PL Capital cuts 12-month Nifty target; adds these 7 stocks to high conviction bets

While cutting the 12-month target for the Nifty50 index, PL Capital believes that the Indian equity markets may stabilise by December 2025. In the base case scenario, it foresees the 50-share index may touch 25,689 (27,172 earlier) by February 2026. The brokerage believes that the impact of various government initiatives and monsoons (normal monsoons as per APEC Climate Center South Korea) will likely start reflecting in improved consumer demand in the second quarter of 2026.

In the bull case scenario, PL Capital thinks that the Nifty index may touch 27,041 (29,263 earlier) in the next 12 months and 24,337 (25,082 earlier) in the bear case. The index closed 0.20% higher at 74,602 on February 25, 2025.

In its model portfolio, PL Capital turns overweight on consumers due to an expected uptick in demand following tax cuts, a decline in food inflation, and a cut in repo rate, and has increased weight in banks and healthcare. It added Cipla and Astral Poly in the model portfolio and increased the weight on Maruti Suzuki, ICICI Bank, Kotak Mahindra Bank, ABB, Bharat Electronics, Interglobe Aviation, ITC and Bharti Airtel. On the other hand, PL Capital reduced weights in L&T, Titan, HUL, Reliance Industries, HCL Tech, HDFC AMC, among others.

While sharing its view on the outflows by global investors, PL Capital said, “FIIs are selling due to global uncertainty, and a weak rupee against dollar. FIIs have pulled $20.2 billion from Indian equities and bonds since October 2024, marking one of the steepest outflows in recent history.”

It further added that India has seen an outflow of $8.2 billion, which is a lion's share of total FII outflows from emerging markets. The lack of strong domestic buffers, persistent global uncertainty, tepid domestic demand, and sustained FDI outflows pose a near-term risk to volatility in currency and FPI flows in India.

Although uncertainty about global markets is sustained, PL Capital believes the growth outlook in India looks far better in FY26 than in FY25. “As the impact of the budget starts getting reflected in higher Capex on a low base and tax cuts and monsoons revive consumer demand, we should see FPI flows turning positive. However, FDI outflows remain a lingering problem that can pressurize INR and add to volatility,” it said.

PL Capital has removed Ambuja Cement, Siemens, Lemon Tree, Praj, Jindal Stainless, Cyient, and Cyient DLM from conviction picks, although they remain positive on Siemens, Lemon Tree, and Praj in long-term. PL Capital has added ABB, Astral Poly, Chalet Hotels, Cipla, Ingersoll Rand, Keynes Tech, and Maruti Suzuki in conviction picks.