Motilal Oswal Adjusts Portfolio: Increases SBI Weight, Trims HDFC Bank Exposure

Original: Motilal Oswal trims HDFC Bank, increases weight in SBI amid latest reshuffle. Here’s the full list

The Economic Times•Apr 7, 20263 min

In a Nutshell

Motilal Oswal has reshuffled its model portfolio, increasing its weight in State Bank of India (SBI) by 100 basis points while reducing its exposure to HDFC Bank. The brokerage maintains an optimistic outlook on SBI due to strong loan growth and healthy asset quality, while also adding several new companies to its portfolio.

Key Points

01Motilal Oswal raised SBI's weight by 100 basis points, citing strong loan growth prospects.
02HDFC Bank's exposure was trimmed to fund this increase.
03New additions to the portfolio include ICICI Prudential AMC and Jio Financial Services.
04The brokerage remains overweight on defence stocks, adding Hindustan Aeronautics.
05In healthcare, Mankind Pharma was included, indicating signs of recovery.

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Full Summary

Motilal Oswal, a domestic brokerage firm, has recently reshuffled its model portfolio, raising its allocation to State Bank of India (SBI) by 100 basis points while trimming its exposure to HDFC Bank. SBI remains a top pick due to its strong loan growth prospects, robust liability franchise, and healthy asset quality, with credit costs below 50 basis points. The brokerage has also introduced new companies including ICICI Prudential Asset Management Company (AMC) and Jio Financial Services, highlighting their growth potential. In the defence sector, Hindustan Aeronautics was added, supported by a strong order book worth ₹2.54 trillion. Additionally, the portfolio sees new entries in healthcare with Mankind Pharma, indicating recovery signs in its domestic formulations business. Overall, Motilal Oswal is maintaining an overweight stance on several sectors, including new-age platforms and defence.

Key Figures

100 basis points

Increase in weight for SBI

50 basis points

Credit costs for SBI

₹2.54 trillion

Order book for Hindustan Aeronautics

43%

Expected EBITDA CAGR for Waaree Energies

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Why It Matters

The increased allocation to SBI may lead to enhanced financial stability and growth opportunities for investors, while new entries in the portfolio could provide diverse investment options for those looking at emerging sectors.

Who is affected

Investors and stakeholders in the banking and financial sectors.

What to know

Investors should consider reviewing their portfolios in light of these changes and assess opportunities in the newly added companies.

FAQ

The increase in SBI's weight is due to strong loan growth prospects, a robust liability franchise, and healthy asset quality.

New additions include ICICI Prudential AMC, Jio Financial Services, AU Small Finance Bank, and Mankind Pharma.

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