Axis Securities shares top 16 picks; says Nifty may cross 20,000 by December

While retaining a bullish view on the domestic equity market, brokerage Axis Securities believes that the benchmark NSE Nifty index may end the year at 20,200 in the base case scenario. The 50-share index closed 0.34 per cent up at 19,388.90 on July 4.  

The brokerage in a report said the Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. “We continue to believe in the long-term growth story of the Indian equity market, supported by the emerging favourable structure as increasing capex enables banks to improve credit growth. Strong earnings trajectory continues in the Nifty 50 universe. We foresee Nifty EPS to post growth of 16 per cent and 13 per cent in FY24 and FY25, respectively,” Axis Securities said in a report.

Considering the present market conditions, the brokerage is bullish on ICICI Bank, Maruti Suzuki India, State Bank of India, RITES Ltd, Federal Bank, Varun Beverages, Ashok Leyland, PNC Infra, ITC, Aarti Drugs, Relaxo, Mahindra CIE, Praj Industries, CCL Products (India), Polycab India, and CreditAccess Grameen.

It further added that the medium to long-term outlook for the overall market remains positive. “We may see volatility in the short run with the market responding in either direction. Keeping this in view, the current setup is a ‘Buy on Dips’ market. We recommend investors to maintain good liquidity (10 per cent) to use any dips in a phased manner and build a position in high-quality companies with an investment horizon of 12-18 months,” Axis Securities said.

In the bull case, Axis Securities sees Nifty at 22,200 levels by December. On the other hand, Nifty may reach 18,200 in the bear-case scenario.

Commenting on June quarter results, Axis Securities added that the majority of the domestic high-frequency indicators trended higher during the quarter which is likely to translate into good demand momentum for the domestic corporates.

“Banks, consumers, industrial and automobiles are likely to post robust earnings while Q1FY24 remains critical for the IT sector as it will set the tone for FY24 demand. Moreover, margins for the consumer sector are likely to post positive surprise, thanks to the recent cool-off in the raw material prices. The commentary on the demand momentum, margin recovery, and the pickup in the rural demand will be keenly watched by the street. Against this backdrop, the market is expected to witness sector and style rotation moving forward,” the brokerage said.