Five Quality Stocks for Long-Term Investment Amid Market Volatility
Domestic market sentiment remains weak this week. Relentless foreign capital outflow, geopolitical uncertainties, and mixed Q3 earnings have created pressure. The equity benchmark Nifty 50 stayed flat for the week ending January 16. It moved in a narrow range between 25,470 and 25,900 points.
Experts expect stock-specific action to continue in the near term. The ongoing Q3 results season will drive this activity. However, analysts remain positive about medium to long-term prospects. A healthy macro environment, policy support, and expectations of further RBI rate cuts provide a strong foundation.
Expert Recommendation for Long-Term Investors
Nandish Shah, AVP– PCG Research and Advisory at Motilal Oswal Financial Services, suggests picking quality stocks for the long term. He remains bullish on the market's future. Shah has identified five stocks with strong potential. These companies demonstrate robust execution and clear growth drivers.
Bharti Airtel: Leadership in Premium Mobility
Bharti Airtel continues to show strong execution across its core businesses. The company reinforces its leadership in premium mobility and digital infrastructure. Management has moderated FY26 capex expectations. They highlighted healthy free cash flow generation of ₹146 billion despite higher network investments.
Key structural drivers include premiumisation, ARPU gains, broadband expansion, and Nxtra’s data centre growth. These factors strengthen Bharti’s long-term cash flow visibility. Shah maintains a buy rating on the stock. He cites consistent operational outperformance and steady free cash flow generation.
"We model a CAGR of 15% and 18% in Bharti Airtel’s consolidated revenue and EBITDA over FY25-28E," said Shah. Multi-year earnings visibility comes from 5G rollout, broadband growth, and digital infrastructure expansion.
Bharat Electronics: Defence Electronics Powerhouse
Bharat Electronics continues to reinforce its leadership in India’s defence electronics space. Strong execution and a resilient order pipeline support this position. In Q2FY26, the company reported a robust beat across all metrics. Revenue rose 26% year-on-year. EBITDA margin improved to 29.4%. PAT grew 18% year-on-year.
Superior cost control and project execution drove these results. The order book stood healthy at ₹746 billion. Inflows more than doubled year-on-year. Management reaffirmed its long-term export strategy. They aim to increase exports from 3-4% of turnover to 5% over the next two to three years.
The eventual target is 10% of total revenues. Key programs like QRSAM, Project Kusha, and next-generation corvettes will lead this expansion. "With expanding system integration capabilities and a strong export order book, we estimate steady growth ahead," said Shah.
ICICI Bank: Exemplary Performance and Strong Balance Sheet
ICICI Bank continues to deliver exemplary performance. The bank rises above sectoral challenges. It sustains Return on Assets in the range of 2.3-2.4%. This level exceeds aspirational targets for most banks. The bank maintains a strong balance sheet. Provisions declined 26% year-on-year and 50% quarter-on-quarter.
This places the bank well on track to comfortably beat its credit cost guidance. ICICI Bank remains focused on delivering superior risk-adjusted returns. Prudent underwriting practices and strong credit discipline support this focus. Investment in technology has resulted in consistent productivity gains.
The bank also achieved market share gains and steady improvement in cost ratios. Asset quality remains under control. Expected credit loss impact should be fairly manageable for the bank.
Mahindra and Mahindra: Ambitious Growth Targets
Mahindra and Mahindra targets strong long-term growth. The company aims for 8 times expansion in SUVs and light commercial vehicles. It targets 3 times growth in the farm segment over FY20–30. This implies a 12% revenue CAGR. Upcoming launches like XEV 9S and NU-IQ platform rollout from 2027 will support this growth.
A 1.6 times volume increase in the sub-3.5-tonne segment is also expected. M&M's growth businesses are scaling rapidly. Last Mile Mobility targets 6 times revenue growth. Trucks and buses aim for a top-three ILCV position. Aerostructures pursues a global top-ten ranking.
Mahindra Holidays targets 3 times keys, 3 times revenue and 4 times PAT growth. Lifespace plans over 14 times sales growth this decade. Management indicated they may enter one new segment next year. This move must fit M&M’s guiding principles of delivering 18% RoE on a sustainable basis.
HCL Technologies: Diversified Portfolio and AI Momentum
HCL Technologies benefits from its diversified, all-weather portfolio. The portfolio performs well amid uncertain demand conditions. Strong deal traction and improving service mix underpin confidence in sustained growth. The company maintains its position as the fastest-growing large-cap IT services player.
AI conversations have matured from experimentation to enterprise-wide business reimagination. Clients now prioritise data lifecycle management, AI readiness, infrastructure, and foundational services. Large-scale deployments remain early. However, this shift supports revenue momentum.
This is reflected in 4.2% quarter-on-quarter constant currency growth and $3 billion deal total contract value. Profitability remained resilient with EBIT margins at 18.6%. Execution strength supported this despite macro uncertainty. FY26 revenue guidance increased to 4–4.5% year-on-year constant currency.
The long-term outlook remains positive. Shah projects USD revenue and INR PAT CAGR of 6.7% and 8.9% respectively over FY25–28.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert. We advise investors to consult with certified experts before making any investment decisions. Market conditions can change rapidly and circumstances may vary.
