HDFC Bank, ICICI Bank, SBI, HCL Tech, Lupin, Aurobindo Pharma among Axis Securities’ top picks for December – India News

The countdown to 2025 has begun and all eyes are on what the investment strategy should be heading into the new year. Axis Securities has shortlisted 16 stocks for December 2024 as the brokerage believes it is the best time to build a long-term portfolio. The brokerage expects that the long-awaited correction has already taken place and most stocks are available at reasonable valuations compared to what was available three months ago. The theme is to choose stocks based on “growth at a reasonable price” and “quality” to generate satisfactory returns over the next year. With Nifty refinancing target for December 2025 at 26,100.

HDFC Bank, ICICI Bank, Dalmia Bharat, State Bank of India, HCL Tech, Lupin, Aurobindo Pharma, Healthcare Global, Varun Beverages, Gravita India, Bharti Airtel, Chalet Hotel, J Kumar Infra, Prestige Estates, Sansera Engineering and Cholamandalam Invest and Finance are the best picks for December 2024.

All eyes are now on the earnings recovery in the first half of FY25, which will be based on the expectation of increased public investment, post-monsoon activities, good number of wedding days and the expectation of a rural recovery in the second half.

The brokerage expects the Nifty 50 EPS to rise 7.6% in FY25, 13.7% in FY26 and 11% in FY27. Axis Securities forecasts Nifty’s earnings growth of 14% CAGR between FY23 and FY27. Based on current economic dynamics, stable political regime, investments and other infra programs, double-digit profit growth will be achievable over the next 2-3 years.

With the recent rise in the market, Axis Securities believes that most of the talk has already been absorbed. The brokerage expects market consolidation in the near term, with the scope likely to narrow further. The emphasis therefore remains on the rotation of styles and sectors. After the recent correction, he believes the market is in the oversold zone.

October 2024 has been a tough month for the Indian stock market, with a widespread correction seen across market capitalization, styles and sectors. Most of the correction is due to FII selling, lower-than-expected Q2FY25 results, a rise in US 10-year bond yields and expectations of a recovery in China. The correction further deepened in November 2024 due to continued FII selling and rise in the dollar index.

After the Maharashtra election verdict, the market saw some pause and now 50% of the NSE 500 stocks are trading above their high of 52 W. With this correction, the valuations are also reasonable for the market. Axis Securities believes that now is the best time to act and shift gears to build a long-term portfolio.

However, the short-term direction of the market will be more macroeconomic and the market could react in either direction depending on how the situation evolves. The brokerage therefore recommends building positions in two themes “Growth at a reasonable price” and “Quality” to generate satisfactory results next year.

Axis Securities continues to believe that the Indian economy is at the sweet spot of growth and remains a land of stability amid a volatile global economy. The brokerage continues to believe in its long-term growth, driven by the favorable structure of the country, thanks to the increasing investments which allow banks to improve credit growth. This will ensure that Indian stocks easily manage to generate double-digit returns over the next 2-3 years, supported by double-digit earnings growth.

In this context, Axis Securities expects Nifty’s earnings to show an excellent growth of 14% CAGR over FY23-27. Financial services will remain the main contributors to profits in FY25/26. In its base case scenario, the brokerage assumes continued political stability in a coalition government, a faster GDP growth rate than other emerging markets, a stable monsoon, stable oil prices and a two rate cuts of 25 basis points each over the next half-year. one year.

Based on recent developments, we have also made some changes to its top picks. This includes profit recognition in TVS Motors and Federal Bank, while adding Gravita India and Healthcare Global.

(Disclaimer: All stock recommendations are from Axis Securities’ Top Picks for December 2024 Report. The views, recommendations and opinions expressed are personal and do not reflect the official position or policy of Financial Express Online. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproduction of this content without permission is prohibited.)