“We recommend increasing cash positions by up to 10% in the short term and utilizing any market dips in a phased manner to build positions in high-quality companies with strong earnings visibility,” Axis Securities said in its latest investment strategy report.
The brokerage maintained a preference for large-cap private banks, telecom, consumption, hospitals, and interest-rate proxies, naming HDFC Bank, ICICI Bank, State Bank of India, Bharti Airtel, Trent Ltd, Hero MotoCorp, Max Healthcare, Indian Hotels, Kalpataru Projects, APL Apollo Tubes, Varun Beverages, Prestige Estates, and Cholamandalam Investment and Finance as its top picks.
Axis Securities said it expects the pharmaceutical sector—exempt from the new U.S. tariffs—to benefit in the near term. “The pharma sector could see a breather rally in the coming days,” the brokerage noted. Indian drugmakers have already seen gains on Thursday, driven by relief that the new levies spare the country’s largest export category to the U.S.
Despite the tariff shock, Axis Securities said it sees India relatively insulated compared to other affected nations, with China, Vietnam, and Taiwan facing even steeper levies. “The risk-reward balance appears to favor domestic-facing sectors due to minimal impact from reciprocal tariffs, while export-oriented sectors will remain in a wait-and-watch mode,” the brokerage said.
Meanwhile, Axis Securities has downgraded the IT sector, warning that a slowdown in U.S. spending, coupled with the impact of tariffs, could pressure earnings and valuations. “With the overnight development of Trump tariffs, the chances of downgrades have further increased. Hence, we recommend reducing positions in the IT sector,” the brokerage said.Looking ahead, the brokerage highlights domestic tailwinds, including recent Reserve Bank of India policy moves and a government-led consumption boost, as factors that could support market stability in FY26. However, it remains cautious on global risks, particularly the potential for a slowdown in the U.S. economy.Also read | Trump tariff hike hits Dalal Street: 4 sectors facing the biggest impact, global brokerages decode
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
