The Indian stock market is expected to deliver strong double-digit returns over the next 2-3 years, led by strong domestic economic growth, rising capex, and the consumption boost from the recent Union Budget and GST 2.0 reforms, driving credit growth for banks, Axis Securities said.
Against this backdrop, the brokerage firm foresees Nifty 50 earnings to post excellent growth of 13% CAGR over FY23-27. Financials will remain the biggest contributors for FY26/27 earnings. However, trade policy uncertainty, rupee depreciation, and relatively higher valuations compared to other emerging markets, even after the correction, remain key risks to near-term market multiples.
After the Q1 results, in its base case, Axis Securities revises its March 2026 Nifty 50 target to 25,500 by valuing it at 20x on March 2027 earnings, implying an upside of nearly 4% from current levels.
It recommends investors to use the current dips in a phased manner and build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months.
In the bull case, Axis Securities values Nifty 50 at 21x, translating into a March 2026 target of 26,800.
The brokerage firm recommends five smallcap stocks and midcap stocks to buy in September. These stock picks are Prestige Estates Projects, APL Apollo Tubes, Kirloskar Brothers, Sansera Engineering and Kalpataru Projects International.
Prestige Estates Projects | Target Price: ₹2,000
Prestige Estates has set FY26 guidance targeting pre-sales of ₹27,000 crore and a robust launch pipeline with ₹43,000 crore in GDV. The brokerage has Prestige Estates Projects share price target of ₹2,000 per share.
APL Apollo Tubes | Target Price: ₹1,950
With the growth drivers intact, the brokerage believes APL Apollo tubes is well positioned to capture India’s infrastructure growth. It projects EBITDA CAGR of 38% over FY25-27E. APL Apollo Tubes share price is trading at a 12-month forward P/E of 35x, Axis Securities said. It maintains a ‘Buy’ rating on the stock with a target price of ₹1,950.
Kirloskar Brothers | Target Price: ₹2,330
With sustained demand from key end markets and a robust order book, Kirloskar Brothers remains on track to achieve double-digit revenue growth in the medium term. The brokerage firm values Kirloskar Brothers stock at 25x September 2027E EPS and maintains a ‘Buy’ rating on the stock, with a target price of ₹2,330 per share.
Sansera Engineering | Target Price: ₹1,500
Axis Securities expects Sansera Engineering’s revenue, EBITDA, and PAT to grow at a CAGR of 10%, 12%, and 18%, respectively, over FY25-27E. It has a target of ₹1,500 for Sansera Engineering shares.
Kalpataru Projects International | Target Price ₹1,470
Kalpataru Projects International share price is currently trading at 21x/17x FY26E/27E EPS. the brokerage firm maintains a ‘Buy’ call on the stock with a target price of ₹1,470 per share.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
