December-quarter earnings were quite in-line with Motilal Oswal’s expectations. Corporate banks, IT and consumer sectors delivered a healthy performance unlike automobile and cement sectors, which continued to disappoint sequentially. According to Motilal Oswal, corporate banks, consumer, IT and auto (4W) sectors look attractive. And, correction in mid-cap space offers a good opportunity for bottom-up idea selection across sectors.

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Here are the top 10 stocks under the radar of Motilal Oswal after reviewing Q3 FY19 earnings:

1)

Axis Bank: The bank under the leadership of a new CEO reported highest profit in the past 11 quarters at Rs 16.81bn, led by steady NII growth, controlled opex and healthy recoveries/treasury gains.

2) ICICI Bank: Margin improved 7 bps QoQ to 3.4%, mainly led by a healthy recovery in one of the large NPL accounts. Fresh slippages moderated sharply to Rs 20.9 bn.

3) SBI: NII growth was robust driven by strong loan growth. Gross slippages moderated to Rs 65.4 bn as corporate slippages declined. Provisions declined 68% YoY, mainly due to write-backs on the treasury portfolio.

4) LIC Housing Finance: Despite the tight liquidity environment, the loan book grew 16% YoY to Rs 1.81 tn. Spreads remained sequentially stable due to 15 bps increase in cost of funds was offset by higher home loan yields.

5) Titan: Titan continued reporting strong top-line growth in jewelry, with 27% SSSG and 20% volume growth. Management commentary indicated that the outlook for jewelry remains buoyant.

6) Maruti Suzuki: Factors such as higher discounts, forex, negative operating leverage and one-time staff cost led to multi-quarter-low EBITDA margin of 9.8%. However, with the partial easing of these factors, margins are likely to recover in Q4FY19 to 12.4%.

7) Mahindra & Mahindra: EBITDA remained under pressure led by raw material (RM) inflation impact and higher discounts. M&M has taken a price increase and has managed to pass on partial RM inflation impact in M9FY19.

8) Tech Mahindra: Constant Currency revenue grew 4.3% QoQ in the quarter. Deal wins were a positive surprise for the second consecutive quarter.

9) Coal India: The company delivered a strong quarter driven by the benefit of price hike and lower cost. Coal has managed to strictly control cost of production adding on the benefit of higher realization.

10) Bharti Airtel: The quarter was characterized by a deceleration in the sequential decline in India wireless EBITDA and continued robust growth in Africa EBITDA. Notably, the strategy of minimum recharge plans appears to be working well. Management indicated that Dec-18 exit revenues were even better.

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First Published:Feb 19, 2019 2:02 PM IST