As the June quarter earnings season is set to begin, with Tata Consultancy Services (TCS) scheduled to report its Q1FY27 results on Thursday, domestic brokerage Motilal Oswal expects Nifty earnings to grow 10%, marking the strongest pace in four quarters.
Revenue growth is expected to remain healthy across segments, with large, mid and small-cap companies likely to report sales growth of 17%, 15% and 16% YoY, respectively. EBITDA is estimated to decline 2% for large-caps and 7% for mid-caps, while small-caps are expected to register 12% growth during the quarter.
Here are 10 Nifty stocks that the brokerage is bullish on ahead of Q1 results.
1) Bharti Airtel: With a target price of Rs 2,270, the brokerage forecasts an upside of 21% from current market levels.
Motilal Oswal expects consolidated revenue to grow 4% quarter-on-quarter, driven by strong performance in the Homes business, which is likely to expand around 6%, and the Africa business, where revenue is expected to rise about 5%.
The brokerage expects India wireless revenue and reported EBITDA to grow around 2.5% quarter-on-quarter, supported by one additional operating day during the quarter and steady subscriber additions.
2) State Bank of India: The brokerage has assigned a target price of Rs 1,300, an upside of 25% from the last closing price.
Motilal Oswal expects net interest margins (NIMs) to remain largely stable at 2.84% after the sharp decline in the March quarter, with the impact of term deposit repricing likely to be offset by an improvement in corporate lending spreads. The brokerage also expects asset quality to improve during the quarter.
3) ICICI Bank: One of India’s leading private lenders can rally 27% from current levels. Motilal Oswal expects net interest margins to soften marginally in Q1FY27, although adjusted NIMs are likely to remain broadly stable on a sequential basis, with the impact of deposit repricing offset by interest reversals during the quarter.
The brokerage expects loan growth of 4.1% quarter-on-quarter and 18.5% year-on-year, driven by healthy traction in gold loans, corporate lending, personal loans and mortgages. Deposits are projected to grow 3.2% sequentially and 15.2% annually.
4) M&M: With a target of Rs 3,910, the brokerage forecasts an upside of 25%. Motilal Oswal expects Mahindra & Mahindra's strong volume growth to be offset by margin pressures in Q1FY27. The company reported an 18% year-on-year increase in tractor sales and an 11% rise in passenger vehicle volumes, including Pik-Up models, during the quarter.
However, the brokerage believes price hikes implemented in April are unlikely to fully offset higher input costs, resulting in a sequential margin contraction of around 200 basis points in the automotive business. A similar trend is expected in the tractor segment, where cost pressures are likely to outweigh the benefit of price increases. As a result, Motilal Oswal expects M&M to report broadly flat earnings growth for the quarter.
5) Titan Company: Analysts have pegged the target at Rs 5,250, forecasting a 19% upside. Motilal Oswal expects Titan's standalone revenue, excluding the bullion business, to grow 38% year-on-year in Q1FY27, while Tanishq's like-to-like sales are projected to rise 35%.
The brokerage expects the standalone jewellery EBIT margin, excluding bullion and inventory gains following the customs duty increase, to decline by 80 basis points year-on-year to 10.7%. The margin pressure is likely to be driven by an unfavourable product mix, with higher sales of gold coins amid elevated gold prices.
6) Eternal: Motilal, with a TP of Rs 380, sees 36% upside in the company. Motilal Oswal expects net order value in Eternal's food delivery and quick commerce businesses to grow 19.7% and 84.4% year-on-year, respectively. It forecasts the food delivery take rate at 21.5%, while the quick commerce business is expected to report a gross profit margin of 26.9%.
Key monitorables for the quarter include management commentary on competitive intensity, Blinkit's performance, food delivery gross order value growth and margin trends.
7) Shriram Finance: The brokerage has assigned a target of Rs 1,230, forecasting a 17% upside. Motilal Oswal estimates disbursements of around Rs 49,800 crore in Q1FY27, taking assets under management (AUM) to approximately Rs 3,14,000 crore, up 15% year-on-year and around 4% quarter-on-quarter.
Key monitorables for the quarter include management's commentary on loan growth in the commercial vehicle segment and asset quality trends in the two-wheeler and personal loan portfolios.
8) InterGlobe Aviation: The operator of IndiGo has a target price of Rs 6,590, a 22% upside. The brokerage expects fuel costs to account for around 38% of revenue during the quarter, compared with 28.5% in the year-ago period, due to higher ATF prices.
Motilal Oswal said management remains focused on expanding its international footprint through new routes and code-share partnerships.
9) HDFC AMC: The brokerage has pegged the target at Rs 3,250, an upside potential of 18% from current levels.
Motilal Oswal expects quarterly average assets under management (QAAUM) and yields to remain largely stable on a sequential basis in Q1FY27.
Revenue growth is likely to be muted, reflecting largely flat QAAUM during the quarter. The brokerage expects EBITDA margin to remain around the 80% mark, while other income is projected to improve sequentially.
10) BSE: India’s oldest bourse has a target price of Rs 4,350, an upside of 8% as Motilal reiterates in Neutral rating. Motilal Oswal expects strong growth in transaction revenue in Q1FY27, driven by higher cash and derivatives trading volumes.
Motilal Oswal expects EBITDA margin to expand on a sequential basis, aided by improved operating efficiency.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
