Motilal Oswal’s market strategist outlines sectoral trends, stock picks, valuation outlook, and key risks in Diwali 2025 interview
Earnings and Tariff Clarity: The Twin Engines for Nifty’s 30K Target
In an exclusive interaction with Business Today, Nandish Shah, AVP – PCG Research & Advisory (Fundamental) at Motilal Oswal Financial Services, predicted that the Nifty 50 could touch 30,000 by next Diwali, but only if two critical conditions are met:
- Earnings Growth: MOFSL expects Nifty earnings per share (EPS) to rise to ₹1,096 in FY26 (8% YoY growth) and ₹1,274 in FY27 (16% YoY growth).
- Resolution of US Tariff Issues: A favourable outcome on global trade tensions, especially with the US, is key to sustaining investor sentiment and capex momentum.
Sectors to Lead the Charge
Shah expects a domestic demand-driven rally over the next 6–12 months, favoring sectors with consumer-facing or capex-driven tailwinds.
🔹 Banking, NBFCs & Insurance
- Set for an earnings rebound in 2HFY26, aided by rate cuts and stronger credit growth.
- Top Picks:
- ICICI Bank, HDFC Bank, SBI
- HDFC Life, Max Life, L&T Finance, Aditya Birla Capital, Shriram Finance
🔹 Auto & Ancillaries
- Beneficiaries of a normal monsoon, festive demand, and a potential GST rate cut.
- Top Picks:
- Maruti Suzuki, Hyundai, M&M, Hero MotoCorp, TVS Motor
🔹 Consumer Discretionary & Travel
- Rising incomes and aspirational spending driving demand.
- Top Picks:
- Radico Khaitan, Indian Hotels, Lemon Tree, Eternal, Swiggy
Investment Approach: Staggered Buying, Prefer Large & Midcaps
Given moderate earnings visibility and geopolitical risks, Shah suggests a conservative investment stance.
- Strategy:
- Accumulate quality large-cap and mid-cap stocks gradually.
- Avoid chasing overheated small caps.
- Valuation Snapshot:
- Nifty-50: 21x forward P/E (in line with historical average of 20.7x)
- Midcap-100: 26.4x (13% premium to long-term average)
- Smallcap-100: 24.7x (48% premium to long-term average)
Top Stock Picks with 25–38% Upside
| Company | LTP (₹) | Target (₹) | Upside (%) | Rationale |
|---|---|---|---|---|
| Swiggy | 435.35 | 560 | 28.63% | Easing competition, improving unit economics, GST boost |
| UltraTech Cement | 12,275 | 15,200 | 23.83% | Capacity-led growth, market share expansion |
| ACME Solar Holdings | 284.30 | 370 | 30.14% | Strong EBITDA growth, BESS upside |
| Dixon Technologies | 17,456 | 22,300 | 27.75% | Smartphone expansion, backward integration |
| VA Tech Wabag | 1,425 | 1,900 | 33.33% | Strong order book, desalination project tailwinds |
| Max Healthcare | 1,155.50 | 1,450 | 25.49% | Consistent margins, brownfield expansion |
| Kirloskar Oil Engines | 892 | 1,230 | 37.89% | Strong exports, margin expansion, trading at discount |
Risks That Could Derail the Bull Case
Shah cautions that three key risks could derail the journey to Nifty 30,000:
- Weaker-than-expected corporate earnings
- No breakthrough on US trade/tariff issues
- Escalation in geopolitical tensions
Suggested Hedge: Increase allocation to commodities and precious metals as a defensive play against equity volatility.
Motilal Oswal’s Nandish Shah sees Nifty scaling 30,000 by Diwali 2026, if earnings momentum strengthens and tariff concerns ease. While domestic sectors like banking, auto, and consumer discretionary are likely to lead, investors are advised to adopt a disciplined, conservative approach, and stay alert to global risks.
