PL Capital sets Nifty base target at 27,958; Adani Ports, HAL, L&T, Tata Steel, M&M among top picks

Market Overview - Equity markets are set for expansion after nine months of consolidation, with the Nifty index trading in a narrow 5-6% range amid global uncertainties and earnings recalibrations [1] - The Nifty index has experienced a 9-9.5% moderation in FY26-27 EPS estimates, yet corporate performance remains resilient [1] Target Projections - The base case for the Nifty index has a 12-month target of 27,958, with a bullish scenario suggesting an upside to 30,497 at a 20x multiple, while a conservative bear case indicates a target of 26,486 [2] Sector Preferences - The brokerage remains overweight on sectors such as banks, diversified financials, healthcare, consumer, auto, and capital goods/defense, citing sustained infrastructure spending and asset creation [2] - It is underweight on IT services and commodities, while favoring select cement and metals companies [2] Top Picks - PL Capital's large-cap top picks include Adani Port & SEZ, Britannia Industries, Hindustan Aeronautics, ICICI Bank, Larsen & Toubro, Mahindra & Mahindra, Shriram Finance, Tata Steel, and Titan Company [3] - For mid- and small-caps, favored companies include HealthCare Global Enterprises, Ingersoll-Rand (India), Ipca Laboratories, KEI Industries, and LG Electronics India [3] Changes in High-Conviction List - The brokerage has removed HDFC Life Insurance Company, State Bank of India, Aster DM Healthcare, Fine Organic Industries, and Max Healthcare Institute from its high-conviction list, adding HealthCare Global Enterprises, Ingersoll-Rand (India), and Ipca Laboratories instead [5] Trade Diplomacy and Economic Growth - India's accelerating trade diplomacy is identified as a key catalyst, with the recent India-EU Free Trade Agreement covering nearly 19% of India's exports and granting preferential access across 97% of tariff lines and 99.5% of trade value [6] - Immediate duty elimination on over 70% of tariff lines is expected to benefit sectors such as textiles and apparel, marine products, leather, gems and jewellery, chemicals, machinery, and electrical equipment [6] - The services component opens opportunities in IT and ITeS, financial services, telecom, education, and digital trade, along with collaboration in semiconductors and critical electronics [7]