India’s improving earnings outlook, resilient domestic demand and the prospect of a revival in foreign institutional investor (FII) flows have prompted HSBC to recommend 10 stocks across banking, autos, retail, healthcare, industrials, metals and real estate.
In its latest India Equity Strategy report, the brokerage said India stands out as a relatively stable market as global investors look to diversify away from volatile AI-driven markets. HSBC estimates that more than 80% of active Global Emerging Market (GEM) funds remain underweight on India, and even a move back to neutral positioning could bring around $25 billion of inflows.
June quarter earnings steady
The brokerage also noted that 73% of companies reporting June-quarter earnings have either met or exceeded expectations, while credit growth, auto demand and other high-frequency indicators continue to support the market.
Against this backdrop, HSBC has retained a preference for domestically focused sectors such as financials, autos, retail, hospitals and select industrials. Its top India ideas span lenders, consumer, real estate, healthcare, infrastructure, manufacturing and metals, with target prices implying upside potential ranging from 8.5% to 46.8%.
HSBC’s top 10 stock ideas
| Company | Rating | Target price | Upside potential |
| Hindalco) | ‘Buy’ | Rs 1,430 | 46.8% |
| Adani Ports & SEZ | ‘Buy’ | Rs 2,200 | 29.7% |
| Phoenix Mills | ‘Buy’ | Rs 2,450 | 29.4% |
| Syrma SGS | ‘Buy’ | Rs 1,750 | 28.0% |
| Fortis Healthcare | ‘Buy’ | Rs 1,200 | 27.0% |
| Mahindra & Mahindra | ‘Buy’ | Rs 4,200 | 23.6% |
| ICICI Bank | ‘Buy’ | Rs 1,700 | 18.4% |
| Cummins India | ‘Buy’ | Rs 6,500 | 17.8% |
| Cholamandalam Investment | ‘Buy’ | Rs 2,140 | 15.7% |
| Titan | ‘Buy’ | Rs 5,290 | 8.5% |
*Upside is calculated using HSBC’s target price and the closing price mentioned in the report.
HSBC on Titan: Jewellery growth
HSBC has a ‘Buy’ rating on Titan Company Ltd. with a target price of Rs 5,290, implying an 8.5% upside.
The brokerage believes the jewellery business continues to enjoy a stronger demand outlook than the broader consumption space, aided by the ongoing shift from unorganised to organised players. It added that while a sharp correction in gold prices could temporarily slow demand, it expects buying activity to rebound thereafter.
The brokerage says, “Titan remains a dominant consumer franchise in India with strong visibility of growth.”
HSBC also likes the company’s long-term growth roadmap, particularly its target of around 20% CAGR for the jewellery business, and believes fading regulatory headwinds strengthen the investment case.
HSBC on Cholamandalam Investment: Growth momentum
HSBC has a ‘Buy’ rating on Cholamandalam Investment with a target price of Rs 2,140, implying a 15.7% upside.
The brokerage prefers diversified NBFCs over monoline lenders with higher rural exposure and believes the company is well placed to benefit from healthy vehicle finance growth, expansion in non-vehicle finance and improving asset quality.
The brokerage notes, “It remains in an earnings upgrade cycle on back of healthy growth in vehicle finance, scale-up in non-vehicle finance segments and benign asset quality trends.”
HSBC expects the company to deliver an EPS CAGR of 26% between FY26 and FY29. It also said the stock trades at a discount to Bajaj Finance despite recent earnings upgrades, leaving room for further rerating.
HSBC on Cummins India: Data centre demand
HSBC has a ‘Buy’ rating on Cummins India with a target price of Rs 6,500, implying a 17.8% upside.
The brokerage believes Cummins is well placed to benefit from India’s long-term infrastructure, manufacturing and industrial capex cycle, while rising investment in data centres is creating another growth engine for the company.
The brokerage says, “Cummins India is a play on India’s long-term infrastructure, manufacturing and industrial capex cycle.”
HSBC expects demand for backup power systems to remain strong as commercial real estate and hyperscale data centres expand. It also forecasts around 20% earnings growth during FY26-FY29, supported by exports recovery and strong cash generation.
HSBC on ICICI Bank: Earnings consistency
HSBC has a ‘Buy’ rating on ICICI Bank with a target price of Rs 1,700, implying an 18.4% upside.
The brokerage prefers ICICI Bank for its consistent earnings performance, supported by strong loan growth, stable net interest margins and healthy asset quality. It said the lender continues to gain market share in retail and SME loans as well as deposits while maintaining operating leverage.
The brokerage adds, “Its strong capital position and high provisioning buffer are adequate cushions to protect earnings from macro/asset quality risks.”
