Axis Securities’ newest research notes a 12% discount in the market’s forward price‑to‑earnings ratio, with the benchmark now trading at 16.4 times earnings versus the historical 18.4 times. At the same time, the Nifty has slid 10.4% in the last 12 months, erasing a decade‑long rally and pushing valuations below long‑term averages.
Axis sees the correction as a buying window, arguing that the lower P/E multiplies the risk‑reward profile for value‑oriented investors. The brokerage says the 12% discount reflects a 16.4‑to‑18.4 P/E differential that could translate into upside if earnings grow.
To anchor its strategy, Axis lists nine Diwali picks across private banks, metals, quick commerce, select automobiles and hotels. The list includes DCB Bank, Nephrocare Health Services, Indian Hotels Company, Ashok Leyland, Coforge, Eternal, Hindalco Industries, APL Apollo Tubes and Elecon Engineering.
DCB Bank is highlighted for its credit‑growth momentum and a recent rebound from a ₹220 floor. Axis also spotlights Coforge, which, despite a six‑month rally, delivered results that matched expectations and is banking on its Encora acquisition to lift revenue and EPS in coming quarters.
The brokerage cautions against consumer durables, oil marketing, paints, aviation, tyres and real‑estate, citing uncertain outlooks. It stresses that lower valuations alone do not guarantee a pick; durable earnings growth remains the yardstick.
Looking ahead, Axis urges investors to focus on companies with disciplined capital allocation and sound management. The firm’s Diwali picks are a call for selective, fundamentals‑driven playbooks rather than a blanket bet on the market’s dip.