Having consolidated for the larger part of the last year, the recent bull run in the market has served as a reprieve for many, with Nifty closing in on September 2024's all-time high of 26,277.
However, UBS believes that while Nifty will reach and surpass the all-time highs by the end of the year, the bull run seen in the benchmark index is likely to fizzle out, with the firm not expecting any further gains for the benchmark.
In its latest India Strategy report, UBS noted, "Although this is already a consensus view, further gains in the Nifty index are unlikely."
The brokerage firm does, however, believe that Nifty will reach the all-time highs of last September, thanks to two years of double-digit earnings per share growth and falling 10-year government bond yields, which support current valuation.
In an earlier conversation with NDTV Profit, Nirmal Bang's managing director and promoter, Kishore Bang said he is witnessing signs of a bull run in the market, especially in the midst of a raging demand for IPOs.
This is supported by the fact that Nifty has gained over 5% over a one-month period and is up almost 10% on a year-to-date basis. UBS, though, believes the rally might fizzle out once the index reclaims its all-time highs.
The UBS note also highlights ongoing tariff negotiations between India and the United States, expecting a final agreement by the end of the year or early 2026.
UBS Shuffles India Portfolio
UBS made significant changes to its India model portfolio.
The bank added eight new stocks: Avenue Supermarts, Bharat Electronics, HCL Technologies, Kotak Mahindra Bank, Mahindra & Mahindra, Persistent Systems, Thermax, and Titan.
It removed nine companies: Ambuja Cements, Cummins India, Hero MotoCorp, Jubilant FoodWorks, Lupin, Nestle, Sapphire Foods, Tata Consultancy Services (TCS), and Zydus Lifesciences.
Some of the other conviction picks from UBS include Reliance Industries and HDFC Bank. UBS is also bullish on MakeMyTrip and Axis Bank, among others.
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