From ICICI Bank, HDFC Bank To CAMS: Motilal Oswal's Top 16 Stock Picks In BFSI Space — Check Full List

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Motilal Oswal Report

Over the past 12 months, the Nifty Financials and Nifty Bank Index have outperformed the Nifty 50 by 11% and 7%, respectively. However, banking stocks continue to show divergence, with both Private and PSU banking segments delivering mixed returns.

While our bias was tilted towards NBFCs and non-lending financials in earlier editions, we are now incrementally adopting a more balanced view, as we expect the performance of banking stocks to improve with an impending recovery in earnings.

Additionally, management commentary is turning constructive. This, coupled with a demand uptick led by the GST rate cut and potential resolution on tariffs (as negotiations have resumed), is expected to boost investor sentiment.

Even as the macro-environment continues to evolve at an unprecedented pace, the biggest challenge we face is event risk. This has adversely impacted the performance of some of our BFSI picks.

However, we take comfort in the fact that despite these external events impacting prices, the aggregate performance of our model portfolio remains strong. This resilience, supported by multiple winners, has resulted in the portfolio’s outperformance against both Nifty and Bank Nifty.

In this note, we present an updated view along with a refreshed list of our top 16 BFSI stocks, selected from our overall BFSI coverage of ~70 stocks.

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