Large-Cap Stocks With Strong Buy Calls and Up to 25% Upside

At a time when Indian equity markets are grappling with uncertainty, mixed global cues and sharp swings, investors may need to rethink how they approach opportunities. Instead of choosing between optimism and caution, a twin strategy-being selectively bullish while keeping cash ready for volatile days-could offer better balance.

A review of portfolios held by global emerging market funds offers useful insight. Indian equities do not dominate these portfolios; Taiwanese and Chinese stocks often carry higher weight. However, where India does feature, fund managers show a clear preference for large-cap companies.

Why Large-Caps Matter Right Now

As a new financial year approaches in key global markets, fresh allocation decisions are expected. If India sees increased flows, large-cap stocks are likely to attract the bulk of that money. Historically, large-caps also tend to lead both downturns and recoveries-making them early indicators of changing sentiment.

This is particularly relevant because the current corrective phase, which began in late 2024, was driven largely by selling in large-cap names. Any reversal in trend could therefore show up first in this segment.

Managing Volatility With a Twin Strategy

Market volatility remains elevated, driven by earnings uncertainty, global interest rate expectations and valuation concerns. Rather than viewing volatility as a threat, investors can use it as a tool-accumulating quality stocks during panic-driven corrections while maintaining a long-term perspective.

Earnings visibility becomes critical in this environment. Companies showing improving profitability and scope for further earnings growth are better positioned to justify current valuations.

Focus on Strong Fundamentals

Domestically focused sectors, particularly financial services, are showing signs of strength after years of balance-sheet clean-up. Large banks and NBFCs appear better placed today than many other sectors. At the same time, investors should remain cautious in pockets where optimism has pushed valuations far ahead of fundamentals.

As companies grow in size and complexity, transparent financial reporting and governance play a bigger role in sustaining investor confidence. Robust processes aligned with auditing services in india help ensure earnings quality, risk visibility and long-term credibility-factors global funds closely track when allocating capital.

Stocks With High Upside Potential

Using ET Screener powered by Refinitiv’s Stock Reports Plus, a list of large-cap stocks has been identified that meet three key criteria:

• At least two analyst recommendations

• “Buy” or “Strong Buy” ratings

• Upside potential of 25% or more over the next 12 months

These companies are not only large by market capitalisation but also stand out due to strong brands, sector leadership or improving fundamentals. The emphasis is on balancing upside potential with manageable downside risk.

Long-Term View Is Key

With valuations elevated across many sectors, short-term corrections are inevitable. Investors entering at current levels should be prepared for periods of consolidation and profit-booking, particularly in overheated segments. A disciplined, long-term approach remains essential.