After a recent correction, the market has once again entered a slightly oversold zone, with only 47 per cent of the NSE 500 stocks currently trading above the 200-day moving average.
Data showed only 31 index stocks are now trading near their 52-week highs, compared to 73 stocks as of three months back. A total of 278 stocks (56 per cent) are trading below 20 per cent of their 52-week highs. On April 1, the percentage was 76 per cent.
Besides, 28 per cent of the NSE500 stocks have corrected by over 30 per cent from their 52-week high, indicating that all negative factors are now priced in, Axis Securities said.
Lastly, the brokerage noted that only two of 55 PSU stocks are near their 52-week high, compared to 35 stocks in February 2024, adding that largecap market looks attractive at current levels.
Axis Securities said the market’s performance is likely to be rangebound for at least one quarter until signs of relief in tariff negotiations and earnings revival become visible. Sector and style rotation will likely be visible in the market moving forward.
The brokerage observed that PE compression was observed across the board during the previous FII selling phase between 09/2021 and 06/2022, when total FII outflows exceeded $34.5 billion. In the current cycle, cumulative FII selling has reached $29 billion so far.
It noted that the last four quarters’ cumulative net profit reached an all-time high in Q1FY26, crossing the mark of Rs 15.5 lakh crore.
“Benchmark indices have corrected from all-time highs, and so have the valuations. FTSE India is now trading at a PE premium of 49 per cent to the EM index (PE) against an average premium of 44 per cent. During Sep’24, the Indian market traded at a 97 per cent PE premium to EM, and now,
after the correction, it is trading at a 49 percent premium, which looks attractive compared to the past,” Axis Securities said.
It believes the Indian equity market will continue to trade at a higher premium to EM over the next year due to strong economic growth compared to other EM countries, a healthy earnings outlook for FY26-27, sustained demand across sectors, a well-capitalised banking sector with improving fundamentals, and expectations of a revival in the private capex cycle.
In its base case, Axis Securities revised its March 2026 Nifty target to 25,500 by valuing it at 20 times on March 2027 earnings.
3 stocks to buy
While Axis Securities picked 15 stocks to buy for double digit returns, it sees Lupin, Max Healthcare Institute Ltd and Prestige Estates Projects Ltd delivering 26-32 per cent upside over the next 12 months.
Lupin: The pharma major is seen sustaining double-digit revenue growth in FY26, led by strong US market execution, new launches like Glucagon and Liraglutide, and a robust injectable and biosimilar pipeline. While some loss of exclusivity in FY27 may create near-term volatility, management projects high single-digit to potential double-digit growth, supported by new approvals including Risperdal, Pegfilgrastim, and Ranibizumab.
“Ebitda margins are expected to remain healthy at 24-25 per cent in FY26, with further expansion in FY27, driven by premium product mix and continued cost optimisation. R&D spending will stay elevated as focus shifts toward complex generics, 505(b)(2) products, and global biosimilar expansion. Adjacency businesses are currently dragging margins by 1 per cent but are expected to break even by FY27, adding further upside to profitability,” Axis Securities said. The brokerage suggested a target of Rs 2,400 on the stock, hinting at 26 per cent upside.
Prestige Estates: Axis Securities said Prestige Estates has set FY26 guidance targeting pre-sales of Rs 27,000 Cr and a robust launch pipeline with Rs 43,000 crore in GDV. The strong Q1 performance, particularly in NCR, establishes a solid base for achieving these targets, it said adding that Q2 launches are expected to contribute Rs 12,000 Cr in GDV. The management remained
confident of sustaining the sales momentum. The annuity portfolio is also expected to scale up meaningfully, with exit rentals projected to reach Rs 4,900 crore by FY30. The brokerage suggested a target of Rs 2,000, suggesting 32 per cent potential upside on the counter.
Max Healthcare Institute: Axis Securities said the Max Healthcare management reiterated guidance of 3-7 per cent ARPOB growth in mature hospitals, led by higher case complexity and clinical mix, alongside sustained 80 per cent occupancy levels. Developing hospitals are expected to ramp up gradually, driving incremental occupancy and revenue growth. Focus remains on scaling oncology and international patient business while maintaining strong return ratios.
Axis Securities suggested a target of Rs 1,450 on Max Healthcare Institute.