Hero MotoCorp, Delhivery, BEL among Motilal Oswal's top growth bets

Large Cap

Hero Moto Corp | Target: ₹6,168

Hero MotoCorp (HMCL) reported a strong start to the festive season with robust traction across dealerships and expects record festive sales. Nearly 95 per cent of its product portfolio benefits from the GST rate cuts, which along with festive demand, should aid volume recovery. We expect HMCL to end FY26 with about 1 per cent volume growth and post a much better 6 per cent volume growth in domestic business in FY27E. We also factor in a marginal 30bp margin improvement in both years. HMCL will also benefit from a gradual rural recovery, given strong brand equity in the economy segments. We project a CAGR of ~7 per cent/8 per cent/9 per cent in revenue/Ebitda/PAT over FY25-27. 

Bharat Electronics | Target: ₹490

 

The Indian Army has issued the much-awaited ₹30,000 crore tender to Bharat Electronics for the DRDO-developed QRSAM ‘Anant Shastra’ project (5–6 regiments), with BEL as lead integrator, lifting its order book past ₹1 trillion. BEL is well positioned under the TPCR 2025 roadmap to capture opportunities across Army, Navy, & Air Force, spanning EW systems, radars, communication networks, & drone-countering solutions, ensuring multi-year growth visibility. We expect BEL to benefit from orders for next-generation corvettes, electronic warfare, follow-on orders for electronics for 97 Tejas Mk1A, loitering munition programs, and export opportunities. We expect sales/Ebitda/PAT CAGR of 18 per cent/17 per cent/17 per cent over FY25–28.

Mid Cap

L & T Finance | Target: ₹260

 

L&T Finance (LTF) is poised for scalable, high-quality growth, driven by AI-led underwriting (Project Cyclops), robust digital partnerships (Amazon, CRED, PhonePe), and a shift toward secured lending, including gold loans. The swift integration of Paul Merchants’ gold loan business adds scale with 130 branches and 700+ staff. Improved asset quality—GNPA trending toward ~2.4 per cent by FY27—alongside rating upgrades (S&P BBB-/Positive, Fitch BBB-/Stable), supports lower borrowing costs and stronger risk-adjusted returns. With diversified growth across 2W, farm, and personal loans, we project a ~22 per cent CAGR in loans and ~25 per cent in PAT over FY25–27, driving RoA/RoE to 2.7 per cent/~14 per cent by FY27, ensuring resilient and sustainable profitability.

Vishal Megamart | Target: ₹170

 

Vishal Mega Mart (VMM) delivered a strong performance in Q1FY26, with 21 per cent Y-o-Y revenue growth, led by 21 net store additions (+15 per cent Y-o-Y) and resilient ~11.4 per cent SSSG, despite a shift in Eid to Q4FY25. We believe that VMM's unique business model, characterized by: 1) a wide presence in Tier 2+ cities (717 stores in 472 cities), 2) a well-diversified exposure to key consumption baskets; 3) a strong and affordable own brands portfolio (~76 per cent revenue share), and 4) one of the lowest cost structures, provides it with strong moats against both offline and online value retailers. We model a CAGR of 20 per cent/21 per cent/27 per cent in revenue/Ebitda/PAT over FY25-28E, driven by ~13 per cent CAGR in store additions and double-digit SSSG.

Small Cap

KEI Industries | Target: ₹4,700

 

KEI Industries (KEII) has embarked on a robust expansion trajectory with a ₹1,700 crore Sanand greenfield facility, adding ₹5,500-6,000 crore capacity by FY27. With further expansions at Salarpur & Kheda, it targets 19-20 per cent revenue CAGR over 5 years. KEII has increased its B2C revenue share from 29 per cent in FY20 to 52 per cent in FY25 through enhanced marketing and retail presence across India and overseas. Export sales grew 15 per cent Y-o-Y in FY25, with a focus on expanding high-value international mkts, aiming to raise export share from 13 per cent to 15-18 per cent in 3 years. Given KEII’s sustained growth momentum, softer-than-expected competitive pressures, attractive valuations, and the stock’s underperformance over the past year, we estimate a 18 per cent/21 per cent revenue/PAT CAGR over FY25-28E.

Delhivery | Target: ₹540

 

Delhivery, India’s largest 3PL express parcel logistics operator with >20 per cent market share, is well-placed to benefit from rising e-commerce penetration, GST-led consolidation, and B2B formalisation. The recent ₹1,400 crore acquisition of Ecom Express strengthens its rural network, enhances density, and is expected to deliver cost synergies, reinforcing its leadership. While express parcels contribute ~60 per cent of revenues, the high-margin PTL segment is scaling strongly; we estimate PTL revenues to grow at an 18 per cent CAGR over FY25–28, aided by SME adoption and value-added services. Supply Chain Services is another key lever, where we estimate a 22 per cent CAGR over FY25–28. On profitability, management expects PTL and express parcel Ebitda margins to reach 16–18 per cent by FY27, while we estimate overall Ebitda margins to expand from 4.2 per cent in FY25 to 7.3 per cent in FY28. We expect the company to report a CAGR of 14 per cent/38 per cent/53 per cent in Sales/Ebitda/APAT over FY25-28.

 

(Disclaimer: This article is by Motilal Oswal Financial Services Research desk. Views expressed are their own.)