Model portfolio by Motilal Oswal sees additions: Chola Investments, Hindalco, JK Cement.

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Ahead of the Q4FY24 earnings season, Motilal Oswal (MOSL) forecasts a 6 percent year-on-year (YoY) growth in Nifty earnings, with domestic cyclicals like BFSI (Banks, Financial Services and Insurance) and Auto expected to lead the charge. MOSL predicts a 9 percent YoY growth in Nifty sales and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), with BFSI and Auto sectors anticipated to post 20 percent and 15 percent YoY growth, respectively. Conversely, global cyclicals like Oil & Gas and Metals are expected to decline 6 percent and 12 percent YoY, respectively. 

Maintaining its forecast for Nifty EPS at ₹980 for FY24, MOSL revises its projection for FY25 to ₹1,132, expecting EPS growth rates of 21 percent for FY24 and 16 percent for FY25. The brokerage also makes key changes to its model portfolio, maintaining overweight positions on Financials, Consumption, Industrials, and Real Estate. In the Financials sector, MOSL remains bullish on PSU banks and adds Chola Investments to its portfolio, projecting sustained growth supported by a diverse product range and market share enhancement. 

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In the Consumption space, MOSL retains its overweight stance and introduces Cello World to the portfolio, anticipating robust revenue and profit growth driven by a growing total addressable market. Additionally, MOSL maintains its allocations in SAMIL (Sundaram-Clayton) and reintroduces Craftsman Automation, citing their market leadership and growth potential.

In Metals, MOSL includes Hindalco alongside Coal India, expecting improved performance driven by Novelis' enhanced EBITDA. In the Cement sector, MOSL adds JK Cement, recognizing its superior execution capabilities and expansion plans, with upgraded EBITDA estimates for FY25 and FY26. These strategic adjustments align MOSL's model portfolio with evolving market dynamics and growth opportunities across sectors.