Stocks to buy for long term: The Indian stock market is reeling under pressure due to tariff blow by US President Donald Trump, uninspiring earnings and foreign capital outflow.
The Nifty 50 is now over 7 per cent down from its all-time high of 26,277.35, which it hit on September 27 last year.
At this juncture, it seems difficult to foresee a fresh high for the Nifty 50 in the near future. Trump’s tariffs are estimated to reduce India’s GDP growth by as much as 1 per cent, hopes of an earnings recovery in the second half of the financial year (H2FY26) are weakening, and foreign investors are relentlessly pulling money out of Indian markets.
Can Nifty hit 27k by year-end?
Pankaj Pandey, the head of research at ICICI Securities, still believes that the Indian stock market can emerge from the Trump tariffs shock and the Nifty may hit the 27,000 level by the end of the year.
“On an overall basis, we see limited impact on the equity market amid the India-US tariff across most sectors. We, in fact, see current tariff threats as negotiation tactics,” said Pandey.
Pandey even sees some winners out of this trade war. For example, with tariffs being imposed by the US across countries, India’s relative export competitiveness has improved at the global stage in the electronic manufacturing service (EMS) segment, he explained.
The head of research at ICICI Securities underscored that the trade war is still an evolving space, but it will force global brands to look for alternatives to countries like China over the medium term for manufacturing electronics items like mobile phones and laptops.
However, Pandey said the contours of the ultimate tariff, which will be clear later once the negotiations end, will hold the key.
“We believe we have learnt to live with this uncertainty and domestic factors such as corporate earnings, as well as macroeconomic indicators like GDP growth, capex spending, consumption, etc, will be a bigger catalyst,” said Pandey.
“Overall, we expect markets to move towards a new high by FY26 end. Our 12-month rolling Nifty target is pegged at 27,000 levels, wherein we have valued the index at nearly 22 times PE on FY27E,” Pandey said.
Stock picks for the long term
Larsen & Toubro | Previous close: ₹3,607.60 | Target price: ₹4,380
Larsen & Toubro (L&T) is India’s largest engineering and construction (E&C) company. It has a current order backlog of ₹6,12,761 crore.
L&T began FY26 with a strong quarter at 16 per cent revenue growth and 33 per cent growth in order inflows.
L&T further has ₹14.8 lakh crore order bid pipeline for the remaining nine months of the financial year (9MFY26E).
“With solid execution momentum expected to continue, we expect revenues and PAT to grow at a CAGR of 14.5 per cent and 19.4 per cent over FY25-FY27E. Further, L&T aspires to reach 18 per cent ROE by FY26E versus nearly 17 per cent in Q1FY26 and is best placed to play the India capex-led growth story,” said Pandey.
City Union Bank | Previous close: ₹210.14 | Target price: ₹250
City Union Bank is a strong regional franchise with a deep-rooted presence in South India. Nearly 56 per cent of its advances are in secured MSME and agri segments.
City Union Bank is well-positioned to deliver advanced growth surpassing the industry, aided by its focus on high-yield, granular segments.
Margins are expected to remain resilient in the range of 3.45–3.5 per cent despite repo-linked repricing, supported by a favourable loan mix and improved liabilities mobilisation.
Credit costs are projected to stay benign at nearly 50–60 bps, with an aim to raise specific PCR to nearly 63–64 per cent.
While MSME stress remains a key monitorable, better-than-peer margins, stable asset quality and RoA at 1.4-1.5 per cent, justify relatively superior valuation.
Lemon Tree Hotels | Previous close: ₹143.31 | Target price: ₹185
Lemon Tree Hotels is emerging as India’s largest hotel chain in the mid-priced sector, with a room inventory of 10,269 in 111 hotels.
“Scale-up in performance of Aurika Mumbai and strong growth of 40 per cent+ in management contract revenues, coupled with steady growth in existing hotels, will drive Revenue and PAT CAGR of 16 per cent and 33 per cent over FY25-27E,” said Pandey.
Value unlock in its subsidiary Fluer will be an additional trigger for stock, along with favourable industry tailwinds.
Dalmia Bharat | Previous close: ₹2,243.40 | Target price: ₹2,650
Dalmia Bharat, the fourth largest cement manufacturer in India with a cement capacity of 49.5 mtpa, is poised to grow significantly, led by capacity additions along with a strong focus on capital allocation and cost-saving measures.
With ongoing expansions at Karnataka, Maharashtra & Andhra Pradesh (3 mtpa each), total capacity would reach 61.5 mtpa by FY28E. Company targets to reach 110-130 mtpa by FY31E.
“Profitability to improve driven by operational efficiencies (led by increasing green power share, optimisation of fuel mix, logistics, etc.) and positive operating leverage, translating to nearly 30 per cent EBITDA CAGR over FY25-27E,” said Pandey.
Steel Strips Wheels | Previous close: ₹217.08 | Target price: ₹290
Steel Strips Wheels is a prominent player in the domestic oligopolistic wheels industry.
It currently has five plants in India with a total production capacity of nearly 2.5 crore wheels per annum (including nearly 0.42 crore of alloy wheels), and it realises 32 per cent of its revenue from alloy wheels.
“Its powertrain agnostic product profile (no EV risk) and healthy growth in volumes supported by capacity expansion will help it to achieve sales and PAT CAGR of 10 per cent and 17 per cent, respectively, over FY25P-27E,” Pandey observed.
“It is one of the inexpensive stocks in the auto ancillary space and trades at less than 13 times PE on FY27E, offering healthy upside. Double-digit CFO yield provided a good margin of safety,” Pandey said.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, 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.
