Stock picks for long term: Reliance, HDFC Bank, ITC... Ajit Mishra of Religare Broking suggests 5 stocks to buy

Stock picks for long term: Despite a sharp selloff since October last year, which dragged the benchmark index Nifty 50 down about 16 per cent from its peak, the index closed the financial year 2025 with a 5 per cent gain.

In March, the Nifty 50 surged over 6 per cent, snapping its five-month losing streak, driven by valuation comfort, foreign investor buying, and improving macroeconomic indicators.

However, experts caution that the road ahead remains uncertain, with a trade war triggered by US President Donald Trump's tariff policies posing a key challenge for the market. Additionally, all eyes are on the upcoming Q4 earnings season. If earnings show signs of improvement or stability, the market could extend its gains.

For investors, this is a crucial period marked by uncertainty and confusion over investment strategies. Experts recommend focusing on quality stocks, as the long-term outlook for the domestic market remains strong, supported by solid growth prospects and a steady influx of retail investors.

Ajit Mishra, SVP of research at Religare Broking, recommends five stocks to buy for the next financial year (FY26). He expects these stocks to rise up to X per cent in a year. Do you own any of these?

Stocks to buy for long term

Reliance Industries | Previous close: ₹1,275.10 | Target price: ₹1,570 | Upside potential: 23%

Reliance Industries is one of India’s largest conglomerates, with operations spanning petrochemicals, refining, oil and gas, retail, and telecommunications.

Jio’s expanding customer base, rising 4G/5G penetration, and entry into IoT (internet of things), AI (artificial intelligence), and cloud services are expected to drive ARPU (average revenue per user) and revenue growth by 2027.

Reliance Retail is set for sustained growth through acquisitions, an omnichannel model, and improving EBITDA margins, boosting overall financial performance.

The company is investing ₹75,000 crore in renewable energy, including a 30 GWh battery plant and multi-GW electrolyser facility, set to go live by 2025-26.

HDFC Bank | Previous close: ₹1,828.20 | Target price: ₹2,065 | Upside potential: 13%

HDFC Bank is India's largest private sector bank with 15.6 per cent market share in advances and 11.6 per cent in deposits, with presence across banking, insurance, AMC, and securities.

Its merger with HDFC unlocks value through mortgage cross-selling, a larger funding base, and cost efficiencies.

Margins are expected to recover as deposit growth improves, interest rates ease, and loan mix stabilises.

The company maintains strong asset quality with low GNPA/NNPA and controlled credit costs, supporting sustainable growth.

"Trading at nearly 2.8 times ABV, below the historical average, the stock offers a compelling long-term entry point," said Mishra.

ITC | Previous close: ₹409.75 | Target price: ₹548 | Upside potential: 34%

ITC has a diversified business. It operates across cigarettes, FMCG, hotels, agri,

paperboards, and IT, reducing sector-specific risks and ensuring stable revenue streams.

With a robust portfolio and extensive distribution, ITC continues to capture market share through new product launches and premiumization across FMCG categories.

The company generates strong free cash flows and maintains a high dividend payout (nearly 80–85 per cent), appealing to income-focused investors.

Strategic focus on capital efficiency and core businesses is driving consistent improvement in return ratios.

"The stock trades at a discount to consumer peers, offering a margin of safety," said Mishra.

HDFC Life Insurance Company | Previous close: ₹685.70 | Target price: ₹870 | Upside potential: 27%

HDFC Life Insurance has a strong market position. Owned by HDFC Bank, it is India’s

second-largest private life insurer with industry-leading VNB (value of new business) margins and persistency ratios (87 per cent in FY24), backed by a diversified product mix and digital focus.

With 600 branches and 2.4 lakh agents, the company has a strong tier 2 and tier 3 presence, contributing 65 per cent to APE (annualised premium equivalent) and nearly 75 per cent to NOP (number of policies).

"Despite near-term margin pressures from ULIP demand, margin recovery is expected from FY26E. Re-rating potential exists as regulatory overhang fades and growth sustains," said Mishra.

Computer Age Management Services (CAMS) | Previous close: ₹3,723.35 | Target price: ₹4,390 | Upside potential: 18%

CAMS is India’s largest Registrar and Transfer Agent (RTA) for mutual funds, with a 68 per cent market share of MF AUM as of Dec’24, offering end-to-end tech-enabled services across the transaction value chain.

With over 30 years of tech investment, CAMS operates in a scale-intensive industry with deep client integrations, serving 10 of the top 15 mutual funds, making client switching unlikely.

CAMS is scaling in AIFs, PMS, NPS, insurance repositories, account aggregation, and KYC, supported by acquisitions in fintech and AI.

Its nearly 74 per cent of revenue is tied to mutual fund AUM, making CAMS a strong play on India’s growing mutual fund industry.

It recently secured RTA mandates from Jio BlackRock MF, Pantomath MF, and Choice MF, reinforcing its market leadership.

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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, as market conditions can change rapidly, and circumstances may vary.