Oil, War, and AI: What’s Reshaping Dalal Street Bets in Samvat 2083

The stock market’s strong start to Samvat 2083—the Hindu calendar year—has shifted attention towards pockets of strength in the domestic equity market after tumultuous trading in the last traditional year. Bets for this year reflect that brokerages are favouring companies linked to India’s macroeconomic resilience.

Brokerages and portfolio managers have made diverse bets across sectors, primarily on names that have declined significantly amid high inflation, elevated oil prices, and foreign fund outflows. A strong showing by domestic players in the September quarter and the global unwinding of the artificial intelligence trade have given strong indications of a rally in Samvat 2083.

Foreign investors have purchased equity worth ₹663.02 billion so far in November, as per NSDL data. This is a sharp turnaround from October and September, when these investors had withdrawn ₹348.43 billion and ₹358.61 billion, respectively.

Global brokerage Citi Research has raised its target on the benchmark Nifty 50 index to 28000 points by 2027-end, primarily due to strong earnings growth, lower oil prices, and expectations of a slowdown in AI investments. An increase of arou­­nd 100 basis points in India’s active weight will likely drive around $12 billion of inflows, Citi said.

HSBC upgraded Indian equities to overweight from neutral against the backdrop of strong domestic credit growth and resilient earnings. The brokerage said Indian equities offer higher diversification and lower volatility compared to its Asian peers, which are extremely exposed to corrections in AI stocks.

Domestic brokerages, too, see a strong buying opportunity as several large-cap players are trading below their long-term averages. While some analysts pointed out that the low valuations reflect slower earnings growth, others said domestic earnings, albeit slow, have been more reliable compared to other emerging markets.

Healthcare, Banks Among Top Picks

Portfolio managers said financial services companies continue to form the largest share of their total holdings, but the weight of other sectors offering the biggest opportunities has grown, while metal and select industrial names have become less attractive.

“Healthcare has become the biggest piece in our portfolios, and financials, especially private and public banks, are right up there too,” said Sonam Srivastava, Chief Executive Officer of Wright Research. A sharply higher number of healthcare-related companies, especially pharmaceutical companies, are seeing earnings upgrades, which provides a data-backed incentive to buy these stocks, Srivastava said.

Srivastava noted that in the event the war in West Asia ends and money rotates into cyclical sectors, pharmaceutical stocks will likely “lag for a bit,” but his firm’s interest in the sector is driven by strong earnings. “US generics are delivering, and results have beaten expectations. None of that changes if the war ends,” said Srivastava.

Meanwhile, Divam Sharma, CEO of Green Portfolio noted a shift towards specialty chemicals, particularly in the fluorochemicals and contract development and manufacturing businesses, as the war in West Asia has disrupted supply chains and accelerated the import substitution theme. Sharma said his firm is avoiding commodity chemical makers that depend on imported feedstock.

“The broader rotation has been away from crude-sensitive consumption names, with the money moving toward businesses that have pricing power or benefit from domestic supply,” said Sharma, adding that his firm is overweight on financials as well, owing to expectations of healthy earnings growth going ahead.

Portfolio managers and brokerages are both positive on select industrial pockets; HSBC said capital goods, electronic manufacturing services, and ports are expected to do well. It said manufacturing and electronics supply chains will continue to benefit from capacity expansion, domestic data centre investment and broader infrastructure development.

In the near term, investors are also trying to build positions around sectors that will likely show resilient earnings in the December quarter. Several brokerages expect companies to face the brunt of high Brent crude oil prices in the current quarter.

Upstream oil and gas companies, banks, telecommunication, capital goods, and pharmaceutical companies are expected to do well. Aviation, fast-moving consumer goods, cement, and tyre companies, along with rate-sensitive consumer discretionary companies’ profit margins will likely be under pressure, analysts said.

If the war in West Asia ends in the near-term, cheaper packaging, palm oil and logistics costs will benefit FMCG and defensive names, though stocks may lag as money rotates into cyclical sectors, as per analysts. Meanwhile, upstream oil names such as ONGC and Oil India face an earnings downgrade risk as crude oil realisations fall from $90 per barrel.

Beaten down names are also being selectively purchased, with portfolio managers pointing to the eventual stabilisation of crude oil prices playing out in favour of FMCG, consumer staples, and consumer cyclical names. IT services and agriculture-related themes, however, have not yet become attractive enough, portfolio managers said.

Earnings growth in the IT sector has slowed to around 2–3%, from 4–5% in recent years, partly because of AI-led deflationary pressure, HSBC said. Even in case of a recovery in the next financial year, IT services’ growth is expected to remain in the mid-single digits.

Top Nifty Picks For Samvat 2083

Institutional analysts are increasingly betting on structural growth drivers, capacity expansions, and cyclical recoveries to propel market performance through the upcoming festive cycle.

Motilal Oswal picked Kotak Mahindra Bank to leverage broad-based lending growth with a target of ₹500, while ICICI Securities picked the lender with an ₹540 target to capture improving margins and steady credit expansion. Motilal Oswal also picked Adani Ports with an ₹2,130 target based on robust cash balances, while ICICI Securities issued an ₹2,210 target focusing on its logistics park integration.

In high-growth consumer and retail segments, Motilal Oswal picked Eternal with a target of ₹420 driven by aggressive Blinkit store expansion. Axis Securities picked the stock with a target of ₹365, citing an over 79% year-on-year surge in net order value during the September quarter.

Additionally, Motilal Oswal picked Titan with a target of ₹6,000, pointing to its extensive network of 3,551 stores as of June and strong jewellery sourcing capabilities.

SBI Securities picked Tata Steel with a target price of ₹200, highlighting the ramp-up of the Kalinganagar facility and anticipated sales-volume growth of around 6% for FY27. HDFC Securities picked the steel major with a target of ₹210.

PL Capital picked Shriram Finance with a target of ₹1,200, anticipating an 18% compound annual growth rate in assets under management from FY26 through FY29, supported by capital infusions from MUFG Bank and lower funding costs. In the defence sector, the brokerage picked Bharat Electronics with a target of ₹490 backed by a massive ₹687.2 billion order book, while HDFC Securities set a target of ₹475 on the stock.