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Axis Securities lists 16 top picks across segments for May with potential upside of up to 55%; do you have one?

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Real estate agency Axis Effects is positive about the Indian market. The brokerage firm expects Nifty to maintain momentum after a 4 percent gain in April and says its current setup is a buy on dips market.

The brokerage firm maintains its December 2023 Nifty target at 20,400 in the base case scenario, valuing the index 20 times over December 2024 earnings, implying a 12 percent increase from current levels (Nifty’s close of 2 May at 18,147.65).

In the case of a bull, Axis values ​​Nifty 22 times, resulting in a December 2023 target of 22,500, implying a 24 percent increase. In the case of a bear, Axis values ​​Nifty at 18 times, which would translate into a December 2023 target of 18,400, implying a one percent increase.

“The Indian economy is in a good growth spot and remains the land of stability against the background of a volatile global economy. We continue to believe in the long-term growth story of the Indian stock market, supported by the emerging favorable structure as increasing Capex (capital spending) states banks position to improve credit growth,” said Axis Securities.

However, the brokerage firm added that while the medium to long-term outlook for the overall market remains positive, we could see short-term volatility with the market reacting in both directions.

Axis pointed out that a strong earnings trajectory continues in the Nifty50 universe and the brokerage firm expects Nifty to grow earnings per share (EPS) by 10 percent, 16 percent and 13 percent in FY23, FY24 and FY25, respectively.

In addition, the brokerage firm pointed out that the current level of the India VIX volatility index is below its long-term average, indicating that the market is currently in a neutral zone (neither panic nor exuberance).

Axis said it is a “buy on dips” market and recommends that investors maintain good liquidity (10 percent) to use such dips in stages and build exposure to high-quality companies (where earnings visibility is quite high) with an investment horizon of 12-18 months.

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Top picks from Axis for May

The brokerage firm recommends 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 for the month of May.

These stocks can provide double-digit returns in the range of 10 percent to 55 percent.

Top picks from Axis Securities.

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Top picks from Axis Securities. (Axis Effects)

The brokerage firm emphasized that its basket of top picks delivered an impressive 14.4 percent return over the past year, outperforming benchmark Nifty by an encouraging margin.

Axis said in April 2023 that the basket rose further by 3.6 percent, while Nifty rose by 4 percent.

Axis claimed that its basket of top picks has delivered an impressive 158 percent return since its inception in May 2020, significantly higher than the 95 percent return achieved by Nifty50 over the same period.

disclaimer: The views and recommendations in this article are those of the brokerage firm. These do not represent the opinion of Mint. We recommend that investors consult certified experts before making investment decisions.


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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.