Deven Choksey backs power and large-cap stocks for 2026

Deven Choksey, Managing Director of DRChoksey Finserv, sees selective opportunities for 2026, favouring large, fundamentally strong companies while warning that elevated valuations could weigh on broader mid-cap and small-cap performance.

Choksey is particularly bullish on the power and power ancillary space, identifying transmission and distribution as a key growth area. “We believe that the power and power ancillary segment is likely to fetch a higher amount of demand growth,” he said, calling the T&D segment “quite promising.” Within this space, he named Adani Energy Solutions as a top pick for a 12–36 month horizon, citing the significant capacity additions underway in its transmission portfolio.

At the same time, Choksey cautioned that stretched valuations could lead to underperformance in parts of the mid-cap and small-cap universe. “They could be the ones who could disappoint in this particular period,” he warned, adding that the segment may face either price pressure or consolidation. “The mid-cap and small-cap are required to have, if not a sharp price correction, definitely a time correction of a degree of around 12 to 18 months.” As a result, he expects market leadership to tilt toward larger companies, noting that “Large caps could possibly rule the next financial year.”

Choksey also remains constructive on the non-banking financial company (NBFC) space, particularly large consumer-focused lenders. He urged investors to ignore unverified market reports, saying, “The best thing that one should do is ask the company, and if the company denies it, then probably ignore such kind of report.” He believes the operating environment remains supportive, adding, “Some of the larger ones having the consumer leg attached to it, I think, are going to be the winners in this game.” In this context, he cited Shriram Finance and Bajaj Finance as looking “quite convincing,” supported by improving balance sheets and sustained consumer demand. “Consumer demand is picking up. Discretionary, non-discretionary are both on the rise. And we see this particular trend continuing for the next few quarters,” he said.

Also Read: Auto ancillary stocks offer strong growth play as volumes, exports pick up: SBI Securities

In the cement sector, Choksey favours large players with pan-India reach, especially as construction activity typically accelerates post-monsoon. “We have been maintaining [our view on] some of the larger companies which have a pan-India footprint, like UltraTech or the likes of Adani Cements where ACC and Ambuja combined, along with now the Orient as well,” he said. On Adani Cements, he highlighted logistical advantages, noting, “Ambuja Cement now is basically appearing to be much better placed, largely because of their east-west corridor connectivity through the ports.” While near-term price hikes may be uncertain, demand remains strong. “Not too sure immediately whether the cement prices will go up in a hurry, but I believe that the demand scenario definitely remains quite upbeat.” He expects a potential upside of 15–20% over 12–15 months.

Within automobiles, Choksey prefers commercial vehicles over passenger vehicles, citing stronger structural drivers. “On one hand, an infrastructure-led push is happening in the economy. The freight corridors are emerging faster,” he said, adding that industrial expansion and logistics demand support higher CV growth. He identified Tata Motors’ commercial vehicle business and Ashok Leyland as safer bets, stating that the downside risk is currently “perfectly less.”

Also Read: Rohit Srivastava recommends shifting from gold to equities, bets on autos and metals

Choksey remains positive about the Indian IT sector despite regulatory uncertainties, such as the H-1B visa system. He views artificial intelligence as a key driver of growth, both in terms of internal efficiencies and client demand. He stated that companies such as TCS and Infosys are building AI-led offerings for clients, supporting a steady growth outlook. “Maybe if one is comfortable, between a higher single-digit to the mid-double-digit, that kind of growth is distinctly possible in the revenue stream of many of these companies,” he said.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here