Indian equities received fresh investment cues on May 25, 2026, as Motilal Oswal Wealth Management Research Desk identified two high-conviction stock picks for the week ahead: Samvardhana Motherson International and Zydus Wellness, both offering strong upside potential. The recommendations come amid a volatile macro backdrop, with oil markets reacting to geopolitical developments.
Motilal Oswal assigned a target price of ₹600 to Zydus Wellness, implying a 22% upside from its closing market price (CMP) of ₹490. The company’s diversified wellness portfolio spans seasonal healthcare, nutrition, skincare, and healthy snacking, with growth increasingly anchored in brands like RiteBite Max Protein and Comfort Click. Analysts highlighted innovation-led premiumization, expanding digital sales channels, and improving international scale as key margin drivers. While 4QFY26 performance was broadly in line, domestic revenue growth was impacted by delayed summer onset and unseasonal rainfall, which affected sales of Glucon-D and Nycil. Despite this, consolidated revenue surged 63% year-on-year, driven by strategic acquisitions and strong performance from Everyuth and international operations. Over FY26–FY28, Motilal Oswal projects consolidated revenue and EBITDA CAGRs of ~26% and ~37%, respectively, supported by scaling up of Comfort Click, profitability improvements in RiteBite, and normalization in seasonal demand. EBITDA margins are expected to trend toward the company’s long-term target of 17–18%, while earnings for FY27 and FY28 are expected to benefit from operating leverage and product innovation.
Meanwhile, Samvardhana Motherson International delivered a standout 4QFY26 performance, with adjusted profit after tax (PAT) rising 55% year-on-year and EBITDA margin expanding by 200 basis points to 11%. This performance was driven by robust execution and margin improvement across key segments including wiring harness, integrated assemblies, and emerging businesses. The company’s growth visibility remains robust, supported by a $96 billion booked business pipeline, multiple greenfield projects across global markets, planned acquisitions, and rapid scaling in high-growth verticals such as consumer electronics and aerospace. Management has raised its five-year revenue aspiration to $108 billion, underpinned by a strong order backlog, EV transition, and premiumization trends. Better-than-expected 4Q performance in a challenging global macro environment has led Motilal Oswal to revise FY27 and FY28 earnings estimates upward by 8%.
On the macro front, global oil markets witnessed a sharp correction on May 25, 2026, as hopes of a U.S.-Iran peace deal gained traction, potentially easing tensions in the Strait of Hormuz—a critical chokepoint handling nearly one-fifth of global oil and LNG shipments. Brent crude futures fell $4.71 (4.55%) to $98.83 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped $4.57 (4.73%) to $92.03 per barrel, marking the lowest levels since May 7. The recent pullback follows a more than 8% weekly decline in U.S. crude and over 5% drop in Brent, after U.S. President Donald Trump announced the cancellation of imminent airstrikes on Iran to allow diplomatic progress. Trump stated on social media that negotiations were proceeding “in an orderly and constructive manner” and cautioned against rushing into a deal. He emphasized that “we are not in a hurry to finalize an agreement when time is on our side.”
However, significant disagreements persist, particularly over restrictions on the Strait of Hormuz, which Iran has enforced since early March in response to U.S. and Israeli strikes that killed Iran’s Supreme Leader Ayatollah Ali Khamenei and other senior leaders. The blockade has effectively disrupted oil flows through the strait, which previously handled up to 20% of global oil supply. Even if a deal is reached, analysts warn that full normalization of shipments could take months, with potential impacts extending into 2027. Saudi Aramco CEO Amin Nasser previously cautioned that disruptions in Hormuz could delay stability in global oil markets until 2027, with nearly 100 million barrels of oil supply per week potentially affected.
Global brokerage Morgan Stanley described the oil market as being “in a race against time,” noting that factors preventing further price spikes may weaken if the Strait of Hormuz remains closed into June. While higher U.S. crude exports and softer demand from China have so far mitigated supply shock risks, an extended closure could tighten global supplies beyond sustainable levels. The brokerage emphasized that the balance remains fragile and sensitive to geopolitical developments.
Amid these market dynamics, investors are advised to consider the dual impact of domestic stock recommendations and global oil volatility. Motilal Oswal’s bullish stance on Samvardhana Motherson and Zydus Wellness reflects confidence in execution, margin expansion, and long-term growth visibility, even as macro risks persist.
