High shares to purchase for long run: Pankaj Pandey of ICICI Securities picks L&T, M&M, and extra

High shares to purchase for long run: Large overseas capital outflows, issues over a significant world commerce warfare, weak earnings, and faltering macroeconomic indicators have mixed to maintain the Indian inventory market beneath stress for the previous 5 months.

After hitting a document excessive of 26,277.35 on September 27 final yr, benchmark index Nifty 50 has been within the crimson since October every month. As of February 24 shut, the index is down over 14 per cent from its document excessive.

Consultants anticipate the market to stay risky within the brief time period on account of issues over US President Donald Trump’s tariff insurance policies, the counter measures of the nation’s commerce allies and its influence on world financial progress.

Consultants say it’s time to guess on high quality shares for the long run. After the current corrections, a number of high quality shares throughout sectors can be found at enticing valuations. These shares have stable progress potential, and specialists anticipate them to see wholesome positive factors within the medium to long run.

Pankaj Pandey, the pinnacle of analysis at ICICI Securities, has picked the 5 shares under to purchase for the long run. Have a look:

Larsen and Toubro (L&T) | Goal worth: ₹4,400

L&T has a present order backlog of ₹5,64,223 crore, up 20 per cent year-on-year (YoY). Revenues and PAT (revenue after tax) are anticipated to develop at a CAGR of 14.5 per cent and 15.1 per cent, respectively, over FY25-FY27E.

The corporate’s administration is assured that it’ll surpass the order influx and income steering of 10 per cent and 15 per cent, respectively.

“We consider given the backlog progress and choose up in execution, there stays a powerful chance of a beat within the income progress steering. With a continued deal with enchancment of general return ratios and aspiration of 18 per cent RoE (return on fairness) by 2026E, it appears to be like reasonable. L&T stays one of the simplest ways to play the India capital expenditure (capex) story,” mentioned Pandey.

Mahindra & Mahindra (M&M) | Goal worth: ₹3,850

M&M has sustained its income market management within the SUV class, bolstered by profitable launches like Thar Roxx, XUV 3XO, XUV 700, and Scorpio-N. These automobiles have rapidly resonated with clients, pushed by cutting-edge expertise and a price providing.

It has acquired encouraging responses to the just lately launched electrical automobiles, particularly BE 6 and XEV 9e, amidst its general objective of accelerating its BEV volumes to 20-30 per cent of its SUV gross sales by 2027.

On the farm gear entrance, wholesome water reservoir ranges and elevated authorities spending in rural house are anticipated to profit the home tractor business, with M&M a key beneficiary given its business management with practically 44 per cent market share.

“Given its constant optimistic shock on new product launches, means to develop forward of the market and protracted deal with capital effectivity (RoE of greater than 18 per cent), it’s effectively poised for progress,” mentioned Pandey.

Indian Accommodations Firm | Goal worth: ₹984

The Indian Accommodations Firm redefined its progress technique from aspiration to acceleration, specializing in doubling its room stock and revenues with constant enchancment in margins by 2030. 

It targets revenues to the touch ₹15,000 crore by 2030, with like-for-like revenues rising at 8 per cent CAGR, new companies rising at over 30 per cent CAGR and administration charges clocking a 15-18 per cent CAGR (touching ₹1,000 crore from present ranges of ₹400-450 crore. 

“EBITDA margins might enhance constantly pushed by working leverage and effectivity and beneficial income combine (to be at practically 36 per cent in FY27 from 32 per cent in FY24. Massive money flows generated shall be utilised for prudent capital allocation and regular dividend payout within the coming years,” Pandey mentioned.

Narayana Hrudayalaya | Goal worth: ₹1,600

Narayana Hrudayalaya’s revenues for the quarter grew practically 14 per cent YoY to ₹1,366.7 crore, pushed by practically 13 per cent YoY progress in India, which was primarily attributable to sturdy progress within the southern peripheral, northern peripheral, and Kolkata areas. Cayman Hospitals witnessed 15 per cent YoY progress because the second hospital in Cayman commenced its operations. 

The corporate is concentrating on aggressive capex (practically ₹3,000 crore over the subsequent two to 3 years) in cities reminiscent of Bengaluru and Kolkata, the place it has a powerful presence and model loyalty. 

“We consider the corporate is much better poised (regardless of adverse FCF in FY25-26E) to fathom the influence on the stability sheet because the margins and the return ratios are in good condition,” mentioned Pandey.

JK Cement | Goal worth: ₹5,700

After recovering gross sales volumes in Q3FY25, JK Cement’s volumes might enhance additional over Q4FY25 and FY26E-27E, led by a pickup in demand, a capability addition plan, and improved capability utilisation of just lately commissioned vegetation (practically 4 mtpa added within the final 1.5 years).

“The longer-term outlook stays sturdy, led by a powerful deal with capability growth (30 mtpa by FY26E and 50 mtpa by FY30E from 24 mtpa at current) and constant efforts on enhancing operational efficiencies ( ₹150-200/ton of additional price financial savings anticipated within the subsequent three years),” mentioned Pandey.

Learn all market-related information right here

Learn extra tales by Nishant Kumar

Disclaimer: This story is for academic functions solely. The views and suggestions above are these of particular person analysts, specialists, and brokerage companies, not Mint. We advise traders to seek the advice of licensed specialists earlier than making any funding choices.