Top stocks to buy for long term: Pankaj Pandey of ICICI Securities suggests Crompton Greaves, Kotak Bank, 3 others
Top stocks to buy for long term: The Indian stock market has been under strong pressure this year due to heightened geopolitical tensions, elevated oil prices, and massive foreign capital outflow.
The Nifty is down more than 12% this year so far; from its all-time high of 26,373, the index is down 14%.
Pankaj Pandey, the head of research at ICICI Securities, underscored that markets are currently navigating a phase of heightened volatility, with the Nifty and broader market indices witnessing a meaningful correction from their recent highs.
However, Pandey added that the weakness is less a reflection of any fundamental deterioration in the domestic earnings cycle and more a consequence of a confluence of external pressures - elevated crude prices, rising domestic and global bond yields, and heightened geopolitical uncertainty.
Pandey pointed out that the underlying earnings picture remains encouraging.
"The listed universe, so far in the current earnings season, has delivered over 20%+ growth in both topline and PAT, providing increasing evidence that the domestic corporate earnings cycle is gaining traction. This resilience in earnings, despite a challenging macro backdrop, reinforces our core thesis of an earnings-led recovery in Indian equities," said Pandey.
Pandey emphasised that the recent correction needs to be viewed in the context of price adjustment rather than a fundamental reset.
"With valuations having moderated meaningfully, the risk-reward equation is gradually becoming more favourable, particularly for quality businesses where earnings visibility remains intact," said Pandey.
Pandey believes the next leg of the market may be driven less by liquidity or multiple expansion and increasingly by fundamental earnings delivery - a healthier and more sustainable foundation for returns.
"We see no material risks to our 16% CAGR Nifty earnings estimates over FY26-28E. We expect markets to deliver healthy double-digit returns over the next 12 months," said Pandey.
Pandey recommends buying the following five stocks for the next one year:
Pandey said Crompton Greaves is a leading FMEG player, wherein nearly 76% of its revenue comes from electrical consumer durables (fans, pumps, appliances), nearly 13% from lighting, and the balance from Butterfly Gandhimathi.
Driven by expansions into wires, solar, and water purifiers, the company aims to double its revenue by FY31, implying nearly 15% CAGR and 12%+ exit EBITDA margin (9-10% currently).
"Despite recent geopolitical tensions and commodity inflation temporarily squeezing gross margins, proactive mitigation strategies support a projected nearly 21% PAT CAGR over FY26–28E. Trading at a nearly 30% discount to its historical P/E multiples, the stock presents a compelling risk-reward opportunity," said Pandey.
BlueStone Jewellery and Lifestyle is an omnichannel, digital-first direct-to-consumer (D2C) jewellery retailer in India focused on contemporary lifestyle jewellery.
It is the second largest player in the studded segment in India.
Pandey underscored that Bluestone’s H1FY27 revenue growth of 47% is largely in line with the company’s medium-term guidance of 50% revenue growth.
Pandey believes Q3FY27 will be boosted by high festive demand, while medium-term growth will be driven by rising demand for lightweight jewellery and increasing store penetration.
"EBITDA margins will consistently improve and reach close to 15% by FY29 on the back of consistent improvement in the fundamentals of new stores. Recent correction of 25% from its high provides a good entry opportunity. We remain positive on BlueStone," said Pandey.
Pandey underscored that CIE Automotive India (CIE), part of the Spain-based CIE Automotive Group, is a multi-product automotive component player, operating across India and Europe.
In India, it caters to the PV+LCV segment (53% of sales), 2Ws (23%), CV (11%) and off-highway (tractor) segments (13%), benefitting from strong domestic demand and expanding capacity.
"European operations are recovering, with EBITDA margins improving to 16.3% following restructuring while EV components offer additional growth opportunities," Pandey noted.
"CIE aims to double down on domestic capex in CY26E versus CY25 at nearly 8% of sales, signalling confidence in growth and execution amid healthy domestic demand prospects. We remain positive on CIE Automotive," said Pandey.
Pandey pointed out that Kotak Mahindra Bank, India’s fourth-largest private sector bank with a nearly ₹5.8 lakh crore loan book, looks attractive at current levels, supported by leadership clarity, nearly 22–23% FY27E loan growth, favourable FCNR(B) inflows, largely stable margins and benign asset quality.
Management’s focus on credit growth at 1.5-2 times nominal GDP, stable margins and gradual operating leverage is seen to sustain RoA at 1.9-2%.
"With the stock trading at reasonable valuations, we see scope for re-rating as leadership overhang and growth improves (core advances growth of nearly 19% YoY in Q2FY27). We value the standalone bank at nearly 2.3 times FY28E BV," said Pandey.
Pandey pointed out that Jindal Steel, one of India's leading steel makers, reported healthy Q2FY27 results with revenue up 43% YoY to ₹16,679 crore, led by steel volumes growth (up 27% YoY to 2.4 MT) and favourable steel prices.
Supported by its wide value-added portfolio and efforts towards raw material security (captive coal and others), the company continues to focus on cost optimisation initiatives such as usage of slurry pipeline and energy fuel substitution while it aims to increase flat products' contribution to support a rich product mix.
"With low leverage on the balance sheet, management expectations of a stronger pricing environment and capacity-led volume expansion underway, we remain positive on the company," said Pandey.
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