HSBC expects the bank’s earnings per share to grow at around 15% CAGR between FY26 and FY28 and believes its valuation of 1.9x FY28 estimated book value remains attractive.
HSBC on Mahindra & Mahindra: Product pipeline
HSBC has a ‘Buy’ rating on Mahindra & Mahindra with a target price of Rs 4,200, implying a 23.6% upside.
The brokerage expects M&M to continue outperforming peers as passenger vehicle demand remains resilient despite higher fuel costs and industry-wide price hikes. It believes new launches on the NU platform, capacity-led export growth and resilient earnings will continue to support the stock.
The brokerage says, “Mahindra & Mahindra (M&M) stands out as one of the more efficient auto OEMs globally, with a solid track record of successful launches in recent years.”
HSBC also believes the downside in the tractor business is largely reflected in the stock price, while any improvement in reservoir levels could lift earnings estimates.
HSBC on Fortis Healthcare: Growth visibility
HSBC has a ‘Buy’ rating on Fortis Healthcare Ltd. with a target price of Rs 1,200, implying a 27% upside.
The brokerage believes Fortis has entered a new growth phase, backed by improving profitability at key hospitals, brownfield capacity additions and the integration of Gleneagles hospitals. It also expects the company to benefit after the resolution of key regulatory and legal overhangs.
The brokerage says, “Fortis has entered a new phase of growth.”
HSBC expects the company’s adjusted profit after tax to double to Rs 2,120 crore during FY26-FY29, representing a 26.7% CAGR, driven by stronger hospital margins and additional bed capacity.
HSBC on Syrma SGS: Electronics opportunity
HSBC has a ‘Buy’ rating on Syrma SGS Technology Ltd. with a target price of Rs 1,750, implying a 28% upside.
The brokerage believes Syrma SGS is well placed to benefit from India’s expanding electronics manufacturing ecosystem, supported by government incentives and rising domestic production. It highlighted the company’s presence in the electronics manufacturing services (EMS) segment as a key advantage.
The brokerage says, “Syrma SGS is one of India’s top electronics manufacturing services (EMS) companies.”
HSBC expects the government’s continued push towards semiconductor and electronics manufacturing to support the company’s long-term growth outlook.
HSBC on Phoenix Mills: Mall expansion
HSBC has a ‘Buy’ rating on Phoenix Mills Ltd. with a target price of Rs 2,450, implying a 29.4% upside.
The brokerage views Phoenix Mills as a play on India’s premium consumption story, backed by its leadership in organised retail malls and its expansion into offices, hotels and residential projects.
The brokerage says, “The company has a strong moat in mall management and is able to generate superior trading density for its malls vs peers which translate to higher rentals.”
HSBC expects the opening of two new malls by FY28, three additional malls by FY30 and the expansion of its office portfolio to drive earnings growth over the coming years.
HSBC on Adani Ports & SEZ: De-risking story
HSBC has a ‘Buy’ rating on Adani Ports & Special Economic Zone with a target price of Rs 2,200, implying a 29.7% upside.
The brokerage believes the company’s stronger disclosures, balance sheet deleveraging and integrated ports and logistics network have strengthened its long-term investment case.
The brokerage says, “ADSEZ’s thesis is a de-risking plus compounding story.”
HSBC expects growth to be driven by container-led expansion, logistics and marine businesses. It also highlighted the company’s FY31 EBITDA target of Rs 52,000 crore, while forecasting a 17% EBITDA CAGR through the period.
HSBC on Hindalco: Aluminium preference
HSBC has a ‘Buy’ rating on Hindalco Industries Ltd. with a target price of Rs 1,430, implying a 46.8% upside.
The brokerage has identified aluminium as its preferred commodity, citing China’s capacity cap and resilient global demand. Hindalco is its preferred way to play that theme among Indian metals companies.
The brokerage says aluminium remains its “preferred commodity”, supported by China’s production cap and steady global demand.
With an upside potential of nearly 47%, Hindalco offers the highest return potential among HSBC’s 10 preferred India stock ideas.
Conclusion
From consumer discretionary and financials to industrials, healthcare and metals, HSBC’s preferred stock basket reflects its view that India’s next leg of market gains will be driven by companies benefiting from domestic demand, improving earnings and sector-specific growth drivers rather than a broad-based rally. While the brokerage continues to flag external risks such as geopolitical tensions and global monetary policy, it believes improving corporate earnings, resilient economic indicators and the potential return of foreign capital provide a supportive backdrop for Indian equities.
Disclaimer: The views, recommendations, target prices and estimates mentioned in this story are those of HSBC and do not represent the views of The Financial Express. Investors should consult a qualified financial adviser and consider their risk appetite before making investment decisions. Brokerage estimates and target prices are subject to change based on market conditions and company-specific developments.