ITC, Tata Motors, Kotak Bank— Rahul Ghose of Hedged.in bullish on 10 stocks for long term | Stock Market News

Stocks to buy for the long term: The Indian stock 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 nearly 6 per cent each.

Sensex is now down 12,780 points, or about 15 per cent, from its peak of 85,978, which it hit on September 27 last year. At present, the index is at 73,198. The Nifty 50 has plunged 4153 points, or nearly 16 per cent, from its all-time high of 26,277. The index closed at 22,124.70 on Friday.

Most Nifty 50 stocks have suffered solid losses since October due to a plethora of headwinds, including foreign capital outflow, stretched valuations, weak earnings, signs of a slowdown in the domestic economy and global factors.

Shares of Tata Motors, Trent, Bajaj Auto, BPCL, Hero MotoCorp, Asian Paints, Adani Enterprises and IndusInd Bank have crashed 30-36 per cent since last October.

Amid this market crash, Rahul Ghose, CEO of Hedged.in, sees opportunities in select stocks due to their strong fundamentals, growth potential and expectations of tailwinds for the sector. He picks 10 stocks to buy in the long term. Take a look:

Shares to buy for the long term

ITC | Previous close: ₹394.70 | Expected target price: ₹522

Ghose pointed out that ITC’s diversified business model encompasses sectors such as fast-moving consumer goods (FMCG), hotels, paperboards, and agribusiness, offering a robust shield against sector-specific volatilities. 

The company’s FMCG segment has consistently grown, driven by product innovation and an expanding distribution network. Simultaneously, the tobacco division generates strong cash flows, bolstering overall financial health. 

Ghose expects the cigarette business’s volume growth to be sustained, as the recent Budget did not increase tax. 

“ITC has undertaken relevant strategic actions to revive growth in the non-cigarette FMCG business in the near term. After the demerger of the asset-heavy hotel business, its return profile will substantially improve in the coming years,” said Ghose. 

“Various analysts maintain a buy on the stock with a revised SOTP-based price target (PT) of ₹522. Although the stock is available at a good valuation even at the current market price, we believe the best price to buy will be in the range of ₹370-360,” said Ghose. 

ABB India | Previous close: ₹4931.65 | Expected arget price: ₹6,200-7,000

Ghose said ABB’s opportunity pipeline remains robust, fueled by traction across F&B (food and beverage), chemicals, pharma, automotive, power distribution, water, and new-edge industries such as electronics, data centres, and renewables. 

In addition, with the premiumization trend at the centre stage in India, higher demand for premium products will aid margin expansion. 

The view on ABB is positive, considering its diverse presence across key sectors of core industries and the product range it has to capitalise on the tailwinds in the economy’s capex growth.

“The view on ABB is positive considering its diverse presence across key sectors of core industries and product range, which is to capitalise the tailwinds in the capex growth of the economy,” said Ghose. 

“With strong balance sheet and ROCE generation, various analysts have projected targets in the range of ₹6,200-7,000 for the stock based on CY 2026 earnings estimates,” said Ghose. 

Tata Motors | Previous close: ₹620.55 | Expected target price: ₹850- ₹900 

Tata Motors stock had seen selling pressure on account of the weak demand outlook for Jaguar Land Rover (JLR) across key markets and for domestic heavy commercial and passenger vehicles for the financial year 2025-2026.

Additionally, the risk of import tariffs from the European Union being implemented in the US, which will impact JLR sales in the US, added to the pressure. The US market accounts for 25 per cent of JLR’s retail sales.

However, the stock has made significant strides in the automotive industry, particularly with its focus on electric vehicles (EVs) and sustainable mobility solutions. 

Ghose noted that the company’s robust product lineup in both passenger and commercial vehicle segments, along with strategic collaborations, has enhanced its market position. Ongoing investments in EV infrastructure and technology underscore Tata Motors’ commitment to future-ready solutions.

“The stock has an important support near ₹630 – ₹640 zone, and that should remain intact. We recommend continuing to hold on to Tata Motors and possibly accumulating the stock at the lower levels. Eventually, we can expect the stock to move towards ₹850 – ₹900 levels again, but the time horizon has to be at least a year-and-a-half,” said Ghose.

Kotak Mahindra Bank | Previous close: ₹1,900.75 | Expected target price: ₹2,100

Kotak Mahindra Bank’s prudent risk management practices and strong capital adequacy ratios have consistently delivered superior returns, Ghose underscored. 

“The bank’s diversified portfolio, encompassing retail banking, asset management, and insurance, provides a balanced revenue stream. Emphasis on digital transformation and customer-centric services has expanded its market reach,” said Ghose. 

“A target price of ₹2,100 has been projected, indicating confidence in the bank’s operational efficiency and growth prospects,” said Ghose.

