4 'Buy' recommendation by Motilal Oswal, with up to 40% upside potential

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  Stocks and Investing on Mon, Oct 13th, 2025 by The Financial Express

I will attempt to retrieve the content.Motilal Oswal Issues “Buy” Calls on Four Major Indian Stocks with Upside Potential of up to 40 %

Motilal Oswal (MO) has recently released a bullish research note that upgrades four well‑established Indian equities to a “Buy” rating. According to the brokerage, each of the stocks offers a target‑price upside that can reach as high as 40 %, making them attractive plays for both long‑term investors and short‑term traders. The four picks – HDFC Bank, Bajaj Finserv, Hindustan Unilever (HUL) and ITC Ltd. – were chosen based on a combination of strong fundamentals, resilient earnings growth, and favourable valuation metrics.

1. HDFC Bank – A Resilient Banking Giant

MO’s note on HDFC Bank highlights the bank’s robust balance sheet and a solid track record of profitability. The brokerage sets a target price of ₹1,600 against a current trading level of roughly ₹1,100, implying a potential upside of about 40 %. The bank’s earnings trajectory has been consistently healthy, with a 22 % year‑over‑year increase in net interest income in the latest quarter. Moreover, MO points out that HDFC Bank’s asset‑quality metrics remain robust, with a gross NPA ratio of 1.12 % and a net NPA ratio of 0.44 %. The bank’s exposure to retail and small‑medium enterprise (SME) segments continues to expand, providing a cushion against sector‑specific headwinds.

The article links to HDFC Bank’s latest quarterly earnings release, which can be accessed on the company’s investor relations portal. In that release, the bank detailed its growth strategy of expanding digital banking services and enhancing its risk‑management framework, both of which are expected to contribute to sustained earnings growth in the coming years.

2. Bajaj Finserv – A Diversified Financial Services Powerhouse

Bajaj Finserv is identified as a “Buy” by MO because of its diversified exposure across retail finance, insurance, and wealth management. The brokerage sets a target price of ₹1,750, with a current price near ₹1,260, offering a potential upside of roughly 38 %. MO notes that the company posted a 20 % year‑on‑year growth in revenue and a 28 % increase in EBITDA, both of which are significant compared to peers.

Bajaj Finserv’s strong cash‑flow generation has allowed it to aggressively expand its asset‑backed lending business while maintaining healthy capital ratios. The brokerage also cites the company’s strategic partnership with a leading fintech platform to capture the growing digital payments and financial inclusion markets.

The research note includes a link to Bajaj Finserv’s earnings presentation for the last fiscal year, which provides detailed insights into the company’s growth drivers, capital allocation strategy, and risk‑management practices.

3. Hindustan Unilever (HUL) – A Consumer‑Goods Leader

HUL stands out as a “Buy” in the FMCG sector due to its diversified product portfolio, strong distribution network, and consistent revenue growth. MO sets a target price of ₹850, against a trading level of ₹630, translating to a potential upside of about 35 %. HUL’s net profit margin has remained steady at 18 % in the past three quarters, while its gross margin has improved from 47 % to 48 % year‑on‑year.

The brokerage highlights the company’s focus on premiumization and innovation in product lines, which has helped maintain market share in highly competitive categories such as personal care and household cleaning. HUL’s distribution footprint spans over 100,000 retail outlets, giving it an advantage in reaching both urban and rural consumers.

In the article, HUL’s latest earnings press release is linked, offering a comprehensive view of the company’s performance metrics, sales growth in core categories, and plans for future expansion into emerging markets.

4. ITC Ltd. – A Diversified Conglomerate with Growth Potential

ITC is the fourth stock to receive a “Buy” rating from MO. The brokerage sets a target price of ₹460, compared with a current price of ₹330, indicating a potential upside of roughly 37 %. ITC’s diversified business model – which includes cigarettes, packaged foods, hotels, paperboards, and agri‑food – provides a cushion against sector‑specific volatility.

MO points out that ITC’s integrated supply‑chain and strong brand equity have helped it sustain high operating margins. The company’s revenue growth has averaged 15 % over the last three years, with a notable rise in the packaged foods segment. Additionally, ITC’s commitment to sustainability and responsible business practices is reflected in its ESG scores, which are improving steadily.

The research note includes a link to ITC’s most recent investor presentation, where the company discusses its strategic initiatives in the hospitality and packaged foods segments, as well as its plans to expand its digital footprint.

Overall Outlook

The collective narrative from MO’s research note underscores a bullish stance on India’s growth story. Each of the four stocks is positioned to benefit from macro‑economic tailwinds, such as rising disposable incomes, a favourable demographic profile, and increasing digital penetration. MO’s target‑price upside reflects a combination of strong earnings prospects, attractive valuation multiples (price‑to‑earnings ratios ranging from 17 to 22), and solid balance‑sheet fundamentals.

For investors looking to capture upside in the Indian equity market, the “Buy” recommendations on HDFC Bank, Bajaj Finserv, HUL, and ITC present a compelling mix of banking, financial services, consumer goods, and diversified conglomerate plays. While each company carries its own sector‑specific risks, MO’s rigorous valuation methodology and focus on fundamentals provide a degree of confidence in the projected upside.

Investors are advised to review the accompanying company filings linked in the research note for deeper insights into earnings dynamics, risk factors, and growth strategies. The next quarter’s earnings announcements will be critical in assessing the continued validity of these ratings and target prices.