Motilal Oswal Wealth Management has highlighted Federal Bank and TVS Motor Company as top picks following their strong Q1FY27 financial results. Federal Bank reported a 37% jump in net profit, while TVS Motor saw EBITDA beat estimates by 8%.
Detailed Coverage
Motilal Oswal Wealth Management Research has released its latest weekly stock recommendations, placing a focus on Federal Bank and TVS Motor Company. Both companies recently delivered their financial results for the first quarter of the 2027 fiscal year, showing performance metrics that caught the attention of the brokerage.
Federal Bank Financial Highlights
Federal Bank posted a net profit of ₹11.8 billion for the quarter ending June 30, 2026, representing a 37% increase compared to the same period last year. This result finished 3% ahead of market expectations. The bank’s Net Interest Income, which is the money earned from loans minus interest paid on deposits, grew 26% year-on-year. A key driver for this performance was the Net Interest Margin—a measure of profitability on loans—which expanded to 3.33% due to a reduced cost of funds.
On the asset quality front, the bank reported Gross Non-Performing Assets at 1.52%. With a Provision Coverage Ratio of 88.2%, the bank has set aside significant funds to cover potential bad loans. Looking ahead, management has indicated that loan growth is expected to remain in the mid-teen range, supported by steady demand in the SME, gold loan, and corporate sectors.
TVS Motor Company Growth Outlook
TVS Motor Company reported a profit of ₹10.2 billion for the first quarter of fiscal year 2027, a 32% rise over the previous year. The company's EBITDA, or operating profit, surpassed expectations by 8%. This gain was largely attributed to a focus on selling higher-value products, along with effective cost control and favorable currency movements.
The company is currently moving ahead with a significant capital spending plan of ₹35 billion, aimed at new product development and factory capacity expansion. By the end of FY27, TVS Motor aims to scale its annual two-wheeler production capacity to 8.3 million units and three-wheeler capacity to 420,000 units. The brokerage expects the company to maintain a steady revenue growth rate of 20% over the next two years, contingent on its ability to sustain market share and manage the costs associated with its expansion.
For investors, the key monitorables moving forward will be the actual execution of TVS Motor’s large capital spending plans and whether Federal Bank can maintain its improved margin trend as competition for deposits in the banking sector remains intense. While these brokerage updates reflect current performance, the long-term benefit for shareholders will ultimately depend on consistent demand in the two-wheeler sector and the bank’s ability to manage loan quality in changing economic conditions.