PL Capital highlights 21 stocks with upside potential up to 35% as market digests geopolitical risks

Shrugging off geopolitical uncertainties, Indian equity markets have staged a sharp rebound over the past six weeks, reflecting investor optimism amid easing global tariff tensions and better-than-expected corporate results. This has prompted domestic brokerage firm Prabhudas Lilladher Capital to pick a bouquet of 21 stocks which could deliver returns of up to 35%.

The report identifies the following stocks as top investment picks, with estimated upside potential ranging from 5% for Titan Company to 34.3% for Triveni Turbine:

Large Cap

ABB India, Bharti Airtel, Britannia Industries, Hindustan Aeronautics, ICICI Bank, InterGlobe Aviation, ITC, Kotak Mahindra Bank, Mahindra & Mahindra, Max Healthcare Institute, Sun Pharmaceutical Industries, Titan Company

Mid / Smallcap

Astral, Chalet Hotels, Crompton Greaves Consumer Electricals, Eris Lifesciences, IRCTC, Ingersoll-Rand (India), KEI Industries, Rainbow Children’s Medicare, Triveni Turbine

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PL Capital noted that the markets appear to have digested uncertainties surrounding global tariff tensions, with hopes pinned on limited disruption and new trade agreements.However, global risks persist, including China’s economic slowdown and interest rate dynamics in the US and Japan.Domestically, a further 50 basis point rate cut by the RBI is seen as possible over the next six months, although narrowing rate differentials with major global economies remain a key monitorable.

The report highlights “Operation Sindoor” as a key development redefining the role of advanced military technology, including air warfare, drone systems, and space technology.

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PL Capital states that India is being viewed as a potential global military superpower, with rising investments in related sectors like air defense systems, smart grids, power solutions, and hydroelectric infrastructure.

It also adds that the abeyance of the Indus Water Treaty may open up fresh opportunities in EPC, PSP, and hydroelectric equipment.

On the macroeconomic front too, PL Capital says conditions are favourable for a recovery in domestic demand. It attributes this to factors such as low food inflation (1.78% as of November 2021) and the CPI at 3.16%, the lowest since August 2019.

Adding to this, the Indian Meteorological Department has forecasted a normal southwest monsoon for 2025 at 106% of the long-period average, which could aid in demand revival.

The report further highlights that the personal income tax cuts proposed in the FY26 budget are beginning to reflect in improved demand. PL Capital estimates a demand surge of around Rs 2.5 lakh crore (USD 30 billion) due to the tax cuts, with a stronger impact expected for individuals earning above Rs 1 lakh per month.

Sectors seen benefiting from this trend include Travel, Durables, QSR, Apparel, Auto, building materials, and jewellery.

PL Capital concludes that demand recovery is visible across segments such as auto, hotels, airlines, durables, household goods, paints, and capital goods, with continued positivity in hospitals, pharma, EMS, travel, and telecom.

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