Top Long-Term Stock Picks: ICICI Bank and Shriram Finance Highlighted by Motilal Oswal’s Sneha Poddar

Market Overview
The Indian stock market has experienced increased volatility in April 2025, influenced by global trade tensions and policy shifts. Following announcements from U.S. President Donald Trump regarding tariffs on imports from over 100 countries, the India VIX—a measure of market volatility—spiked by 69 percent this month, reversing a declining trend seen in previous months. As a result, the Nifty 50 Index has fallen approximately 5 percent this month after a 6 percent gain the prior month. With ongoing uncertainties surrounding global trade, including a recent 90-day pause on reciprocal tariffs by Trump, analysts suggest that investors should focus on long-term investments as they navigate the current market climate.

Investment Guidance from Motilal Oswal
Amid the market fluctuations, Sneha Poddar, an Assistant Vice President at Motilal Oswal Financial Services, has provided recommendations for five stocks that she believes hold significant long-term potential.

Recommended Stocks for Long-Term Growth

1. ICICI Bank

   • Previous Close: ₹1,300.80
   • Target Price: ₹1,600
   • Upside Potential: 23%

   ICICI Bank is noted for its robust loan growth, achieving a compound annual growth rate (CAGR) of nearly 17 percent between FY22 and FY24. This growth is attributed to various factors, including a strong retail banking sector and successful analytics-driven customer acquisition strategies. ICICI Bank maintains a commendable provision coverage ratio (PCR) of around 79 percent and a substantial contingency buffer of ₹13,100 crore to counter rising delinquencies. Poddar projects the net interest margin (NIM) will stabilize around 4.25 percent, predicting a return on assets (RoA) of 2.2 percent and return on equity (RoE) of 17 percent by FY27E.

2. Shriram Finance

   • Previous Close: ₹624.55
   • Target Price: ₹775
   • Upside Potential: 24%

   Shriram Finance has positioned itself as a strong player across various lending segments, showcasing resilience in asset quality through different economic cycles. The company is anticipated to benefit from reduced borrowing costs, which will improve its profitability metrics. Estimates for Q4FY25 suggest disbursements of ₹45,300 crore, with an increase in assets under management (AUM) to ₹2.65 lakh crore, reflecting an 18 percent year-on-year growth. The expectation of an 18 percent AUM CAGR and a 19 percent profit after tax CAGR from FY24 to FY27 further underscores Shriram’s potential.

3. Varun Beverages

   • Previous Close: ₹540.20
   • Target Price: ₹670
   • Upside Potential: 24%

   Despite some short-term challenges in the beverage market, Varun Beverages has reported solid year-on-year volume growth driven by enhanced market penetration. The company’s strategic foray into the food-snacking market could serve as a significant growth catalyst. Analysts expect expansive growth in volumes and steady EBITDA margins, projected at 29 percent year-on-year growth for Q1CY25. 4. The Indian Hotels Company

   • Previous Close: ₹768.20
   • Target Price: ₹950
   • Upside Potential: 24%

   Benefitting from a resurgence in tourism and business events, The Indian Hotels Company anticipates double-digit revenue growth in FY25. The hospitality sector in India is recovering, with robust demand across pivotal markets. Poddar forecasts revenue, EBITDA, and adjusted profit after tax to grow significantly, buoyed by increased average room rates and occupancy levels.

4. Castrol India

   • Previous Close: ₹196.16
   • Target Price: ₹260
   • Upside Potential: 33%

   With Brent Crude prices falling to a four-year low, lubricant manufacturers like Castrol India stand to gain from improved profit margins. The company is focusing on expanding its technology capabilities and product offerings, aiming to leverage the growing demand for lubricants in India as vehicle ownership rates increase. Castrol is projected to maintain a strong EBITDA margin, supported by brand development and distribution strategies.

Final Thoughts
As the markets navigate through turbulent times, Motilal Oswal’s recommendations offer insights into potentially lucrative long-term investments. Investors are advised to consider these picks while remaining vigilant about market trends and economic indicators.

Disclaimer
This article serves an informational purpose and does not constitute investment advice. It is prudent for investors to consult with certified experts before making investment decisions.

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