Motilal Oswal has reshuffled its model portfolio to prioritise domestic growth-driven companies such as State Bank of India, Jio Financial Services, and Waaree Energies, as rising Middle East tensions and elevated crude prices heighten risks to inflation and corporate margins. The brokerage announced the changes in its latest report, shifting exposure toward sectors with predictable earnings like financials, autos, and manufacturing while trimming global-sensitive bets. The move comes as Indian markets undergo time and price corrections, prompting a sharper bottom-up strategy aimed at building resilience for FY26 amid ongoing geopolitical uncertainty.
Motilal Oswal rejigs model portfolio
The changes come at a time when Indian markets are undergoing both time and price corrections, prompting the firm to adopt a sharper bottom-up investment approach.
By reallocating capital toward sectors with high revenue visibility, the firm aims to provide a more resilient portfolio for the coming fiscal year despite the sequential earnings pressure triggered by the crisis in the Strait of Hormuz.
India’s heavy reliance on crude imports could push up inflation and pressure corporate margins if energy prices stay elevated, as per report.
Motilal Oswal adjusts sector weights to favour domestic cyclical companies
The brokerage firm has decided to maintain an ‘Overweight’ stance on key sectors such as automobiles and public sector undertaking banks along with diversified financials and manufacturing or industrials.
Motilal Oswal has also expressed a preference for consumer discretionary names and new age platforms while deciding to remain ‘Underweight’ on sectors like oil and gas or private banks and consumer staples.
Motilal Oswal increases its position in State Bank of India
State Bank of India remains a top banking pick for the brokerage firm which has increased its weight in the stock by 100 basis points. Motilal Oswal funded this by trimming its weight in HDFC Bank because it expects State Bank of India to deliver superior loan growth in the coming years.
The firm points to a robust liability franchise and unmatched balance sheet liquidity as the primary reasons for its confidence in the public sector lender. Analysts expect the bank to maintain a return on assets of over 1% for the next two fiscal years while keeping its credit costs well below 50 basis points.
Motilal Oswal adds ICICI Prudential Asset Management to its top picks
The brokerage firm has introduced ICICI Prudential Asset Management Company into its model portfolio to benefit from its increasing market share in the financial services space. Motilal Oswal analysts note that the company has shown sustained strong fund performance and has successfully grew its non mutual fund business to represent more than 15% of its total revenue.
The firm expects the asset management company to maintain its best in class profitability while capitalizing on the ongoing trend of domestic investment and market share gains.
Motilal Oswal picks Jio Financial Services for platform scale growth
Jio Financial Services has been added to the model portfolio as it offers what the firm describes as a platform scale opportunity for the future of Indian finance. Motilal Oswal observes that the company is building a full stack financial services platform with multiple growth engines in sectors like payments and insurance along with asset management.
The broking believes that these diverse business segments provide significant optionality for the company as it expands its footprint across the Indian financial sector using an ecosystem led approach.
Motilal Oswal includes AU Small Finance Bank for high loan momentum
The firm has added Au Small Finance Bank to its portfolio with the expectation that the lender will achieve a 24% loan compound annual growth rate through the 2028 fiscal year. Motilal Oswal anticipates that the bank will benefit from its transition into a universal banking entity and its focus on portfolio diversification across India.
The brokerage firm expects asset quality and operating metrics to improve which should lead to lower credit costs and stronger earnings momentum in the coming years.
Motilal Oswal reallocates technology sector weight to favour Infosys
The brokerage firm has decided to increase its allocation to Infosys by 100 basis points while bringing the overall information technology sector back to an ‘Underweight’ position. Motilal Oswal analysts explain that this move is driven by a high conviction in specific technology names rather than the broader industry which faces narrative shocks from artificial intelligence implementation.
The firm is reallocating weights to prioritise companies that can offer growth visibility in a period where the sector faces valuation compression and global macroeconomic pressures.
Motilal Oswal introduces Lenskart to its retail coverage picks
Lenskart has entered the model portfolio because the brokerage firm identifies its strong competitive moats in an industry that is difficult for competitors to scale. Motilal Oswal expects the company to deliver industry leading growth rates in both revenue and earnings through the 2028 fiscal year with a projected 25% revenue compound annual growth rate.
Lenskart is seen as a key beneficiary of the shift toward organised retail in the eyewear segment where it has established a dominant market position.
Motilal Oswal selects Hindustan Aeronautics for defence sector visibility
The firm has added Hindustan Aeronautics to its model portfolio citing its attractive valuation which is currently the cheapest in the domestic defence universe at 22 times its projected 2028 earnings. Motilal Oswal notes that the current market price already factors in concerns about delivery delays for the Tejas Mark One A aircraft and competitive pressures from private players.
This move is consistent with the firm’s ‘Overweight’ stance on the defence and industrial manufacturing themes as government spending in these areas remains a priority.
Motilal Oswal adds Jindal Stainless for structural growth
Jindal Stainless has been introduced into the model portfolio as the firm seeks exposure to companies expanding their capacity and moving toward higher value-added products. Motilal Oswal expects the company to benefit from its market leadership and cost efficiencies gained from backward integration and captive renewable power.
The firm believes that the rising share of high margin offerings will support structural earnings growth for the stainless steel manufacturer even during periods of commodity price volatility. This addition comes as the firm seeks out specific winners within the metals sector that have strong internal growth drivers independent of global price cycles.
Motilal Oswal includes Waaree Energies for renewable manufacturing
The brokerage firm has added Waaree Energies to its picks because of the company’s significant domestic capacity expansion plans for solar modules and cells. Motilal Oswal expects this scale-up to drive a 40% compound annual growth rate in profit after tax over the next three years as the company expands its capacity to 25 Gigawatts by 2027.
The firm believes that government mandates for domestic manufacturing will protect margins for integrated solar players and provide a stable environment for long term growth. This move reflects the firm’s interest in the ongoing energy transition and the government’s push for indigenization in the renewable energy sector.
Motilal Oswal picks Mankind Pharma for domestic recovery
The brokerage firm has added Mankind Pharma to its healthcare picks with the belief that its earnings are currently reaching a bottom after a period of consolidation. Motilal Oswal expects a recovery in the domestic formulations business following strategic corrective actions and sees the current valuation as a compelling entry point for long-term investors.
The firm notes that the company’s broadly India-focused portfolio and limited global exposure provide a safer investment profile during periods of international trade disruptions and currency stress. This addition is part of a strategy to find companies with strong domestic demand tailwinds that are insulated from the ongoing crisis in the Middle East.
Motilal Oswal adds LT Foods for Basmati demand tailwinds
The firm has included LT Foods in its model portfolio to capitalise on the durable demand tailwinds for Basmati rice consumption across the globe. Motilal Oswal analysts point out that the company benefits from strong brand recall and procurement efficiencies through its deep relationships with domestic farmers.
The firm views the company as attractively valued at 13 times its projected earnings for the 2028 fiscal year compared to its peers in the consumer staples sector who trade at higher multiples. This move highlights a preference for companies that can use their cash-generative core businesses to fund the growth of organic and healthy food categories.
Conclusion
Motilal Oswal expects that the resolution to the conflict will release pent-up positive sentiment and help Indian markets recoup some of the losses experienced in fiscal year 2026.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.
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