Motilal Oswal has sharply increased its midcap bets in model portfolio
The weight of midcap stocks in the model portfolio of Motilal Oswal has increased significantly to 22% from 16% earlier. The Mumbai-based financial services firm said the rise was ‘owing to better earnings delivery and improving prospects’. However, 70% of the model portfolio is still made up of largecaps.
54 midcap stocks in the MOSL universe have extended their streak of the past two quarters and yet again delivered the highest annual growth at 12% compared to the brokerage’s estimate of 8%, the report dated August 4 added.
| Segment | Earnings upgrade/(downgrade) |
| Large-cap | -1.2% |
| Mid-cap | +2.8% |
| Small-cap | -4.2% |
Estimates from Motilal Oswal Financial Services
Technology, capital goods, PSU banks, healthcare, cement, metals, and utilities are the top five sectors where midcaps have outperformed largecap peers. The earnings of smallcap companies have lagged behind the analysts’ estimates.
| Stock | Earnings upgrade |
| Tata Consumer | +9.7% |
| Eicher Motors | +3.8% |
| IndusInd Bank | +2.6% |
| Wipro | +2% |
| ICICI Bank | +1.9% |
Makers of cement, chemicals, and metals saw their margins expand while profitability shrank in automobiles, telecom, consumer products, and real estate.
| Stock | Earnings downgrade |
| Eternal | -35.4% |
| Axis Bank | -8.7% |
| Power Grid | -5.3% |
| Sun Pharma | -5.1% |
| Nestle India | -3.9% |
The move signals a significant shift from the consensus view that mid-cap stocks were overvalued, a lot more than the large-cap peers. However, in the last five weeks, Indian equities have seen the longest losing streak in over two years.
BSE-listed companies collectively saw their market capitalisation shrink by ₹7.2 lakh crore, bringing the total down to ₹444.52 lakh crore by the end of trade on Friday (August 1).
“We believe that better earnings prospects and reasonable valuations (barring small-caps) should help the market to eke out gains. We believe that the influence of the US tariff wars on Indian markets will be limited,” the report dated July 4 added.
Earlier in July, Gautam Duggad, Head of Research, Institutional Equities at Motilal Oswal Financial Services, revealed to CNBC-TV18 that stocks like Radico Khaitan, Dixon Technologies India, Kaynes Technology India, UTI Asset Management Company, Macrotech Developers, and Niva Bupa Health Insurance Company were added to the model portfolio.
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First Published: Aug 4, 2025 9:42 AM IST
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