Motilal Oswal Financial Services (MOFSL) has published its finance report for 13 May 2026 with a focus on essential updates on earnings, sectoral movements and the macroeconomic data. The report provides a detailed picture of the corporate and economic scenario in India, ranging from ONGC's royalty-driven profit boost to Dixon Technologies' impressive quarterly earnings release, recovery in PNB to the earnings miss by Dr Reddy. While the headline CPI remains steady at 3.5%, below the RBI's tolerance level, the report captures the various developments in the corporate and economic landscape, with risks on the horizon.

Key Highlights

• MOFSL report highlights inflation trends, corporate earnings momentum, and emerging risks shaping India’s markets.
• ONGC, Dixon, and Tata Power shine while Dr Reddy faces pressure amid weak earnings.

Macro Economy: India CPI Inches Up but Remains Comfortable

The headline CPI inflation ticked slightly higher to 3.5% YoY in April 2026 compared to 3.4% in March 2026, continuing to stay within the Reserve Bank of India target range of 4% inflation. The increase was largely due to the increase in food inflation which reached 4.2% YoY in April after 3.9% in March, with vegetables and edible oils showing significant price pressures, as well as protein-based items like meat and fish. The core inflation rate edged up 0.0% to 3.4% YoY for the third month running.

But the risks on the upside are starting to grow. Inflation in restaurants and accommodation services has also increased significantly, moving from 2.9% YoY in March to 4.2% in April, as the supply of LPG has begun to be affected by war, and commercial LPG prices have risen. The inflation discrepancy between rural and urban areas continues, with food prices increasing at a higher rate in rural areas (3.7%) than in urban areas (3.2%). Motilal Oswal is predicting inflation could cross 5% in FY27, as “heat wave conditions” and El Niño’s potential impact and high global prices for energy and edible oils could drive the numbers up.

ONGC: Royalty Rejig to Boost Profits

Weestimate -5%PAT increase for ONGC SA

Oil and Natural Gas Corporation (ONGC) will get massive advantage from the new scheme of upstream royalty. The new structure has resulted in a reduction of onshore crude oil royalty rates from 20% to 12.5% and the calculation basis has moved from a cum-royalty to an ex-royalty basis to increase the financial benefits. MOFSL estimates royalty savings of around Rs 27,378 million to ONGC in FY27 which translates to a net-of-tax savings of Rs 20,534 million. This works out to a standalone PAT growth of around 5% to Rs 402,601 million in FY27.

Likewise, Oil India (OINL) is poised to benefit even more as the company has a predominantly onshore production profile and is estimated to see a PAT improvement of ~13% for FY27. Key offshore projects like Daman Upside and KG-98/2 are commissioned, further enhancing ONGC's production visibility in the medium term. MOFSL has a Neutral rating on ONGC with an oil and gas production CAGR of 1.7% and 2.5% for the next four years, respectively, and has rated it on a Sum-of-the-Parts (SoTP) basis. The market price is Rs 295, which means that there is a 7% margin of downside from the price target.

Tata Power: Multiple Catalysts in FY27

Tata Power has posted a mixed performance in the fourth quarter of FY26. Revenue was Rs 149 billion (14% below estimates) and EBITDA was Rs 26 billion (13% below estimates). Positive regulatory deferral balance of Rs 10.6 billion, including recognition of regulatory assets under TPDDL under tariff true-up order, however, boosted Adjusted PAT to Rs 10.7 billion, which was much higher than estimates.

Tata Power has already booked approximately 2.5 GW of renewable energy capacity for FY26, and had indicated its plans to commission a similar 2.5 GW capacity in FY27 and FY28. Roof mounted solar installations grew by 100% year-on-year to 1.7 GW in FY26 and are expected to rise by 50-60% in FY27, while the management is looking to achieve 20% market share in the next three years. The manufacturing EBITDA of cells and modules rose by over 200% YoY to Rs. 8.6 billion. The PAT of Odisha discoms has been impressive with Rs 8.1 billion in FY26 and FY27 anticipated to be the best year of their lives. The capex guidance for FY27 is Rs 250 billion. MOFSL has a BUY rating with a price target of Rs 490, which suggests a bull of 17% from the current market price of Rs 418.

