Motilal Oswal Private Wealth has significantly increased its allocation to Indian mid and small-cap stocks, raising the overweight position by 10 percentage points to 50% while maintaining a neutral stance on Indian equities overall. According to Sandipan Roy, chief investment officer at Motilal Oswal Private Wealth, the firm has increased overweight to mid and small-caps given their stronger representation in high-growth, new-economy sectors and improvement in valuations. The wealth manager has set hybrid and large-cap allocations at 40% and allocated the remaining 10% to global equities. For hybrid strategies, Roy recommends lump sum deployment at current levels, while pure equity-oriented strategies should be staggered given prevailing uncertainties.
Motilal Oswal has issued a buy rating on Equitas Small Finance Bank with a target price of ₹90 in its research report dated July 29, 2026. According to the brokerage's analysis, the recommendation is based on strong quarterly performance and positive outlook for the small finance bank.
Equitas Small Finance Bank delivered robust first quarter results for FY27, with profit after tax (PAT) of ₹1.8 billion, representing a 16% beat over expectations. As reported by Motilal Oswal, the bank's net interest income (NII) grew 31% year-on-year and 5% quarter-on-quarter to ₹10.3 billion, which was in line with estimates. The net interest margin (NIM) contracted 12 basis points quarter-on-quarter to 7.24%, primarily due to an 11 basis points increase in cost of funds to 7.05%.
The bank demonstrated strong business expansion with net advances growing 28.8% year-on-year and 4.6% quarter-on-quarter to ₹447 billion. According to Motilal Oswal's report, the microfinance institution (MFI) business grew 4.6% quarter-on-quarter, while deposits increased 10.4% year-on-year and 5.2% quarter-on-quarter. However, the CASA ratio moderated 108 basis points quarter-on-quarter to 25.1%.
Motilal Oswal has increased earnings estimates by 10% for FY27 and 7% for FY28, expecting the bank to achieve return on assets (RoA) of 1.2% and return on equity (RoE) of 12.2% by FY27E. The brokerage maintains its buy rating with a target price of ₹90, representing a valuation of 1.4x FY28E adjusted book value. This target price reflects the bank's strong fundamentals and growth prospects in the small finance banking sector.
