The brokerage firm JM Financial recently launched its India Model Portfolio, highlighting key opportunities in the current market. The brokerage is ‘Overweight’ on five key sectors which include – Banking, Real Estate & Hospitality, Telecom, Infrastructure, and Defence.
Let’s take a look at the reason behind these sector calls and the top stocks that JM Financial is betting on.
JM Financial on Banking
The brokerage has gone 119 basis points Overweight on banks, which forms the core of its strategy. Its top picks include ICICI Bank, Axis Bank, HDFC Bank, SBI, and DCB Bank.
According to the brokerage, the shift in the RBI stance from inflation-focused to growth-oriented- plays a major role. “There is a clear shift in the approach of the monetary policy post the change of guard at the helm of the RBI,” JM Financial said in the note, referring to Governor Malhotra’s prioritisation of growth.
JM Financial on Real Estate, REITs and Hotels
The brokerage is also 85 bps Overweight on real estate and hospitality, a sector that had been long subdued but is now seeing a gradual revival. The top recommendations here include DLF, Embassy REIT, and Chalet Hotels.
With urban housing demand steady and hospitality benefiting from both domestic travel and business recovery, this cluster of sectors is poised for growth.
JM Financial on Telecom
With a 69 bps Overweight stance, JM Financial’s telecom bet rests squarely on Bharti Airtel. The firm believes that India’s telecom sector is gradually shedding the pricing pressures of the past and entering a phase of ARPU improvement.
As per the brokerage, Bharti’s position in both mobile and broadband, along with 5G rollout and cost efficiency, makes it a compelling pick in the current environment.
JM Financial on Infrastructure
Infrastructure, long the engine of economic momentum, is Overweight by 52 bps, with Larsen & Toubro (L&T) as the flagbearer.
JM Financial on Defence
Simultaneously, the brokerage house is Overweight on Defence with 49 bps weightage, where it prefers Bharat Electronics (BEL).
“The capex allocation of Rs 11.2 trillion for FY26 is substantial and should drive growth,” the note said.
Oil & Gas, NBFCs, Insurance, and Metals
While not part of the top five, sectors like Oil & Gas (+37 bps), NBFCs & AMCs (+28 bps), Insurance (+24 bps), and Metals (+23 bps) also have a strong presence.
Key stocks recommended here include Reliance Industries, Bajaj Finance, Shriram Finance, Nuvama Wealth, HDFC Life, ICICI Lombard, Hindalco, JSPL, and Tata Steel.
Where they are cautious: The underweights
The brokerage is taking a cautious stance on a few segments such as the Internet, Utilities, Cement, Pharma, and Consumer. The brokerage believes some of these spaces are overheated or face structural challenges.
Even so, it makes exceptions. “We like NTPC and JSW Energy in utilities, Ultratech in cement, and Titan, Havells, Varun Beverages, and Britannia in the consumer pack,” the note highlighted.
Market valuations and earnings
The brokerage firm believes the market is not cheap, especially when looking at FY26 valuations. “Large, mid and small cap indices are all trading 1 standard deviation or more above the mean,” the report noted.
Though large caps may look cheaper on a price-to-earnings (P/E) basis, midcaps appear more attractive when looked at from a PEG (Price-to-Earnings-to-Growth) angle. “Looking at FY26E PEG, one might interpret that midcaps are the cheapest,” it said.
As for earnings, the EPS downgrade cycle is far from over. The brokerage pointed out that while FY25 earnings saw a small upgrade of 0.3%, FY26 and FY27 estimates were cut by 1.1% and 1.0%, respectively, in April 2025.