Punjab National Bank: Steady Operations, RoA Above 1%

Punjab National Bank (PNB) is steadily on the road of recovery. Gross NPA fell to 2.95% and Net NPA to 0.29% in 4QFY26, down from 3.95% and 0.40% respectively a year ago to improve the asset quality. The Provision Coverage Ratio has increased to 97.14%. Slippages stayed within limits at 0.94% and recoveries were 2.4 times slippages in FY26.

Global NIMs of Punjab National Bank for FY27 were guided in the range of 2.6–2.7%, which was driven by improving funding costs and a favourable shift in loan mix towards higher yielding RAMs, against 2.47% in 4QFY26. The bank is also expanding fee-based activities such as cash management services, credit cards and supply chain finance to enhance the efficiency of its operations. The cost-to-income ratio improved to 48.4% in 4QFY26 from 54.6% in FY25. Capital adequacy continues to be robust at 17.74% CAR, and there is an adequate buffer for provisioning to help transition to ECL. MOFSL currently has a BUY rating with target price of Rs 135 which is a 31% upside from the prevailing price of Rs 103.

Dr Reddy's Laboratories: Earnings Miss on Revlimide Erosion

Dr Reddy's Laboratories (DRRD) reported a disappointing 4QFY26, missing estimates by 4%, 32%, and 43% on sales, EBITDA, and PAT respectively. Sales in North America fell by a whopping 51% YoY to Rs 17.6 billion and this was due to a Shelf Stock Adjustment (SSA) of Rs 4.5 billion, which took place due to generic Lenalidomide (Revlimid) and increased competition in the segment. But sales at the SSA fell 38% year-over-year.

EBITDA margin also declined by 930 basis points YoY to 14.8% (vs. estimated 20.9%). In FY26, the revenue increased by 5% while EBITDA and PAT fell 12.7% and 12% respectively. MOFSL has lowered its FY27 and FY28 earnings estimates by 25 per cent and 8 per cent respectively, respectively accounting for lower profitability following the arrival of Revlimide competition, delayed launch in markets such as Brazil and Canada, pricing pressure in generics, and smaller operating leverage. The stock is being rated ‘neutral' with a revised target price of Rs 1,195, which suggests a potential fall of 6% from the current share price of Rs 1,270.

Dixon Technologies: Better-Than-Expected Performance

Dixon Technologies beat expectations with revenue broadly in line at Rs 105.1 billion and its EBITDA outperforming estimates by 11% at Rs 4.08 billion in 4QFY26. The mobile phones business, which accounts for the bulk of revenues, recorded an EBITDA margin of 3.6% exceeding estimates. Revenue rose 25.8% to Rs 488.7 billion for FY26, while the EBITDA and PAT increased by 23.8% and 20.3% respectively.

The future looks bright for management with a steady growth in the IT hardware segment, where Dixon Technology is anticipated to see revenues surpass Rs 40 billion in FY27, with laptop manufacturing, desktop manufacturing and SSD production contributing to this growth. Mobile and telecom export revenues should continue to grow. MOFSL expects the revenue cagr to be 33% in FY26-28, EBITDA to be 37% and PAT to be 36% for the same period. MOFSL has a BUY rating with a Rs 14600 target price (using the DCF valuation approach) suggesting an enormous 44% upside from its present market price of Rs 10138.

Mutual Fund Flows: Capital Goods in Limelight

April 2026 saw a sharp recovery in equity markets, with the Nifty bouncing back 7.5% MoM - its strongest monthly gain since January 2024. Total mutual fund industry AUM rose 11.1% MoM to Rs 81.9 trillion. Equity AUM touched an all-time high of Rs 39.1 trillion, though net inflows moderated to Rs 431 billion from Rs 485 billion in March. SIP contributions stood at Rs 311.2 billion, up 16.8% YoY.

Also Read: AMFI April 2026 Data Shows Shift Toward Mid, Small-Cap Funds

Sectoraly, Capital Goods rose to a 17-month high allocation weight of 7.8%, claiming the third spot in mutual fund allocations. Utilities climbed for the fifth consecutive month to a 19-month high of 3.9%. In contrast, Technology allocation fell to an eight-year low of 6.7%, while Private Banks slipped for the second consecutive month to 17.3%.