Shares to purchase for the long run: The Indian inventory market remained on a downward trajectory for the fifth consecutive month in February, with benchmarks—the Sensex and the Nifty 50—ending the month with losses of almost 6 per cent every.
Sensex is now down 12,780 factors, or about 15 per cent, from its peak of 85,978, which it hit on September 27 final yr. At current, the index is at 73,198. The Nifty 50 has plunged 4153 factors, or almost 16 per cent, from its all-time excessive of 26,277. The index closed at 22,124.70 on Friday.
Most Nifty 50 shares have suffered strong losses since October attributable to a plethora of headwinds, together with overseas capital outflow, stretched valuations, weak earnings, indicators of a slowdown within the home economic system and international elements.
Shares of Tata Motors, Trent, Bajaj Auto, BPCL, Hero MotoCorp, Asian Paints, Adani Enterprises and IndusInd Financial institution have crashed 30-36 per cent since final October.
Amid this market crash, Rahul Ghose, CEO of Hedged.in, sees alternatives in choose shares attributable to their robust fundamentals, progress potential and expectations of tailwinds for the sector. He picks 10 shares to purchase in the long run. Have a look:
Shares to purchase for the long run
ITC | Earlier shut: ₹394.70 | Anticipated goal value: ₹522
Ghose identified that ITC’s diversified enterprise mannequin encompasses sectors equivalent to fast-moving client items (FMCG), motels, paperboards, and agribusiness, providing a sturdy protect in opposition to sector-specific volatilities.
The corporate’s FMCG section has constantly grown, pushed by product innovation and an increasing distribution community. Concurrently, the tobacco division generates robust money flows, bolstering total monetary well being.
Ghose expects the cigarette enterprise’s quantity progress to be sustained, because the latest Price range didn’t enhance tax.
“ITC has undertaken related strategic actions to revive progress within the non-cigarette FMCG enterprise within the close to time period. After the demerger of the asset-heavy lodge enterprise, its return profile will considerably enhance within the coming years,” mentioned Ghose.
“Varied analysts preserve a purchase on the inventory with a revised SOTP-based value goal (PT) of ₹522. Though the inventory is offered at valuation even on the present market value, we consider the perfect value to purchase shall be within the vary of ₹370-360,” mentioned Ghose.
ABB India | Earlier shut: ₹4931.65 | Anticipated arget value: ₹6,200-7,000
Ghose mentioned ABB’s alternative pipeline stays sturdy, fueled by traction throughout F&B (meals and beverage), chemical substances, pharma, automotive, energy distribution, water, and new-edge industries equivalent to electronics, knowledge centres, and renewables.
As well as, with the premiumization development on the centre stage in India, increased demand for premium merchandise will help margin enlargement.
The view on ABB is constructive, contemplating its various presence throughout key sectors of core industries and the product vary it has to capitalise on the tailwinds within the economic system’s capex progress.
“The view on ABB is constructive contemplating its various presence throughout key sectors of core industries and product vary, which is to capitalise the tailwinds within the capex progress of the economic system,” mentioned Ghose.
“With robust steadiness sheet and ROCE technology, varied analysts have projected targets within the vary of ₹6,200-7,000 for the inventory based mostly on CY 2026 earnings estimates,” mentioned Ghose.
Tata Motors | Earlier shut: ₹620.55 | Anticipated goal value: ₹850- ₹900
Tata Motors inventory had seen promoting strain on account of the weak demand outlook for Jaguar Land Rover (JLR) throughout key markets and for home heavy business and passenger automobiles for the monetary yr 2025-2026.
Moreover, the danger of import tariffs from the European Union being carried out within the US, which is able to influence JLR gross sales within the US, added to the strain. The US market accounts for 25 per cent of JLR’s retail gross sales.
Nevertheless, the inventory has made vital strides within the automotive trade, notably with its give attention to electrical automobiles (EVs) and sustainable mobility options.
Ghose famous that the corporate’s sturdy product lineup in each passenger and business car segments, together with strategic collaborations, has enhanced its market place. Ongoing investments in EV infrastructure and expertise underscore Tata Motors’ dedication to future-ready options.
“The inventory has an vital assist close to ₹630 – ₹640 zone, and that ought to stay intact. We suggest persevering with to carry on to Tata Motors and presumably accumulating the inventory on the decrease ranges. Ultimately, we will anticipate the inventory to maneuver in the direction of ₹850 – ₹900 ranges once more, however the time horizon needs to be a minimum of a year-and-a-half,” mentioned Ghose.
Kotak Mahindra Financial institution | Earlier shut: ₹1,900.75 | Anticipated goal value: ₹2,100
Kotak Mahindra Financial institution’s prudent danger administration practices and robust capital adequacy ratios have constantly delivered superior returns, Ghose underscored.
“The financial institution’s diversified portfolio, encompassing retail banking, asset administration, and insurance coverage, supplies a balanced income stream. Emphasis on digital transformation and customer-centric providers has expanded its market attain,” mentioned Ghose.
“A goal value of ₹2,100 has been projected, indicating confidence within the financial institution’s operational effectivity and progress prospects,” mentioned Ghose.
