Indian Stock Market Hits Record Highs: Motilal Oswal’s Sneha Poddar Recommends 5 Must-Buy Stocks for Long-Term Growth – Do You Own Any?

The Indian stock market has seen strong growth this year, despite challenges like high interest rates, global tensions, and concerns about a slowing economy. As of September 19, the Sensex has risen 15%, and the Nifty 50 has gone up by 17%, reaching record levels. Experts believe this positive trend will continue, driven by retail investors and solid economic growth. Additionally, a potential interest rate cut in the U.S. could attract more foreign investment into the Indian market.

However, financial experts advise against getting carried away by the market’s success. Instead, they suggest focusing on high-quality stocks with strong fundamentals for long-term investment.

Sneha Poddar, VP-Research at Motilal Oswal Financial Services, recommends five stocks for long-term investment. Let’s take a closer look:

1. Kaynes Technology

Kaynes Technology is a key player in the electronics manufacturing sector, with a focus on Internet of Things (IoT) solutions. The company’s strong order book includes major contracts in aerospace, industrial equipment, electric vehicles, and medical sectors, which will drive growth through FY25. It has also secured a large two-year order for industrial equipment and is expected to see significant revenue from the U.S. and European markets.

Poddar predicts an 18% annual revenue growth in USD from FY24 to FY27, supported by increasing profit margins and a projected 21% earnings growth per share.

2. Persistent Systems

Persistent Systems stands out as a leader in product engineering and IT services. The company’s diverse range of offerings and strong earnings growth make it well-positioned for continued success. Despite being valued highly, Poddar believes there’s still room for further growth due to its superior performance.

3. HDFC Life

HDFC Life continues to focus on balancing its product range and offering top-notch customer service. The company plans to expand its presence in smaller cities, supported by HDFC Bank’s branch network. Improved customer retention rates (persistency) will help keep renewal premium growth steady. HDFC Life aims to double its business over the next four years, and Poddar expects the company’s value of new business (VNB) to grow by 18% annually from FY24 to FY26, with profit margins staying in the 25-26% range.

4. Cholamandalam Investment

Cholamandalam Investment is expected to achieve strong asset growth and maintain low credit costs compared to its competitors, leading to a high return on equity (RoE) of around 21-22%. The company’s vehicle finance business is likely to see an improvement in yields, which will contribute to overall growth in the coming quarters. The management also expects borrowing costs to stabilize, ensuring steady performance.

5. KEI Industries

KEI Industries has consistently performed well, driven by strong demand and a diversified customer base in both domestic and international markets. The company’s focus on expanding its retail segment and increasing capacity will support continued growth. Poddar estimates that KEI Industries will achieve a compound annual growth rate (CAGR) of 24% in EBITDA (earnings before interest, taxes, depreciation, and amortization) and 22% in earnings per share (EPS) from FY24 to FY27.

These five stocks are recommended for long-term investment due to their strong growth prospects and solid fundamentals.