ICICI Bank, Titan, HDFC Life, Bajaj Finance: 12 largecap stocks that BofA likes for 10% to 42% upside

Foreign brokerage firm BofA Securities expects the 50-stock Nifty50 to reach 25,000 by the end of the year after the recent correction. The target implies a 14% potential upside from the current levels but is still 5% lower to the index's record high of 26,277 reached in September 2024.

Nifty has fallen 14% from its September 2024 high of 26,277.

The brokerage said the index is now trading at its long-term average valuation and on earnings growth estimates.

However, BofA Securities has maintained its bearish stance on small and midcap stocks. It has recommended buying 12 largecap stocks with a potential upside of 10% to 42%.

Bajaj Finance

BofA has assigned a price target of Rs 9,350, implying a potential upside of 9%. The brokerage listed out key triggers for its bullish stance.

Strong track record of managing asset quality stress, re-acceleration in earnings growth, stable funding costs and credit costs peaking are some key triggers for Bajaj Finance Ltd. Other two triggers are industry leading growth with proactive pruning in high-risk segments and managing director's intention to continue to contribute towards medium-term objections.

Eicher Motors

The brokerage sees a 22% upside in the auto stock with a price target of Rs 6,000. Eicher is in a rare pocket of growth in a slowing two-wheeler market. Earnings and valuations at 26 times financial year 2026 and 23 times financial year 2027 price-to-earnings should re-rate as delivery growth sustains, said BofA.

Divis Laboratories

The pharma stock has a price target of Rs 6,850, an upside of 24% from the current levels. The brokerage sees over 25% earnings growth over the next two years with a faster ramp-up of new capacity and GLP-1 being upside risks to their estimates.

ICICI Bank

The private sector lender's stock can reach up to Rs 1,500, an upside of 24% from current levels.

The brokerage said better earnings visibility deserves a bigger premium versus peers, especially in the current macro environment. ICICI is one of the safest lenders in terms of asset quality with no signs of stress and the highest provision buffer.

Shriram Finance

BofA has a price target of Rs 780 on the NBFC retail stock, a potential upside of 26%. The brokerage expects consistent delivery on asset quality metrics in comparison to peers, despite stress in certain vehicle finance segments at an industry level, consistent growth delivery, hopes of a better margin delivery with funding cost benefits and valuations at a significant discount versus peers.

Infosys

The IT major has received a price target of Rs 2,150 on the stock, an upside of 26% from current levels. Infosys is likely to be a key beneficiary given its exposure to themes that will do well in a recovering demand environment such as cloud, data and ERP. The IT stock is trading at 23.5 times 12-months forward price-to-earnings, a 5% discount to its five-year average trading multiple, according to BofA.

Axis Bank

BofA has a assigned a price target of Rs 1,300 on Axis Bank, a potential upside of 29%. Axis Bank stock is trading at 1.3 times price-to-book, which is attractive in historical context, according to BofA. Growth and NIM contraction risks are already priced in, it said.

Titan

The gems and jewellery and luxury goods major has a price target of Rs 3,980, a potential upside of 29% from current levels. The brokerage expects healthy mid-to-high teens revenue and earnings growth and market share gains from Titan, looking beyond the volatility in gold prices for the very short term. Focus on gold exchange, golden harvest advance purchase schemes, wedding segment push will help the stock remain resilient amid the consumption slowdown, according to BofA.

L&T

The firm has received a price target of Rs 4,150 from BofA, an upside of 30% from the current levels. The brokerage says valuations are undemanding for order inflow / EPS CAGR of 12% and 22% respectively. However, continued correction in crude oil prices though, likely to cause a delay in orders or slower execution in the middle east business and remains a key downside risk. Potential of a share buyback remains an upside risk for L&T, it added.

Bharti Airtel

BofA has assigned a price target of Rs 2,085 on the lone telecom services provider in its report. The target implies a potential upside of 31%. The brokerage expects another round of tariff hikes in the next 12 months. It says even without the tariff hike, the telco's Average Revenue Per User (ARPU) is expected to improve by Rs 2-Rs 3 per quarter led by feature phone users upgrading to smartphones and prepaid users moving to postpaid. It also said low capex guidance and improving EBITDA should improve free cash flow as well.

Mahindra & Mahindra

M&M shares have comes on BofA's radar after the recent correction. It has a price target of Rs 3,650, an upside of 40% from current levels. BofA called the pessimism surrounding Tesla's potential India entry as exaggerated, adding that M&M's luxury feature lineup is at the right price point. Tractor upcycle, SUV market share gains and EV strategy makes them confident of earnings delivery. BofA also likes the risk-reward at current levels.

HDFC Life

BofA Securities has assigned a price target of Rs 875 on the insurance major, a potential upside of 42% from the current levels. The brokerage believes diversification of distribution channels, opening of new branches, a balanced product mix and strong granular growth in tier-2 and tier-3 cities are some key tailwinds for the stock.