5 Nifty stocks to buy; Dixon, Groww shares among 5 non-Nifty stock ideas

MOFSL in its latest strategy note said State Bank of India (SBI), Titan Company Ltd, Mahindra & Mahindra Ltd (M&M), Infosys Ltd, and Eternal Ltd are its top five Nifty stock ideas following the December quarter results. Its top five non-Nifty stock picks included Dixon Tech, Indian Hotels, Billionbrains Garage Ventures Ltd (Groww), TVS Motor, and Radico Khaitan.
   
A total of 31 Nifty companies that have declared results so far reported 7 per cent YoY growth in earnings compared with MOFSL's estimates of 8 per cent YoY, driven by HDFC Bank, Tata Consultancy TCS, Infosys, Larsen & Toubro (L&T), and Maruti Suzuki India. These five companies contributed 65 per cent to the incremental YoY accretion in earnings. Conversely, Cipla, ICICI Bank, and Interglobe Aviation (IndiGo) dragged Nifty earnings lower. Six companies within the Nifty reported lower-than-expected profits, while seven recorded a beat, and eighteen registered in-line results, MOFSL said.

The domestic brokerage said TCS, Axis Bank, Ultratech Cement, Bharat Electronics (BEL), Dr Reddy’s Labs, Eternal, and SBI Life Insurance exceeded its profit estimates. Conversely, ICICI Bank, NTPC, Interglobe Aviation, Tech Mahindra, JSW Steel, and Cipla missed its profit estimates for 3QFY26.

"Top FY27E upgrades included Dr Reddy’s Labs (5.6 per cent), Ultratech Cement (4.9 per cent), Titan Company (4.6 per cent), Nestle India (3 per cent), and Tech Mahindra (2.2 per cent). Top FY27 downgrades included Eternal (down 14.3 per cent), Cipla (down 13.2 per cent), Maruti Suzuki (down 7.5 per cent), Tata Consumer (down 4.2 per cent), and NTPC (down 3.5 per cent).

MOFSL said the earnings for Q3 to date have been in line. It expects 12 per cent earnings growth for Nifty over FY25-27E. Valuations for Nifty at 20 times remain marginally below its LPA at 20.9 times 12-month forward earnings, while they remain stretched for broader markets, it said.

"We are overweight on auto, diversified financials, technology, discretionary, and EMS, which are our key preferred investment themes," it said.

MOFSL said in a swift reversal of events, the long-awaited Indo-US trade deal has been announced. This is a high-impact development and will have a multi-layered effect on the economy, prevailing market sentiments, and several sectors exporting to the US, which will benefit from improved competitiveness. 

"The Indo-US trade announcement comes on top of the Indo-EU FTA, which was inked last week, and together they will help assuage the growing concerns over India’s geopolitical seclusion. Further, the Union Budget was broadly in line with our modest expectations but shorn of high-impact immediate measures, signaling more continuity in the fiscal approach of the past five years," it said.