Goldman Sachs has identified 15 large-cap Indian stocks, including Reliance, HDFC Bank, and HAL, as potential beneficiaries of returning foreign investment and stabilized valuations in the second half of 2026. The selection focuses on sectors like energy, banking, and defense, favoring large-cap companies that are currently trading at a valuation discount compared to mid-caps.
Global investment firm Goldman Sachs has released its outlook for the Indian equity market for the second half of 2026, highlighting a shift in sentiment that could favor large-cap stocks. As foreign investor ownership in Indian equities recently reached a decade low, the brokerage suggests that a reversal in this trend could drive capital toward more stable, high-market-cap companies. The firm’s selection includes 15 stocks across diverse sectors, including banking, energy, utilities, defense, and tourism.
Strategic Shift to Large Caps
A primary factor in this selection is the current valuation gap. Goldman Sachs notes that large-cap stocks are trading at a significant discount relative to mid-caps. Furthermore, these larger companies have seen less aggressive downward revisions to their earnings estimates, making them more resilient in the current market environment. The brokerage expects that as foreign investors re-evaluate their exposure to India, the liquidity and stability of large-cap companies will likely attract higher interest compared to the broader market.
Sector Highlights and Focus Areas
The 15-stock basket is not limited to a single theme but covers sectors anticipated to benefit from specific macro-economic conditions. In the energy and utilities sector, Goldman Sachs has included Reliance Industries, Adani Power, Adani Enterprises, NTPC, and Power Grid Corporation of India. The brokerage maintains an overweight stance on energy, citing tight capacity and healthy margins. Utilities are also favored, with the expectation that changing weather patterns like a strong El Niño could drive electricity demand.
In the financial space, HDFC Bank, Kotak Mahindra Bank, and HDFC Life Insurance Company have been selected. The brokerage expects these banks to be significant recipients of returning foreign capital, supported by consistent credit growth and stable asset quality in their books. Meanwhile, the defense sector is represented by Hindustan Aeronautics and Mazagon Dock Shipbuilders, which are included for their long-term strategic importance to the country’s security infrastructure.
The consumption and tourism segment rounds out the list with InterGlobe Aviation (IndiGo), Indian Hotels, and MakeMyTrip. These selections reflect expectations of rising domestic travel and an easing of operational costs for airline companies.
Financial Profile of the Basket
As of July 7, 2026, the basket of 15 stocks features a median market capitalization of $29 billion. The portfolio carries a projected median earnings per share (EPS) growth of 14% for the 2026-27 period. In terms of valuation, the median forward price-to-earnings (P/E) multiple stands at 34 times, with a median price-to-earnings growth (PEG) ratio of 2 times.
While the report suggests potential for outperformance, Goldman Sachs cautions that the latter half of 2026 is likely to see a shift in market leadership rather than a uniform rally across all sectors. Investors may continue to track foreign institutional investor flows, currency stability, and the actual realization of earnings growth as the primary triggers for these identified stocks.