Stocks to buy for long term: Despite persisting concerns over sticky inflation, elevated rates, geopolitical tensions and stretched valuations, the Indian stock market benchmark, Nifty 50, has seen an impressive gain of about 17 per cent this year so far.
Experts are positive about the Indian market's medium—to long-term growth prospects due to the durability of economic growth, the influx of domestic retail investors, and the expectations of policy reforms and continuity.
However, volatility in the short term could be due to India Inc.'s quarterly earnings, US Fed rate cuts, and the news surrounding the US Presidential election.
Experts suggest betting on quality stocks for the long term at this juncture. Here are five stocks that brokerage firm Nirmal Bang Institutional Equities recommends buying for the long term as the brokerage firms expect them to rise 9-61 per cent from their current levels.
Ambuja Cements' major strengths are consistent capacity utilisation levels of more than 80 per cent, strong brand equity with a pan-India presence, cost-effective operations, and a robust balance sheet.
The management has guided an increase in market share from nearly 14 per cent to 20 per cent in FY28. Capacity growth from the current level of 89MTPA to 140MTPA will be met through internal accruals and operating cash flows.
The brokerage firm pointed out that SBI is the biggest bank in India. Leadership position in corporate and retail lending coupled with a good capital position with CAR of 13.9 per cent and a good deposit franchise with a domestic CASA ratio of 40.7 per cent, has put it in a position to pick up the best quality credit.
Despite the increase in interest rates, the bank is witnessing strong demand in retail, especially home loans. In a highly competitive market, SBI has one of the lowest cost of funds (nearly 4.5 per cent) and the largest distribution network (22,580 branches), likely allowing it to provide the PSU pack's leading growth.
The brokerage firm observed that despite a high base of ₹24.6 lakh crore loan book, the bank is expected to maintain double-digit growth for the next few years on the back of (1) a good capital position with tier-1 capital of 17.2 per cent, (2) continued branch addition and digital footprint, and (3) cross-selling opportunities that arise due to reverse merger with erstwhile-HDFC.
The demand outlook for alcoholic beverages (Alco-Bev) remains strong. Over the past year, Alco-Bev is one of the categories where consumer demand has remained healthy, and the outlook remains robust.
The premiumisation trend has increased in recent years, as consumers are upgrading even if the frequency of consumption has not increased massively.
“United Spirits has a comprehensive portfolio of products laddered across price points to capitalise on this trend. The potential impact of a UK-India FTA on the Spirits sector could result in a 5-15 per cent reduction in the market price of Scotch products depending on the MRP of the spirits and the extent of the import duty reduction, making the products more affordable to the domestic Indian consumer,” said the brokerage firm.
The Indian Hotels Company is the largest hospitality player in India. While its strong presence in the luxury segment with Taj (51 per cent market share) at the helm is well known, a significant focus on investing in different brands, assets and capability building has enabled the company, a growth machine’ to cater to the needs of various consumer segments and locations of vibrant India.
"Nimble-footed management, diversified portfolio presence, significant focus on new businesses, cost management, and a cash-rich balance sheet make Indian Hotels Company a truly incredible business franchise," the brokerage firm said.
"We believe Indian Hotels is best placed to identify and proactively respond to consumer needs and should continue to remain the biggest beneficiary of the vibrant tourism and hospitality ecosystem," said the brokerage firm.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
