Motilal Oswal rejigs model portfolio: Adds HDFC Bank, Paytm, Vishal Mega Mart; exits PNB, CAMS, Trent

Motilal Oswal rejigs model portfolio: Adds HDFC Bank, Paytm, Vishal Mega Mart; exits PNB, CAMS, Trent

Motilal Oswal has made three fresh stock additions and exited an equal number in its August 2025 update of the MOSt Signature model portfolio. The brokerage added HDFC Bank, Paytm, and Vishal Mega Mart, replacing PNB, CAMS, and Trent from the 20-stock, high-conviction model basket.

The latest reshuffle reflects Motilal Oswal's growing preference for financials and Tier-2 retail themes with valuation comfort and improving fundamentals.

Rationale behind new additions
The inclusion of HDFC Bank signals confidence in the bank's post-merger consolidation. The lender is expected to clock robust loan growth from FY26 onward, supported by strong provisioning buffers and a 1:1 bonus issue declared recently. The brokerage estimates the bank's return on assets (RoA) and return on equity (RoE) to improve to 1.9% and 14.9% respectively by FY27.

Paytm's steady pivot to financial services with disciplined cost management and record merchant subscription base helped it return to profitability in Q1FY26, prompting its entry into the portfolio.

Meanwhile, Vishal Mega Mart was picked for its asset-light expansion and strong Tier-2 and Tier-3 India focus. The company operates nearly 700 stores, primarily in smaller towns, and plans to open 100+ outlets annually.

Exit calls
Motilal Oswal exited PNB citing modest loan and deposit growth, while CAMS was dropped due to weak revenue visibility and margin pressure. Trent, despite its strong brand recall, was removed following a continued deceleration in growth during Q1FY26, even as store additions picked up pace in the previous quarter.

Performance so far
Since inception in March 2025, the MOSt Signature portfolio has delivered 17.1% absolute returns, outperforming the Nifty 200 index's 12.1% by 500 basis points. Top gainers include JK Cement (up 51%), Eternal (up 46%) and Kaynes Technology (up 45%), driven by strong quarterly results and long-term growth visibility.

The portfolio maintains a balanced allocation across large-caps (50%), mid-caps (40%), and small-caps (10%), and is benchmarked to the Nifty 200 index. It continues to favour capital goods, healthcare, and consumption-oriented names while remaining underweight on staples, metals, and utilities.