Axis Securities has highlighted nine stocks for the upcoming Samvat 2079 across various themes.

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The upcoming new year looks much brighter and more promising, according to the brokerage. It believes that the Indian market is likely to outperform in Samvat 2079 led by favourable macro-economic factors and better-than-historical fundamentals of Indian corporates.

The cumulative and rolling net profit of the NSE 500 universe over the last four quarters hit an all-time high of Rs 10 lakh crore with loss-making sectors also turning profitable. With improving Return-on-Equity for the broader market and asset quality of the banks, Axis Securities expects the outperformance of Indian equities to sustain in the upcoming new year as well.

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Based on these tailwinds, the brokerage has highlighted six major themes for the upcoming new year:

Housing & Banking: On improved economic outlook and pick-up in credit growth

Consumption: Normalisation to pre-covid levels. QSR is well-placed to deliver superior returns

Home Improvement: Pick-up in real estate and housing demand

Commercial Vehicles: Demand momentum is likely to sustain

Travel & Tourism: Gaining momentum post a pick-up in vaccination drive

Balance sheet strength of corporates

Based on these themes, the brokerage has highlighted nine stock picks for the upcoming Samvat:

Axis Securities expects ITC's overall volumes to remain stable. Strengthening distribution in rural and semi-urban regions and expanding its portfolio with new launches will likely boost ITC's footing among its peers. The brokerage believes that the stock's current valuation, 4-5 percent dividend yield, and an uptick in other businesses make ITC a better play in the FMCG space where valuations are high.

Sundaram Finance has controlled its asset quality stress due to its conservative approach to building its loan book during uncertain times. Axis Securities believes that the company's well-diversified and secured loan mix and strong underwriting practices will support operating performance in the current CV cycle. The firm also believes that the company has all the right levers to grow its profitability over the next two financial years.

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Ashok Leyland is well positioned to benefit from the cyclical recovery in the Commercial Vehicles space, particularly in busses and high-tonnage trucks with a high market share. It expects demand recovery and gradual price increases to drive long-term improvement. Subsiding cost pressures will aid margin improvement in the coming quarters.

Axis Securities sees a long growth runway for this retail-focused housing finance company. It expects compounded Assets Under Management (AUM) growth of nearly 30 percent over the medium term. The brokerage also expects the company to deliver best-in-class Return on Assets over the medium term, aided by higher Net Interest Margins, lean cost structure, and moderating credit costs.

Axis Securities expects Indian Hotels' Average Room Rate and Occupancy levels to improve by 400 basis points for the current and next financial year. Therefore it expects significant improvement in the hotel chain's realisations and occupancies. Over the next two financial years, Indian Hotels is likely to post compounded revenue growth of 25.7 percent with consolidated free cash flow of Rs 1,000 crore - Rs 1,500 crore per year.

Axis Securities expects Nocil to be a key beneficiary of the China alternative theme in the niche rubber chemical space in India. Strong demand and reducing raw material pressure are other tailwinds. The brokerage expects the company's margins to improve and expects a 24 percent compounded earnings growth over the next two years.

IDFC First Bank's retail book is expected to drive loan growth in the coming quarters, according to Axis Securities, who also believes that the stock is poised for re-rating due to the improved asset quality. It expects 20-25 percent loan book growth over the next two years, with a key focus on the retail segment. The brokerage also says the bank is well-positioned to grow with a 50 percent CASA ratio.

Westlife Development finds a place among Axis Securities' picks for the upcoming Samvat due to a multi-year growth opportunity within the QSR space. The company plans on opening over 200 stores in the next 3-4 years, implying significant headroom for further expansion into smaller towns and cities. The brokerage also expects the company's margin to be in the 14-15 percent range.

With a 24 percent market share, Polycab has maintained its leadership in the Cables and Wires segment. It is also poised to gain market share from unorganised players in both wires and the FMEG segment due to superior financial strength, better distribution and strong brand recall. Axis expects demand recovery, new product launches, product premiumisation and increasing exports to aid growth.