2 hrs ago
Motilal Oswal Adds Meesho, PhysicsWallah, Shifts 400 Basis Points
Motilal Oswal is a company that studies businesses and markets.
It expects many companies to make more profit in the September quarter than they did a year earlier.
It thinks some industries, including banks, metals and telecom, will help drive that growth.
The brokerage moved some money in its model portfolio away from the biggest companies and toward medium-sized and smaller ones.
It added Meesho and PhysicsWallah to its picks and reduced its holding in Eternal.
The brokerage says Indian markets still face uncertainty from overseas conditions and foreign investors selling shares.
It also noted that Indian institutions have continued to invest in the market.
Its strategy is to focus on companies whose profits are expected to grow, rather than trying to predict the direction of the whole market.
Motilal Oswal expects Q2FY27 profit after tax to rise 22% across its 399-company universe and 27% for the Nifty 50.
It shifted 400 basis points of its model portfolio from large caps toward mid- and small-cap stocks.
The brokerage added Meesho and PhysicsWallah to its new-age technology portfolio and trimmed Eternal.
It expects FY27 and FY28 profit growth of 15% and 17% for its universe, respectively.
Foreign selling, global yields, energy prices and new equity issuance remain risks, while domestic institutional investment has supported markets.
- Who
- Motilal Oswal Financial Services.
- What
- It issued earnings expectations and changed its model portfolio, shifting 400 basis points from large caps toward mid- and small-cap stocks.
- Where
- Indian equities.
- When
- The earnings forecast is for Q2FY27, the September quarter; the article does not specify a publication date.
- Why
- The brokerage expects earnings growth to improve and says company-level earnings and execution will be important, while global conditions and foreign flows remain sources of pressure.
Supportive factors
Market headwinds
Domestic fundamentals and foreign flows
Supportive factors
Motilal Oswal cited supportive domestic indicators and resilient domestic institutional and retail flows; a stabilization in foreign flows could help equities.
Market headwinds
The brokerage said global developments and foreign institutional selling have weighed on sentiment and remain a constraint on market performance.
Valuations and market volatility
Supportive factors
Valuations have fallen from their September 2024 peaks, and the brokerage said the risk-reward profile has improved.
Market headwinds
It warned that global bond yields, energy prices, inflation, IPO supply and other uncertainties could continue to cause volatility; small-cap valuations remain above their long-period average.
Key facts
- Companies in forecast universe
- 399
- Universe Q2FY27 PAT growth estimate
- 22% year-on-year
- Nifty 50 Q2FY27 earnings growth estimate
- 27% year-on-year
- Model portfolio allocation change
- 400 basis points shifted from large caps to mid- and small-cap stocks
- New-age technology additions
- Meesho and PhysicsWallah
- DII investment, July–September
- About $18 billion in Indian equities
- FII investment, July–September
- $0.7 billion in Indian equities
- Nifty 50 forward P/E
- 17.2 times, 18% below its long-period average
Quotes
Motilal Oswal Financial Services
The brokerage whose model portfolio and market outlook are discussed in the article.
“We have reallocated 400 bp of weight from the large to the mid and small caps in our model portfolio.”
financialexpress.com
Sources
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