Amid slowing growth, struggling equities, and increasing downside risks, HSBC picked five top stocks in the Indian market, citing the recent sell-off as a good opportunity.

Global funds are on edge with slow growth and elevated US bond yields and forex pressures, HSBC said in a note. The consumption-oriented proposals in the recent budget may not be enough to turn around the downbeat sentiment, it said.

However, the fiscal discipline exhibited by the government gives the central bank room to turn less restrictive, the firm said. “Monetary policy, amidst falling inflation, will have to play a bigger role to revive growth.”

HSBC economists expect more liquidity measures in coming weeks, but look for just one more rate cut in April, the note said. The Monetary Policy Committee, led by newly appointed RBI Governor Sanjay Malhotra, cut the benchmark repo rate by 25 basis points while maintaining its neutral stance.

Foreign outflows are already at levels seen in previous intervals of FII selling, but the 2021-2022 period shows they have room to sell more, it said.

Growth is likely to remain weak for at least two quarters before the lower base or potential policy impact kicks in, it said. “We see downside risk to consensus’ 15% growth expectations in calendar 2025.”

“However, there are pockets of growth,” HSBC said. The recent sell-off has created a good opportunity for companies, with a strong or improving growth narrative, it said.

Recent results affirm improving growth prospects for software companies, and the sector also benefits from the weak Rupee, HSBC said. Further, a less restrictive monetary policy will be good for lenders struggling for capital, it said. “We also like consumer companies that benefit from the recovery in rural demand or are tapping into the overseas market.”

HSBC’s ‘India Five’

  • Dixon Technologies Ltd.: The growth story should continue unfolding, supported by industry tailwinds, a favourable policy environment, and strong execution.

  • Maruti Suzuki India Ltd.: The market does not fully appreciate the company’s export potential.

  • PB Fintech Ltd.: Expected to grow at two to three times the industry due to strong competitive advantages.

  • Godrej Properties Ltd.: Strong pan-India presence, robust balance sheet, brand strength, and a large land bank enable growth despite market challenges.

  • LTIMindtree Ltd.: Should benefit from rising demand, particularly from banking clients.

. Read more on Markets by NDTV Profit.HSBC said the consumption-oriented proposals in the recent budget may not be enough to reverse the downbeat sentiment.  Read MoreMarkets, Business, Notifications 

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