Safe and steady: 10 Bluechips that offer reasonable value
Despite concerns about expensive valuations, a section of the market feels the correction has thrown up some buying opportunities, here’s a rundown of top 10 blue-chip stocks.
Benchmark indices gave up early gains to close in the red on August 6, as sentiment remains edgy following Monday’s sell-off. Despite concerns about expensive valuations, a section of the market feels the correction has thrown up some buying opportunities. Let’s take a look.
#1 ITC | CMP: Rs 485 per share
Analysts at Prabhudas Lilladher view the stable taxation on cigarettes in the recent budget, coupled with stringent enforcement against illicit trade, as favorable for ITC. They expect good demand for staples, snacks, dairy, personal care, and homecare products in the run up to the festive season and commodity costs to be stable. Furthermore, the upcoming demerger of the hotels business, expected to be completed in about six months, is likely to unlock value and enhance return ratios.
#2 ICICI Bank | CMP: Rs 1,166 per share
Analysts see the private sector lender as a strong candidate for re-rating, given its consistent performance in recent quarters. The stock is in a position to command premium valuations, thanks to its good asset quality, loan-to-deposit ratio (LDR), and margins. Motilal Oswal projects a 12 percent profit CAGR for ICICI Bank over FY24-26E and has raised its target price to Rs 1,400 per share, indicating a potential upside of over 19 percent from current levels. Likewise, Nirmal Bang values ICICI Bank at 2.8x its June 2026 ABV, suggesting an upside potential of over 23 percent.
#3 Maruti Suzuki India | CMP: Rs 12,126 per share
Following a strong June quarter performance, Jefferies and Nuvama analysts project up to a 30 percent upside for the stock, citing ongoing margin expansion as a key trigger. Analysts attribute this potential to falling commodity prices, cost reduction efforts, and favorable foreign exchange movements, all positioning the automaker as a leader. Additionally, as an early adopter of hybrid vehicles, Maruti could benefit from any GST cuts or favorable government policies for hybrids, driving a re-rating. The management is confident of achieving its export target of 3 lakh vehicles by the end of the fourth quarter.
#4 State Bank of India | CMP: Rs 797 per share
The PSU bank has outshone its large private sector peers, reporting healthy profits and return on assets, driven by 16 percent YoY credit growth and lower operational expenses in Q1FY25. While deposit growth has been slow, the bank has the flexibility to adjust savings account rates if needed. Major brokerage houses—including Nomura, Prabhudas Lilladher, YES Securities, and Emkay Global—maintain a bullish outlook on SBI, forecasting over 27 percent upside from current levels. Nomura, in particular, highlights SBI as its top pick among peer lenders due to its low LDR ratio of 69 percent, compared to the industry average of 79 percent, and a comfortable liquidity coverage ratio of 127 percent.
#5 Larsen & Toubro | CMP: Rs 3,527
L&T’s record order book and robust order pipeline, combined with a gradual revival in private capex, are the key positives. Its strong balance sheet, diversified business portfolio, and proven execution capabilities give it an edge in the current volatile and challenging economic environment. Despite lower margin guidance, analysts at LKP Securities expect L&T to benefit from an improving pipeline and enhancements in net working capital (NWC) and return on equity (RoE). L&T has reaffirmed its guidance of 15 percent revenue growth and 10 percent order inflow growth for FY25.
#6 Coal India | CMP: Rs 499 per share
The increasing acceptability of coal as a dominant fuel mix and strong volume delivery in recent quarters make Coal India a compelling ‘buy’, according to Elara Securities. Analysts highlight the company’s healthy balance sheet and anticipated annual dividend payout of Rs 23-25 per share, which makes it a safe bet amid market turmoil. Coal India has retained its production and sales volume guidance of 838 million tonnes each for FY25. With the government’s goal to ensure 24×7 power supply for all by CY25, the management has set an ambitious target to reach a production volume of 1,000 million tonnes by FY26, providing further potential for re-rating.
#7 Bajaj Finance | CMP: Rs 6,540
The recent lifting of RBI restrictions on sanctioning and disbursing digital loans, imposed in November 2023, marks a significant turning point. These restrictions had temporarily dented profitability in Q3 and Q4FY24, causing a 4 percent decline in net income. With the restrictions now lifted, analysts expect a boost in Return on Assets (ROA) going ahead, driven by enhanced fee income. Prabhudas Lilladher has set a target price of Rs 8,200 apiece.
#8 Britannia Industries | CMP: Rs 5,700 per share
The consumer goods maker reported improved rural demand trends in the June quarter, resulting in better sales over the past few months. The company’s volume growth accelerated into high single digits, leading to market share gains. Management expects this volume growth to continue, supported by stable retail inflation, a healthy monsoon, and Budgetary allocations aimed at boosting the rural economy. JM Financial has maintained a ‘buy’ rating on the biscuit maker, with a target price of Rs 6,070.
#9 TCS | CMP: Rs 4,170 per share
With the US unemployment rate climbing to a three-year high, analysts suggest that fears of a recession might prompt the Federal Reserve to cut interest rates earlier than expected. A potential September rate cut could boost discretionary spending by IT firms and revitalise the sluggish deal flow observed in recent quarters. Jefferies, Nuvama, and Nomura analysts project up to a 15 percent upside for the stock, highlighting that strong deal wins are likely to translate into increased revenue in the coming quarters.
#10 NTPC | CMP: Rs 415 per share
NTPC stands out as a key player in both energy transition and security. The company’s expanding renewable energy (RE) pipeline and ventures into green hydrogen and pumped hydro storage are expected to drive future growth, believe analysts. Currently trading at 2.0x FY27E P/B, the stock appears attractive, said Elara Securities, projecting over 14 percent upside in the stock, driven by improved visibility on regulated returns and progress in renewable energy initiatives.
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