Bulls And Bears — Top Idea Picks For Large, Mid, Small Cap Stocks For September: Motilal Oswal

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Motilal Oswal Report

Indian markets have been lackluster over the past year (Nifty -3.2% YoY) and underperformed several global peers. This is primarily attributed to earnings weakness, compounded further by a series of geopolitical and macro headwinds.

We believe that the influence of the US tariff wars on Indian markets will be limited. India’s real GDP growth surprised positively as it accelerated to 7.8% YoY in Q1 FY26 (highest in five quarters), up from 6.5% in Q1 FY25 and well above our expectations of 6.5%. The expansion was broad-based, with manufacturing, agriculture, and services all contributing meaningfully to the strong performance.

The Nifty trades at 22x FY26E earnings, near its long period average of 20.7x. While our model portfolio bias remains towards largecaps (~70% weight), we have turned more constructive towards mid-caps (with 22% weight vs 16% earlier) owing to better earnings delivery and improving prospects.

We are overweight on BFSI, consumer discretionary, industrials, healthcare and telecom, while we are underweight on oil and gas, cement, real estate, and metals.

Top ideas:

Largecaps – Bharti Airtel, ICICI Bank, Larsen and Toubro, Mahindra and Mahindra, Sun Pharma, Ultratech Cement, Titan Company, Eternal, Bharat Electronics, Tech Mahindra, TVS Motor, Lodha Developers, and Indian Hotels.

Midcaps and Smallcaps – Dixon Technologies, SRF, Suzlon Energy, Jindal Stainless, Coforge, Supreme Industries, Page Industries, Kaynes Tech, Radico Khaitan, UTI AMC, and Niva Bupa Health.

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