Benchmark indices Sensex gained 594 points to 78,746 and Nifty rose 77 points to 23,949 on Friday amid positive global cues. The rally was led by IT stocks with the BSE IT index rising 283 points to 29,719, while stocks such as Bajaj Finserv, IndiGo, Trent, BEL, HDFC Bank and Reliance emerged as top Sensex gainers, rising up to 1.84%. As per Choice Broking, the bias remains cautiously positive with global equities supportive, though elevated crude prices and persistent US-Iran tensions could restrict sustained gains.
According to CLSA's report titled India Capex Insight #71, the brokerage has turned bullish on multiple infrastructure and defence stocks amid India's accelerating capital expenditure cycle. The brokerage argues that India's capex cycle is entering a higher orbit under Modi 3.0, with government spending driving fresh project awards while early signs of private-sector investment and a growing pipeline of overseas projects are adding to the order flow for engineering and construction companies. Brent crude oil prices were trading at $96 per barrel amid ongoing attacks between US and Iran, with Iran claiming it hit bases used by US forces in Kuwait and UAE.
CLSA has identified seven preferred capex stocks with target prices implying up to 75% upside potential. Larsen & Toubro leads with a target price of ₹4,842, implying 22.1% upside, followed by Hindustan Aeronautics at ₹5,481 (14.7% upside) and Bharat Electronics at ₹522 (27.8% upside). NCC offers the highest potential with a target of ₹216, implying 46.5% upside, while J.Kumar Infraprojects and IRB Infrastructure round out the list with targets of ₹765 (57% upside) and ₹34.50 (74.9% upside) respectively. The brokerage noted that the order backlog of the top 36 engineering and construction companies rose 20% year-on-year to $248 billion in Q1 FY27, while profit after tax increased 19%.
CLSA has assigned a 'High-Conviction Outperform' rating on Oil And Natural Gas Corporation Ltd. with a target price of ₹405, implying 71% upside potential. The brokerage noted that the stock was pricing in a Brent crude price below the current level, limiting downside even if supply from the Organisation of the Petroleum Exporting Countries increases. Management's confidence around strong production growth over the next three years was encouraging, with ONGC offering a dividend yield of around 6%.
CLSA has an 'Outperform' rating on Oil India with a target price of ₹550, implying 12.4% upside. The brokerage said the stock was pricing in a lower crude price than the level it expects, creating room for further gains if oil prices rise. Oil India's management has guided for a steep increase in oil and gas production over the next three to four years, with the northeastern gas grid and expansion of Numaligarh Refinery playing important roles.
According to CLSA's analysis, around 70% of the more than 1 billion-barrel supply shortfall from Strait of Hormuz countries between March and July 2026 had been met through releases from strategic reserves in China, the US and other Organisation for Economic Co-operation and Development countries. The brokerage expects this temporary support to weaken, potentially pushing crude prices higher. Japan and South Korea may become less willing to continue drawing down strategic reserves if the disruption persists, which could normalise imports and increase crude demand by around 1 million barrels per day.
