Stocks to buy for the long term: The Indian stock market has faced challenges this year due to US tariffs, weak earnings, relentless foreign capital outflow, and stretched valuations. Benchmark Nifty 50 has gained 5 per cent this year so far, trading rangebound since June.
However, a solid domestic growth outlook, direct and indirect tax reforms, and monetary easing are expected to augur well for the market. Experts believe earnings will see notable growth in the second half of the current financial year (H2FY26), and FIIs, too, will come back to Indian markets after valuations cool further.
Worst over?
The domestic markets have been range-bound for the last few months. Nevertheless, they have exhibited significant resilience despite global headwinds and massive FII selling. Since July, FIIs have sold off Indian stocks worth over ₹1 lakh in the cash segment.
Pankaj Pandey, the head of research at ICICI Securities, underscored that the Indian stock market has largely climbed the walls of worry in terms of a challenging global macro-economic scenario, rise in tariffs on US exports, as well as geopolitical tensions.
Pandey is constructive on domestic markets in the near term as the GST 2.0 reforms are expected to stimulate consumption.
“It is one of the most comprehensive reforms by the government, giving more purchasing power in the hands of consumers,” he said.
Pandey finds GST rate cuts well-positioned ahead of the festive season (to be implemented from September 22, 2025), thereby giving the much-needed thrust for the economic revival ahead and partially cushioning the global tariff-led impact.
“The fiscal impact of the rate cut is expected to be limited in nature. All essential products required for daily needs are proposed to be taxed at the lower tariff rate of 5 per cent from 12 per cent presently. Key beneficiaries of this move include automobiles, FMCG (packaged foods, dairy products), discretionary (apparels, hotels, ACs), cement and insurance,” Pandey pointed out.
He expects corporate earnings growth to pick up pace in H2FY26, and we expect Nifty earnings to grow at a CAGR of 12 per cent over FY25-27E.
“We retain our 12-month rolling Nifty target of 27,000, valuing the index at 22 times PE on FY27E. Earnings growth over FY25-27E will be led by the telecom space amidst successful pass-through of tariff hikes, the metals and mining domain led by healthy domestic demand and improved metal prices (consequent to drop in imports), as well as the capital goods domain amid a healthy capex execution cycle domestically,” said Pandey.
Stock picks for the long term
Arvind Fashion | Previous close: ₹550.80 | Target price: ₹705
Arvind Fashion (AFL) has transformed its business into a profitable and efficient business model by rationalising its product portfolio to five marque brands, increasing focus on scaling up direct-to-consumer sales and strengthening its balance sheet by better working capital management and reduction in debt.
“Benefits of tax cut and GST 2.0 reforms likely to push the growth in the near term. This will aid Arvind Fashion’s revenues and EBIDTA to grow by 13 per cent and 18 per cent, respectively, and PAT to grow multi-fold over the next three years,” said Pandey.
Lumax Auto Technologies | Previous close: ₹1,072.10 | Target price: ₹1,285
Lumax Auto Technologies (LAT) is a leading auto ancillary player. Its main revenue contributors are integrated plastic modules (51 per cent), gear shifters (18 per cent), aftermarket (10 per cent), and alternate fuels (9 per cent).
The passenger vehicle (PV) domain contributed a maximum of 55 per cent of sales at LAT, with M&M and Bajaj Auto as its top OEM clients contributing nearly 44 per cent of its sales.
“Recent GST rationalisation is positive for the auto space, improving affordability and potentially lifting industry volumes by 8–10 per cent, with Lumax Auto a key beneficiary. Supported by a strong order book, margin improvement, and healthy return ratios (nearly 20 per cent), we are structurally positive on the company,” said Pandey.
Kilburn Engineering | Previous close: ₹542.30 | Target price: ₹730
Kilburn Engineering (KEL) is a leading industrial drying solutions provider. Over FY23-FY25, its revenue and PAT grew at 38 per cent and 44 per cent CAGR, respectively, to ₹425 crore and ₹62 crore, respectively.
Going ahead, it is expected that revenues and PAT will grow at 30 per cent and 32 per cent CAGR over FY25-FY28E to ₹925 and ₹144 crore, respectively.
KEL bagged orders worth nearly ₹585 crore in FY25, up over 100 per cent YoY (year-on-year), nearly ₹200 crore in YTD (year-to-date) FY26, with the expectation of ₹600 crore order inflow in FY26.
“KEL has expanded capacity to execute and acquired ME Energy and Monga Strayfield at attractive valuations, which will help achieve its targeted growth. We have a positive view of the company,” said Pandey.
Nuvoco Vistas Corporation | Previous close: ₹428.35 | Target price: ₹590
Nuvoco Vistas Corporation is India’s fifth-largest cement manufacturer, with a capacity of 25 mtpa and a presence in mainly eastern and northern region markets.
Going forward, Nuvoco Vistas is increasing its capacity by 40 per cent to reach 35 mtpa by FY28E, including the acquisition of Vadraj Cement and debottlenecking initiatives.
“We expect volume growth at 9 per cent CAGR over FY25-28E, led by capacity additions and increasing exposure to newer markets. Profitability is expected to improve substantially, led by a focus on operational efficiencies and a rising share of blended and premium products. Absolute EBITDA is expected to grow at nearly 30 per cent CAGR over FY25E-28E. We have a positive view of the company,” said Pandey.
Krishna Institute of Medical Sciences | Previous close: ₹762.40 | Target price: ₹875
Krishna Institute of Medical Sciences (KIMS) is one of the largest corporate healthcare groups in India. It has 25 multi-speciality hospitals and a major presence in Southern India.
It is looking to add 2070 beds (nearly 33 per cent of the existing bed capacity) in the next two to three years, 800 of which are coming up in Bangalore and 500 in Telangana, along with this ramp-up in Thane Hospital.
The new additions have potentially high ARPOB (average revenue per occupied bed) (nearly 60,000 per day) and are generating additions that are expected to have faster paybacks.
“Due to this, along with a ramp-up in relatively new hospitals in Nashik, Srikakulam and Kannur, we expect a CAGR of 26.2 per cent in revenues and 23.9 per cent in EBITDA during FY25-FY27E,” said Pandey.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
