The mood is shifting decisively toward autos, consumer durables, power, financials and manufacturing stocks, even as IT emerges as the biggest contrarian call amid growth slowdown and multiple threats from the Trump administration. Market insiders are also ramping up allocations to gold and silver as precious metals’ breathtaking rally leaves many favorite stocks trailing.
“During Samvat 2082, post consolidation of last 12 months, we expect Indian equities to shed it’s underperformer tag and is likely to deliver better returns backed by (a) 2-digit earnings growth in the backdrop of subdued crude oil prices; (b) likely optimum trade deal between US-India coupled with India diversifying its export basket; (c) shift of money flow from safe haven to EMs like India and (d) likelihood of further reforms by government to accelerate economic growth,” SBI Securities said.
The valuation reset has been dramatic. In September 2024, the Indian market commanded a hefty 97% premium to emerging market peers. Following the recent correction, the current 49% premium appears more palatable and offers a relatively attractive entry point when viewed against historical valuations, analysts say.
“The government has pivoted from capex-oriented growth to consumption-led growth, and the Indian market is in a phase of adjustment to this new normal. Based on these dynamics, we believe the earnings weakness is nearing its bottom, with a broad-based recovery expected to begin from Q3FY26 onwards,” said Neeraj Chadawar of Axis Securities.
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The real kicker could come in FY27 when the full impact of GST 2.0 reforms is likely to reflect in the economy, driving sustained pickup in consumption demand across sectors. “On the back of these expectations, double-digit earnings growth is projected for FY27, which could translate into double-digit market returns as the recovery in corporate earnings gains traction,” Chadawar added.
While risk-reward is slowly building toward mid and smallcaps, recovery is expected to be gradual as Samvat 2082 progresses, he cautioned.
Top stock ideas from brokerages for Diwali 2025:
ICICI Direct’s Diwali Picks: HDFC Bank, Credit Access Grameen, L&T, AIA Engineering, Allied Blenders, Kaynes Technology, Data Patterns, Greenlam Industries.
SBI Securities’ Portfolio: HDFC Bank, TVS Motor, Apollo Hospitals, Indian Bank, Ashok Leyland, Jubilant Foodworks, Nalco, NSDL, Azad Engineering, Orswal Pumps, Subros, Indian Metals & Ferro Alloys, Fiem Industries, Swaraj Engines, Pondy Oxides.
Geojit’s Selection: SBI, Infosys, HUL, Maruti Suzuki, Axis Bank, UltraTech Cement, Tata Consumer, Hero MotoCorp, Suzlon Energy, Brigade Enterprises, Can Fin Homes, HG Infra Engineering.
Axis Securities’ Picks: Kotak Mahindra Bank, Federal Bank, JSW Energy, Coforge Ltd, DOMs Industries, Chalet Hotels, Rainbow Children’s Medicare, Minda Corp, KEC International.
Anand Rathi’s Choices: Avenue Supermarts, Tilaknagar Industries, BSE, Fiem Industries, Shakti Pumps, Blackbuck.
Ventura Securities’ Bets: Ambuja Cement, Royal Orchid Hotels, Adani Green, Paytm, V-Mart Retail, Capri Global, HCC, Transformers & Rectifiers.
The diverse picks across market caps and sectors reflect brokerages’ conviction that after a year of going nowhere, Indian equities are poised for a breakout as fundamentals align with more rational valuations.
How to invest in Samvat 2082?
After a year of consolidation amid global volatility, the market setup now looks balanced and the earnings downgrade cycle appears largely over, with improving domestic fundamentals providing a more stable outlook.
“Going forward, the next market move will depend on external triggers, particularly developments related to the US tariff policies on India, where a resolution could boost sentiment and drive markets higher. With this backdrop, investors should adopt a multi-cap strategy—maintaining a core allocation to largecaps for stability and fair valuations, while taking selective midcap exposure where earnings visibility and recovery prospects are strong. Diversification across sectors remains key to balancing risks and capturing growth opportunities across the economy,” said Gautam Sinha Roy, Chief – Equity and Fund Manager at ICICI Prudential Life Insurance.
Domestic brokerage firm ICICI Securities has set a target of 27,000 for Nifty over the next year, reflecting optimism about the improving growth outlook.
“With improving growth outlook amid greater purchasing power in the hands of consumers through income tax & GST rate cuts as well as government’s relentless focus on increasing manufacturing GDP through policy reforms, we remain positive on markets. With the rest of the asset classes, namely global equities, debt, precious metals (gold, silver) delivering healthy returns in the recent past, the stage is all set for domestic equities to outperform peers going forward,” ICICI Securities said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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