Asian Paints | Earlier shut: ₹2179.95 | Anticipated goal value: ₹3,500
As a frontrunner within the Indian paint trade, Asian Paints advantages from robust model fairness and an in depth distribution community. The corporate’s steady give attention to innovation, together with introducing eco-friendly and technologically superior merchandise, caters to evolving client preferences. Enlargement into house décor and enchancment segments additional diversifies its income streams.
“The valuations are under historic averages, providing a pretty alternative from a longer-term perspective. Analysts have set a goal value of ₹3,500, reflecting constructive expectations for its sustained progress,” mentioned Ghose.
Shree Cement | Earlier shut: ₹27,277.35 | Anticipated goal value: ₹32,670
Shree Cement’s operational effectivity and strategic capability expansions have solidified its place within the cement trade. The corporate’s give attention to price optimisation, use of different fuels, and dedication to sustainability practices improve its aggressive benefit.
“A powerful steadiness sheet and prudent capital allocation assist its progress initiatives. Analysts have set a goal value of ₹32,670, reflecting confidence in Shree Cement’s future efficiency,” mentioned Ghose.
Supreme Industries | Earlier shut: ₹3,326.50 | Anticipated goal value: ₹5,000
Supreme Industries is anticipated to learn from wholesome agriculture, housing, and infrastructure demand, stabilising PVC costs at decrease ranges, mentioned these.
It’s well-poised to attain a wholesome quantity progress trajectory over the subsequent three to 4 years owing to sustained demand. An excellent long-term demand outlook and incremental capability additions are prone to drive a ten per cent web earnings CAGR over FY2024-FY2027,” mentioned Ghose.
The inventory trades at a PE (price-to-earnings ratio) of 42.4 instances and 35.8 instances its FY2026E and FY2027E earnings, respectively.
“Analysts preserve a purchase with a revised goal value of ₹ ₹5,000. Technically, the inventory is poised for a correction. The very best alternative to enter shall be across the stage of ₹3,000, providing sufficient upside potential. ₹3,000 was the breakout stage in June 2023, from the place the inventory went on to make an all-time excessive. The breakout stage is prone to act as a robust assist for this correction,” mentioned Ghose.
Havells India | Earlier shut: ₹1,422.05 | Anticipated goal value: ₹1,820-1,850
Havells’ in depth vary {of electrical} and client sturdy merchandise, supported by a sturdy distribution community, positions it nicely to capitalize on rising client demand.
Enlargement into rural markets and good house options additional diversifies its income streams.
“Regardless of latest challenges, equivalent to a 5.46 per cent drop in share value following Q2 FY25 revenue figures that missed market expectations, Havells’ long-term progress prospects stay promising, supported by strategic initiatives and a sturdy monetary basis. Analysts have set a goal value of ₹1,820-1,850, reflecting constructive sentiment in the direction of Havells’ market place,” mentioned Ghose.
Granules India | Earlier shut: ₹461.55 | Anticipated goal value: ₹700
Granules India, a outstanding pharmaceutical firm, has just lately undertaken strategic initiatives to reinforce its market place and progress prospects.
It has reported improved margins, pushed by elevated demand for value-added merchandise.
Administration anticipates that the contribution from the Completed Dosage Kind (FDF) section will rise to 75 per cent, fuelled by a better share of value-added merchandise and new product launches.
Ghose mentioned that within the close to time period, progress is anticipated to be led by the North American market, which is projected to develop by 20 per cent in FY25E. The European market is anticipated to rebound subsequent yr as demand for paracetamol picks up beginning in FY26E.
Moreover, Ghose identified that the corporate’s administration has raised its EBITDA margin steerage to 22 per cent, supported by a number of elements: (1) new product launches in high-value classes, (2) a rise in part three and 4 medical trials from the earlier part two trials, (3) the commercialisation of pilot initiatives for DCDA and PAP, and (4) a drop in enter prices.
“On the present market value, the inventory is buying and selling at roughly 21 instances and 18 instances its FY2026E and FY2027E earnings of ₹27.91 and ₹31.14, respectively, leading to a value goal of ₹700 per share. The very best value to enter this inventory is across the ₹450-420 vary,” mentioned Ghose.
IPCA Laboratories | Earlier shut: ₹1,353.45 | Anticipated goal value: ₹1,980
IPCA Laboratories’ built-in operations in lively pharmaceutical substances (APIs) and formulations, together with a robust presence in home and worldwide markets, underscore its progress potential.
The corporate’s give attention to price effectivity, high quality compliance, and a sturdy product pipeline helps its aggressive place.
Ghose identified that in FY19-FY24, IPCA Labs’ earnings recorded a meagre 3 per cent CAGR, led by a 200bp drop in its EBITDA margin. Nonetheless, it’s anticipated that the corporate will generate a sturdy earnings progress of 27 per cent throughout FY25-FY27, pushed by the 170 bps enchancment in margin.
“Analysts have set a goal value of ₹1,980, reflecting optimism about IPCA Laboratories’ strategic course and market alternatives. We consider the perfect value to purchase the inventory is between ₹1,250-1,200 vary. In keeping with broader markets, the inventory may appropriate, providing an important reward-to-risk ratio on the above ranges,” mentioned Ghose.
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Disclaimer: This text is for instructional functions solely. The views and suggestions expressed are these of the person analyst and don’t mirror Mint’s opinions or suggestions. The purchase suggestions and goal costs talked about are offered by the professional. Buyers and merchants are suggested to seek the advice of licensed professionals earlier than making any funding selections.
