Nandish Shah of Motilal Oswal says focus on big caps, mid -caps in Samvat 2082, list 14 shares to buy this Diwali

After a phase of consolidation and earnings in the continued Samvat year, the stage seems to be on a new rally -powered by normalized valuations, resilient domestic flow and the promise of earnings in FY27. Although global uncertainties remain, especially around trade developments with the US, the spotlight is firmly on domestic growth themes. Nandish Shah, AVP -PCG Research & Advisory, (Fundamental) Wealth Management, Motilal Oswal Financial Services, emphasizes the prospects for the next Samvat, top shares and how to approach the upcoming Mahurat trading session. Edited experts: The market seems to have found its mojo back. Do you see that the index reaches a new high in the run -up to Diwali? Indian stocks delivered a strong run in FY20–24, with good earnings compiled at ~ 20% and the index better than global counterparts. However, since late FY24, the narrative has shifted to time correction. Nifty earnings have grown in FY25 only ~ 5%, and FY26 is expected to stay in the middle of the single digit with a nifty EPS with £ 1,096. From FY27 we see a sharp setback with a Nifty EPS projected at £ 1,274, leading to a growth of ~ 16%, led by finance, cars, capital goods and consumption. Valuations have also normalized. Nifty’s one -year -old forward p/e now stands at ~ 20.6x, almost in line with the long period of 20.7x. On an rear base, the P/E cooled up to ~ 23.2x versus ~ 27x a year ago, allowing earnings prices to catch up. With the earnings under the FY26 and the recovery of the recovery in FY27, together with normalized valuations, we believe that the consolidation phase is the way for the next leg of the rally. By the end of CY25, markets should have found a clearer direction, supported by earnings acceleration, supportive macros and policy continuity. We remain cautiously optimistic for the markets. Any positive development on the US tariff front is a trigger for the markets in the short term. What should the investor’s strategy for the Muhurat trading session be this time? Investors should focus on the domestic theme, given the uncertainty on the global macro front. We have seen India’s pace for the restoration of consumption recovery, aided by GST2.0 rate, relieve inflation and improve rural sentiment. Consumer discretionary is likely to be better than consumer staples. We like the discretionary space of the consumer, as higher income levels and aspiration to consume will lead to higher growth for the sector. Themes such as travel and hospitality benefit from robust domestic tourism and sustained occupations, but the durability of this cycle is not fully priced. Mass market retail in Tier-2 and Tier-3-towns also expands as consumers move from disorganized to organized players. Other areas, including Alco Bankages and Premium Apparel, are supported by rising disposable income and premiumization trends. Although the recovery of staples is more visible, the market still appreciates the long -term expense of these discretionary segments, which may appear as the most important drivers of India’s consumption story in the future. Can you suggest some shares for investors that they can buy in Samvat 2082? We would like to stick to big names and mid -cap, given that little captain is still overvalued. Our portfolio positioning remains overweight over cars, industries, healthcare, BFSI and discretionary of consumers, while underweight on oil and gas, cement and metals. Autos are supported by GST cuts, lower interest rates and a rural question recovery, making them one of the strongest earnings drivers. Industrials and EMS benefit from robust order books, policy-led Capeex and manufacturing incentives, which keep growth momentum intact. Healthcare provides steady composition, with a strong demand in pharmaceutical products, diagnostics and hospitals. On the consumption side, discretionary themes such as travel, relaxation and fast trade are still expanded, supported by premium and formalization. In contrast, global cyclical products such as IT services and metal external wind winds have. Selectivity will remain crucial, but the local sectors are best positioned to deliver superior alpha in this cycle. Our preferred stock ideas are as follows: ICICI Bank, Max Financial, Shriram Finance, Bharti Artel, Eternal, Bharat Electronics, Interglobe Aviation, Nippon Life India AMC, One 97 Communications, Polycab India, Radico Khaitan, Lemon Tree Hotel, Visha Mega Mart and Vip Industries. US trading transaction is an important roadblock for the market. Do you see a decrease in the absence of a positive outcome? We do not expect a major decline for the markets in the event of no positive outcome on the US trading street. India has already started trade talks with countries and has begun signing bilateral agreement on the trade front. In addition, the share of total US imports on May 25 was about 3.1%, which was the ten largest partner for the US. The stock is relatively lower on the trading front. What will the Indian stock market drive in Samvat 2082? Restored in earnings growth, foreign institutional investors who transform buyers, and domestic flow left, the Indian stock markets will drive in Samvat 2082. With FY26 earnings likely to produce the middle of the single growth (~ £ 1,096 EPs), the valuations have now normalized, with one year forward p/e at ~ 20.6x, near the average average. From Q3FY26, the recovery of earnings must get traction, with the FY27 EPS forecast on £ 1,274 (~ 16% growth). With earnings at the bottom and valuations that become reasonable, we expect FII flow to relive. FII streams have been weak in recent years when earnings delayed, valuations increased and the world sentiment remained careful. Since the peak of the Sep’24 market, FIIs have sold about $ 27 billion, including USD $ 15.3 billion in CY25 YTD, even though DIIS has applied a $ 67 billion record in $ 9MCY25, which has picked up markets. Historically, flow earnings and valuations have detected: in CY20–21, when the Nifty earnings rose, FIIs invested 21-23 billion, while muted earnings dampened in later years. Over the past year, Dii has administered a record ~ ​​USD89B in Indian shares, which effectively neutralized the FII sales of ~ USD29B against the 240 to 240 to the 2440. This resilience is supported by a strong monthly SIP inflow of ~ USD3B, which has continuously strengthened the DII participation. The spacious domestic liquidity also absorbs all primary market release during the year. Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or brokerage firms, not coin. We advise investors to consult with certified experts before making investment decisions, as market conditions can change quickly and conditions can vary.