Brokerages Release Updated Models and Buy Recommendations Following Weak Q2 Earnings Season
Mumbai, August 15 - With the Q2FY25 earnings season drawing to a close, several top brokerages have made significant changes to their model portfolios. Analysts at Motilal Oswal Financial Services (MOFSL), Nuvama Institutional Equities and Kotak Institutional Equities have revisited their preferred stocks and buy recommendations, following the disappointing earnings reports from Indian corporates.
Motilal Oswal has strengthened its stance on technology, healthcare and BFSI sectors with large-cap stocks showcasing a distinct bias. The brokerage now prefers HDFC Bank, Bharti Airtel, ICICI Bank, State Bank of India (SBI), HCL Technologies, Larsen & Toubro (L&T) and Mahindra & Mahindra (M&M).
The firm remains overweight on IT, healthcare, BFSI, consumer discretionary, industrials, and real estate. Nuvama Institutional Equities also maintains an "overweight" stance for the same sectors, although with a higher emphasis on consumer discretionary, private banks, insurance, telecom and pharma.
However, Kotak Institutional Equities has downgraded its rating in several stocks amid earnings downgrade risks persisting despite elevated valuations close to historical highs. The brokerage now sees more downside ahead from both domestic companies and international peers.
In the Nifty 50 Index, Nuvama remains bullish on ICICI Bank and Axis Bank, while underweight on HDFC Bank and SBI.
Among Kotak Institutional Equities' model portfolio additions are Godrej Consumer Products (GCPL), while the removals include Pidilite Industries and Britannia Industries. Motilal Oswal's largest constituents are HDFC Bank and SBI, with Axis Bank following closely after ICICI Bank in terms of weightage.
In related news, Nifty has seen its year-on-year net profit increase by 4%, which surpasses the brokerage estimates, while Kotak Institutional Equity cited a combined increase in the adjusted net profits for the second consecutive quarter due to SBI's and ONGC's improved numbers.