Domestic brokerage house Motilal Oswal has turned optimistic on select set of stocks across financials and automobiles. The brokerage sees a potential upside of as much as 24% in one of the stocks. 

According to the brokerage report, the common thread across these picks is improving business visibility, better earnings quality, and clearer medium-term growth triggers.

Let’s take a look at what is driving the key ‘Buy’ recommendations at this hour and Motila Oswal’s investment rationale for each –

Motilal Oswal on ICICI Prudential AMC

Motilal Oswal is also positive on ICICI Prudential Asset Management Company (AMC), betting on structural growth in the mutual fund industry. The brokerage has set a target price of Rs 3,850. This translates to about 15% upside potential from current levels..

According to the brokerage report, while equity market flows may remain volatile in the near term, the company is well-positioned due to its diversified product mix and strong distribution network.

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“While near-term equity net flows may be volatile, the company is well positioned structurally, supported by product diversification, strong investor stickiness, improving fund performance, and upcoming launches,” the brokerage house report noted.

The brokerage expects AUM, revenue, and profit after tax (PAT) to grow at a CAGR of 17%, 15%, and 16%, respectively, over FY26-2028.

Motilal Oswal on Hero MotoCorp

In the auto space, Hero MotoCorp has also received a ‘Buy’ rating, with a target price of Rs 6,205. This indicates an upside potential of around 18% from current levels..

“We expect HMCL to deliver a volume CAGR of around 7% over FY25-28, driven by rural recovery and a ramp-up in scooters and exports,” the brokerage said.

This is expected to translate into an 11% CAGR in revenue, earnings before interest, tax, depreciation and amortisation (EBITDA), and net profit over the same period.

According to the brokerage report, growth will be driven by a recovery in rural demand, expansion in scooters, and improving exports.

The report also flagged some near-term challenges. “While these tailwinds remain supportive, input costs have started rising sharply in the recent past, and the company is likely to see some near-term margin pressure,” it added.

Motilal Oswala on Indostar Capital Finance

Motilal Oswal has maintained a ‘Buy’ rating on the stock with a target price of Rs 270. This implies around 24% upside potential from current levels.

According to the brokerage report, Indostar Capital Finance appears to be entering a more stable growth phase after years of transition. The company has moved from a wholesale-focused non-banking financial company (NBFC) model to a retail-led business, which is typically more granular and less risky.

“The business is entering a phase where a cleaner portfolio, an improving funding profile, and a more efficient operating model are converging to support sustainable growth,” the brokerage noted.

The brokerage expects assets under management (AUM) and pre-provision operating profit (PPOP) to grow at a compound annual growth rate (CAGR) of 23% and 36%, respectively, between FY26-28.

“With execution gaining consistency, the medium-term trajectory looks more predictable and scalable,” the report added.

Motilal Oswal on ICICI Prudential Life Insurance

In the insurance space, ICICI Prudential Life Insurance is another preferred pick. The brokerage has assigned a ‘Buy’ rating with a target price of Rs 650, indicating a potential upside of about 19% from current levels..

According to the brokerage report, the company’s strategy of shifting towards better product mix and higher retail protection business is helping improve profitability.

“ICICI Prudential Life Insurance continued efforts toward the product mix shift and increasing retail protection contribution have resulted in continued YoY expansion in VNB margin,” the brokerage said. 

The company reported steady growth in annual premium equivalent (APE).

“In the long term, the company’s profitability will be supported by higher volumes, driven by GST exemption, increased traction of non-linked products, and improved product-level margins,” the report added.

What investors need to watch 

From NBFC transformation and insurance margin expansion to asset management flows and auto demand recovery, each company is at a different stage of its growth cycle  but with improving visibility. Motilal Oswal has outlined the target over the next 12 months for each of the stocks.

Disclaimer: Investment recommendations and target prices mentioned in this report are based on brokerage analysis and do not constitute an offer or solicitation. Stock market investments are subject to market risks; please consult a SEBI-registered investment advisor before making any financial decisions. Past performance or projected growth rates (CAGR) are not indicative of future results.

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