11 Top Large Cap Picks As Given By Motilal Oswal In Its India Strategy Report

Nifty in trade today has again retraced lower on the back of weak global cues. This iterates of the high volatility the markets are confronting now.

Indian markets faring better than global peers on a YTD basis

Amid such a momentum, the leading brokerage firm Motilal Oswal in its India Strategy report as we enter the earnings season for the first quarter of Fy23, "the market is at a crossroads. Despite a multitude of headwinds adverse macros, rising rates, tightening liquidity, and volatile commodity costs, the Nifty has outperformed global markets YTD. FII outflows in 1QFY23 have been the highest ever at USD15b. This, coupled with higher 10-year G-Sec yields, a worsening external balance, and consequent currency depreciation provided a very challenging backdrop to the equity market. However, robust domestic equity inflows (DII inflows stood at USD15.2b in 1QFY23) and decent corporate earnings have kept the Indian market relatively resilient. As we look ahead, we note that commodity costs have corrected in the last couple of weeks, offering some respite to the adverse macros. Global bond yields have moderated by 20-50bp from the recent highs and earnings estimates for the Nifty haven't seen any worthwhile cuts. Meanwhile, valuations for the Nifty have moderated to 18.7x FY23 EPS, in line with its long period averages. Thus, the glass appears half-full to us, delicately balancing the headwinds with some silver linings"

Minor change effected for Nifty FY23E/FY24E EPS

Our Nifty FY23/FY24 EPS estimate has seen a minor tweaking to INR866/INR1,006 (prior: INR864/NR1,002). The 21%/10% cut in our FY23 earnings estimate for Metals/Cement is compensated
by a 9% increase in our O&G estimate. If not for the recent imposition of windfall tax and export duty in the O&G sector, there might have been an earnings upgrade in our FY23 EPS. We expect Nifty's FY23 EPS to grow by 18% YoY on a base of 36% growth in FY22. BFSI, Auto, and O&G will contribute over 100% of incremental profit growth among Nifty constituents in FY23. We estimate a Nifty EPS growth of 16% in FY24. Over FY20-23, Nifty EPS, at our current estimate, should compound at 24% CAGR, with underlying profit
expanding to INR7t in FY23 from INR3.5t in FY20".

Top Largecap picks

The brokerage has listed out 11 stocks as its top picks which are as following-ICICI Bank, SBI, Infosys, ITC, Reliance, Titan, Apollo Hospitals,
Hindalco, Bharti Airtel, UltraTech Cement, and Maruti.

These largecap picks in the current volatile environment can offer stability to your portfolio and offer good returns in the long term.