Stocks to buy: Nifty may hit 25k by year-end, says Axis Securities, lists 16 top picks to buy in May

Stocks to buy: SBI, ICICI Bank, Bharti Airtel, Bank of Baroda, Varun Beverages, Lupin, and PNC Infratech are among the 16 stocks, across segments, that brokerage firm Axis Securities is positive about for the short term. These 16 stocks are the top picks of Axis Securities for the month of May and the brokerage firm expects them to rise in the range of 10-31 per cent.

The brokerage firm pointed out that the 'Axis Top Picks' basket beat the equity benchmark Nifty 50 by a margin of 4.6 per cent in April, delivering a return of 5.8 per cent in the month against the 1.2 per cent return of the Nifty 50.

Over the last year, the top picks basket of Axis Securities has gained 49 per cent, while since its start in May 2020, this top picks basket of Axis has delivered a solid return of 284 per cent, well above the 144 per cent return of the Nifty 50 index over the same period, the brokerage firm claimed.

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Largecap stocks to buy

ICICI Bank, Coal India, Nestle India, State Bank of India (SBI), Varun Beverages, Bank of Baroda, Bharti Airtel and TVS Motor Company are the largecap stocks suggested by Axis Securities.

Midcap stocks to buy

Aurobindo Pharma, Lupin, Federal Bank and CreditAccess Grameen are the top picks of Axis Securities from the midcap segment.

Smallcap stocks to buy

JTL Industries, CIE Automotive India, Westlife Foodworld and PNC Infratech are the top picks from the smallcap segment.

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Nifty may hit 25k by year-end

Axis Securities is positive about the growth prospects of the domestic market, and it suggests the use of market corrections to buy stocks.

"Any market correction on account of global challenges will be an opportunity to add to the equity investment," Axis Securities said.

In the bull case, Axis values Nifty at 22 times, which results in Nifty's December 2024 target of 25,000.

"Our bull case assumption is based on the overall reduction in volatility and the success of a soft landing in the US market. At present, we find ourselves near the peak of the current rate hike cycle, and the outlook for a soft landing has notably strengthened over the last one to two months. In the bull case, we foresee the Nifty earnings to grow at a CAGR of 16 per cent from FY23-26. This, in turn, would increase the market multiple," said Axis Securities.

In the bear case, Axis values Nifty at 16 times, which translates into Nifty's December 2024 target of 18,500.

"We assume the market to trade at an average valuation, led by political instability in case of no clear mandate in the 2024 General Election. Adding to that, we assume inflation to continue posing challenges in the developed world," Axis Securities said.

Axis sees the elevated rate hike cycle as a big risk for the market. This has the potential of causing a slowdown or heightened recession in the developed market, which can impact export-oriented growth in the Indian market. This will pose challenges to the earnings and market multiple of the domestic market, Axis said.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.