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Led by robust measures taken by the central bank and government, the BSE Sensex and NSE Nifty rallied about 70% in FY21 despite the ongoing uncertainty over Covid-19 pandemic. Sustained inflows by foreign institutional investors further aided sentiment. Going ahead, analysts believe that the benchmark equity indices may rally up to 15% in the new financial year largely by the expected surge in corporate earnings over the next two years.

Kotak Securities believe that Nifty can hit 15,500 by the end of March 2022, while Sensex could reach the level of 55,000. “India’s stable currency and bond yields could help attract higher FPI flows in comparison to other emerging markets,” the brokerage said.

Market watchers also see plenty of opportunities in the broader markets, which have outperformed largecaps in FY21. The BSE Midcap and Smallcap index gained 90% and 115%, respectively, during the previous financial year, while the Sensex advanced 68%.

Here are the top stock recommendations by brokerages for FY22.

Gaurav Garg, Head of Research, CapitalVia Global Research
What to expect from FY22: Nifty may touch 16,500 from current levels, while Sensex may scale 56,300 by the end of FY22.

Stocks to buy: TCS, HDFC Life Insurance, Grasim, Biocon, Sun Pharma

Rajnath Yadav, Research Analyst, Choice Broking
What to expect: Sensex may remain in the range of Rs 52,000-55,000 in FY22.
Stocks to buy: Bharti Airtel, L&T, Happiest Minds Tech, ICICI Bank and Tata Motors

AK Prabhakar, Head of Research, IDBI Capital Market
What to expect: Focus should be on market leaders in sectors that have seen over 70% normalisation to pre-covid levels.
Stocks to buy: Alembic Pharma, Bayer Corp, Jonhson Control Hitachi, Nestle, HDFC Life Insurance

Rusmik Oza, Executive Vice President, Head of Fundamental Research, Kotak Securities
What to expect: Small caps having better scope to outperform large caps.
Stock to buy: SBI Life Insurance, Bharti Airtel, L&T, Kalpataru Power Transmission and Escorts

Gaurav Dua, SVP, Head – Capital Market Strategy, Sharekhan by BNP Paribas
What to expect: There is a scope for 12-15% returns in the benchmark indices in the next fiscal.
Stocks to buy: Mahindra Lifesapces, Polycab, Kirloskar Oil Engines, Dalmia Bharat, Gland Pharma

Siddhartha Khemka, Head Retail Research at Motilal Oswal Financial Services
What to expect: From the next 12 months perspective, apart from being positive on IT, BFSI, healthcare, telecom, auto and consumer, Motilal Oswal Financial Services also prefers some cyclical within metals, cement, oil & gas and PSU space.
Stocks to buy: Larsen & Toubro, Sun Pharma, Infosys, BPCL, Tata Power