20 stocks to buy: Elara sees solid upside as Nifty enters 'bounce zone'

Brokerage firm Elara Capital has identified 20 stocks across large, mid, and smallcap segments that it believes offer an attractive risk-reward profile following the recent correction in Indian equities triggered by geopolitical tensions.

 

According to the brokerage, markets have been volatile amid the ongoing US-Iran tensions, with “continued conflicting signals” and uncertainty around the Strait of Hormuz keeping investors on edge. However, Elara believes some macro signals are turning constructive.

 

It noted that improving energy availability in India is a key positive for equities. As per government orders issued on March 26, 2026, domestic refinery production has been increased by 40 per cent, raising daily LPG output to 50,000 tonnes, meeting over 60 per cent of the total daily requirement of around 80,000 tonnes. Over and above domestic production, 800,000 tonnes of assured inbound LPG cargo have been secured from the US, Russia, Australia, and other countries.

 

 

"That the situation is improving is evident from the hike in commercial LPG allocation to 70 per cent of the pre-crisis level from 20 per cent earlier to meet industrial requirements," the brokerage said in its note. 

Nifty valuation signals a potential for rebound

On valuations, analysts at Elara said the Nifty50 is currently trading at around 17.3 times one-year forward earnings, nearly 7 per cent below its 10-year average of 18.6 times, placing it in a historical ‘bounce zone’.

 

It added that such levels have typically acted as a floor for valuations outside extreme disruptions like Covid-19. Even during the Russia–Ukraine conflict, despite Brent sustaining above ₹100 per barrel, Nifty multiples bounced back from 10-year rolling averages. 

 

"The recent TACO and Iran allowing non-hostile ships to transit the Strait of Hormuz, along with crude oil prices dropping below $100 per barrel, have reduced immediate energy supply risks. With our base case assuming gradual de-escalation, current valuation provides a favourable entry point, with limited downside," the brokerage said in its note.  

  Historically, Elara noted, market drawdowns during geopolitical conflicts have typically been limited, and once early signs of normalisation emerge, recoveries tend to be swift. With the Nifty already correcting by over 10 per cent from recent highs, the brokerage believes that downside risks remain limited while selective opportunities have emerged for investors. 

Source: Elara Capital

       Auto & power among bets

Elara continues to prefer auto stocks, particularly large-cap names such as Maruti Suzuki and Eicher Motors, which have corrected sharply, with declines of around 17 per cent since the onset of the US-Iran conflict. While near-term concerns around input costs and demand remain, the brokerage highlighted that underlying retail trends are strong.

 

Vahan registration data indicates robust double-digit growth, with passenger vehicles up around 38 per cent and two-wheelers up about 30 per cent year-on-year. Elara expects this momentum to be supported by upcoming pay commission-related tailwinds.

 

Within the power sector, the brokerage highlighted relative resilience, noting that 18 out of the 19 utility stocks under its coverage have outperformed the Nifty50 during the recent drawdown. It expects the ongoing situation to accelerate India’s electrification cycle, supported by rising data centre demand and potential regulatory reforms.

 

“The sector is emerging not merely as a defensive anchor but as a structural beneficiary in the medium to long term,” the brokerage said, naming NTPC, NLC India, and ACME Solar as its key picks.  Against this backdrop, the brokerage has identified 20 stocks which offer a good risk-reward opportunity with healthy fundamentals in the current scenario of extreme correction. 

 

Elara’s list includes large caps such as HDFC Bank (TP: ₹1,147), Larsen & Toubro (₹4,487), Maruti Suzuki (₹18,686), Axis Bank (₹1,555), Titan (₹5,000), Eternal (₹415), Eicher Motors (₹9,300), LTIMindtree (₹6,740), Apollo Hospitals (₹8,670), and Polycab (₹8,180).

 

Mid-cap picks include United Spirits (TP: ₹1,650), GMR Airports (₹140), UNO Minda (₹1,503), IDFC First Bank (₹90), and Godrej Properties (₹3,700).

 

Among small caps, the brokerage has identified Gland Pharma (TP: ₹2,225), Gabriel India (₹1,381), BEML (₹2,700), Ujjivan Small Finance Bank (₹72), and Safari Industries (₹3,248).

 

According to the brokerage, stock selection was based on a combination of valuation comfort, price correction, growth visibility, and analyst conviction.

 

Key filters included trading at a discount to 5/10-year median valuations or below Russia-Ukraine crisis lows, corrected by 5 per cent or more in the drawdown phase, or had already seen a sustained correction earlier, healthy FY26–28E sales and PAT CAGR, usually in the double digits, and at least 14 per cent upside for large caps and 25 per cent for mid and small caps.   Disclaimer: Views and outlook shared belong to the brokerage and are not endorsed by Business Standard. Readers' discretion is advised.