ITC, RIL, HDFC Bank among top laggards as Nifty falls over 12% in 2026: Time to buy beaten-down stocks or wait for a recovery?

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FMCG major ITC leads the list of worst-performing stocks, plunging 34% so far this year, followed by Maruti Suzuki India, which has fallen 32%. HDFC Bank and HDFC Life Insurance Company have declined 31% each, while Jio Financial Services has shed 30%, according to data from ACE Equities.

Among other index heavyweights, Infosys has dropped 29%, Tata Motors Passenger Vehicles has declined 28%, RIL has fallen 26%, and Tata Consultancy Services (TCS) has lost 23%. Mahindra & Mahindra is also down 22% over the same period.

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Source: ACE Equities

"Large-cap stocks have corrected sharply amid FII selling, as investors shifted from India toward AI-driven growth opportunities, cheaper emerging markets, and safer developed-market and non-equity assets amid elevated bond yields," said Vinod Nair, Head of Research at Geojit Investments.

Nair said the correction has created opportunities for long-term investors, with valuations below historical averages. The Nifty 50 is trading at around 17 times one-year forward earnings, compared with its five-year average of 19.5 times, he noted.

However, valuations could remain under pressure in the near term amid external headwinds and cautious FII sentiment. Nair also cautioned that some heavyweight stocks could remain subdued due to a modest earnings outlook for the December and March quarters, external pressures and a high cost of capital.

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He identified banking, fast-moving consumer goods (FMCG) and information technology (IT) as sectors offering relatively attractive valuations compared with their long-term averages.

Buy the dip or wait for a recovery?

The sharp correction has brought several large-cap stocks into focus, but analysts caution that falling share prices alone do not make stocks attractive investments. Valuations, earnings expectations and downside risks, they said, remain crucial to assessing whether a stock offers an attractive entry point.

Somil Mehta, Head of Retail Research at Mirae Asset Sharekhan, said investors should focus on business quality, earnings potential and valuations rather than buying stocks simply because their share prices have fallen sharply.

"However, a sharp fall in share prices does not automatically make stocks attractive. Investors should assess current valuations, earnings expectations and downside risks before investing. A staggered investment approach may be appropriate for long-term investors, while maintaining diversification and realistic return expectations," Mehta said.

ITC, RIL, Maruti Suzuki, TCS among top bets

Despite the possibility of further volatility, Mehta sees long-term investment potential in ITC, Reliance Industries, Maruti Suzuki India and TCS, citing their business strengths and growth opportunities while highlighting risks investors should monitor.

For ITC, Mehta pointed to its established cigarette business, packaged consumer goods and hotels, noting that strong cash generation and diversified operations support its long-term investment case. However, cigarette taxation and regulatory risks remain important factors to watch.

Reliance Industries has multiple growth drivers across retail, digital services and new energy, alongside its established energy business. According to Mehta, the pace of growth and profitability across these businesses will be crucial in determining future returns.

On Maruti Suzuki India, Mehta highlighted the potential benefits of rising vehicle ownership, new product launches and demand for passenger vehicles in India. However, competition, changing consumer preferences and the transition towards electric vehicles remain key risks.

Turning to TCS, Mehta noted that the company benefits from strong client relationships and an established business model. While uncertainty around global technology spending and artificial intelligence (AI) could weigh on near-term growth, AI adoption could also open up new opportunities for technology services companies.

Data compiled by: Ritesh Presswala

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here