scorecardAnalysts remain optimistic about India’s top 100 stocks: Most popular 5 stocks deliver double digit returns
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Analysts remain optimistic about India’s top 100 stocks: Most popular 5 stocks deliver double digit returns

Analysts remain optimistic about India’s top 100 stocks: Most popular 5 stocks deliver double digit returns
Stock Market10 min read
  • Of these 100 stocks, the top five most popular stocks are covered by at least 50 analysts and have delivered returns in the range of 15% to 40% in the last one year.
  • ICICI Bank, Maruti Suzuki and Bajaj Auto are amongst the most-covered stocks.
  • Majority ‘buy’ calls are for stocks like Hindalco Industries, Adani Ports & SEZ and State Bank of India.
While India’s corporate earnings performance in the December 2022 quarter was muted and largely below market expectations, analysts have remained largely bullish on the top 100 stocks by market capitalisation. The ‘buy’ recommendations of analysts on these stocks has moderated only marginally to 71% in March 2023 from 73% a year ago, according to an analysis by Motilal Oswal.

India Inc’s Q3 was muted due to inflation and other macroeconomic headwinds, according to the brokerage. Also, Indian equities’ outperformance against the global indices that was witnessed in 2022 has been wiped out as massive selling by foreign institutional investors (FIIs) took a toll amid macro headwinds and weak demand environment.

“Impaired by relatively muted corporate earnings season and severe FII selling ($2.5 billion current year till date), India’s sharp outperformance in 2022 has started fading CYTD,” the report said.

In 2022, the Sensex rose 4.4% while the major global indices were down 8-33%.

However, there has been a reversal in 2023. The Sensex has tanked more than 5% while global market indices have risen. The Nasdaq Composite has surged nearly 8%, China’s SSE Composite Index has gained 4% and Japan’s Nikkei has gone up nearly 6%, among others.

Amidst the volatile market conditions, a report by Motilal Oswal has examined the popularity and performance of the top 100 stocks by market capitalisation. Some of the interesting findings include the fact that Zomato and Nykaa are among stocks with the most upside estimated by brokerages. These 100 stocks are notable since they account for 68% of the total market capitalisation of India’s equity markets.

Most and least covered stocks

The most-tracked stocks with coverage by more than 10 analysts include large cap stocks like ICICI Bank, Maruti Suzuki, Bajaj Auto, Axis Bank and IndusInd Bank. On the other hand, Hindustan Aeronautics, Abbott India, Max Healthcare, JSW Energy and Yes Bank were stocks that are least covered by analysts.

The top five most popular stocks have been covered by at least 50 analysts and have delivered returns in the range of 15% to 40% in the last one year.

Most popular stocks with ‘Buy’ rating

Analyst coverage

1yr perf

Least popular stocks with ‘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

31%


In terms of sectoral preference, capital goods, private and public sector banks, healthcare and real estate have seen their preference increase between 4% to 11%.

Stocks with most and least ‘buy’ ratings

The stocks with the most ‘buy’ ratings include India’s biggest aluminium producer Hindalco Industries, India’s largest commercial ports operator Adani Ports and SEZ, India’s largest public sector bank State Bank of India and engineering giant Larsen and Toubro.

Stocks with most ‘Buy’ ratings

‘Buy’ ratings

Stocks with 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%


Buy ratings is computed as a percentage of the total ratings given by analysts for a particular stock. For example, a stock with 100% buy rating means that all analysts covering the stock have a ‘buy’ rating on it.

Stocks with most upside and downside

Overall, according to consensus target prices for the top 100 stocks examined by Motilal Oswal, the potential upside is at 17%.

UPL, Zomato, SBI Life Insurance, LIC and Nykaa are among stocks with the most upside estimated by brokerages. Meanwhile, JSW Energy, Shree Cement, ABB, Cummins India and Berger Paints are among stocks that analysts feel could fall in the future.

Stocks with most upside

Upside %

Stocks with 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%


Best- and worst-performing stocks in the last one year

Varun Beverages, Hindustan Aeronautics and TVS Motor are stocks that gave multibagger returns to investors in the last one year.

On the other hand, Falguni Nayar-owned FSN E-Commerce (Nykaa), IT major Wipro, pharma major Divi’s Laboratories and insurance behemoth LIC are stocks that delivered poor returns to investors.

Overall, the most popular stocks have delivered double-digit returns and beat the benchmark Nifty50 between 5x to 12x. While 2023 so far has seen Nifty50 decline, analysts remain largely bullish on 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%


SEE ALSO:

Indian banks pass Jefferies’ Silicon Valley Bank test, brokerage finds them ‘well placed’

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