A bronze bull statue stands at the entrance to the Bombay Stock Exchange (BSE) building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Goldman Sachs Says ‘Plenty To Play’ In India, Here’s A List

Asia’s best performing stock market has room to rise further. That’s according to Goldman Sachs latest report on the Indian stock market where it sees “plenty to play”.

There are many opportunities in Indian equities even after the S&P BSE Sensex’s 11 percent rise this year, as it is one of the few markets where cyclical growth is rising, Goldman Sachs’ analysts wrote in note Thursday.

This rally in the Indian indices has been led by only selected stocks—HDFC Bank Ltd., Reliance Industries Ltd. and Infosys Ltd.—which means that there is “still plenty to play” for in India. From consumption to construction, India remains one of the only markets with cyclical growth still on the upcycle.

Along with this, the macro data indicators from the ground also point to a healthy outlook.

Going forward, markets are expected to benefit from the Reserve Bank of India’s intervention in foreign exchange market, good earnings growth, a pick up in capital expenditure, decent monsoon, limited exposure to trade wars and upcoming festive season.

The brokerage is bullish on a couple of large cap stocks and rural demand beneficiary companies’ scrips going into the general elections next year.

Here are Goldman Sachs’ top stock picks:

Large Caps

Reliance Industries

  • Best large-cap downstream energy exposure in Asia.
  • Expect EBITDA to double in next three years; significant inflection in free cash flow.
  • Strong market dynamics for refining and petrochemical businesses.
  • Risk reward for Jio remains favourable.
  • Potential earnings boost from the International Maritime Organisation 2020 regulation.


  • Digital drive is adding momentum in all dimensions.
  • Benefiting from rising consumerism, credit card penetration and “financialisation” of savings.
  • Economies of scale and the ongoing formalisation of India’s economy to help expand profit pools.
  • One of the most exciting consumer growth stories in Asia.


  • To benefit from rising rates and an improving macro environment.
  • Housing affordability at its best level for eight years.
  • Significant push by the government in the housing sector.
  • Trading at a steep discount to long-term average.


  • Large deal wins are up for fourth consecutive quarter.
  • Course correction towards digital is starting to pay-off.
  • Expect revenue growth to pick up in FY20/21.
  • Trading at a sharp discount to TCS, despite very similar growth profile.

Three Rural Reboot Stories Ahead Of Elections:

TVS Motor Co. Ltd.

  • TVS is the best growth story within India automobile space.
  • Company leading the shift to electric vehicles; on track to launch li-ion hybrid and electric scooters.
  • Expect earnings before interest tax, depreciation and amortisation margin expansion for the rest of the year.
  • Positives: improving volumes/mix, better pricing and cost reduction.

Maruti Suzuki India Ltd.

  • Maruti Suzuki remains largest listed play on discretionary consumption in India.
  • Demand still running at a record pace with strong rural growth.
  • Expect 13 percent volume growth for Maruti as against industry growth of 8-9 percent.
  • Recent price hike, robust launch pipeline, platform consolidation and operating leverage to support Ebitda.

Colgate-Palmolive India Ltd.

  • Re-gaining market share will be key to a turnaround in the share price of Colgate India.
  • Aggressive pricing and new launches indicate management’s focus on market share.
  • Significant increase in direct distribution to allow more control over retail channels.