Stocks to buy for the long term: Despite strong volatility caused by heightened uncertainty surrounding the trade war, Q4 earnings, and geopolitical tensions, the Indian stock market benchmark Nifty 50 extended its gains for the second consecutive month in April.
Even as the volatility index, India VIX, surged 43.3 per cent last month, the Nifty 50 rose 3.5 per cent after a 6.30 per cent rise in March. Year-to-date, the benchmark index has risen 3 per cent.
Pankaj Pandey, Head of Research at ICICI Securities, remains positive about the Indian stock market over the medium to long term, citing the country’s healthy growth outlook and easing trade war jitters.
Speaking to Mint’s Nishant Kumar, Pandey suggested five stocks for the long term, with expected upside potential ranging from 14 per cent to 43 per cent. Take a look:
Stock picks for the long term
Axis Bank | Previous close: ₹1,182.20 | Target price: ₹1,350 | Upside potential: 14%
After muted fiscal, Axis Bank’s credit momentum is poised to reaccelerate amid a comfortable CD (credit-deposit) ratio and improving systemic liquidity.
Strategic emphasis on improving deposit granularity and tightly matched asset-liability duration is expected to keep margin compression at 10-12 bps, thereby aiding margins.
“Asset quality is expected to witness a gradual revival with the stabilising of stress in credit cards, though personal loans might take some more quarters. Overall, sustained and consistent execution on the growth and asset quality front is seen to aid valuation,” said Pandey.
“Discount compared to private peers warrants a re-rating. Thus, we recommend a buy rating with a target price of ₹1,350, valuing the stock at nearly 1.6 times FY27E BV (book-value) and ₹100 for subsidiaries,” Pandey said.
Tata Consumer Products | Previous close: ₹1,156.80 | Target price: ₹1,350 | Upside potential: 17%
Tata Consumer Products has transformed itself from a commodities tea/coffee business to a high-margin food and beverage business through innovations, entering into categories, and acquiring brands in fast-growing categories.
The company’s strategic focus will help it achieve double-digit earnings growth ahead of large FMCG peers.
Mahindra & Mahindra (M&M) | Previous close: ₹2,926.20 | Target price: ₹3,700 | Upside potential: 26%
M&M is a conglomerate with presence in auto, IT, logistics and real estate, among others.
M&M has sustained its revenue market leadership in the SUV category, bolstered by successful launches like Thar Roxx, XUV 3xo, XUV 700, and Scorpio-N.
It has also received encouraging responses to the recently launched Electric Vehicles BE 6 and XEV 9e. On the tractor front, it stands to benefit from healthy water reservoir levels and a positive monsoon 2025 outlook.
“We like M&M amidst its consistent positive surprise on new product launches, ability to grow ahead of the market and persistent focus on capital efficiency (RoE >=18%),” said Pandey.
Transformers And Rectifiers | Previous close: ₹495.65 | Target price: ₹640 | Upside potential: 29%
Transformers and Rectifiers is a leading manufacturer of power transformers and rectifiers.
Its revenue and PAT grew 56 per cent and 4.6 times, respectively, in FY25. It is undertaking capacity expansion to double its current manufacturing capacity to 75,000 MVA.
Given ₹22,000 crore bid prospects, it aims for a ₹8,000 crore order book in FY26E.
With an order book ( ₹5,132 crore) already in place and bright bid prospects, execution is expected to scale further due to new capacity in FY26E and FY27E.
“Transformers and Rectifiers aims to improve EBITDA and PAT margins to 16 per cent and 10 per cent, respectively, through various backwards integration measures. We expect revenues and PAT to grow at a CAGR of 59.8 per cent and 53 per cent, respectively, over FY25-FY27E,” said Pandey.
PCBL Chemical | Previous close: ₹360.85 | Target price: ₹515 | Upside potential: 43%
PCBL Chemical is the leading manufacturer of carbon black, which is used as a reinforcing material in tyres. It also derives nearly 11 per cent of its volumes from speciality carbon black, which fetches high margins and is used in paints, plastics, etc.
With a thrust on exports, it is targeting a double-digit volume CAGR over the next five years, with a near-term capacity target of 10 lakh tonnes.
“With organic levers of growth, increasing share of speciality grade carbon black, expansion at its new acquired Aquapharm, and ramp up of EV battery chemical business, it expects to clock five times PAT in five years (FY24-29E),” said Pandey.
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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
