According to Axis Securities' July report, their 'Top Picks Basket' has yielded a 9.7% return over the past three months, while the Nifty50 returned 8.5% during the same period. This means the basket outperformed the Nifty by 1.2%. In the last month alone, the basket saw a robust increase of 3.7%. Looking at the longer term, from May 2020 to date, this basket has generated a total return of 336%, significantly exceeding the Nifty's 175% return.
The beginning of fiscal year 2026 is expected to be somewhat subdued in the market, but experts believe the market could regain momentum in the coming months. According to Axis Securities' recent report, focusing on specific sectors and quality stocks could bring good profits to investors. The company's Top Picks Basket has delivered a return of 9.7 percent in the last three months, while the Nifty recorded a gain of 8.5 percent during the same period. In the last month, this basket yielded a profit of 3.7 percent.
Significant Returns Since May 2020
Axis Securities' Top Picks Basket has generated a total return of 336 percent since May 2020, while the Nifty returned 175 percent during the same period. This indicates that the company's strategy has performed far better than the market.
Impact of Policies in FY26
The report quotes Axis Securities' Research Head, Neeraj Chadha, stating that India's economic condition remains b and that the government and Reserve Bank's policies will further strengthen growth in FY26. He mentioned that potential interest rate cuts, changes in cash reserve ratios, an increase in government spending, and decisions to boost consumption in the budget will support the market.
Strong Market Recovery After February
The Indian stock market has witnessed a b recovery since February 2025. The Nifty has gained approximately 15 percent, while midcap and smallcap stocks have jumped 25 and 29 percent, respectively. This surge has been driven by improving global conditions, lower oil prices, and b domestic demand. In June, the smallcap index rose by 5.7 percent and the midcap index by 4 percent, while the Nifty saw a modest gain of 3.1 percent.
Focus on Q1FY26 Results Now
The report clearly states that the market's direction going forward will largely depend on companies' first-quarter results and their forecasts. If these results do not present any major negative news and policy uncertainty also decreases, the Nifty could establish a new record. However, the months of July and August might be somewhat limited for the market, where investors may remain cautious and profit-booking could be observed.
Changes in Sectors and Stocks
According to the report, opportunities for investment are once again increasing in midcap and smallcap stocks. However, this recovery will not be simultaneous but will come in phases. Axis Securities has made changes to its Top Picks, booking profits in ICICI Bank and including Bajaj Finance. Bajaj Finance is expected to benefit the most from interest rate cuts.
Special Focus on Domestic Sectors
The company is now particularly focusing on sectors linked to domestic consumption and investment. These include banking, financial services, telecom, consumption, hospitals, and infrastructure capex sectors. The report states that such sectors can prove beneficial for investors in the long run.
Nifty Could Reach 26,300 in the Base Case
Axis Securities has set a base case target of 26,300 points for the Nifty by March 2026. This target is determined at 20 times the valuation of estimated earnings for FY27. Earlier, this multiple was set at 19 times, which has now been increased to 20 as some high-value stocks have been added to the index.
Target of 27,600 in the Bull Case
If market conditions remain very favorable, global volatility is reduced, and there is a soft landing in the US, the Nifty target could reach 27,600 points at a valuation of 21 times.
Eyes on Company Guidance
In the coming time, investors will keep a close eye on companies' guidance and business outlook. If companies provide b guidance, it could further strengthen the market. At the same time, policy stability will also play a vital role in maintaining investor confidence.
