Q3 FY25 Results Review — Valuations Still Expensive For SMIDs; Prefer Large-Caps, Says Motilal Oswal

The recent correction in broader markets factors into some of the potential disappointments in earnings ahead. That said, the valuations for mid and small-caps are still expensive vis-àvis their history as well as versus Nifty-50..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. .Motilal Oswal Report.The Q3 FY25 earnings are in line with modest expectations; however, forward earnings revisions are the weakest in recent times, with downgrades far outpacing upgrades, especially in our non-Nifty 50 universe. Weakness in consumption coupled with a drag from commodities has put severe pressure on earnings even as BFSI, Healthcare, Capital Goods, and Technology have recorded a healthy print. After a healthy 55% earnings CAGR over FY19-24 by our banking universe, the tailwind is now tapering off with FY25 earnings growing at a healthy but relatively modest 14%, while FY25-27E CAGR is projected at 12% (within which FY26E growth is estimated at a mere 9%). The expectations for FY26 corporate earnings (19% for our Universe and 15% for the Nifty-50) are still somewhat elevated, in our opinion, given the underlying macro-micro backdrop and are thus ripe for further downgrades. The recent correction in broader markets factors into some of the potential disappointments in earnings ahead. That said, the valuations for mid and small-caps are still expensive vis-àvis their history as well as versus Nifty-50. The Nifty is trading at a 12-month forward P/E of 19.3x, below its long-period average of 20.5x. Thus, we continue to remain biased toward large caps with a 76% allocation in our model portfolio. We are over weight on consumption, BFSI, IT, industrials, healthcare, and real estate, while we are underweight on oil and gas, cement, automobiles, and metals..Click on the attachment to read the full report:.Samvardhana Motherson Q3 Review: Motilal Oswal Maintains 'Buy' On The Stock, Lowers Target Price — Here's Why.DISCLAIMERThis 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.

Q3 FY25 Results Review — Valuations Still Expensive For SMIDs; Prefer Large-Caps, Says Motilal Oswal

Motilal Oswal is over weight on consumption, BFSI, IT, industrials, healthcare, and real estate, while we are underweight on oil and gas, cement, automobiles, and metals.

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Q3 FY25 Results Review — Valuations Still Expensive For SMIDs; Prefer Large-Caps, Says Motilal Oswal

Motilal Oswal is over weight on consumption, BFSI, IT, industrials, healthcare, and real estate, while we are underweight on oil and gas, cement, automobiles, and metals.

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