The brokerage firm Motilal Oswal has put out four ‘Buy’ calls – two on specific companies and two in the broader sectoral space where it sees potential for steady upside. According to the brokerage report, the upside could be as high as 28% from current levels.
So, what are these picks, and what is the rationale behind them? Let’s take a look at the top picks by the brokerage house –
Motilal Oswal on Hindustan Aeronautics
Motilal Oswal has given a ‘Buy’ rating to Hindustan Aeronautics (HAL), with a target price of Rs 5,800. That translates into a 21% potential upside from the current market price.
According to the brokerage report, HAL’s growth visibility has brightened significantly after the Ministry of Defence signed a follow-on order worth Rs 62,400 crore for 97 light combat aircraft (LCA) Mk1A. This comes in addition to an earlier order of 83 jets placed in January 2021.
“With GE F404 engine deliveries now normalizing after past supply chain disruptions, the MoD has signed an INR624b contract with HAL for the procurement of 97 additional LCA Mk1A aircraft for the Indian Air Force,” the report noted.
Deliveries of these fighters, comprising 68 single-seat and 29 twin-seat jets, are scheduled to begin in FY28 and finish within six years. Importantly, the order also aligns with India’s self-reliance drive, with more than 64% indigenous content, including the UTTAM AESA radar and Swayam Raksha Kavach electronic warfare suite.
“Our estimates build in execution scale-up of the manufacturing order book as HAL begins deliveries of the Tejas aircraft from 3QFY25 onward,” Motilal Oswal added, reiterating its Buy call.
Motilal Oswal on Grasim Industries
Another big recommendation from the brokerage is Grasim Industries, where it has set a target of Rs 3,550, a 28% upside potential.
Management commentary suggests that capturing market share in its paints and B2B e-commerce ventures remains the immediate priority. “Management emphasised that gaining market share is a near-term priority, supported by unique industry offerings in product warranties and financing schemes,” the report said.
The brokerage highlighted that these financing options and digital certificates could help Grasim reach new customers more effectively. Importantly, the company has set a clear revenue ambition.
“It remains committed to achieving INR100b in revenue by FY28E (third year of full-scale operations), along with profitability at the operating level,” the note added.
Paints and B2B platforms have already shown stronger-than-expected traction, even as early losses in these verticals appear to have peaked. The real monitorable, according to Motilal Oswal, will be how quickly these businesses cut down losses in the coming quarters.
Motilal Oswal on Microfinance sector
Within the sector, Motilal Oswal has picked two names for investors – CreditAccess Grameen and Fusion finance. On CreditAccess, the brokerage has set a target of Rs 1,660 against the current market price of Rs 1,417, an upside of 17%. Meanwhile, Fusion Microfinance has a target of Rs 240, up 24%.
“Business growth remains a secondary focus for most MFI players, as the primary concern is stabilizing asset quality and collections,” the note observed.
But the tide seems to be turning. “The MFI sector is emerging out of a stress cycle, with signs of normalisation visible in collection efficiencies, flow rates, and PAR trends,” the report pointed out.
Valuations in the space remain inexpensive, with most NBFC-MFIs trading at just 0.5x–1.1x FY27 estimated book value. “We believe that the worst of this MFI asset quality cycle is now clearly behind us,” Motilal Oswal said.