹1,120 | Upside: 29%
- Inox Wind | Target: ₹190 | Upside: 54%
- Kirloskar Brothers | Target: ₹2,330 | Upside: 45%
- Kalpataru Projects | Target: Not specified in detail
- Sansera Engineering | Target: ₹1,950 | Upside: 16%
Rationale Behind Key Picks
Bajaj Finance is expected to resume a strong growth trajectory from FY27, driven by its core and new products, projecting a 24-25% CAGR in Assets Under Management (AUM). The brokerage forecasts a healthy return on assets (RoA) between 4.4-4.5% over FY26-28.
State Bank of India (SBI) is praised for its best-in-class performance among large banks. Axis Securities highlights the management's focus on a strong liability franchise, disciplined pricing, and technology-driven efficiency. The bank's ability to maintain a RoA of 1% or more is seen as a key strength.
HDFC Bank is noted for its strong execution capabilities as it works to return to pre-merger performance levels. With a loan-to-deposit ratio (LDR) below 100%, the bank aims to accelerate growth. Margin pressures are expected to reverse in the second half of FY26, supporting a RoA of 1.8-1.9%.
Bharti Airtel retains a 'Buy' rating due to its superior margins, impressive subscriber additions, and increasing 4G conversions.
Avenue Supermarts (D-Mart) is undertaking strategic initiatives to overcome past challenges like subdued demand and competition. A focus on profitability in D-Mart Ready and a target of adding 10-20% new stores are seen as positive steps.
Max Healthcare benefits from management guidance of 6-7% growth in average revenue per occupied bed (ARPOB) and a recent Central Government Health Scheme (CGHS) rate revision expected to add over ₹200 crore in revenue.
Inox Wind, with a massive 54% projected upside, is well-placed to capitalise on India's renewable energy push, backed by a robust order pipeline and cost-efficient execution.
Disclaimer: This information is for educational purposes only. The views and recommendations are those of the brokerage firm. Investors are strongly advised to consult with certified experts before making any investment decisions, as market conditions are dynamic and individual circumstances vary.
