Stock Picks for 2025: HDFC Bank to Senco Gold— Religare Broking suggests THESE six stocks to ‘accumulate’ for long-term

Stocks picks for 2025: The Indian stock market‘s performance in 2024 has been notably positive, with significant gains across major indices. On the benchmark front, both Nifty 50 and Sensex edged higher for the ninth consecutive calendar year and have surged nearly nine per cent. The upward trend reflects a broader rally, with both indices consistently reaching new highs with the Nifty crossing multiple milestones, from 22,000 to 26,000, in a relatively short period. 

However, in the second half of 2024, the market faced challenges such as weak corporate earnings, foreign outflows, elevated inflation, and sluggish economic growth. Despite these headwinds, steady buying by domestic investors and strong participation from retail investors have supported the markets.

Outlook for 2025

As we move into 2025, several notable trends are expected to influence markets in India and globally. Shifts in US trade policies, including higher tariffs, could alter international trade patterns and supply chains, prompting countries like India to reassess trade agreements and may introduce market uncertainty.

Additionally, resolving ongoing geopolitical conflicts could stabilize global markets and improve economic sentiment. A recovery in corporate earnings is anticipated as businesses rebound from a period of slower growth, supported by higher government capital expenditures and renewed private-sector investments. 

If inflationary pressures ease, the demand environment could improve, boosting consumer spending and increasing purchasing power. According to D-Street brokerages, together, these factors will likely create a dynamic environment in the coming year, offering investors opportunities and challenges.

Analysts at domestic brokerage Religare Broking say investors should focus on accumulating fundamentally strong stocks during market dips, particularly those with solid balance sheets and growth potential, to navigate fluctuations.

In the current market scenario, Religare Broking has released its top six New Year stock picks for 2025 and recommends accumulating the stocks for long-term potential returns. The domestic brokerage has selected quality stocks for investors based on technical and fundamental parameters.

Stocks picks for 2025 by Religare Broking:

Let’s take a look at the top six technical and fundamental stocks for the New Year by domestic brokerage Religare Broking:

1.HDFC Bank: Current market price (CMP): ₹1,797.65; Accumulation range: ₹1,720-1,810; Targets: ₹1,920-2,008

Following the merger with HDFC, the private bank’s credit-to-deposit (CD) ratio experienced significant deterioration, reaching levels as high as 108.4 per cent. However, this trend has recently begun to reverse, with the CD ratio falling to 100.7 per cent in Q2 FY25, as the bank has increased its focus on deposit growth.

Asset quality continues to remain Robust: Asset quality saw marginal deterioration during the quarter, but overall, the asset remains robust as Gross NPA (GNPA) and Net NPA (NNPA) remain at the lower end of their historical range and are expected to remain around current levels only.

Re-rating potential: The elevated CD ratio has been a significant challenge for HDFC Bank, adversely affecting its margins and growth and leading to a decline in its valuation multiple. However, as the bank gradually improves its CD ratio, we can expect to see a gradual margin enhancement over the next few quarters, and the potential for a re-rating should not be overlooked.

2.Life Insurance Corp (LIC): CMP: ₹887.60; Accumulation range: ₹840-900; Targets: ₹1,045-1,160

Increasing share on non-par products: It has significantly boosted its share in non-participating (non-par) products, enhancing its VONB margins. Over the past year, the contribution of non-par products in individual APE rose from ₹967 crore to ₹3,164 crore, increasing their share from 11.1 per cent to 27.7 per cent. This focus on high-margin non-par products is expected to improve its margins.

Well positioned in evolving landscape: LIC of India, a leading life insurer showing strong growth from steady premium income and improved margins from high-margin non-participating products and non-par products. With a strategic focus on expanding its product mix and enhancing profitability, LIC is well-positioned for continued success in the evolving insurance landscape.

3.DLF: CMP: ₹835.05; Accumulation range: ₹800-850; Targets: ₹960-1,050

Strong launch pipeline: DLF has a robust launch pipeline with a projected sales potential of ₹41,000 crore for FY2025 and ₹63,500 crore in the medium term beyond FY2025, highlighting strong revenue growth potential. Some key upcoming projects include Dahlias (Phase 5), Downtown Gurugram, new developments in Goa, Mumbai, and the next phase of Privana. The management retained a pre-sales guidance of ₹17,000 crore for FY2025.

Strategic expansion and market leadership: DLF holds a leading position in the Delhi-NCR real estate, supported by extensive land reserves with a development potential of 187 msf. The company is strategically expanding its footprint into other key markets, including the Chandigarh Tri-city region, Mumbai, and Goa.

To benefit from India’s growing residential demand: DLF is expected to benefit from the strong growth potential of the real estate industry. The residential segment in India is experiencing a resurgence, with demand exceeding supply in major cities. Urbanization, increasing household incomes, and a desire for homeownership are fueling demand in the residential sector.