Axis Capital Lists Top Picks For October, Sees Nifty At 18,400 In March

Axis Capital expects the Nifty 50 to touch 18,400 by the end of March next year, and sees domestic-oriented themes such as banks, automobiles and hospitals as “attractive in the near term”.

“We continue to maintain a positive long-term outlook on the market, supported by the favourable structure emerging with increasing capex enabling banks to improve credit growth. Moreover, the overall expenditure boost in the Union Budget 2022-23 will help deliver broad-based growth in FY23,” the brokerage said in its note.

But there could be volatility in the short run with the market responding in either direction, it said. “In this context, the current setup is a ‘buy on dips' market. We recommend investors maintain good liquidity (10%) to use such dips in a phased manner to build a position in quality companies (where the earnings visibility is very high) and with an investment horizon of 12-18 months.”

Though aggressive policy tightening will help in curbing inflationary pressure, persistently elevated oil and commodity prices would continue to pose challenges to the market multiple in the next few quarters, the report said.

Here are Axis Capital's top picks for the month:

“We continue to believe that profitability will shift from commodity producers to commodity consumers. Keeping this in view, banks, automobiles, hospitals, discretionary consumption, and domestic industrial themes look attractive in the near term over export and commodity sector themes.”