Stocks to buy: Kotak Securities picks Axis Bank, ONGC as preferred bets
Stocks to buy, Jan 6: Shrikant Chouhan said that the financial profile of Axis Bank has improved steadily while Oil and Natural Gas Corporation's outlook continues to improve
 "Stocks to buy: Kotak Securities picks Axis Bank, ONGC as preferred bets")
Stocks to Buy Today, January 6
Kotak Securities Equity Research Head Shrikant Chouhan recommended Axis Bank and Oil and Natural Gas Corporation for Tuesday's session.
Axis Bank – Buy
CMP – ₹1,287
FV – ₹1,400
Resistance – ₹1,330–₹1,400
Support – ₹1,250–₹1,180
Axis Bank is India’s third-largest private sector bank with a well-diversified business model spanning retail banking, corporate and institutional banking, Medium, Small, and Micro Enterprises (MSME) lending, and treasury operations. Over the past few years, the bank has consciously shifted its strategy towards improving balance sheet quality, strengthening its liability franchise, and driving sustainable profitability. Retail banking remains a key focus area, with emphasis on secured products such as home loans, loans against properties, and vehicle loans, while the corporate book is calibrated to prioritise higher-rated borrowers and better risk-adjusted returns. This balanced approach has helped Axis Bank reduce earnings volatility and improve consistency.
The bank has demonstrated healthy growth momentum. As of December 2025, gross advances registered a 14.1 per cent Y–o–Y growth, while total deposits increased 15.0 per cent Y–o–Y. Deposit growth has been broad-based, with Current Account and Savings Account (CASA) balances growing 13.9 per cent Y–o–Y, indicating steady traction in granular retail and savings deposits despite intense competition in the system. Term deposits grew faster, reflecting a conscious strategy to support loan growth while maintaining liquidity comfort. Overall, Axis Bank continues to grow broadly in line with the system, without compromising on underwriting standards.
Axis Bank’s financial profile has steadily improved, supported by lower slippages, controlled credit costs, and stable net interest margins. Asset quality metrics have shown consistent improvement over the last few years, aided by proactive recognition, recoveries, and tighter risk controls. Capital adequacy remains comfortable, providing sufficient headroom to support growth over the medium term without frequent dilution. The improving mix towards retail and Small and Micro Enterprises (SME) loans is structurally positive for return ratios and earnings stability.
Axis Bank presents a strong investment case driven by steady loan growth, improving asset quality, and a strengthening deposit franchise. The bank has moved past its earlier asset quality challenges and is now in a phase of stable execution and predictable earnings delivery. With a balanced business mix, improving return profile, and valuations that remain reasonable compared to large private peers, Axis Bank offers an attractive risk-reward for investors seeking exposure to a high-quality private sector bank with medium-term compounding potential.
ONGC – Buy
CMP – ₹238
FV – ₹295
Resistance – ₹250–₹265
Support – ₹230–₹220
Oil and Natural Gas Corporation (ONGC) is a Maharatna public sector enterprise and India’s largest crude oil and natural gas producer, contributing nearly 71 per cent of the country’s domestic hydrocarbon output. The company has integrated, in-house capabilities across the entire exploration and production (E&P) value chain, providing it with strong operational resilience and cost efficiency.
ONGC’s overseas operations are housed under its wholly owned subsidiary, ONGC Videsh Limited (OVL), a Miniratna Schedule “A” CPSE. OVL is engaged in the exploration, development, and production of oil and gas assets across multiple geographies, strengthening ONGC’s global presence and reserve base. Another key subsidiary, Mangalore Refinery and Petrochemicals Limited (MRPL), is a Schedule “A” Miniratna CPSE and adds downstream integration to ONGC’s portfolio.
The outlook for ONGC continues to improve, supported by a recovery in production volumes and better price realizations. During Q2FY26, ONGC’s oil and gas production and sales volumes showed a sequential improvement. Gas production is ramping up at the KG-98/2 block, while output from Western offshore assets, including Mumbai High (with BP as Technical Services Provider) and the Daman offshore fields, is also increasing.
Gas price realizations remain firm, aided by a rising share of New Well Gas (NWG). Average gas realization stood at US$7.05/mmbtu, reflecting a 6.8 per cent year-on-year increase and stability on a quarter-on-quarter basis. Overseas performance also improved, with OVL’s oil sales rising 8.5 per cent Q–o–Q and 2.8 per cent Y–o–Y in Q2FY26.
Additionally, the withdrawal of Force Majeure at the Area-1 Mozambique LNG project, where OVL holds a 16 per cent stake, significantly enhances long-term production visibility and cash flow potential. Reduced policy risks, improving domestic gas pricing, and a stronger production outlook underpin ONGC’s earnings visibility.
============== Disclaimer: This article is by Aakash Shah, technical research analyst at Choice Equity Broking. Views expressed are his own.