According to sell-side forecasts provided by Bloomberg, analysts remain upbeat, expecting a rise of nearly 15% for the NSE Nifty 50 Index over the next 12 months. This comes on top of the index's 138 percent gain since its March 2020 bottom, the best among the world's major equity markets for the time period. Over the next year, analysts expect India's stock market will gain more than 10%, according to analysts.
Despite fears about high valuations and the slow unwinding of easy-money policies, India's benchmark has outperformed the rest of Asia so far in 2022, gaining more than 4%.
According to several of the largest brokerages, the following are the top sector and stock picks:
As a result of the crisis, a measure of the country's top 10 software providers has more than tripled from its pandemic low, signalling a shift in how the globe does business. While India's top IT firms are battling with rising pay and higher attrition rates as a result of increased demand for people, analysts predict that robust demand for new technology will continue.
As a result of digitization, Indian IT companies are developing at the highest rate in the recent decade. Tech Mahindra Ltd, Infosys Ltd, Tata Consultancy Services Ltd, and HCL Technologies Ltd are among the top picks.
Analysts believe the worst is over for lenders' asset quality and loans after a multi-year credit crisis compounded by the Covid-19 economic shock. Retail, along with agriculture and the micro, small, and medium enterprise segment, has been and will continue to be the primary driver of credit offtake. State Bank of India, ICICI Bank Ltd, and Axis Bank Ltd are among the top selections in the real estate sector.
Even as the work-from-home trend helped enhance demand for home ownership, the pandemic caused a downturn in housing prices in India. Strict lockdowns forced away small and marginal companies, allowing strong developers to expand their market.
Top picks include Godrej Properties Ltd, Oberoi Realty Ltd, Sunteck Realty Ltd, Phoenix Mills Ltd and Prestige Estates Projects Ltd.
The health-care sector is expected to remain in focus as the world continues to deal with the coronavirus. Beyond the pandemic, we expect an improvement in core businesses, driven by better execution on product approvals and regulatory clearances particularly from the US FDA.
Top picks include Ipca Laboratories Ltd, Max Healthcare Institute Ltd, Gland Pharma Ltd, Cipla Ltd, Sun Pharmaceutical Industries Ltd and Aster DM Healthcare Ltd.
Brokerages surveyed for top picks across the different sectors include: Nomura, Jefferies, Yes Securities, Kotak Securities, HDFC Securities and ICICI Direct.