3 ‘Buy’ recommendations by Motilal Oswal, with 17% to 44% upside potential

The brokerage said Tata Power could benefit from additional rooftop solar growth and gains in Odisha distribution operations. Punjab National Bank remained among its preferred public sector lenders while Dixon Technologies continued to attract confidence after reporting better-than-expected quarterly earnings and stronger export traction.

Motilal Oswal on Tata Power: ‘Buy’

Motilal Oswal Financial Services Ltd. maintained its ‘Buy’ rating on Tata Power Company Ltd. with a target price of Rs 490, implying an upside potential of 17%. The brokerage said FY27 could turn into a strong operational year for the company as multiple business segments gather pace simultaneously. 

According to the report, rooftop solar installations doubled year on year to around 1.7 gigawatt in FY26, while the company expects rooftop solar operations to grow another 50% to 60% in FY27. Motilal Oswal also pointed to the renewable energy pipeline where Tata Power plans to commission 2.5 gigawatt each in FY27 and FY28.

The brokerage said Tata Power’s renewable energy business continued to gather momentum with management prioritising hybrid renewable projects and storage-led opportunities due to stronger return ratios. It also noted that Odisha distribution companies could post their best performance yet in FY27 after operational measures implemented over the past few years started yielding results. Motilal Oswal further said supplementary power purchase agreements with states outside Gujarat could get finalised within four to six weeks, adding another trigger for earnings growth.

Motilal Oswal valued Tata Power’s regulated business at 2.5 times regulated equity while assigning a 12 times FY28 estimated EBITDA multiple to the renewables segment. The brokerage said cash and investments alone contributed Rs 76 per share to its valuation framework. It added that cell and module manufacturing EBITDA more than doubled year on year in FY26, strengthening confidence in the company’s renewable manufacturing ambitions.

“Management indicated that FY27 could potentially be the strongest year for Odisha discoms, supported by operational initiatives implemented over the past few years,” Motilal Oswal said in its report.

The brokerage also noted that Tata Power’s FY27 capital expenditure guidance stood at Rs 25,000 crore after FY26 spending came below guidance due to transmission delays and right of way issues. It added that the company’s Noida and manufacturing expansion plans could support long-term earnings growth across renewable and power infrastructure businesses.

Motilal Oswal on Punjab National Bank: ‘Buy’

Motilal Oswal reiterated its ‘Buy’ rating on Punjab National Bank with a target price of Rs 135, implying upside potential of 31%. The brokerage said the lender continued to strengthen its earnings profile through higher yielding retail agriculture and micro small and medium enterprise loans, while keeping stress under control. 

According to the report, Punjab National Bank’s retail loans excluding interbank participation certificates rose 18.2% year on year in FY26, while MSME loans climbed 19.9% and agriculture loans increased 10.7%. Overall advances reached Rs 12.3 lakh crore after growing 13.7% year on year.

Motilal Oswal said the bank’s focus remained firmly on raising the share of retail agriculture and MSME loans to around 60% over the longer term. The brokerage also pointed to improving margins after pressure in recent quarters. Punjab National Bank guided for FY27 net interest margins of 2.6% to 2.7%, compared with the 2.47% reported in the March quarter of FY26. The brokerage said easing deposit costs and a stronger loan mix should support profitability.

The report also noted steady progress in fee income businesses including credit cards cash management services and supply chain finance. Motilal Oswal expects these businesses to improve operating efficiency and bring down the cost to income ratio to 46.4% by FY28 from 51.8% in FY26. The brokerage added that the bank’s credit card base could rise to 13 lakh to 14 lakh cards over the near term.

On asset quality, Motilal Oswal said Punjab National Bank continued to report strong improvement. Gross non-performing assets declined to 2.95% in FY26 from 3.95% a year earlier, while net non-performing assets came down to 0.29% from 0.40%. Provision coverage ratio improved to 97.1%. The brokerage also said recoveries during FY26 remained healthy at 2.4 times net slippages.

“PNB continues to pivot toward higher-yielding segments, with RAM loans growing at a faster pace and management targeting around 60% mix over the coming years,” Motilal Oswal said in the report.

The brokerage further said the bank traded at around 0.8 times FY27 estimated adjusted book value, leaving room for re rating if margins improve and loan growth stays in double digits. Motilal Oswal added that strong underwriting standards and lower stress formation provided comfort even as the banking system prepared for expected credit loss provisioning norms.

Motilal Oswal on Dixon Technologies: ‘Buy’

Motilal Oswal retained its ‘Buy’ rating on Dixon Technologies (India) Ltd. with a revised target price of Rs 14,600, implying upside potential of 44%. The brokerage said Dixon delivered better-than-expected March quarter earnings despite weak smartphone demand and elevated memory prices. According to the report, FY26 revenue rose 26% year on year to Rs 48,870 crore, while EBITDA increased 24% to Rs 1,870 crore and profit after tax climbed 20% to Rs 850 crore.

Motilal Oswal said Dixon’s mobile phone division remained resilient even as industry demand weakened. The brokerage noted that smartphone realisations improved 12% to 15% due to memory price inflation and a better product mix. It added that domestic smartphone volumes excluding Vivo could remain stable at around 3.2 crore units in FY27. Export growth through Motorola and Ismartu partnerships also remained a key support factor.

The brokerage said Dixon’s telecom and information technology hardware operations were entering another phase of expansion. Telecom revenue increased to Rs 5,000 crore in FY26 from Rs 3,600 crore in FY25 and management targeted Rs 7,500 crore to Rs 8,000 crore revenue in FY27. Motilal Oswal added that laptop production at the Chennai facility had stabilised while desktop manufacturing and solid-state drive production should ramp up by mid FY27.

Motilal Oswal also pointed to the company’s push into specialised electronics manufacturing services across aerospace defence automotive medical devices and industrial electronics. According to the brokerage, Dixon expected this business to become an opportunity worth Rs 3,000 crore to Rs 4,000 crore over time with stronger margins than traditional electronics assembly operations.

“The Vivo joint venture remains a key upside trigger, as it could potentially add 20 million to 22 million per annum in volumes with better realizations compared to the current portfolio,” Motilal Oswal said in the report.

The brokerage said Dixon continued to build export opportunities across mobile telecom and lighting products. Mobile exports already touched around 40 lakh to 45 lakh units in FY26 while export revenue stood at nearly Rs 5,400 crore. Motilal Oswal expects further gains from African market partnerships and export orders from large retail chains in the United States and Europe.

Conclusion

Motilal Oswal’s latest recommendations pointed to companies where earnings momentum and expansion plans remained intact despite uneven global demand and rising input costs. All three companies continued to carry ‘Buy’ ratings from the brokerage with upside potential ranging between 17% and 44%.

Disclaimer: This article contains specific investment ratings and price targets from a third-party brokerage and does not constitute an offer or solicitation by this publication. These projections are based on current market data and involve inherent risks; actual returns may vary significantly. Readers are strongly advised to consult with a SEBI-registered investment advisor before making any financial decisions based on this information.

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