Domestic Investors Take the Lead: Motilal Oswal Recommends Buying Opportunities

Domestic institutional investors now hold more of Indian equities than foreign funds for the first time in recent memory. Motilal Oswal notes that the FII-DII ratio in the Nifty-500 has contracted to 0.8x. Against this backdrop, the brokerage has put out detailed ‘Buy’ recommendations on companies spanning financials, cement, infrastructure and defence. The DII ownership in Nifty-500 companies has now increased to an all-time high of 20.9% in March 2026, even as foreign institutional investors retreat to a multi-year low of 17.1%. The central finding from Motilal Oswal’s latest ownership analysis is that domestic institutional investor inflows have not just held steady through one of the most turbulent years in recent memory but have actually accelerated. In the first quarter of calendar year 2026, domestic institutional investors pumped about Rs 2.72 lakh crore into Indian equities, riding an unwavering Systematic Investment Plan run rate, even as foreign institutional investors sold about Rs 1.58 lakh crore in the same period, with March 2026 alone accounting for about Rs 1.42 lakh crore of that exodus after the Iran-Israel conflict reignited. “Domestic investors have continued to repose their unstinted faith in Indian equities, demonstrating strong resilience and an impressive capacity to absorb volatility over the past few years,” Motilal Oswal writes in its ownership analysis. Sectorally, domestic institutional investors raised their holdings in 21 of 24 sectors year-on-year, with the biggest increases visible in private banks, technology, telecom, real estate and healthcare. Foreign institutional investors cut positions in 17 of 24 sectors over the same period, with their allocation in technology stocks falling to an all-time low of 7.3% in March 2026, down 280 basis points year-on-year. “Once the war dust settles, there is a high likelihood of a better FII flow environment, and even an abatement in outflows will be taken positively by the market, while a full-blown positive flow can lead to sharper rallies,” the brokerage adds in the same report. A look now at the key Buy recommendations by Motilal Oswal Motilal Oswal has a target price of Rs 1,900 on Cholamandalam Investment & Finance , implying a 16% upside, premised on 3.6 times the March 2028 estimated book value per share. The non-banking finance company posted fourth quarter financial year 2026 profit after tax of Rs 1,640 crore, growing roughly 30% year-on-year and beating Motilal Oswal’s estimate by 8%. Business assets under management grew 21% year-on-year to Rs 2,24,000 crore at the end of the quarter, with newer business segments now forming 13% of the overall mix. Net interest margin on a calculated basis rose 10 basis points quarter-on-quarter to 7.1%, while gross Stage 3 assets improved 30 basis points quarter-on-quarter to 3.05%, pointing to a meaningful recovery in credit quality across the book. “Management highlighted that early delinquency indicators and non-starters have improved significantly in April 2026 compared to April 2025 and April 2024, indicating better credit quality at the origination level,” Motilal Oswal states in its results note. The company has guided credit costs lower to approximately 1.5% in financial year 2027 from a pre-overlay figure of 1.6% in financial year 2026. Motilal Oswal retains a ‘Buy’ on Ambuja Cements with a revised target price of Rs 530, implying 19% upside, valued at 16 times financial year 2028 estimated enterprise value to earnings before interest, taxes, depreciation and amortisation, trimmed from an earlier target of Rs 560. The fourth quarter financial year 2026 was a stumble by any measure. Consolidated earnings before interest, taxes, depreciation and amortisation fell 22% year-on-year to Rs 1,460 crore, missing Motilal Oswal’s estimates by 17%, dragged down by higher fuel, freight and packing costs alongside operating inefficiencies in recently acquired assets. Earnings before interest, taxes, depreciation and amortisation per tonne declined 28% year-on-year to Rs 736 against an estimate of Rs 884, while capacity targets of 140 to 155 million tonnes per annum have been deferred by one to two years, now pointing towards financial year 2030. “Cost escalation in the fourth quarter of financial year 2026 was a negative surprise, driven by higher fuel, freight, packing costs, and operating inefficiencies in acquired assets,” Motilal Oswal notes, though it adds that management believes the first quarter of financial year 2027 marks the peak of cost per tonne. The brokerage has cut its earnings before interest, taxes, depreciation and amortisation estimates by 13% for financial year 2027 and 3% for financial year 2028, but maintains its long-term conviction on internal cost efficiency measures and the benefits of operating on a unified cement platform. Motilal Oswal has a sum-of-the-parts based target price of Rs 430 on Aditya Birla Capital, implying 24% upside, based on March 2028 estimates. The diversified financial conglomerate posted fourth quarter financial year 2026 consolidated profit after tax of Rs 1,120 crore, up 30% year-on-year excluding one-off items, with the full financial year 2026 figure rising 21% to Rs 3,800 crore. The combined non-banking finance company and housing finance company lending book grew 32% year-on-year to Rs 2,08,000 crore, and the housing finance company arm emerged as the standout performer with assets under management surging 53% year-on-year to Rs 47,500 crore. The company has guided for assets under management of Rs 1,00,000 crore across its housing finance business over the next 24 to 30 months. “Management highlighted that credit costs are at their lowest levels in the past few years and expects them to remain broadly stable at approximately 1.1% to 1.2% in financial year 2027,” Motilal Oswal writes in its fourth quarter update. Total assets under management across the asset management company, life insurance and health insurance businesses grew 16% year-on-year to Rs 5,91,000 crore. The brokerage expects a consolidated profit after tax compound annual growth rate of approximately 30% over financial year 2026 to 2028, with return on equity reaching approximately 16% by financial year 2028. Motilal Oswal values APL Apollo Tubes at 35 times financial year 2028 estimated earnings per share, arriving at a target price of Rs 2,250 which implies 20% upside. The structural steel tubes maker posted fourth quarter financial year 2026 earnings before interest, taxes, depreciation and amortisation growth of 24% year-on-year, with earnings before interest, taxes, depreciation and amortisation per metric tonne rising 14% year-on-year to Rs 5,525. Volume grew 9% year-on-year, and market share expanded to 60% to 65% from approximately 55% a year earlier. For the full financial year 2026, revenue, earnings before interest, taxes, depreciation and amortisation and profit after tax grew 12%, 50% and 59% year-on-year respectively, while cash from operations improved sharply to Rs 2,100 crore from Rs 1,200 crore in March 2025. “APL Apollo Tubes reported a healthy operating performance in the fourth quarter of financial year 2026 despite geopolitical headwinds, with strong performance in January and February partially offset by a subdued performance in March,” Motilal Oswal notes in its results update. Management trimmed financial year 2027 volume growth guidance to 15% to 20% from a prior 20% given geopolitical uncertainty, while raising earnings before interest, taxes, depreciation and amortisation per metric tonne guidance from Rs 5,000 to Rs 5,500, signalling confidence in the company’s pricing power even as volume visibility stays tempered. The data from Motilal Oswal’s ownership analysis tells a story that goes well beyond individual stock calls. Domestic institutional investors now own 22% of large-cap Nifty-500 stocks, a figure that stood at just 13.3% in March 2016, while foreign institutional investors have slipped to 19.3% of large-cap holdings over the same period. The cushion that domestic money provides against bouts of foreign selling is thicker than it has ever been, and that structural depth is what gives Motilal Oswal the confidence to maintain its preference for large and mid-cap stocks in its model portfolio through a period of sustained geopolitical and commodity price volatility.