HDFC Securities is positioning itself strategically in India's recovering equity markets, with Devarsh Vakil, Head of Prime Research, identifying clear sector preferences. According to The Economic Times, the firm favors power and energy sectors, citing infrastructure growth, while maintaining an overweight position in the banking, financial services, and insurance (BFSI) space. However, the IT sector faces an underweight stance due to disappointing quarterly results and uncertain earnings trajectory.
Within the power value chain, Vakil points to utilities, grid upgradation plays, battery management software companies, and transformer manufacturers as key opportunities. As reported by The Economic Times, larger cap names like Power Grid and NTPC continue to remain in the largecap model portfolio, with several smaller names across the power ancillary space also offering compelling risk-reward. The bullish thesis aligns with India's accelerating infrastructure buildout, rising electricity demand, and increasing investment in grid modernisation both domestically and globally. Recent developments show India participating in the global AI boom primarily through data centres, with hyperscalers committing large capital and the government backing the trend with a 10-year tax holiday.
HDFC Securities maintains an overweight position in the BFSI space, highlighting large banks such as ICICI Bank, Kotak Mahindra Bank, SBI, and Axis Bank as preferred picks. According to The Economic Times, the firm also includes select NBFCs including M&M Finance and PNB Housing Finance. With the Reserve Bank of India's repo rate cycle appearing to bottom out, Vakil argues that NBFCs are well-positioned to weather broader macroeconomic uncertainty, with diversified loan books across retail, housing, and SME segments helping maintain stable net interest margins of 3.5–4%. Recent analysis shows a Goldilocks setup forming with credit growth running above 15% and deposit growth recovered to 13–14%, while credit costs remain low.
In contrast to the positive outlook on other sectors, HDFC Securities remains underweight on the IT sector. As reported by The Economic Times, Vakil cited disappointing quarterly results and an uncertain earnings trajectory as reasons for the cautious view, stating that "Quarterly results are still waiting to stabilise." This cautious stance suggests the sector's near-term recovery may remain elusive despite broader market recovery.
Vinay Rajani, AVP and Senior Technical & Derivative Analyst at HDFC Securities, has identified specific trading opportunities in the steel and metals space as the sector begins to participate in the broader rally. According to ETMarkets.com, Jindal Steel & Power is recommended as a buy at ₹1,270–1,275 with a stop loss at ₹1,250 and target of ₹1,350 for approximately 6% upside. NMDC, trading around ₹90.50, has given a fresh breakout with a recommended entry at current levels, stop loss at ₹88.50, and upside target of ₹94. The steel and metals rally is expected to continue as the sector offers strong opportunities for both positional investors and short-term traders.
