Nifty Poised for Fresh Rally, Says Motilal Oswal: 4 Key Catalysts Identified & 25 Stocks to Watch

Despite a mild three-session consolidation, the Nifty 50 continues to show strong momentum after hitting a record high of 26,325.80. Brokerage firm Motilal Oswal Financial Services (MOFSL) believes the index is setting up for a new upward leg, supported by solid earnings growth, stronger liquidity, and favourable policy conditions.

The Nifty ended November with a 1.9% gain, marking its third straight monthly rise, and is already up 11% in 2025 on a YTD basis.
On Tuesday, the index closed at 26,032.20, down 0.55%.

⭐ 4 Factors Supporting a Bullish Uptrend

1️⃣ Strong Earnings Outlook

• MOFSL estimates 11% YoY earnings growth in 1HFY26
• Followed by 15% YoY growth in 2HFY26, driven by bottom-up analyst forecasts

2️⃣ Attractive Valuations

• Nifty trades at 21.5x, just above its long-period average of 20.8x
• Any acceleration in earnings growth could further expand valuations

3️⃣ Liquidity Boost + Supportive Policies

• Better domestic liquidity
• Fiscal and monetary measures remain growth-friendly

4️⃣ Robust DII (Domestic Institutional Investor) Inflows

• November 2025 inflows: $8.7 billion
• CY25 total inflows: $81.3 billion
• Significantly higher than $62.9 billion in CY24

⚠️ Risks & Bearish Triggers

1️⃣ MSCI India Underperformance

• MSCI India Index: +1% in last 12 months
• MSCI EM Index: +27%
• Historically, India outperformed EM by 68% over 10 years

2️⃣ Premium Valuations vs Emerging Markets

• MSCI India trades at a 51% P/E premium over EM
• Lower than historical average premium (78%) but still elevated
• Two-thirds of sectors trade above their average valuations

3️⃣ Weak FII Trends

• FIIs recorded muted flows: $0.04 billion in Nov 2025
• FII equity outflows YTD: $16.2 billion
• Markets await clarity in India–US relations

📈 Sectors & Stocks to Watch (As per Motilal Oswal)

Preferred Sectors

• Diversified financials
• IT services
• Automobiles
• Telecom
• Capital goods

Underweight Sectors

• Energy
• Metals
• Utilities

⭐ Top 14 Large-Cap Picks

1. Bharti Airtel
2. ICICI Bank
3. SBI
4. L&T
5. M&M
6. Infosys
7. Titan Company
8. Bharat Electronics (BEL)
9. InterGlobe Aviation (IndiGo)
10. Tata Steel
11. TVS Motor
12. Tech Mahindra
13. Max Healthcare
14. Indian Hotels

⭐ Top Midcap–Smallcap Picks

1. Swiggy
2. Dixon Technologies
3. Suzlon Energy
4. Jindal Stainless
5. Coforge
6. Angel One
7. Radico Khaitan
8. Kaynes Technology
9. Delhivery
10. V-Mart Retail
11. VIP Industries