Domestic brokerage firm Motilal Oswal has reshuffled its model portfolio, raising its weight in SBI by 100 basis points while trimming exposure to HDFC Bank. According to reports from The Economic Times, SBI continues to be the brokerage's top banking idea and part of its top five India picks, supported by strong loan growth prospects, robust liability franchise, benign CD ratio, and strong balance sheet liquidity. The asset quality remains healthy with credit costs well below 50 basis points, while improvements in the cost-to-income ratio are expected to keep RoA above 1% over FY27-28E.
Among the additions, Motilal Oswal included ICICI Prudential AMC, citing sustained market share gains driven by strong fund performance, scaling up of the non-mutual fund business to over 15% of revenue, and best-in-class profitability. As reported by The Economic Times, the brokerage has maintained an overweight stance on new-age platforms, increasing allocation by 100 basis points to Eternal and introducing Lenskart to the portfolio. Lenskart is seen benefiting from strong competitive moats in a structurally underpenetrated segment, with expectations of a 25% revenue CAGR.
The brokerage remains overweight on defence and EMS names and has added Hindustan Aeronautics to the portfolio, citing the cheapest valuation at 28x and 22x P/E for FY27 and FY28, respectively. According to The Economic Times, the brokerage noted that current valuations factor in delays in Tejas Mk1A deliveries and rising competition, while a strong order book of ₹2.54 trillion provides revenue visibility for the next 7-8 years. In manufacturing, Waaree Energies has been added with plans to expand domestic capacity to 25.0 GW (modules), 15.4 GW (cells), and 10.0 GW (ingot-wafer) along with 4.2 GW module capacity in the U.S. by FY27.
In the banking sector, AU Small Finance Bank has been added with expectations of around 24% loan CAGR over FY26-28E, supported by its transition toward a universal bank, improved diversification, and better operating leverage. As reported by The Economic Times, asset quality and operating metrics are also expected to improve, with lower credit costs aiding earnings momentum. The brokerage has reallocated weights by increasing exposure to Infosys by 100 basis points while maintaining an overall underweight stance on the IT sector.
Within the SMID segment, where the brokerage remains overweight, LT Foods has been introduced, backed by rising global basmati consumption and demand tailwinds from an expanding South Asian diaspora. According to The Economic Times, in healthcare, Mankind Pharma has been added with earnings expected to have bottomed out and early signs of recovery emerging in the domestic formulations business following strategic corrective measures. The brokerage continues to stay underweight on metals while introducing Jindal Stainless alongside existing exposure to Tata Steel, maintaining its selective approach across different sectors.
