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Fundamentally Strong Stocks for Long Term

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Published Date: 28 Mar 2024Updated Date: 21 Jan 20256 mins readBy MOFSL
Best Stocks

The Indian stock market is teeming with opportunities for all types of investors—whether you're an aggressive risk-taker or prefer safer, more conservative options. But if you're someone with a long-term vision, seeking value stocks that offer sustainable growth and stability, your choices are key. The trick is finding those hidden gems that can deliver steady returns over time. So, whether you aim to build wealth gradually or safeguard your portfolio with solid picks, let’s explore the best long-term value stocks which display strong fundamentals as well as have qualified management that can be your pick to build your investment portfolio

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1. Reliance Industries 

Reliance Industries Limited (RIL), one of India’s largest conglomerates, operates in petrochemicals, oil, retail, and telecom sectors. RIL is focusing on digital expansion with Jio which is expected to drive EBITDA growth from FY24 to FY27 through tariff hikes, wireless market share gains, and scaling its Homes and Enterprise business. Retail growth is set to recover, boosted by increased footprint, category expansion, and a possible quick commerce entry.

We recommend buying with a target price of ₹3,255.

2. Zomato

Zomato, launched in 2010, connects customers, restaurants, and delivery partners through its tech platform, and offers Hyperpure for kitchen supplies. Zomato's market share in food delivery grew from 54% in FY22 to 58% in 1QFY25, outpacing Swiggy. Its multi-app strategy enhances innovation, particularly with Blinkit in quick commerce.

We recommend buying Zomato with a target price of ₹320, based on its expanding market share and strong performance in quick commerce.

3. TCS

Tata Consultancy Services (TCS), a global IT leader, offers services in digital transformation, AI, cloud solutions, and software development. For FY25, growth is projected from the BSNL ramp-up and large deal closures, with the ongoing US banking recovery further supporting revenue growth. TCS’s strong financials and innovation make it well-positioned for future success.

We recommend a buy with a target price of ₹5400, driven by its robust growth outlook and strong deal momentum.

4. SBI Card & Payment

SBI Cards holds an 18.5% market share in cards-in-force (CIF) and 15.9% in industry spends. While corporate spending has slowed, strong growth in retail transactions continues to drive its performance. With a focus on product innovation and increased consumer transactions, SBI Cards is expected to achieve earnings growth of 34% CAGR over FY26-27E, supported by better asset quality and reduced funding costs.

We recommend a buy with a target price of ₹850, given its robust growth outlook and strong retail presence.

5. Oil India

Oil India Limited, a public sector enterprise, focuses on crude oil and natural gas exploration, production, and transportation, as well as LPG production. Strong production growth is projected between FY24-FY27, positioning the company well to mitigate potential price declines. Key projects, like the Indradhanush gas grid and Numaligarh refinery expansion, are progressing on track, adding significant value by FY26. With limited downside risk, the stock is an attractive long-term investment.

We recommend a buy with a target price of ₹720.

6. Dabur India

Dabur Ltd., a leader in FMCG, is well-positioned to benefit from rural recovery, driven by favourable monsoons and increasing incomes. With a 45-50% rural presence, Dabur is expanding its reach with affordable, rural-specific product packs, targeting growth in underserved markets. The company’s vast distribution network spans 7.9 million outlets, with direct access to 1.42 million. These factors make Dabur a strong contender for long-term growth.

We recommend buying with a target price of ₹700.

7. L&T Technology

The company specializes in engineering R&D services. The company expects broad-based growth and anticipates closing significant deals soon, including a cybersecurity project with the Maharashtra Government. L&T sees strong demand in sustainability, driven by the China+1 strategy, despite potential delays due to the US elections. It maintains its FY25 guidance of 8-10% organic growth, supported by a strong pipeline and milestone payments.

We recommend buying with a target price of ₹6,400.

8. Vinati Organics

The company has strengthened its operations through backward and vertical integration, especially after the Veeral Additives merger. This is expected to enhance economies of scale and maintain VO's leadership in ATBS and antioxidants. The commissioning of OSBP and DSBP plants positions the company as India's sole domestic producer, reducing reliance on imports. This in-house production is expected to lower raw material costs, enhance margins, and strengthen its competitiveness in specialty chemicals.

We recommend buying with a target price of ₹2,500

Investing in long-term value stocks is about balancing growth and stability and waiting patiently. The stocks mentioned—spanning tech, energy, and FMCG—are primed for sustained growth due to their strong fundamentals and future potential. Whether it's Reliance's digital expansion, TCS's market leadership, or Dabur's rural outreach, these companies offer solid opportunities for wealth-building. With careful research and a clear investment strategy, these picks can be key to long-term portfolio success.

 

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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