As markets gear up for the next phase, one key trigger investors and traders alike need to closely monitor is the earnings season. The reason is simple—markets are gradually shifting into a sector-driven phase, where some industries could outperform sharply while others may continue to lag.
The stocks highlighted this week reflect a noticeable improvement in their overall average scores, derived from five critical parameters: earnings, fundamentals, valuation, risk, and price momentum. A rise in these scores typically signals a strengthening outlook for these companies over the near term.
Global cues are also playing a supportive role. With Iran reopening the Strait of Hormuz and US markets ending higher, Indian equities are expected to start the week on a strong note, possibly with a gap-up opening. A sharp decline of over 12% in crude oil prices has further lifted sentiment—something investors had been waiting for.
That said, uncertainty still lingers. Any unexpected geopolitical development or statement, particularly involving the US, could once again push oil prices higher. For India, apart from crude, natural gas supply and pricing trends will remain equally important, especially for sectors like fertilisers that directly influence food inflation.
Looking ahead, Monday’s trade is likely to see action in sectors that were hit hardest during the Gulf tensions. However, even after recent corrections, valuations in several pockets of the market remain elevated. This makes stock selection crucial.
Investors should stay cautious and focus on earnings visibility. Premium valuations can only be justified if backed by solid growth. Otherwise, it may be wiser to stay on the sidelines. Keeping cash in hand and closely tracking management commentary alongside Q4 results could offer valuable insights.
Also worth watching are sectors that have recently underperformed. Any improvement in their operational metrics could result in strong alpha generation.
How the stocks were selected
The 5 shortlisted stocks have shown consistent improvement in their Stock Reports Plus scores over the past week. The screening covers companies listed on both BSE and NSE, using a combination of quantitative filters.
Key criteria included:
Continuous score improvement over one week
Analyst ratings of ‘Buy’, ‘Strong Buy’ or ‘Hold’
Minimum upside potential of 16 per cent over the next 12 months
Market capitalisation above Rs 30000 crore
The data has been sourced from the latest Refinitiv Stock Reports Plus dated April 18, 2026.
These stocks span sectors such as FMCG, pharmaceuticals, IT and industrials. Most had seen corrections earlier but are now showing signs of recovery in line with broader market trends. Whether this improvement in scores translates into sustained stock performance remains to be seen.
What drove the score improvementAbbott India: Gains driven mainly by stronger price momentum
Procter & Gamble Hygiene: Improvement led by better relative valuation metrics
Havells India: Boost supported by stronger earnings indicators
Dalmia Bharat: Earnings component saw notable improvement
L&T Technology Services: Gains backed by a combination of better price momentum, earnings and valuation
Understanding the scoring system
Stock Reports Plus evaluates companies across five parameters:
Earnings: Based on surprises, estimate revisions, and analyst recommendation changes
Price Momentum: Tracks relative strength and historical return patterns
Fundamentals: Covers profitability, debt levels, earnings quality, and dividend performance
Risk: Assesses volatility, beta, return consistency, and correlation with benchmarks
Valuation: Evaluates price-to-sales, trailing PE, and forward PE relative to historical and benchmark levels
Each stock receives a score between 1 and 10. A score above 8 is considered positive, 4–7 neutral, and below 4 negative.
Overall, while improving scores point to better prospects, investors should combine this data with earnings trends and broader market conditions before making decisions.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
