Anand Rathi favors largecaps and midcaps for FY26

Anand Rathi, a brokerage firm, has shared its market outlook for the fiscal year 2026 (FY26). The firm favors large-cap and mid-cap stocks over small-cap stocks, as they offer more stability and resilience. While there may be short-term market fluctuations, long-term investors should find value in strong stocks. The Indian stock market is seeing a positive trend, with the Sensex and Nifty 50 indices increasing for the seventh straight trading session. Despite uncertainties, the broader economy shows strong fundamentals. Anand Rathi reports that factors like corporate earnings and equity inflows create good opportunities for investors. The Nifty 50 index is currently priced at 17.8 times its expected earnings for the next year. This is cheaper compared to its average over the past five to ten years. Anand Rathi forecasts steady growth in sectors like infrastructure, metals, consumer goods, and banking services (BFSI) for FY26. Conversely, sectors like automobiles and information technology (IT) may face challenges. Some sectors expected to grow include: - **Cement**: Demand is projected to rise by 7-8%. - **Metals**: Stronger commodity prices will help growth. - **BFSI**: A credit growth of 13-14% is anticipated. - **Consumer Durables**: Higher demand for air conditioners and mobile phones is expected due to increased production. - **Healthcare**: Growth is anticipated from rising medical tourism. In contrast, sectors expected to underperform include automobiles and small consumer goods, mainly due to high costs and fluctuating demand. IT spending is also expected to be slow early in the year but may recover later. Anand Rathi recommends focusing on large and mid-cap stocks, which are seen as better investments due to their stability. The firm has identified top stock picks, which include companies like Hindalco Industries, ICICI Bank, and United Breweries for mid-caps. They advise investors to consider these options but encourage consulting certified experts before making investment choices.