Goldman Sachs believes that India’s outlook has improved in recent weeks, amid lower commodity prices, stabilised currency, resilient domestic growth and healthy earnings expectations in Q2. The international brokerage house has identified 15 large cap stocks that could benefit from a potential return of foreign capital and more reasonable valuations.
The list comprises Reliance Industries HDFC Bank, Adani Power, Adani Enterprises, Kotak Mahindra Bank, NTPC, Hindustan Aeronautics, Eternal, Power Grid Corporation of India, Adani Green Energy, InterGlobe Aviation, HDFC Life Insurance Company, Indian Hotels, Mazagon Dock Shipbuilders. The list also includes US-listed MakeMyTrip.
Goldman Sachs on India: Key investment themes
The brokerage’s stock basket reflects several of its key investment themes for the second half, including a potential rotation towards large caps, a reversal in foreign investor positioning, more reasonable valuations, the impact of a strong El Niño, recovery from the oil shock, rupee stabilisation, defence and energy security.
Goldman Sachs said large-cap stocks could benefit from improving foreign investor sentiment after heavy selling pushed foreign ownership to a decade low. Valuations have also moved in favour of large-caps, which trade at a roughly 30% discount to mid-caps, while their earnings have seen shallower cuts.
The brokerage’s strategy is not built around a single sector. Instead, the 15-stock list spans banks, energy, utilities, defence, tourism and domestic consumption, reflecting the areas Goldman Sachs believes could benefit from the changing market environment in the second half.
Reliance Industries
Reliance Industries is among Goldman Sachs’ 15 large cap ideas for the second half of 2026.
The company fits into the brokerage’s broader themes of reasonable valuations, potential recovery following the oil shock and energy security.
Goldman Sachs remains ‘Overweight’ on energy, including refiners and exploration and production companies. The brokerage believes analysts may have cut estimates too aggressively for energy refiners following the oil shock, while tight capacity could help protect margins.
HDFC Bank
HDFC Bank features among Goldman Sachs’ 15 large-cap ideas as Goldman Sachs remains ‘Overweight’ on banks.
The brokerage believes banks could be among the biggest beneficiaries of a reversal in foreign flows after global investors sold around $12 billion of Indian financial stocks in four months.
Financials are also trading at around 16 times forward earnings, compared with approximately 20 times for MSCI India, while the sector could benefit from strong credit growth, healthy asset quality and improved liquidity conditions.
Goldman Sachs economists estimate that recent capital-flow measures could help generate around $60 billion of bond-market inflows in CY26.
Adani Power
Adani Power is among the stocks that fit Goldman’s’s power and utilities theme.
The brokerage has upgraded utilities to ‘Overweight’ as the possibility of a strong El Niño raises the prospect of hotter and drier weather.
The report cited forecasts pointing to a 63% probability of El Niño developing into a very strong, or “super”, event during November-January. Such conditions could increase electricity demand while weaker rainfall constrains hydropower generation.
Goldman Sachs’ historical analysis also found that utilities have been the strongest-performing Indian equity sector during strong and very strong El Niño periods.
Adani Enterprises
Adani Enterprises also features among the 15 large cap stocks highlighted by Goldman Sachs.
The report’s thematic framework links the stock to the brokerage’s broader themes of reasonable valuations and energy security, two factors it believes could influence market leadership during the second half of 2026.
Kotak Mahindra Bank
Kotak Mahindra Bank is the second private-sector bank on Goldman Sachs’ 15-stock list.
Its inclusion comes as the brokerage remains ‘Overweight’ on banks and expects financial stocks to benefit if foreign investors rebuild exposure to India after heavy selling in the first half.
Goldman Sachs prefers banks over NBFCs, citing the combination of valuations, liquidity conditions and the potential asset-quality risks that a strong El Niño could create for lenders with greater rural exposure.
NTPC
NTPC is another power sector stock on Goldman Sachs’ list.
The brokerage’s ‘Overweight’ stance on utilities is supported by the possibility that hotter and drier conditions could drive electricity demand higher while weaker rainfall reduces hydropower availability.
“We expect Power generation companies to outperform, and Agriculture/Rural companies to underperform amid concerns around a drier- and hotter-than normal monsoon season in 2H 2026,” Goldman Sachs said.
Hindustan Aeronautics
Hindustan Aeronautics represents Goldman Sachs’ structural call on the defence sector stocks.
