Top stocks to buy for long term: Pankaj Pandey of ICICI Securities picks BEL, Engineers India and more

Stocks to buy for long term: Nifty's 7 per cent gain in March so far has turned it green for the year even as concerns over US President Donald Trump's aggressive tariff policies and fluctuating macro indicators persist.

Indian stock market benchmark looks set to snap its five-month losing streak. However, the road ahead still appears hazy due to global uncertainty.

Experts say the upcoming quarterly results and macroeconomic indicators will influence the market sentiment. Moreover, the rupee's movement and Trump's tariff policies will also be key factors for the market.

Despite the uncertainty, experts see pockets of opportunities. Pankaj Pandey, the head of research at ICICI Securities, has picked six stocks to buy for the next one year. Take a look:

Stock picks for long-term

Bharat Electronics (BEL) | Target price: ₹355

With strong development and manufacturing capabilities in defence electronics, BEL is well-positioned to benefit from the government's push for increased indigenous electronic content in various defence platforms.

The company has been steadily delivering in terms of execution and sustainable margins. Additionally, growth opportunities exist in non-defence sectors such as space, railways, civil aviation, and exports.

Order inflows stood at ₹17,030 crore for the year-to-date FY25, and the management is confident of meeting guidance of ₹25,000 crore during this year.

Order backlog of nearly ₹78,500 crore (3.4 times trailing twelve month) with strong orders pipeline (management guides order inflow of ₹25,000+ crore annually), indicates strong revenue growth potential in the coming periods.

Syngene International | Target price: ₹960

Syngene is an integrated contract research, development, and manufacturing services company serving the global pharmaceutical, biotechnology, nutrition, animal health, consumer goods, and speciality chemical sectors.

After a lull of several quarters, the company has started witnessing decent revenue growth with a strong margin profile.

The US biotech funding, on which the company is significantly dependent, is slowly but surely picking up.

The company is witnessing increased requests for proposals (RFPs) and on-site visits from prospective customers.

"We believe the growing de-risking mechanism among big pharma which the management coins as 'China rebalancing' is likely to provide incremental opportunities for the global CDMO (contract development and manufacturing organization) players like Syngene," said Pandey.

Engineers India | Target price: ₹205

Engineers India is well-positioned to benefit substantially from the large refinery and petrochemical capex pipeline in India.

The company's focus remains on expanding its share of the high-growth green energy business by engaging in projects across segments such as green hydrogen, ammonia, biofuels, and coal gasification.

Already strong in domestic markets, the company continues to widen its footprint in high-potential international markets, such as the Middle East, Africa, South East Asia, and South America, for key consultancy projects.

Despite a 17 per cent year-on-year (YoY) decline in revenues for nine months, management guides flattish YoY growth for FY25, which implies 50%+ YoY growth in Q4FY25.

"Order inflows remained strong during this year ( ₹7,015 crore in nine months of FY25 as against ₹3,406 crore during FY24). Order backlog of ₹11,352 crore (four times trailing twelve-month revenues) gives healthy revenue visibility as the execution timeline is three to four years," Pandey noted.

Allied Blenders & Distillers | Target price: ₹495

Allied Blenders & Distillers (ABDL) is banking on a premiumisation strategy to drive double-digit revenue growth and margin uptick in the coming years.

With new product launches and inorganic initiatives, the contribution of the Prestige & Above (P&A) category will go up to 50 per cent by FY27 (from 37 per cent in FY24).

The company recently executed definitive agreements and formed a new entity – ABD Maestro Pvt Ltd, in collaboration with Bollywood actor Ranveer Singh to gain a share in the luxury segment.

The company targets revenues to grow by low-to-mid-teens driven by low double-digit volume growth.

"Premiumisation and backward integration will help EBIDTA margins to improve consistently in the coming years and might reach close to 15 per cent over the next three to four years. Recent correct provides good entry opportunity," said Pandey.

Lumax Auto Technologies | Target price: ₹750

Lumax Auto Technologies (LAT) is a leading auto ancillary player with a diversified portfolio serving OEMs (original equipment manufacturers) and aftermarkets.

Its key products include integrated plastic modules, which form a bulk 47 per cent of its revenues, followed by gear shifters at 12 per cent, after-market at 14 per cent, fabrication at 8 per cent, and lighting at 5 per cent.

The passenger vehicle (PV) domain contributed the maximum nearly 50 per cent of sales at LAT, which has significant growth potential due to India’s low car penetration.

"LAT counts M&M and Bajaj Auto as its top OEM clients, contributing nearly 40 per cent of its sales. With a robust order book driving high double-digit sales growth, gradual improvement in margin profile and strong return ratios (nearly 20 per cent), we have a positive view of Lumax Auto Technologies. The stock trades inexpensive at nearly 15 times PE on FY27E," Pandey said.

VA Tech Wabag | Target price: ₹1,870

Va Tech Wabag (Wabag) is a technology player in the water management industry. It provides tailored water solutions, such as seawater desalination, drinking and municipal water treatment, industrial water and wastewater treatment, and sludge treatment.

It has undertaken an organisational and operational restructuring process to improve its EBITDA margins from 7.7 per cent in FY21 to 13.2 per cent in FY24. During this period, revenue stagnated at over FY21-FY24.

However, with substantial order inflows in FY25 (nearly ₹5,435 crore), the company is walking the talk in terms of bagging profitable orders, maintaining strong FCF and working capital discipline, and delivering a mid-teen growth profile over the medium term.

A strong order backlog will improve the company’s operational and financial performance significantly in the coming period.

"We estimate revenue, EBITDA, and PAT to grow at nearly 16.2 per cent, nearly 20.7 per cent and nearly 23.7 per cent CAGR, respectively, over FY24-27E. Thus, it will lead to robust improvement in ROCE (return on capital employed) at 21.9 per cent in FY27E from 19.6 per cent in FY24. Focusing on improving return ratios and asset-light models can lead to rerating," said Pandey.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.