For CY25, the heartbeat index is up 11% on a YTD basis.
The 50-stock index today fell 0.55% to end at 26,032.20.
Factors favouring bulls
1) Earnings: Its bottom-up aggregate of analyst estimates suggests 15% YoY growth in MOFSL earnings in 2HFY26 after 11% YoY growth in 1HFY26.2) Valuations remain reasonable, with Nifty trading at 21.5x, marginally above its LPA of 20.8x, and any evidence of earnings growth pickup should help valuations expand.
3) Better liquidity and stimulative fiscal and monetary measures.
4) Robust DII inflows: Inflows from domestic institutional investors remained strong. In November 2025, they came in at $8.7 billion, taking total CY25 flows to a record $81.3 billion, up from $62.9 billion in CY24, MOFSL noted.
Triggers for bears
1) MSCI India vs rest: During the last 12 months, the MSCI India Index (+1%) underperformed the MSCI EM Index (+27%) in USD terms.
Over the last 10 years, the MSCI India Index notably outperformed the MSCI EM Index by 68%.
2) Valuations: In P/E terms, the MSCI India Index is trading at a 51% premium to the MSCI EM Index, though below its historical average premium of 78%. Two-thirds of the sectors trade at a premium to their historical averages.
3) FII trends: In November 2025, FIIs recorded muted flows of $0.04 billion, after an inflow of $1.3bn recorded in October 2025. FII equity outflows stood at $16.2 billion in CY25YTD versus outflows of $0.8 billion in CY24.
Sectors/stocks to watch
In its model portfolio, MOFSL has raised Indian IT services to mild overweight by trimming its position in consumer discretionary and healthcare names. The preferred sectors are diversified financials, IT services, automobiles, telecom, and capital goods, whereas the key underweights are energy, metals, and utilities.
The top ideas include 14 large caps and viz. Bharti Airtel, ICICI Bank, SBI, L&T, M&M, Infosys, Titan Company, Bharat Electronics, Interglobe Aviation, Tata Steel, TVS Motor, Tech Mahindra, Max Healthcare, and Indian Hotels.
In the midcap–smallcap basket, the picks include Swiggy, Dixon Technologies, Suzlon Energy, Jindal Stainless, Coforge, Angel One, Radico Khaitan, Kaynes Technology, Delhivery, V-Mart Retail and VIP Industries.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
# Nifty Set for Fresh Uptrend, Says Motilal Oswal: Here Are 4 Catalysts and 25 Stocks to Buy
As we wrap up a rollercoaster year in the Indian stock markets, the Nifty 50 index has shown resilience, closing November 2025 with a modest 1.9% gain and clocking an impressive 11% year-to-date return. But according to brokerage firm Motilal Oswal Financial Services Ltd (MOFSL), the benchmark isn't just coasting—it's gearing up for a **fresh uptrend**. After touching an all-time high of 26,325.80, the Nifty is poised for the next leg higher, fueled by robust earnings, supportive policies, and steady domestic investments.
In their latest model portfolio update, MOFSL highlights a bullish setup while tweaking sector allocations—boosting Indian IT services to a mild overweight by dialing back on consumer discretionary and healthcare. Preferred plays? Diversified financials, IT, autos, telecom, and capital goods. On the flip side, they're underweight on energy, metals, and utilities.
If you're an investor eyeing opportunities in this environment, let's break it down: the **four key catalysts** driving this optimism and a curated list of **25 stocks** MOFSL recommends buying. Remember, this isn't financial advice—always do your due diligence and consult a professional.
## The 4 Catalysts Powering Nifty's Next Rally
MOFSL's outlook isn't pulled from thin air. It's backed by a mix of improving fundamentals and market dynamics. Here's what they see as the big drivers:
1. **Earnings Acceleration**: After a solid 11% year-over-year growth in the first half of FY26, MOFSL forecasts a sharper 15% jump in the second half. This earnings pickup across sectors could provide the fuel for sustained momentum.
2. **Reasonable Valuations**: The Nifty trades at 21.5x price-to-earnings (P/E), just a tad above the long-period average of 20.8x. With earnings on the rise, there's room for multiple expansion without stretching into bubble territory.
3. **Liquidity Boost**: Supportive fiscal and monetary policies are expected to keep the liquidity taps open, easing borrowing costs and encouraging spending and investment.
4. **Record DII Inflows**: Domestic institutional investors (DIIs) have been the unsung heroes, pouring in a whopping $81.3 billion in CY25—up from $62.9 billion last year. November alone saw $8.7 billion, offsetting patchy foreign flows.
Of course, it's not all smooth sailing. Risks like muted foreign institutional investor (FII) inflows ($0.04 billion in November, with $16.2 billion outflows YTD) and the Nifty's 51% P/E premium to emerging markets could cap gains. But for now, the bulls seem to have the edge.
## 25 Stocks to Watch: MOFSL's Top Picks
MOFSL's model portfolio features a balanced mix of large-caps for stability and mid/small-caps for growth potential. No specific target prices were detailed in their note, but these selections align with their sector overweight calls and earnings optimism. Here's the breakdown:
### Large Caps (14 Stocks)
These blue-chips offer a defensive yet growth-oriented anchor:
| Stock Name | Sector/Theme |
|---------------------|-----------------------|
| Bharti Airtel | Telecom |
| ICICI Bank | Diversified Financials |
| SBI | Diversified Financials |
| L&T | Capital Goods |
| M&M | Automobiles |
| Infosys | IT Services |
| Titan Company | Consumer Discretionary |
| Bharat Electronics | Capital Goods |
| Interglobe Aviation| Aviation/Travel |
| Tata Steel | Metals |
| TVS Motor | Automobiles |
| Tech Mahindra | IT Services |
| Max Healthcare | Healthcare |
| Indian Hotels | Hospitality |
### Midcap-Smallcap (11 Stocks)
For those chasing alpha, these picks tap into high-growth niches like tech, renewables, and retail:
| Stock Name | Sector/Theme |
|---------------------|-----------------------|
| Swiggy | Consumer Tech |
| Dixon Technologies | Electronics Manufacturing |
| Suzlon Energy | Renewables |
| Jindal Stainless | Metals |
| Coforge | IT Services |
| Angel One | Financial Services |
| Radico Khaitan | Beverages |
| Kaynes Technology | Electronics |
| Delhivery | Logistics |
| V-Mart Retail | Retail |
| VIP Industries | Consumer Goods |
This portfolio reflects MOFSL's strategic tilt toward sectors with tailwinds from digitalization, infrastructure spending, and consumer recovery. Keep an eye on how these play out amid global cues like US Fed moves or geopolitical tensions.
## Wrapping Up: Time to Ride the Wave?
With the Nifty eyeing new highs, Motilal Oswal's call feels like a timely nudge for selective bulls. The combo of earnings firepower, valuation comfort, policy support, and DII firepower could indeed spark that fresh uptrend. But markets love surprises—FII sentiment and external shocks remain wild cards.
If you're building a portfolio, consider blending these ideas with your risk appetite. What's your take? Are you bullish on Nifty for December, or waiting for a dip? Drop a comment below—I'd love to hear your thoughts. Happy investing, and here's to a prosperous end to 2025!
*Disclaimer: This post is for informational purposes only and not investment advice. Past performance isn't indicative of future results. Always consult a certified advisor.*
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