M&M, HDFC Bank, Laurus Labs among Motilal Oswal's top growth bets; Check TP

Large Cap

M&M - TP: ₹4,091

Mahindra & Mahindra delivered a robust FY25 performance, driven by leadership in SUVs, strong international growth, and effective cost management. SUV revenue market share expanded 210 bps Y-o-Y to 22.5 per cent, consolidating its top position. It reported Q1FY26 PAT of ₹34.4 billion, ahead of our estimate (₹30.7 billion), led by higher other income. Ebitda margin was in line. FES margin improved 140 bp Y-o-Y to 19.8 per cent, while auto margin remained steady at 8.9 per cent, impacted by lower margins in e-SUV contract manufacturing. Auto revenue market share rose 570 bp Y-o-Y to 27.3 per cent. M&M has sufficient rare earth inventory for two quarters and is exploring substitutes. Backed by rural recovery and strong UV/tractor launches, we expect ~15 per cent/14 per cent/18 per cent CAGR in revenue/Ebitda/PAT over FY25–27 and reiterate our Buy rating.

HDFC bank- TP: ₹1,175

HDFC Bank (HDFCB) reported a steady Q2FY26, with profit rising 11 per cent Y-o-Y to ₹186.4 billion, aided by healthy NII of ₹315.5 billion and strong treasury gains of ₹23.9 billion. Margins moderated slightly by 8bp Q-o-Q to 3.27 per cent, while provisions rose to INR35b, including INR15b of additional contingencies. Asset quality remained robust, with GNPA/NNPA improving to 1.24 per cent/0.42 per cent. Advances grew 10 per cent YoY, and deposits rose 12.1 per cent YoY, with CASA at 33.9 per cent. Management expects loan growth to outpace the system in FY27 and aims to lower the CD ratio below 90 per cent over time. We estimate revenue, Ebitda, and PAT to grow steadily over FY25–28, supported by strong credit momentum, improving margins, and provision buffers.

Mid Cap

Federal bank- TP: ₹260

Federal Bank’s proposed ~₹62 billion capital infusion from Blackstone enhances its balance sheet flexibility and supports margin-accretive growth. The bank’s focus on CASA-led liability improvement, high-yield loan segments, and disciplined credit costs positions it for structurally higher profitability and sustainable RoA expansion over FY26–28. With calibrated growth in better-yielding assets such as LAP, CV/CE, BB, and gold loans, coupled with stable asset quality, it is set to deliver improved NIMs and strong earnings momentum. We project 17 per cent loan & 29 per cent PAT CAGR during FY26–28, driving robust financial performance. We reiterate BUY with a revised TP of ₹260, valuing the bank at 1.5x FY27E BV, factoring in enhanced capital strength, steady earnings outlook and the sector-wide re-rating potential from rising strategic foreign ownership in high-quality private banks.

Coforge- TP: ₹2,400

Coforge reported 5.9 per cent Q-o-Q CC revenue and 18 per cent Q-o-Q  PAT growth, order intake of USD 514 million, and robust EBIT margin of 14 per cent. A 12-month executable order book of USD 1.6 billion provides near-term revenue visibility. Coforge’s consistent >USD 500 mn quarterly deal wins and Cigniti-led cross-selling synergies are fueling robust momentum. Management targets 20 large deals in FY26 (10 already closed in 1HFY26). Robust deal pipeline, high order visibility, and execution strength underpin management’s 23 per cent YoY organic growth outlook for FY26. Coforge stands out as our top pick and a likely growth leader in the IT universe.

Small cap

VIP Industries- TP: ₹530

VIP Industries, a leading player in India’s INR170b luggage market, has outpaced industry growth, delivering a revenue CAGR of 19 per cent over FY22–25. With a scalable, profitable digital engine complementing its offline leadership, VIP is well-placed to capture the shift in consumer buying behaviour and lock in long-term market share gains. We expect VIP to continue gaining share and deliver industry-beating growth by leveraging the integrated strategy of permiumization, digital scale and margin accretive supply chain, which underpins our confidence. We model a revenue/EBITDA CAGR of 10 per cent/73 per cent over FY25-28E, driven by healthy volume growth, sharp margin improvement, premiumization, channel optimisation, and manufacturing efficiencies and provide a buy rating on the stock.

Laurus Labs- TP: ₹1,110

Laurus Labs (LAURUS) delivered a strong quarter with a 6 per cent/18 per cent/38 per cent beat on revenue/Ebitda/PAT. Higher formulation sales (FDF; backed by robust ARV revenue), a superior mix in the CDMO segment, & improving operating leverage led to a strong 2QFY26 performance. Laurus announced ₹50b capex over the next 5 years and additionally secured 532 acres in Vizag for a $600 million investment to expand pharma manufacturing & R&D. This expansion aims to strengthen its position in high-value CDMO & formulations segments, emphasising scale & technology advancement. We raise our earnings estimate by 11 per cent/10 per cent/6 per cent for FY26–28, reflecting stronger ARV demand, steady CDMO momentum, and growing CMO-led generics opportunities. It is projected to deliver a 50 per cent earnings CAGR over FY25–28, driven by diversified growth across key business segments. 

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