In an exclusive interview with ET Now Swadesh, Gaurang Shah, Senior Vice-President at Geojit Investments, gave investment recommendations for four stocks that have become more attractive due to current market fluctuations caused by geopolitical tensions in the Middle East. Shah emphasises a long-term investment horizon for these picks.
Larsen & Toubro (L&T)
Shah remains bullish on L&T due to its strong order backlog and exposure to the Middle East, suggesting investors buy now and accumulate on dips for a target of Rs 4,500 over the next 12-15 months.
“Our opinion on L&T is a buy. It is a nearly 80-year-old company in our country and has a long and established track record. Over the years, it has consistently delivered profits to long-term investors and is considered one of the most investor-friendly companies. It has also issued bonus shares regularly, such as one bonus share for every two shares held,” Shah said, adding, “after a bonus issue, the stock price typically adjusts and becomes more affordable, which often attracts more investors over time.”
“Considering the ongoing geopolitical tensions and losses in the Gulf region, once the situation stabilises, there will likely be significant reconstruction and infrastructure development. Rebuilding damaged infrastructure and making it stronger than before will require substantial investment. At that stage, companies like L&T, with strong engineering and infrastructure capabilities, will play a crucial role in rebuilding efforts. Therefore, a target of around Rs 4,500 for the stock appears achievable and investors may consider starting positions at current levels and adding more on market declines,” he stated.
Tata Power
With rising temperatures and increased energy consumption, Shah recommends Tata Power with a target of Rs 485, noting it’s a solid company that has performed well despite global market volatility.
He said, “Tata Power is a strong and capable company and we maintain a buy rating on the stock. Over the past two weeks, global developments and geopolitical tensions have created volatility across markets, which has also influenced the stock’s movement.”
“Despite the uncertainty, Tata Power has shown resilience and has seen some upward momentum. We are currently presenting a modest target of around 485 for the stock. However, considering the company’s long-term plans and growth prospects, we believe this target may be on the conservative side. If the company delivers stronger-than-expected results and executes its plans effectively, the target could be revised upward in the future,” Shah added.
Mazagon Dock Shipbuilders
For the defense sector, Mazagon Dock is highlighted for its excellent order book. Shah advised investors to look at a 3-5 year horizon, with a target of Rs 3200.
Shah said, “Mazagon Dock is an excellent company with a strong position in the defence sector. The company has a solid order book, which provides good visibility for future growth. If investors are considering investing in defence stocks, my humble request is to keep a long-term investment horizon of three to five years. Projects in this sector involve complex engineering and high-precision technology and execution of the order book typically takes time.”
“I have a buy opinion on Mazagon Dock with a target of around Rs 3,200. The company’s strong order book and expected increase in execution run rate support this outlook. Overall, the risk-reward ratio appears quite favorable for long-term investors,” he added.
Cipla
In the pharma sector, Shah recommended Cipla as a safe haven during geopolitical instability, with a target of Rs 1650 based on strong fundamentals.
“Cipla is a giant in the pharmaceutical sector. The pharma sector generally tends to remain relatively insulated during periods of geopolitical uncertainty, especially when issues such as war, crude oil and natural gas volatility affect global markets,” he said, adding, “therefore, the pharmaceutical sector appears comparatively safer in such situations. I have a buy opinion on Cipla based on strong fundamentals. A modest target of 1,650 has been set for Cipla. This view is based on a long-term investment perspective.”
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
