The Indian stock market has been a rollercoaster ride over the past six months, with indices experiencing significant corrections after hitting record highs in September 2024. Despite the turbulence, market experts believe this is an opportune moment for long-term investors to rejig their portfolios and invest in quality stocks available at or around their fair value. With global uncertainties and domestic economic resilience shaping market trends, here’s a deep dive into the top 10 stocks experts recommend for long-term investment.
Market Overview: A Tale of Resilience Amid Volatility
The Indian stock market has been a “sell on rise” market for the past six months. After reaching lifetime highs in September 2024—with the Nifty 50 hitting 26,277 and the Sensex scaling 85,978—the indices have since corrected significantly. As of last week, the Nifty 50 closed at 22,397, down 14.75% from its peak, while the Sensex ended at 73,828, marking a 14.15% dip. The Bank Nifty and broader market indices like the BSE Small-cap and Mid-cap indices also witnessed sharp declines, falling 11.75%, 24%, and 21.40%, respectively.
Despite these corrections, the Indian market has shown remarkable resilience compared to global peers, particularly in the face of a US stock market crash and ongoing trade policy concerns. Experts attribute this resilience to strong domestic economic indicators, including robust PMI data, easing inflation, and improved industrial production numbers.
Seema Srivastava, Senior Research Analyst at SMC Global Securities, noted, “The Indian market has been influenced by global economic trends, US trade policy concerns, and sector-specific movements. However, positive domestic data and selective buying in sectors like metals, PSU banks, and IT have fueled optimism. Investors remain cautious but are actively seeking opportunities in fundamentally strong stocks available at discounted prices.”
Why This is the Right Time to Invest
The recent market correction has brought several high-quality stocks to attractive valuations, making it an ideal time for long-term investors to enter or expand their positions. SBI Securities, in its latest market outlook, emphasized sticking to “quality businesses with supportive valuations” for medium- to long-term investment horizons.
Key factors supporting this optimism include:
- Easing Inflation: India’s CPI inflation eased to a 7-month low of 3.6% in February 2025, driven by lower food prices. This has raised hopes of further rate cuts by the RBI in its upcoming policy meeting.
- Strong Industrial Growth: The Index of Industrial Production (IIP) surged to an 8-month high of 5.0% in January 2025, up from 3.5% in December 2024.
- Global Liquidity Trends: While FIIs net sold ₹6,423 crore in the cash market last week, DIIs net bought ₹3,776 crore, indicating strong domestic investor confidence.
Top 10 Stocks to Buy for the Long Term
Here are the 10 stocks recommended by experts for long-term investment, along with the rationale behind their selection:
1. SJVN Limited
SJVN, a mini-ratna public sector enterprise, is a leading player in the hydro and renewable energy sector. With the government’s focus on clean energy and infrastructure development, SJVN is well-positioned to benefit from long-term growth opportunities. The stock is currently trading at a discount, making it an attractive buy.
2. UPL Limited
UPL, a global agrochemicals and seeds company, has a strong presence in over 130 countries. Despite recent challenges in the agrochemical sector, UPL’s diversified product portfolio and focus on sustainable agriculture make it a solid long-term bet.
3. Bharat Electronics Limited (BEL)
BEL, a defense electronics company, is a key player in India’s defense modernization drive. With increasing government spending on defense and aerospace, BEL is expected to see robust order inflows and revenue growth in the coming years.
4. Bank of Baroda (BoB)
Bank of Baroda is one of India’s largest public sector banks, with a strong balance sheet and improving asset quality. The bank’s focus on digital transformation and retail lending positions it well for long-term growth.
5. Axis Bank Limited
Axis Bank, one of India’s leading private sector banks, has consistently delivered strong financial performance. Its focus on retail banking, digital initiatives, and improving asset quality makes it a preferred choice for long-term investors.
6. JSW Steel
JSW Steel, India’s leading steel manufacturer, is poised to benefit from the government’s infrastructure push and rising demand for steel in construction and automotive sectors. The company’s focus on capacity expansion and cost efficiency adds to its growth prospects.
7. Reliance Industries Limited (RIL)
Reliance Industries, India’s most valuable company, continues to dominate sectors like telecom, retail, and energy. With its aggressive expansion in renewable energy and digital services, RIL remains a top pick for long-term investors.
8. KEC International
KEC International, a global infrastructure engineering, procurement, and construction (EPC) company, is a key beneficiary of the government’s infrastructure development plans. Its strong order book and diversified business segments make it a reliable long-term investment.
9. Sapphire Foods India Limited
Sapphire Foods, a leading operator of quick-service restaurants (QSRs) like KFC and Pizza Hut in India, is well-positioned to capitalize on the growing demand for organized food services. Its strong brand presence and expansion plans make it a promising long-term pick.
10. Lemon Tree Hotels Limited
Lemon Tree Hotels, a mid-priced hotel chain, is set to benefit from the recovery in the travel and tourism sector post-pandemic. Its asset-light model and focus on cost efficiency make it an attractive investment in the hospitality space.
Market Outlook: What Lies Ahead?
The coming weeks are crucial for the Indian stock market, with several macroeconomic events on the horizon. The US Federal Reserve’s FOMC meeting, India’s wholesale price inflation data for February 2025, and ongoing global trade tensions will likely influence market trends.
SBI Securities remains cautiously optimistic, stating, “The Nifty 50 index faces immediate resistance at 22,670-22,700 levels. A breakout above this zone could push the index towards 23,000-23,300 levels. On the downside, the 22,300-22,200 zone is expected to provide strong support.”
Conclusion: Patience and Strategy are Key
While the Indian stock market remains volatile, the current correction offers a golden opportunity for long-term investors to buy quality stocks at discounted prices. Experts advise focusing on fundamentally strong companies with supportive valuations and avoiding speculative bets.
As Seema Srivastava aptly puts it, “In times of market uncertainty, patience and a disciplined investment approach are your best allies. Stick to quality stocks, and the rewards will follow in the long run.”
Whether you’re a seasoned investor or a beginner, now is the time to build a robust portfolio with these 10 expert-recommended stocks. The road ahead may be bumpy, but the potential for long-term gains makes the journey worthwhile.