Top Long-Term Stock Picks: ICICI Bank and Shriram Finance Highlighted by Motilal Oswal’s Sneha Poddar
Published: April 10, 2025, 03:43 PM IST
As the Indian stock market faces significant volatility amidst global trade tensions, investors are advised to look for long-term opportunities that offer potential growth. Motilal Oswal’s Sneha Poddar, an Assistant Vice President and research analyst at the financial services company, has identified five stocks that are positioned for growth in the coming years, including leading players ICICI Bank and Shriram Finance.
Market Context
April has seen an uptick in market volatility, largely triggered by announcements from U.S. President Donald Trump regarding tariffs on imports from over 100 countries, igniting concerns about a potential trade war. This instability has contributed to a significant swing in the volatility index, India VIX, which has surged by 69% throughout the month. As such, the benchmark Nifty 50 index has experienced a decline of approximately 5%, after previously gaining 6% in March.
However, the anticipated market response to the recent announcement of a 90-day pause on reciprocal tariffs could lead to a gap-up opening for the Indian stock market, providing a glimmer of hope for investors. In light of these market dynamics, Poddar emphasizes the importance of focusing on high-quality stocks for long-term investment strategies.
Recommended Stock Picks
Here are the five stock picks from Poddar for long-term investors, along with their previous closing prices and projected target prices indicating potential upsides:
1. ICICI Bank
- Previous Close: ₹1,300.80
- Target Price: ₹1,600
- Upside Potential: 23%
ICICI Bank has shown strong loan growth potential, maintaining a compound annual growth rate (CAGR) of nearly 17% from FY22 to FY24. This growth is driven primarily by robust retail loans and effective risk assessment methodologies. The bank’s asset quality is fortified by a high provision coverage ratio (PCR) of 79%, and it has built a robust contingency buffer.
Poddar notes that as the bank’s credit costs normalize and net interest margins stabilize, it is well-positioned to enhance profitability amidst rising loan demand.
2. Shriram Finance
- Previous Close: ₹624.55
- Target Price: ₹775
- Upside Potential: 24%
With a diversified product range and strong performance across all segments, Shriram Finance is set to benefit from lower borrowing costs. The company is anticipated to maintain stable asset quality and steady growth in disbursements, with projected assets under management expected to grow by 18% year-on-year.
Poddar highlights that the merger-led distribution network expansion will allow Shriram to optimize its product offerings to customers.
3. Varun Beverages
- Previous Close: ₹540.20
- Target Price: ₹670
- Upside Potential: 24%
Despite facing short-term challenges, Varun Beverages has reported impressive year-on-year growth in the domestic market. The company is also expanding strategically into the food-snacking market, indicating a diversification of revenue streams, which is critical for long-term sustainability.
4. The Indian Hotels Company
- Previous Close: ₹768.20
- Target Price: ₹950
- Upside Potential: 24%
The Indian Hotels Company anticipates double-digit revenue growth driven by considerable demand from tourism and events. With ongoing expansion in spiritual tourism, Poddar forecasts robust revenue and profitability growth in the upcoming fiscal year.
5. Castrol India
- Previous Close: ₹196.16
- Target Price: ₹260
- Upside Potential: 33%
As Brent Crude prices have decreased, Castrol stands to benefit from improved profit margins in its lubricant segment. The company is investing in technology and product innovation, positioning itself as a leader in a market with significant growth potential.
Conclusion
In a fluctuating market environment, focusing on long-term investments in quality stocks is a prudent approach, as indicated by Poddar’s recommendations. Each of these stocks presents a unique opportunity for growth, backed by strategic planning and favorable market conditions.
Investors are encouraged to consult with certified financial advisors before making investment decisions based on this analysis.
For continual updates on market trends and stock picks, stay tuned to Smart Money Mindset.
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