MOFSL sees buying opportunities emerge from market rout; RIL, Bharti Airtel, HUL among top picks

Nifty-50 has already corrected 16 percent from its recent peak.

Brokerage firm Motilal Oswal Financial Services sees multiple factors that suggest Indian
equities could be in the latter stages of the market rout, with the deep correction offering multiple buying opportunities. The firm has identified some beaten-down stocks of fundamentally strong companies that have faced deep correction but continue to offer solid earnings growth, business momentum, and quality management, hinting at better times ahead.

MOFSL's top picks within the large-cap space include marquee names like RIL, Bharti, Hindustan Unilever, L&T, Maruti, Titan, Adani Ports, Bharat Electronics, LTIM, Shriram Finance, JSW Energy, and Polycab. On the other hand, small and midcap stocks like HDFC AMC, Coforge, Page, AU SFB, JK Cements, Ipca, Godrej Properties, Brigade, Angel One, and Happy Forgings also garnered favour from the brokerage.

On the market front, MOFSL's optimism of an imminent recovery being round the horizon is based on expectations that the modest earnings growth in FY25 would accelerate into double-digit growth in FY26. Although the firm does see some risk to FY26 earnings in the current backdrop, it believes growth would still remain in double digits. "Once the extreme risk aversion and weak sentiment abate, the equity market would be guided by a better earnings growth trajectory in FY26," it feels.

On top of that, market valuations have also moderated, particularly in large-cap stocks, with the Nifty-50 trading at approximately a 10 percent discount to its long-period average, giving comfort.

"Additionally, India’s fiscal and monetary policies have become more stimulative, which should bolster demand and improve market sentiment," MOFSL believes. Moreover, the firm gathered further optimism from a retracement in global factors that have played a huge role in stimulating the correction in Indian equities, as the dollar index, S&P500 and US bond yield ease back to levels closer to pre-US election results.

India’s policy environment has also turned far more accommodative, which is likely to boost demand in the coming quarters. "Both monetary and fiscal policies have shifted to stimulate domestic consumption and liquidity. In the FY26 Union Budget, the Finance Minister reinforced this stance by allocating Rs 1 lakh crore in budgeted savings for taxpayers to drive consumption," MOFSL stated.

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