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India is emerging as a rare safe haven for investors in a turbulent global landscape, according to HSBC, which said domestic markets are “well placed amidst global uncertainty and trade tensions.” The global brokerage flagged India’s strong Q4 earnings and supportive macro indicators as key positives and rolled out five stock ideas it believes are best positioned to benefit.
“Indian markets are well placed amidst global uncertainty and trade tensions,” said Yogesh Aggarwal, Head of India Research at HSBC. “As per our proprietary positioning data, Asia and GEM funds have started to rebuild positions in India, but global investors are still cautious. A weaker dollar and softer inflation suggest the foreign inflows can persist in coming months.”
While HSBC remains neutral on India from a broader Asian perspective, it maintains a Sensex target of 82,240 by end-2025, highlighting that “a sustained recovery in earnings growth is still a few quarters away.” Yet, with local bond yields falling to three-year lows, the setup remains supportive for equities.
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Despite elevated valuations and concerns around the growth outlook, HSBC said it prefers stocks with structural or idiosyncratic growth stories. Here are its top five stock picks in India:
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1) HDFC Life Insurance
Target Price: ₹870
HSBC believes HDFC Life is best-placed among its peers due to its lower dependence on market-linked products, focus on underserved Tier 2 and Tier 3 markets, and robust distribution expansion. The firm expects 15–16% CAGR in embedded value (EV) and 16–17% return on embedded value (RoEV), calling it a strong compounder at current valuations.
2) Ujjivan Small Finance Bank
Target Price: ₹53
HSBC said the current regulatory and liquidity setup is favorable for smaller banks like Ujjivan. Trading at 1.3x FY27 estimated book value per share, the stock looks inexpensive, and a recovery in business momentum and earnings could trigger a re-rating.
3) Godrej Consumer Products
Target Price: ₹1,420
The brokerage is bullish on GCPL’s disruptive pricing strategy in deodorants, air sprays, and liquid detergents. HSBC sees significant total addressable market (TAM) expansion, with the company’s competitive push positioning it to capture future value.
4) UPL
Target Price: ₹775
HSBC expects a sustained earnings recovery to drive cash flow growth for UPL, which it says is entering a “virtuous cycle.” With lower net debt and improved working capital, the company appears fundamentally stronger despite the weak macro backdrop.
5) GAIL India
Target Price: ₹230
HSBC anticipates growth in transmission volumes and sees upside from GAIL’s efforts to reduce volatility in its marketing segment. The company is positioning itself more defensively in a changing energy environment.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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