HSBC says it’s time to look at real estate and life insurance, here are 5 India stocks it’s betting on

India is emerging as a rare safe haven for global investors in an increasingly uncertain world, according to HSBC. The global brokerage firm sees Indian markets as well-positioned amid global trade tensions, falling bond yields, and a softer dollar, which could support sustained foreign fund flows in the coming quarters.

In its latest note, HSBC maintained a Sensex target of 82,240 by December 2025. While it remains neutral on India from a broader Asian market allocation perspective, the brokerage said India’s resilient macro data and strong fourth-quarter earnings have created a favourable setup for equities.

“Indian markets are well placed amidst global uncertainty and trade tensions,” said Yogesh Aggarwal, head of India research at HSBC. “A weaker dollar and softer inflation suggest the foreign inflows can persist in coming months.”

Life insurance and real estate sectors in focus

HSBC has turned positive on two key sectors — life insurance and real estate — citing improving fundamentals, easing rate pressures, and structural demand drivers.

In life insurance, the brokerage said the margin outlook is turning favourable, particularly for companies focused on non-linked products. It believes growth risks are already reflected in current valuations, and margin tailwinds will support improved profitability in the near term.

Among life insurers, HSBC prefers HDFC Life, citing its low exposure to market-linked products and strong presence in Tier 2 and Tier 3 cities. It also sees upside in SBI Life and ICICI Prudential, supported by a better product mix and easing competition.

On the real estate front, HSBC expects continued momentum in project launches and homebuyer demand, aided by the Reserve Bank of India’s recent repo rate cuts and the CRR reduction. The move has injected additional liquidity into the banking system, lowering borrowing costs for developers and homebuyers alike.

The brokerage has reiterated its bullish view on Godrej Properties, DLF, and Sobha, backed by strong free cash flow generation, manageable leverage, and healthy inventory levels. Investor sentiment in the sector has also improved, following back-to-back policy support measures from the central bank.

HSBC’s top five India stock picks

HSBC has identified five Indian stocks it believes are best placed to benefit from domestic strength and structural tailwinds:

1) HDFC Life Insurance – Preferred play in the insurance space for its strong distribution network, non-linked product focus, and consistent return on embedded value.

2) Ujjivan Small Finance Bank – Attractive valuations and a supportive regulatory environment could drive earnings recovery and stock re-rating.

3) Godrej Consumer Products – The company’s aggressive pricing strategy and focus on categories like deodorants and detergents position it well for medium-term growth.

4) UPL – Expected to benefit from improving cash flows, lower debt, and a better working capital cycle, despite global agrochemical sector challenges.

5) GAIL India – Defensive positioning, growing transmission volumes, and efforts to reduce volatility in its marketing business make it a favourable pick in the energy space.

While HSBC notes that a sustained earnings recovery for Indian corporates may take a few more quarters, it remains confident in India’s structural growth story. With falling bond yields, improving margins in insurance, and policy tailwinds in real estate, the brokerage believes current market conditions are supportive for investors looking beyond near-term volatility.

It continues to advise focusing on companies with idiosyncratic or structural growth potential, rather than broad market momentum plays.