Motilal Oswal, a leading brokerage house, has identified 10 large-cap stocks that investors may consider buying ahead of the general election outcome. Despite the market’s decline in May due to various factors such as rising US bond yields and foreign investor outflows, Motilal Oswal remains optimistic about certain stocks, citing potential buying opportunities. Here’s a detailed overview of the stocks recommended by Motilal Oswal:
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L&T (Larsen & Toubro):
- Expectations of ordering momentum post-election, leading to valuation re-rating.
- Focus on increasing market share through large-sized projects.
- Predicted revenue growth of 11% YoY and gradual recovery in core EBITDA margin.
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SBI (State Bank of India):
- Significant recovery in earnings from FY18 loss to FY24 profits.
- Robust business growth, improved asset quality, and steady revenues.
- Expected steady earnings with RoA/RoE of 1.1%/18.5% in FY26.
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ICICI Bank:
- Healthy performance in 4QFY24 with 17% YoY growth in net earnings.
- Strong credit growth across retail, SME, and BB segments.
- Expected sustained PAT growth of ~14% CAGR over FY24-26.
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Coal India:
- Top pick in the metals and mining sector with a positive outlook.
- Robust volume outlook, healthy e-auction premiums, and lower costs.
- Targeting production of 838mt in FY25 to meet increasing coal requirements.
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Titan:
- Steady revenue growth despite the high base and discretionary nature of products.
- On track to achieve existing jewelry revenue guidance with impressive CAGR.
- Expected improvement in gross margin and significant headroom for growth.
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M&M (Mahindra & Mahindra):
- Expected growth in SUV portfolio by mid-to-high teens in FY25.
- Auto business to drive growth with healthy order backlog and new launches.
- Estimated CAGR of 12%/15%/16% in revenue/EBITDA/PAT over FY23-26.
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Hindalco:
- Undertaken a mammoth multi locational-multi product growth capex.
- Novelis achieved EBITDA target and expects further improvement.
- Expectation of stable volume growth and IPO value unlocking for the subsidiary.
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ITC:
- Resilient core business amid uncertain environment, offering defensive bet.
- Contribution of digital and modern trade businesses significant to revenue.
- Expected 7% earnings CAGR over FY24-26 despite rising competitive pressure.
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HCL Tech (HCL Technologies):
- Higher exposure to Cloud services offers better resilience.
- Retained margin guidance band for FY25 and aspires for higher margin in future.
- Expected FY25 EBIT margin of 18.6% and INR PAT CAGR of 12.8% over FY24-26.
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Zomato:
- Positive long-term growth outlook with expectation of sustained growth.
- Blinkit’s Adj. EBITDA break-even guidance retained.
- Predicted strong growth in FY24/FY25 with expected EBITDA margin improvement.