Asian Paints | Previous close: ₹2179.95 | Expected target price: ₹3,500

As a leader in the Indian paint industry, Asian Paints benefits from strong brand equity and an extensive distribution network. The company’s continuous focus on innovation, including introducing eco-friendly and technologically advanced products, caters to evolving consumer preferences. Expansion into home décor and improvement segments further diversifies its revenue streams.

“The valuations are below historical averages, offering an attractive opportunity from a longer-term perspective. Analysts have set a target price of ₹3,500, reflecting positive expectations for its sustained growth,” said Ghose.

Shree Cement | Previous close: ₹27,277.35 | Expected target price: ₹32,670

Shree Cement’s operational efficiency and strategic capacity expansions have solidified its position in the cement industry. The company’s focus on cost optimisation, use of alternative fuels, and commitment to sustainability practices enhance its competitive advantage. 

“A strong balance sheet and prudent capital allocation support its growth initiatives. Analysts have set a target price of ₹32,670, reflecting confidence in Shree Cement’s future performance,” said Ghose. 

Supreme Industries | Previous close: ₹3,326.50 | Expected target price: ₹5,000

Supreme Industries is expected to benefit from healthy agriculture, housing, and infrastructure demand, stabilising PVC prices at lower levels, said those. 

It is well-poised to achieve a healthy volume growth trajectory over the next three to four years owing to sustained demand. A good long-term demand outlook and incremental capacity additions are likely to drive a 10 per cent net earnings CAGR over FY2024-FY2027,” said Ghose.

 The stock trades at a PE (price-to-earnings ratio) of 42.4 times and 35.8 times its FY2026E and FY2027E earnings, respectively.

“Analysts maintain a buy with a revised target price of ₹ ₹5,000. Technically, the stock is poised for a correction. The best opportunity to enter will be around the level of ₹3,000, offering enough upside potential. ₹3,000 was the breakout level in June 2023, from where the stock went on to make an all-time high. The breakout level is likely to act as a strong support for this correction,” said Ghose.

Havells India | Previous close: ₹1,422.05 | Expected target price: ₹1,820-1,850

Havells’ extensive range of electrical and consumer durable products, supported by a robust distribution network, positions it well to capitalize on rising consumer demand. 

Expansion into rural markets and smart home solutions further diversifies its revenue streams. 

“Despite recent challenges, such as a 5.46 per cent drop in share price following Q2 FY25 profit figures that missed market expectations, Havells’ long-term growth prospects remain promising, supported by strategic initiatives and a robust financial foundation. Analysts have set a target price of ₹1,820-1,850, reflecting positive sentiment towards Havells’ market position,” said Ghose.

Granules India | Previous close: ₹461.55 | Expected target price: ₹700

Granules India, a prominent pharmaceutical company, has recently undertaken strategic initiatives to enhance its market position and growth prospects. 

It has reported improved margins, driven by increased demand for value-added products. 

Management anticipates that the contribution from the Finished Dosage Form (FDF) segment will rise to 75 per cent, fuelled by a higher share of value-added products and new product launches. 

Ghose said that in the near term, growth is expected to be led by the North American market, which is projected to grow by 20 per cent in FY25E. The European market is expected to rebound next year as demand for paracetamol picks up starting in FY26E. 

Additionally, Ghose pointed out that the company’s management has raised its EBITDA margin guidance to 22 per cent, supported by several factors: (1) new product launches in high-value categories, (2) an increase in phase three and four clinical trials from the previous phase two trials, (3) the commercialisation of pilot projects for DCDA and PAP, and (4) a drop in input costs.

“At the current market price, the stock is trading at approximately 21 times and 18 times its FY2026E and FY2027E earnings of ₹27.91 and ₹31.14, respectively, resulting in a price target of ₹700 per share. The best price to enter this stock is around the ₹450-420 range,” said Ghose.

IPCA Laboratories | Previous close: ₹1,353.45 | Expected target price: ₹1,980

IPCA Laboratories’ integrated operations in active pharmaceutical ingredients (APIs) and formulations, along with a strong presence in domestic and international markets, underscore its growth potential. 

The company’s focus on cost efficiency, quality compliance, and a robust product pipeline supports its competitive position. 

Ghose pointed out that during FY19-FY24, IPCA Labs’ earnings recorded a meagre 3 per cent CAGR, led by a 200bp drop in its EBITDA margin. Nonetheless, it is anticipated that the company will generate a robust earnings growth of 27 per cent during FY25-FY27, driven by the 170 bps improvement in margin. 

“Analysts have set a target price of ₹1,980, reflecting optimism about IPCA Laboratories’ strategic direction and market opportunities. We believe the best price to buy the stock is between ₹1,250-1,200 range. In line with broader markets, the stock could correct, offering a great reward-to-risk ratio at the above levels,” said Ghose.

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Disclaimer: This article is for educational purposes only. The views and recommendations expressed are those of the individual analyst and do not reflect Mint’s opinions or recommendations. The buy recommendations and target prices mentioned are provided by the expert. Investors and traders are advised to consult certified professionals before making any investment decisions.