Nomura has taken up a definitive ‘domestic focus’ in its portfolio stance as it cut the Nifty March 2026 target to 24,970. They have now turned relatively more positive on ‘consumption and potential beneficiaries of supply-chain relocation.” Nomura recommends a bottom-up approach and would avoid stocks with very high valuation multiples “as any flare up in risk premium could present significant risk to this segment.”
Nomura’s top large cap picks include Axis Bank, ICICI Bank, State Bank of India, Bajaj Finance, Godrej Consumer, Reliance Industries, Mahindra & Mahindra, L&T, CG Power, Tata Power, Lodha. The brokerage house has a Buy recommendation on all these stocks. As is quite evident, the top picks include many names from the list of bank stocks as well as some key ones from the list of petroleum sector stocks.
Nomura positive on financials, consumer staples
One of the key reasons why Nomura is positive on financials as the segment is because the segment has “relatively low earnings risk and presents valuation comfort.” Consumer staples, discretionary, oil and gas, telecom, power, internet, real estate and select domestic healthcare plays are the other segments that they are positive on.
That apart Nomura is now “incrementally more positive on discretionary and autos, where there has been a significant reset of expectations and valuation correction.”
Nomura cautious on export sectors
However, Nomura’s top picks do not have any from the list of Information Technology Sector stocks. That brings us to the next aspect- the key sectors that Nomura would not invest in at the moment. They are “cautious on export sectors and capex themes. These include IT services, industrials, cement, and metals.” On pharma, they added that, “ensuing US tariffs present near-term headwind, but we expect the impact to be passed on and hence a correction should represent a buying opportunity.”
Nomura: The big earnings worry
According to Nomura, corporate earnings in India “still have downside risk to current estimates and expect 5% reduction in FY26 and FY27 estimates.” Given potentially slower economic growth, Nomura expects earnings growth, at best, “to be in line with nominal GDP growth in the near term, as the earnings-to-GDP ratio is already at elevated levels. Slowdown in capex and exports and weak consumer sentiment are a drag, negated to an extent by lower raw material prices.” They expect another 5% reduction in consensus earnings estimates for FY26/27.