Motilal Oswal Wealth Management Research Desk has recommended Federal Bank and TVS Motors as the top stock picks for the week of July 27, 2026, according to a report by the Times of India. The recommendations are based on strong first-quarter earnings, improving margins, and positive growth outlooks for both companies.
Federal Bank: Strong Earnings and Margin Expansion
Federal Bank reported a robust 1QFY27 performance, with profit after tax (PAT) of INR 11.8 billion, up 37% year-on-year and 3% above Motilal Oswal's estimate. The beat was driven by net interest income (NII) growth of 26% YoY (5% above estimate), as the adjusted net interest margin (NIM) expanded 13 basis points quarter-on-quarter to 3.33% on the back of lower cost of funds. Provisions declined 21% YoY, further supporting earnings growth.
Advances grew 15% YoY (5% QoQ), led by the SME, gold loan, and corporate segments. Management guided for loan growth at the higher end of the mid-teen range. Asset quality continued to improve, with gross NPA at 1.52% and net NPA at 0.18%, while slippages stood at INR 4.1 billion. The provision coverage ratio (PCR) was 88.2%. Motilal Oswal has raised FY27/FY28 PAT estimates by 4.6%/1.8%, factoring in sustained NIM expansion, healthy loan growth, stable fee income, and contained credit costs of 50–55 bps. The research desk expects FY27E RoA/RoE of 1.25%/12.1%, supported by improving profitability and strong asset quality.
TVS Motors: Operational Beat and Capacity Expansion
TVS Motor's 1QFY27 EBITDA exceeded estimates by 8%, driven by improved product mix, favorable currency benefits, and disciplined cost control. PAT of INR 10.2 billion grew 32% YoY and was in line with estimates. Management expects the domestic two-wheeler industry to deliver double-digit growth in 2QFY27, with demand momentum similar to or slightly better than 1Q.
The company will continue investing approximately INR 35 billion in new products and capacity expansion, aiming to raise annual two-wheeler capacity to 8.3 million units and three-wheeler capacity to 420,000 units by FY27-end. Motilal Oswal has raised FY27/FY28 EPS estimates by 8%/5% and projects TVS to record a revenue/EBITDA/PAT CAGR of 20%/23%/24% over FY26-28, supported by continued market share gains, margin improvement, and a healthy product launch pipeline.
Market Round-Up: Broader Indices Decline
The BSE Sensex and Nifty50 finished the previous week in the red, marking their fifth straight session of losses. Over the past five trading sessions, the BSE Sensex declined by 2,091.68 points (2.67%), while the NSE Nifty lost 566.85 points (2.32%). Investors remained on edge amid elevated crude oil prices driven by geopolitical tensions in West Asia and fresh concerns over US trade tariffs. Market sentiment was also weighed down by continued foreign institutional selling and weakness in heavyweight HDFC Bank.
Analysts expect developments in the West Asia conflict, movements in crude oil prices, and the outcome of the US Federal Reserve's policy meeting to be the primary factors influencing the stock market this week.
| Metric | Federal Bank (1QFY27) | TVS Motors (1QFY27) |
|---|---|---|
| PAT (INR bn) | 11.8 (+37% YoY, 3% above est.) | 10.2 (+32% YoY) |
| NII growth / EBITDA beat | NII +26% YoY (5% above est.) | EBITDA 8% above est. |
| Guidance | Loan growth at mid-teen range | Double-digit 2-wheeler growth in 2QFY27 |
| Capex / Investment | – | ~INR 35 bn in new products & capacity |
| Capacity target | – | 8.3m 2W, 420k 3W by FY27-end |
(Disclaimer: Recommendations and views on the stock market or any other asset classes given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
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