Pharma top bet for H2-CY2026; be selective in banks, defence: Ajit Mishra

On the broader market outlook, Ajit Mishra, SVP-Research of Religare Broking says the Nifty remains in consolidation mode, with key support at 23,600. On the upside, bullish pivot stands at 24,600.

Equity markets in India have been rangebound in the last six weeks, with the NSE Nifty recently testing the lower band of the trading range. Given this background, Ajit Mishra, SVP-Research of Religare Broking in an emailed interview with Rex Cano says the Nifty remains in consolidation mode, with key support at 23,600; below which he fears the fall may aggravate.  That apart, the analyst decodes strategy in prominent sectors such as IT, Banks, Defence, Pharma and oil marketing companies (OMCs) against the backdrop of geopolitical worries and Q1 results. Edited excerpts:  What is your outlook on the Nifty 50 index? What are the key pivot levels that can trigger a rally to record highs from here?  The Nifty has been consolidating in the 23,800–24,400 range for nearly six weeks after failing to sustain above its long-term average, the 200-day exponential moving average (DEMA). At the same time, the index continues to hold above a rising trendline support placed around 23,600, connecting the April and June lows, which keeps the broader recovery structure intact. A decisive breach below 23,600 could weaken the trend and drag the index towards 23,000 or lower.  Conversely, a sustained breakout above the 24,400–24,600 zone would signal a fresh leg of the uptrend, opening the door for 25,600 initially, followed by the possibility of a new record high over the next few months.  Is the pullback in Nifty IT a 'Dead Cat' bounce or does it signal a change in trend?  The recent recovery in the Nifty IT index appears to be a rebound after successfully retesting the key support zone around 26,000. While the momentum has improved, it is premature to classify it as a structural trend reversal.  A decisive move above 29,800 would strengthen the recovery and could drive the index towards 31,000–31,500. On the downside, the 26,000–27,000 zone is expected to provide strong support.  ALSO READ | Dramatic rally elusive, but healthy returns within reach: Kunal Vora  A sustainable bullish reversal would require the index to establish a higher high-higher low structure and eventually surpass the crucial 32,000 mark.  Private bank stocks witnessed notable action post Q1 results, and with FCNR deposits in focus, what should be the trading strategy here?  The banking space has turned increasingly stock-specific following the Q1 earnings season. While the sector started on a firm footing, sentiment weakened after HDFC Bank reported margin compression. Axis Bank, Kotak Mahindra Bank, and IndusInd Bank also witnessed pressure after their quarterly numbers. In contrast, ICICI Bank and Federal Bank displayed notable resilience and are trading close to their record highs.  Given the mixed earnings outcome and the lack of a clear trend in the banking index, investors should adopt a selective approach, with relatively stronger names such as ICICI Bank and Federal Bank appearing better placed for gradual accumulation.  What should be the trading strategy in Oil Marketing Companies (OMCs) given the volatility in crude oil prices? Can they be bought with a 6-8 month time horizon?  The outlook for OMCs remains closely tied to crude oil movements. With Brent crude continuing to witness sharp swings amid geopolitical uncertainties, the near- to medium-term risk-reward remains less favourable for the sector.  ALSO READ | Next two quarters will be tough for the markets, B. Gopkumar, Axis MF  Elevated crude prices can keep pressure on marketing margins and cap meaningful upside. It would therefore be prudent to avoid aggressive fresh accumulation until crude prices stabilise and trade within a broader range. A sustained cooling in crude prices would be a more favourable trigger for reassessing the sector from a medium-term investment perspective.  Stocks in defence segment have been buzzing amid reports of strong order inflows; what are your top picks here, and why?  The defence sector continues to maintain a favourable long-term outlook, driven by a strong order pipeline, increasing indigenisation, rising defence exports, and the government's sustained focus on strengthening domestic manufacturing capabilities.  Although valuations have become relatively expensive following the recent rally, the sector's structural growth story remains intact, with timely order execution and healthy inflows expected to drive earnings over the medium to long term.  Within the sector, companies such as HAL, Bharat Forge, Data Patterns, and Solar Industries are well placed to benefit from these structural tailwinds, given their strong positioning across aerospace, defence manufacturing, electronics, and ammunition.  Going forward, investors should focus on factors such as order book strength, execution capabilities, earnings visibility, and valuations while evaluating opportunities in the defence space.  Finally, what particular sector do charts suggest can be a key outperformer in the remainder of 2026, and why?  From a technical perspective, the pharma and healthcare space appears well placed to outperform during the remainder of the calendar year. The sector has been witnessing improving relative strength against the broader market, supported by sustained buying interest, favourable chart structures, and consistent participation across large- and mid-cap names.  Fundamentally, stable export demand, easing pricing pressures in key overseas markets, healthy product pipelines, and improving domestic healthcare demand further reinforce the outlook. While intermittent volatility cannot be ruled out, the sector's defensive characteristics, earnings resilience, and strengthening technical setup make it an attractive space to watch over the coming months.  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised. Analyst disclaimer.  (Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt. Ltd.)