'Neither panic nor exuberance on Dalal Street': Axis Securities recommends these 16 stocks to buy

Axis Securities believes that the benchmark equity index NSE Nifty may rally over 10 per cent to hit the 20,400 mark by December 2023. The 50-share index traded 0.36 per cent down at 18,081.45 in the afternoon trade on May 3. In its latest report, the brokerage said that 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 10 per cent, 16 per cent and 13 per cent in FY23, FY24 and FY25, respectively.

It further added that the current level of India VIX is below its long-term average, indicating the market currently being in a neutral zone (neither panic nor exuberance).

“While 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 such dips in a phased manner and build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months,” Axis Securities said in a report.

Considering the present market condition, Axis Securities recommended stocks such as ICICI Bank, Maruti Suzuki India, State Bank of India, Dalmia Bharat, Federal Bank, Varun Beverages, Ashok Leyland, PNC Infra, ITC, Aarti Drugs, Gland Pharma, Mahindra CIE, Praj Industries, CCL Products (India), Polycab India and Bajaj finance.

“The theme ‘Growth at a reasonable price’ looks attractive on account of the domestic play of good Rabi season, the cool-off in commodity prices and inflation, rural recovery and the expectation of margin recovery in the upcoming quarters. Moreover, the selected value stocks from the PSU, metals, commodities, utility and cement sectors are well-placed to deliver superior performance, especially considering their recent price corrections,” it said.

In the bull case, the brokerage sees Nifty at 22,500 by December 2023 and in the bear case, it sees the index at 18,400.

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