In a recent report, HSBC Global Research pointed out five top Indian stocks that investors should consider, stressing the importance of focusing on strong earnings and solid fundamentals rather than geopolitical issues, like the possible effects of Trump-imposed tariffs.
Even with global uncertainties, including trade disputes and tariff worries, HSBC believes these five companies offer strong growth potential, good profitability, and clear earnings visibility, making them great options for long-term investment. Let’s take a closer look at these stocks and why they are considered strong choices for investors.
Reason for the Stock Pick
HSBC thinks that trade tensions won’t significantly affect the growth of Indian companies because low foreign investments lower the risk of further money outflows. The bank also points out that macroeconomic risks have decreased, but concerns about high earnings expectations remain.
Even though the US has imposed a 26 percent tariff on India, the Indian government is in talks with the US and has chosen not to retaliate. This positive outlook is why HSBC has picked certain stocks in India.
List of stocks picked by the Global Brokerage
TVS Motor Company Limited
TVS Motor, one of India’s leading two-wheeler and three-wheeler manufacturers, has established itself as a key player in the competitive Indian automotive market. HSBC believes that TVS Motor shares offer a good risk-reward opportunity. They predict that the company’s EBITDA margin will grow from 12.1 percent in FY25 to 13.3 percent in FY27.
This positive outlook comes from expectations of a recovery in two-wheeler (2W) demand in FY26 after a high base. HSBC also expects a recovery in rural demand due to a good monsoon and believes that new product launches will help TVS maintain its market share. The company has strong research and development capabilities compared to other 2W manufacturers.
Reliance Industries Limited (RIL)
Reliance Industries, the conglomerate led by billionaire Mukesh Ambani, continues to be a dominant force in various sectors, including petrochemicals, retail, telecommunications, and energy. HSBC upgraded Reliance Industries stock to “buy” in its January 17 review, despite a 25 percent drop in the stock since September 2024 due to concerns about its telecom, retail, and O2C businesses and limited updates on new energy.
HSBC sees the current stock price as a good buying opportunity. They expect improvements in the retail business after a restructuring in FY25, with better e-commerce and fashion product quality. For telecom, HSBC expects higher revenue per user from tariff hikes and growth in AirFibre adoption.
In O2C, HSBC anticipates stable margins and earnings growth from new capacity. They also expect Reliance to progress with its new energy projects, including cell and module products and battery storage technology.
Shriram Finance Limited
Shriram Finance is one of India’s largest non-banking financial companies (NBFCs), with a strong presence in retail financing. HSBC sees Shriram Finance as a stable investment. The company’s vehicle financing business is less impacted by market cycles due to its diverse product offerings and lower reliance on vehicle loans.
HSBC expects steady growth in its assets, with net interest margin (NIM) expanding due to stable yields and reduced funding costs. The company’s asset quality and credit costs are expected to remain stable, as it has low exposure to unsecured loans.
ICICI Bank Limited
ICICI Bank, one of India’s largest private sector banks, has consistently delivered strong financial results driven by its robust asset quality, diversified revenue streams, and strong capital base.
HSBC has a “buy” rating on ICICI Bank, noting its strong growth, superior asset quality, consistent earnings, and healthy profitability compared to its peers. Despite pressures on loan growth and net interest margins, ICICI Bank has managed these challenges better than others, and HSBC expects this strong performance to continue, keeping the bank’s valuation premium over competitors.
Adani Ports and Special Economic Zone (APSEZ) Ltd
Adani Ports, part of the diversified Adani Group, is India’s largest private port operator and one of the most prominent players in logistics and infrastructure development. HSBC sees APSEZ as a strong long-term investment due to India’s trade and infrastructure growth.
The addition of new terminals like Vizhinjam and Colombo will boost its capacity and pricing power. The growth in logistics and international operations will help reduce reliance on domestic cargo volume. HSBC also expects strong earnings growth, forecasting a 16 percent CAGR in EBITDA and a 22 percent CAGR in earnings from FY24 to FY27.
Written by Sridhar J
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
