While India’s corporate earnings performance in the December 2022 quarter was muted and largely below market expectations, analysts remain largely bullish on the top 100 stocks by market cap. A Motilal Oswal analysis shows that analyst recommendations on these stocks have moderated only marginally from 73% a year ago to 71% in March 2023.
Based on the brokerage, India Inc’s Q3 result was muted by inflation and other macroeconomic headwinds. Also, Indian equities’ outperformance against the global indices in 2022 has been wiped out as massive selling by foreign institutional investors (FIIs) took a toll amid macro headwinds and a weak demand environment.
In the report, India’s sharp outperformance in 2022 has started fading due to a relatively muted corporate earnings season and severe FII selling ($2.5 billion current year to date).
The Sensex rose 4.4% in 2022 while the major global indices declined 8-33%.
A reversal occurred in 2023. The Sensex has fallen more than 5% while global market indices have risen. Nasdaq Composite is up nearly 8%, China’s SSE Composite Index is up 4%, and Japan’s Nikkei is up nearly 6%.
Motilal Oswal has examined the popularity and performance of the top 100 stocks by market cap in light of volatile market conditions. Zomato and Nykaa are among the stocks with the most upside estimated by brokerages, according to the study. India’s equity markets are dominated by these 100 stocks, which account for 68% of their total market capitalization.
Stocks with the most and least coverage
ICICI Bank, Maruti Suzuki, Bajaj Auto, Axis Bank, and IndusInd Bank are among the most tracked stocks with coverage by more than 10 analysts. However, analysts did not cover Hindustan Aeronautics, Abbott India, Max Healthcare, JSW Energy, or Yes Bank.
In the last year, the top five most popular stocks have delivered returns ranging from 15% to 40% according to at least 50 analysts.
| Most popular stocks with ‘Buy’ rating | Analyst coverage | 1yr perf | Least popular stocks with a ‘Buy’ rating | Analyst coverage | 1yr perf |
| ICICI Bank | 53 | 31% | Hindustan Aeronautics | 10 | 116% |
| Maruti Suzuki | 52 | 28% | Abbott India | 10 | 16% |
| Bajaj Auto | 51 | 15% | Max Healthcare | 10 | 28% |
| Axis Bank | 51 | 28% | JSW Energy | 11 | -7% |
| IndusInd Bank | 51 | 40% | Yes Bank | 14 |
Capital goods, private and public banks, healthcare, and real estate have seen their sectoral preferences increase between 4% and 11%.
A list of stocks with the most and least ‘buy’ ratings
Among the stocks with the most ‘buy’ ratings are India’s largest aluminum producer Hindalco Industries, Adani Ports and SEZ, State Bank of India, and engineering giant Larsen and Toubro.
| Stocks with most ‘Buy’ ratings | ‘Buy’ ratings | Stocks with the least ‘Buy’ ratings | ‘Buy’ ratings |
| Hindalco Industries | 100% | Yes Bank | 7% |
| Adani Ports & SEZ | 100% | JSW Energy | 9% |
| Max Healthcare | 100% | JSW Steel | 19% |
| SBI | 98% | Divi’s Laboratories | 20% |
| L&T | 98% | Hindustan Zinc | 20% |
For example, a stock with 100% buy rating means that all analysts covering the stock rate the stock as ‘buy’.
The stocks with the most upside and downside
Motilal Oswal’s top 100 stocks have a 17% upside potential according to consensus target prices.
Brokers estimate that UPL, Zomato, SBI Life Insurance, LIC, and Nykaa have the greatest upside. JSW Energy, Shree Cement, ABB, Cummins India, and Berger Paints have the greatest downside potential.
| Stocks with the most upside | Upside % | Stocks with the most downside | Downside % |
| UPL | 42% | JSW Energy | -23% |
| Zomato | 39% | Shree Cement | -10% |
| SBI Life Insurance | 38% | ABB | -5% |
| LIC | 36% | Cummins India | -4% |
| Nykaa | 35% | Berger Paints | -3% |
Last year’s best- and worst-performing stocks
The last year has seen multi-bagger returns for investors in Varun Beverages, Hindustan Aeronautics, and TVS Motor.
Falguni Nayar-owned FSN E-Commerce (Nykaa), IT major Wipro, pharma major Divi’s Laboratories, and insurance giant LIC performed poorly.
While the Nifty50 has declined so far in 2023, analysts remain largely optimistic about the prospects of the top 100 stocks.
| Best Performers | 1yr perf | Worst performers | 1yr perf |
| Varun Beverages | 122% | Nykaa | -36% |
| Hindustan Aeronautics | 116% | Wipro | -33% |
| TVS Motor | 107% | Divi’s Lab | -32% |
| M&M | 84% | Hindalco Industries | -31% |
| Bank of Baroda | 79% | LIC | -31% |
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