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The Nifty Midcap100 index has rallied close to 20 percent in the past six months. Naveen Kulkarni, CIO at Axis Securities, told CNBC-TV18 on the first trading day of 2023, that he believes that these stocks will be in a "sweet spot" this year. The brokerage and trading services firm also believes that India will remain the land of stability against the backdrop of a volatile global economy.

Axis Securities’ investment theme for 2023 is sectors like banking and financials because of their improved economic outlook and the pickup in credit growth. It expects rural recovery will be led by moderation in inflation and softness in commodity prices.

Home improvement space is expected to continue to robust business in 2023 because of progress in real estate and demand for housing. The pharma sector is expected to rebound on account of new launches and gain in market share. Also, high-quality retail play will continue to remain in focus.

Speaking in an interview with CNBC-TV18, Kulkarni said, “Midcaps are in a sweet spot to be in. They are not too small where the business models could be impacted by the macroeconomic headwinds, which will be there; there will be slowed down and other challenges and they are not very large where they are not able to manoeuvre their business model quickly.”

Also Read: Coal India to HDFC Bank — the 10 Nifty stocks that stood out in 2022

The firm also believes that railway capex will be a big theme this year and its preferred pick in the space is RITES. “We are looking at railway capex to be a big theme for the year and there is a wide range of stocks which look interesting; there are small caps also which are exposed to railway capex, which look very interesting, but RITES is a very stable company in terms of what they do,” said Kulkarni.

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