MOFSL's Preferred Nifty Stock Picks
Motilal Oswal Financial Services (MOFSL) has released its list of top Nifty stock preferences for the ongoing earnings season, highlighting several prominent names in the Indian market. Among the brokerage's favored picks are Bharti Airtel Ltd, State Bank of India (SBI), and ICICI Bank Ltd, signaling confidence in their performance.
Other significant Nifty stocks that MOFSL recommends include:
- Mahindra & Mahindra (M&M)
- Titan Company Ltd
- Eternal Ltd
- Shriram Finance Ltd
- Bajaj Finance Ltd
- InterGlobe Aviation Ltd
Strong Q1 Earnings Performance
The analysis comes after 39 Nifty companies announced their June quarter results, accounting for 76 percent of the estimated Profit After Tax (PAT) for the Nifty and 82 percent of its weightage. These companies collectively reported an impressive earnings growth of 11 percent year-on-year, surpassing MOFSL's initial estimate of 7 percent.
This robust growth was primarily driven by strong contributions from key players such as Reliance Industries Ltd (RIL), JSW Steel Ltd, ICICI Bank Ltd, Bajaj Finance Ltd, and Axis Bank Ltd. These five entities alone contributed 59 percent to the incremental year-on-year accretion in Nifty earnings.
Conversely, some companies experienced a drag on Nifty earnings, including InterGlobe Aviation, ITC, Dr Reddy’s Labs, Cipla, and Maruti Suzuki. While 20 Nifty companies posted better-than-expected results and 13 delivered in-line performances, six companies reported lower-than-anticipated profits.
Stable EPS Estimates & Market Outlook
MOFSL noted that Nifty's FY27 earnings per share (EPS) estimate remained stable at Rs 1,225, with upgrades in companies like Reliance Industries, ICICI Bank, and Bajaj Finance offsetting downgrades for HDFC Bank, Interglobe Aviation, and Infosys. The FY28E EPS also held steady at Rs 1,424.
The brokerage highlighted that the Indian market has navigated a period of heightened volatility and consolidation over the past two years, influenced by global and domestic factors. Looking ahead, a strong pipeline of large IPOs and capital-raising activities is expected to test market liquidity, with the market's absorption capacity being a crucial indicator.
MOFSL's Model Portfolio Strategy
MOFSL's model portfolio strategy emphasizes growth visibility, structural domestic growth plays, and select global value names. The firm is overweight (OW) on sectors such as Diversified Financials, Automobiles, New Age Tech Platforms, Manufacturing & Industrials, and Consumer Discretionary.
In contrast, MOFSL maintains an underweight (UW) stance on Private Banks, Consumer Staples, Energy/Telecom, Commodities, Utilities, and Renewables, while holding a neutral position on Healthcare.