Stocks to buy for long term: From TCS, Bharat Forge to Lupin— Hedged.in founder suggests 5 shares; do you own any?

Stocks to buy for the long term: The Indian stock market's performance in 2025 has been modest, largely due to heavy foreign capital outflow, weak earnings, and concerns over geopolitical uncertainties and US tariffs.

The Nifty 50 has gained over 9%, while the broader Nifty 500 index has underperformed, rising by just 5% this year so far.

However, experts appear positive about the coming year as they expect a revival in earnings growth amid favourable growth-inflation dynamics and expectations of an India-US trade deal.

Stock picks for long-term

Rahul Ghose, Founder and CEO of Octanom Tech and Hedged.in., suggests the following five stocks to buy for the long term:

TCS

Tata Consultancy Services (TCS) continues to stand out as one of the strongest franchises within the Indian equity market, backed by a long history of high return ratios, robust free cash generation and a dependable dividend payout.

Its diversified exposure across BFSI, retail, manufacturing, communications and other verticals, combined with a growing presence in large, multi-year digital transformation programs, has helped reinforce revenue visibility across cycles.

Following a phase of muted growth and valuation compression across global IT services, the stock is now trading at levels that remain premium to the broader market but are justified by TCS’s balance sheet strength, consistency of execution and superior cash-return profile.

As global technology spending stabilises and discretionary budgets gradually recover, areas such as cost-optimisation, cloud migration and AI-linked initiatives should drive incremental demand.

"TCS is well positioned to participate in this recovery without compromising margins or capital discipline," said Ghose.

"At an indicative level of ₹3,280, a three-year target range of ₹5,200–5,400 appears reasonable. This assumes high single-digit to low double-digit earnings growth, supported by steady deal wins and a valuation multiple that remains stable to marginally higher, anchored by strong cash flows and shareholder payouts," said Ghose.

"Within a long-term portfolio, TCS belongs in the value segment not because it is optically cheap, but because it represents a high-quality compounder where investors are paying a fair price for durable earnings, capital efficiency and a long runway of predictable cash generation," Ghose said.

Bharat Forge

Ghose pointed out that Bharat Forge has steadily transitioned from being largely dependent on cyclical auto forgings to becoming a more balanced, multi-segment engineering company.

While commercial and passenger vehicles remain important, the company today has meaningful exposure to structurally stronger areas such as defence, railways, industrials and exports.

Over recent years, management has deliberately increased focus on segments that offer better margins and lower cyclicality, particularly defence, aerospace and advanced industrial applications, while also building capabilities in electric vehicle components.

"At the current price band of around ₹1,400–1,450, the market appears to be largely discounting a recovery in the domestic commercial vehicle cycle. However, the longer-term opportunity from defence indigenisation, rising export orders and industrial capex is not yet fully reflected in valuations," said Ghose.

A growing and diversified order book, coupled with a favourable shift in product mix, should support operating leverage and margin expansion over the medium term. As a result, profit growth has the potential to outpace revenue growth over the next few years.

Overall, Bharat Forge offers a value-oriented entry into India’s manufacturing and defence capex theme.

"With the stock trading near an indicative level of ₹1,430, a three-year price objective of ₹2,100–2,200 looks achievable. This assumes mid-teens revenue growth, sustained improvement in operating margins as higher-value businesses scale up, and valuations aligning closer to high-quality capital goods and engineering peers," said Ghose.

Lupin

Lupin has emerged from a prolonged period marked by US pricing pressure and regulatory challenges, and is now showing clear signs of operational and financial improvement.

The balance sheet is healthier, execution has stabilised, and the company continues to benefit from its strong position in domestic branded formulations alongside a sizeable US generics business.

Importantly, Lupin is rebuilding its pipeline in complex generics and respiratory products—segments that tend to offer superior margins compared to plain-vanilla generics.

Even after the broader rerating in large-cap pharmaceuticals, Lupin continues to trade below the valuation levels seen in earlier upcycles.

This reflects lingering investor concerns around the sustainability of earnings recovery and regulatory consistency.

However, if the company maintains momentum in higher-margin launches, improves compliance across manufacturing facilities, and exercises capital discipline, return ratios have room to normalise to levels meaningfully higher than what current valuations imply.

"At an indicative price range of ₹2,125, a three-year target of ₹2,900–3,100 appears achievable. This factors in mid-teens earnings growth and a gradual re-rating towards valuations commanded by leading Indian pharma peers as confidence in the recovery strengthens. From a long-term portfolio perspective, Lupin represents a blend of value and quality," said Ghose.

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance benefits from strong parentage and a well-established position across individual protection, ULIPs and traditional savings products, giving it direct exposure to the long-term financialisation of household savings in India.

Despite these strengths, the stock has historically traded at a valuation discount to the sector leaders, largely due to intermittent growth slowdowns and earlier concerns around product mix and profitability.

In recent years, management has shifted focus towards improving the quality of growth rather than chasing volumes. Higher emphasis on protection products, better persistency ratios and disciplined underwriting have begun to translate into healthier value of new business (VNB) margins.

As the company continues to expand its bancassurance partnerships and strengthen its agency network, it remains well-positioned to benefit from the steady migration of savings from physical assets to financial instruments.

"At present, listed life insurance peers trade in a range that reflects moderate growth expectations and some de-rating from earlier peak valuations," said Ghose.

"Over a three-year horizon, there is scope for meaningful upside—potentially in the range of 35–40% (approximately ₹870 level) if VNB (value of new business) growth sustains at low double-digit levels and the valuation gap versus top-tier private insurers narrows with consistent execution," said Ghose.

"For long-term investors, ICICI Prudential Life provides exposure to a structurally under-penetrated sector at valuations that still reflect a degree of caution, offering the potential for gradual re-rating as operating performance continues to improve," Ghose said.

Phoenix

Phoenix Mills, recently rebranded as Phoenix Limited, is among the leading owners and operators of premium retail malls and mixed-use developments across India’s major urban centres.

Its asset portfolio is well-aligned with long-term trends, such as rising urban incomes, increasing formalisation of retail, and the consumer preference for destination-style, experience-oriented shopping environments.

Backed by a strong base of marquee assets and a visible pipeline of upcoming developments, Phoenix is positioned to benefit from a combination of steady rental escalations, improving occupancy levels and operating leverage as newer properties stabilise.

The business model also allows for capital recycling once assets mature, supporting balance sheet strength and future growth.

"Over a three-year period, Phoenix offers the potential for 50–70% upside, driven by incremental asset additions, contracted rental escalations and gradual improvement in leverage metrics," said Ghose.

"Within a long-term portfolio, Phoenix provides a differentiated and asset-backed way to participate in India’s urban consumption story, offering a combination of cash-flow visibility, operating leverage and a proven execution track record," Ghose said.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.