The brokerage remains ‘Overweight’ on defence and views defence and energy security as strategically important themes over the medium term.
HAL is one of two defence-linked stocks included in the 15-stock basket.
Eternal
Eternal is also among Goldman Sachs’ 15 large-cap ideas.
The report’s thematic framework associates the stock with factors including large-cap rotation, a potential reversal in foreign positioning, reasonable valuations and rupee stabilisation.
Goldman Sachs expects domestic-facing companies to become relatively more attractive as the rupee stabilises and the benefits exporters enjoyed from currency weakness begin to fade.
Power Grid Corporation of India
Power Grid Corporation of India is another utility stock included in Goldman Sachs’ second-half basket.
Its inclusion aligns with the brokerage’s upgrade of utilities to ‘Overweight’ and its view that power companies could benefit from a hotter and drier weather environment.
The brokerage expects electricity demand and supply dynamics to become increasingly important if a strong El Niño develops.
Adani Green Energy
Adani Green Energy is the fourth power and utility-linked company among Goldman Sachs’ 15 large-cap ideas.
The stock forms part of a broader utility theme that the brokerage expects could outperform if hotter weather boosts electricity demand and lower rainfall affects hydropower generation.
InterGlobe Aviation
InterGlobe Aviation, the operator of IndiGo, is one of Goldman Sachs’ tourism-linked ideas.
Tourism was among the weakest areas of the market during much of the first half but staged a recovery from mid-June.
Goldman Sachs expects potential earnings upgrades as cost pressures on airlines ease and travel demand improves during the second half of FY27. Despite the recent recovery, the brokerage said tourism stocks remain below their previous peaks, leaving room for further outperformance.
HDFC Life Insurance
HDFC Life Insurance represents the broader financial sector in Goldman Sachs’ 15-stock basket.
The brokerage has a ‘Marketweight’ stance on diversified financials, including insurance and NBFCs, while its broader stock-selection framework identifies potential opportunities from large-cap rotation, foreign positioning and valuations.
Indian Hotels
Indian Hotels is another stock through which Goldman Sachs highlights the potential tourism recovery.
The brokerage expects domestic hotel demand to remain more resilient than previously expected and sees the potential for earnings upgrades as travel activity improves.
Tourism stocks have recovered from their first-half lows but remain below previous peaks, which Goldman Sachs believes leaves room for further performance.
Mazagon Dock Shipbuilders
Mazagon Dock Shipbuilders is the second defence-linked company in Goldman Sachs’ 15-stock list.
The brokerage remains ‘Overweight’ on defence and continues to view the sector as a structural theme linked to India’s strategic priorities.
Along with Hindustan Aeronautics, Mazagon Dock gives the basket exposure to the brokerage’s defence theme.
MakeMyTrip
MakeMyTrip completes Goldman Sachs’ 15-stock list and provides another exposure to the tourism recovery theme.
The brokerage expects improving travel demand and resilient domestic tourism to support the sector during the second half. It believes tourism could continue to recover despite the rebound already seen from mid-June.
What the 15-stock basket looks like
Goldman Sachs’ 15-stock basket cuts across banking, financial services, energy, utilities, consumer businesses, aviation, hospitality, online travel and defence.
According to the table on page 11 of the report, the group had a median market capitalisation of $29 billion, median 2026-27 EPS growth of 14%, a median next-12-month P/E multiple of 34 times and a median PEG ratio of 2 times, based on pricing as of July 7, 2026.
Conclusion
Goldman Sachs’ 15-stock list reflects its expectation that the second half of 2026 could be shaped by a change in market leadership rather than a uniform rally across Indian equities.
The brokerage expects large caps to benefit if foreign investors return after heavy selling, while banks could gain from attractive valuations and improving liquidity. Power companies could benefit if a strong El Nino drives electricity demand higher, tourism could see further recovery, and defence and energy security remain longer-term structural themes.
Disclaimer: This article reports on a thematic stock basket and market analysis compiled by an international institutional brokerage; it does not constitute an offer, solicitation, or personal recommendation to buy, sell, or hold any specific securities named herein. Market conditions and institutional outlooks, including sectoral projections like El Niño impacts or foreign capital flows, are subject to rapid change. Investors should perform independent research and consult a SEBI-registered investment advisor before allocating capital to any listed equities. This disclaimer has been generated using AI to support user well-being and responsible content consumption.