Indian equities may offer a more attractive risk-reward proposition after a prolonged period of consolidation and valuation correction, according to Motilal Oswal Financial Services. In its latest India strategy report, the brokerage said persistent geopolitical and macroeconomic headwinds have weighed on market sentiment, but underlying economic and corporate fundamentals remain resilient.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Motilal Oswal Report
Indian equities may offer a more attractive risk-reward proposition after a prolonged period of consolidation and valuation correction, according to Motilal Oswal Financial Services.
In its latest India strategy report, the brokerage said persistent geopolitical and macroeconomic headwinds have weighed on market sentiment, but underlying economic and corporate fundamentals remain resilient.
The brokerage noted that the Nifty-50 has declined 12% from its September 2024 peak, while broader market performance has remained range-bound. However, ongoing earnings recovery has helped cool valuations across segments, with large-cap and mid-cap valuations correcting 29% and 27%, respectively, from their highs.
Notably, the Nifty-50 is now trading 16% below its LPA, while mid- and small-caps are trading 4% and 27% above their respective LPA (vs trading +20%, +50% and +47% above their respective average in Sep'24). Most sectors are now trading significantly below their Sep'24 peak valuations, adds the brokerage.
Additionally, the past two years have witnessed record FII outflows and DII inflows. Strong retail participation, supported by steadily rising monthly SIP contributions (+Rs 30,000 crore per month), provided a cushion against the relentless FII selling.
Surprisingly, the sharp FII outflows of $56 billion over the past 24 months effectively offset the cumulative FII inflows of the previous eight years, leading to near nil cumulative FII invesesmtnt in the past decade. In contrast, DIIs pumped in a record ~$177 billio in Indian equities over the past 24 months, 23% higher than the cumulative DII inflows over the preceding eight years.
The brokerage's top Nifty-50 ideas include Bharti Airtel, ICICI Bank, SBI, Titan, Adani Enterprises, M&M, Bharat Electronics, Eternal, Hindalco, Shriram Finance, Interglobe Avtion, and Apollo Hospitals.
Top non-Nifty-50 ideas: TVS Motor, BSE, SBI Funds Management, GE Vernova T&D, Lenskart Solutions, Indian Hotels, Meesho, Dixon Tech, Coforge, Radico Khaitan, Kirloskar Oil Engines, RBL Bank, Physicswallah and Inventurus Knowledge Solutions.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
