If you are looking for potential stocks to invest in, Motilal Oswal has a favourable recommendation on three stocks: Mahindra & Mahindra, HCL Technologies, and Axis Bank. The domestic brokerage firm expects one of these stocks to give a return of as much as 23%. Here’s a detailed analysis of why the brokerage chose these stocks.
Motilal Oswal on Mahindra & Mahindra: Well placed to outperform auto and farm segments
Motilal Oswal said that Mahindra & Mahindra’s (M&M) healthy launch pipeline to drive market share gains in the auto segments. The company intends to fortify its leadership in the ICE SUV segment, aided by a healthy launch pipeline that includes 23 new products by 2030 across SUVs and LCVs (light commercial vehicles). Plus, M&M targets an improved contribution from eSUVs to 20-30% of its portfolio by 2027.
In tractors, M&M aims to strengthen its domestic market share while maintaining its profitability and target a quantum growth in farm machinery by investing in new products and brand building.
“While management has outperformed its targets of earnings growth and RoE of 18% each for FY24 and FY25, it remains committed to delivering 15-20% EPS growth and 18% RoE. These ensure sustained profitability and shareholder value,” said Motilal Oswal.
The brokerage kept its ‘Buy’ rating unchanged, with a target price of Rs 3,643, implying an upside potential of 18%.
Motilal Oswal on HCL Technologies: Fastest growing largecap IT services provider
Motilal Oswal maintained its ‘Buy’ rating on the tech giant, HCL Technologies, despite reporting a weak performance in Q1 FY26. Its net profit declined 10% YoY in rupee terms. However, revenue and EBIT grew 8.2% and 3%, respectively. The brokerage firm has a target price of Rs 2,000, implying an upside of 23% upside potential.
“We expect revenue, net profit, and net profit to grow by 9.4%, 2.1%, and 5.3% YoY, each, in Q2 FY26. HCL Tech remains the fastest-growing large-cap IT services company, and we like its all-weather portfolio,” said Motilal Oswal.
However, Motilal Oswal slashed FY26 estimates by 3-4% to account for higher investments, whereas it kept FY27 estimates largely unchanged as the broker expects FY27 margins can again get back to normalised levels of 18-18.5%.
Motilal Oswal on Axis Bank: Focus on creating strong franchise
Motial Oswal said Axis Bank wants to create a strong brand as it remains focused on building a stronger, more consistent, and sustainable franchise. The bank witnessed modest advance growth in FY25 due to a previously high CD ratio (credit-deposit ratio), which has now eased to 88.7% compared to 92.6% in Q3 FY25.
The brokerage said that the stock trades at reasonable valuations and the risk-reward appears favourable. However, the clarity on the trajectory of credit costs, margins, and growth remains key for sustained performance.
“We estimate Axis Bank to deliver FY27 RoA of 1.74% and RoE of 15.3%,” said Motilal Oswal in a research note. The brokerage firm maintained its ‘Neutral’ call on Axis Bank, with a price target of Rs 1,300, implying an upside of 11%.
