Nifty reported 4% year-on-year net profit growth, which was slightly ahead of MOFSL’s estimate of 3%. “Indian corporate earnings for the second quarter of fiscal 2025 reflect poor performance,” the brokerage said, adding that it marked the second consecutive double-digit growth since the pandemic recovery from mid-2020.
While acknowledging the earnings as “weak”, Kotak Institutional Equities maintained that the net profit for the Nifty pack still exceeded expectations. Adjusted net profit of the Nifty50 Index increased by 5% YoY, which was 1.2% above expectations of 3.7% YoY due to strong SBI numbers and higher than expected other earnings in the case of ONGC, the brokerage said.
What do you want to buy?
After a close to 10% correction in the Nifty from its peak, Motilal Oswal has made significant changes to his model portfolio raising weightage in BFSI, technology and healthcare with a different bias to large caps. “We are OW on IT, healthcare, BFSI, consumer discretionary, industry, and real estate. In contrast, we are UW on metals, energy, and cars,” said the broker.Motilal’s favored big ideas are HDFC Bank, Bharti Airtel, ICICI Bank, State Bank of India (SBI), HCL Technologies, Larsen & Toubro (L&T), Mahindra & Mahindra (M&M), Power Grid Corporation, Titan Company, Trent and Mankind Pharma.
There are 11 more stocks to buy, but in the small and midcap space viz. Indian Hotels Company (IHCL), Cummins India, Persistent Systems, Dixon Technologies, Godrej Properties, Coforge, Metro Brands, Global Health (Medanta), Angel One, PNB Housing Finance and Cello World.
Nuvama Institutional Equities remains overweight in consumer, private banks, insurance, telecommunications, IT, pharma and cement, while remaining underweight in industrials, automobiles, metals and PSUs.
Nuvama said in a note that the risk of earnings downgrade remains, although valuations are still quite elevated and close to historical peaks, suggesting more downside ahead.
Domestic brokers have revised upward ratings on 20 stocks while downgrading twelve others.
Among the upgraders are UPL, Eicher Motors, Bank of Baroda (BoB), Bharat Electronics (BEL), NBCC, Dixon Technologies, Larsen & Toubro (L&T), Supreme Industries, Delhivery, Godrej Properties and Anupam Rasayan.
Among the downgrades are Indraprastha Gas (IGL), Mahanagar Gas (MGL), Bajaj Finserv, Kfin Technologies, PNC Infratech, Interglobe Aviation (Indigo), Firstsource Solutions, Blue Dart Express, Gujarat Gas, IHCL and Indiamart and JSW Steel.
Among the good companies, Nuvama remains most bullish on ICICI Bank and Axis Bank and underweight on HDFC Bank and SBI. It is overweight in Bharti Airtel, HUL, Britannia Industries, ITC, Wipro, Infosys, LTIMindtree, Sun Pharma, Grasim Industries and UltraTech.
While there is still less weight in the car, M&M and Maruti Suzuki remain the preferred choices.
Kotak Institutional Equities added to Godrej Consumer Products (GCPL) after another three-month write-off on future growth potential.
The broker also reduced weightage on Hindustan Unilever (HUL), ICICI Bank (100 bps to 9.7% and below the 10 share threshold) and removed Pidilite Industries. The Kotak Model portfolio includes stocks from various sectors such as BFSI (top weight), auto, consumer, capital goods and insurance and others.
After ICICI Bank, the next highest weightage is given to HDFC Bank (8.6) followed by SBI (7) and Axis Bank (6.6). M&M is the only large car stock in the model portfolio. In capital goods, it is L&T and Cummins India.
Britannia Industries, Apollo Hospitals, HUL, United Spirits and HDFC Life Insurance Company are other important constituents.
Also Read: 15% YoY Q2 BFSI earnings growth outperforms Nifty, well. HDFC Bank, ICICI Bank among the top betting analysts
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of Economic Times)
