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Kolkata: There is no doubt that most investors will urge Santa to bring back the bulls in the Indian equity markets in the New Year. While there are several factors that point to an enabling condition such as improved corporate earnings, rising demand, rising GDP and lower inflation, ample policy support like GST rejig and new labour codes, improved trade relations with the US could provide the much-needed impetus. It could also bring back he FIIs amid the continued support of domestic investors. In fact, Morgan Stanley has estimated that in the bull case scenario, Sensex could surge to 1,07,000 by the end of 2026.
In the midst of this gathering optimism, HSBC has listed a few stocks that could rally in 2026. There are forecasts of 10% growth in FY26 and 16% in FY27 which can be driven by rising demand and declining interest rates. India’s premium over other emerging markets are coming back to normal levels. Let's have a look at the stock picks by HSBC.
State Bank of India
Target price: Rs 1,110
HSBC has predicted 16% upside from current market levels. It has flagged that SBI's loan growth could be higher or on par with system loan growth in two successive years FY26 and FY27.
Infosys
Target price: Rs 1,720
HSBC thinks FY27 could witness a pick-up in IT spending. HSBC also expects a 5-7% CAGR against 3-4% over the past three years. There could also be a higher share of discretionary projects.
Mahindra & Mahindra
Target price: Rs 4,000
HSBC thinks M&M has strong earnings resilience. It has aimed at achieving 8 times growth in auto sector between 2020 and 2030 business, which indicates a 20% revenue CAGR in the next five years. In FY26, M&M could grow at a rate higher than peers.
Adani Ports
Target price: Rs 1,700
This Adani group major in the infrastructure sector has started showing growth on all fronts. The most visible is rise in margins in its HSBC has mentioned emerging businesses usually need lower capex which can lead to higher ROCE.
Apollo Hospitals
Target price: Rs 8,510
There seems to be an upside potential of 21%. Apollo seems to be on track to reach cost neutral status over the next few quarters in its health platform. It is also scaling up insurance services through 24/7 and thinks that it can turn into a significant contributor of Gross Merchandise Value and profitability.
Hindalco Industries
Target price: Rs 1,040
This stock has the potential for upside of about 26.5% from current levels, thinks HSBC. The Aditya Birla flagship could generate EBITDA CAGR of 14.6% over FY24–28e, thinks the brokerage. Aluminum prices can remain robust and Hindalco appears poised to capitalise on both expanding volumes and drive cost-reduction initiatives.
ICICI Lombard
Target price: Rs 2,250
It is perhaps HSBC’s preferred stock in the country’s insurance sector. It can grow faster than the industry in the medium term, thinks HSBC. The company has invested in its products and distribution.
Marico
Target price: Rs 870
There can be an upside potential of 20% in this stock. Marico's aggressive inorganic expansion and focus on diversifications have impressed HSBC. The oil business with brands such as Parachute coconut oil and Saffola have stable growth outlook and it has undertaken multiple initiatives in food and D2C of personal care products.
Kalyan Jewellers
Target price: Rs 690
HSBC forecasts huge 49upside potential. Kalyan Jewellers seems set to capture jewellery segment opportunities. It has plans to open dozens of showrooms in India and half a dozen destinations abroad. PBT margin in H2FY26 will be higher, thanks to lower interest cost, thinks HSBC.
Phoenix Mills
Target price: Rs 2,110
Phoenix Mills has rocketed from a single mall operator to the largest shopping mall operator in India. HSBC thinks it is also adding new leasable areas at a faster pace and its core legacy malls are being refurbished.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
