SBI, Bajaj Auto to NMDC: LKP Securities lists these 10 stocks to buy amid strong growth outlook for large & mid-caps

The Indian equity markets have been on a downward streak, driven by valuation concerns, particularly in the mid and small-cap sectors, global uncertainties stemming from trade tensions, and most significantly, the slowing domestic economy.

LKP Securities says the substantial sell-off has lowered the Nifty 50 price-to-earnings (PE) ratio for CY2025 earnings to 18.8x, creating an attractive investment opportunity. 

With current deep price corrections, large-cap and large-mid-cap stocks now present a prudent choice for investors seeking sustainable growth and stability, said the brokerage. It believes that sectors such as consumer durables, two-wheelers, tractors, banking, and capital goods have an edge in the current business environment, making them attractive bets for the medium to long term.

Top Large and Mid-Cap Picks by LKP Securities

Here are 10 large-cap and mid-cap stock recommendations by the brokerage:

1. State Bank of India (SBI): LKP Securities says SBI continues to demonstrate consistent performance in the banking sector, supported by healthy business growth and sustained profitability. With easing liquidity conditions and the government’s repo rate cuts, the bank is positioned to capitalize on rising credit demand. LKP highlights that SBI’s net interest margins (NIMs) are expected to remain stable due to its lower proportion of repo-linked loans. Furthermore, the bank’s asset quality has improved indicating resilience in the current macro environment. LKP assigns a ‘BUY’ rating with a target price of ₹890, indicating an upside potential of 23 per cent.

2. Larsen & Toubro (L&T): LKP Securities says L&T is well-positioned to benefit from India’s infrastructure spending, with management confident of surpassing FY25 revenue and order intake guidance of 10 per cent and 15 per cent, respectively. LKP highlights that L&T’s diversified portfolio, including mobility, energy, roads, and urban infrastructure, ensures strong order visibility. With a record order book and a healthy pipeline, the company is poised for robust growth. LKP assigns a ‘BUY’ rating with a target price of ₹4,070 (28 per cent upisde), backed by L&T’s proven execution capabilities, balance sheet strength, and improving RoEs.

3. Kotak Mahindra Bank (KMB): LKP Securities says Kotak Bank maintains strong growth across its lending portfolio, with a five-year CAGR of 13 per cent. Despite the technology embargo, the bank’s recent performance has been driven by its secured business. The potential removal of the ban could boost deposit growth and customer acquisition through digital channels. LKP highlights the bank’s industry-leading NIM of 4.9 per cent, expected to remain range-bound due to a better asset mix and lower-cost deposits. With the stock trading at 2.6x FY27E BVPS, below its three-year historical average of 3.5x, LKP assigns a ‘BUY’ rating with a target price of ₹2,314, indicating an upside potential of 16 per cent.

4. Mahindra & Mahindra (M&M): LKP Securities expects M&M to continue outperforming industry growth in SUVs and tractors, supported by successful new launches and strong brand equity. LKP says the tractor segment is expected to see an uptick in Q4 FY25, driven by a favourable monsoon and robust crop season. With leadership across key segments and readiness for EV transition, M&M is well-placed for sustained growth. LKP maintains a ‘BUY’ rating with a target price of ₹3,378, valuing the standalone business at ₹2,984 (20x FY27E earnings) and subsidiaries at ₹394 per share. This implies an upside potential of 10 per cent.

5. Axis Bank: LKP Securities highlights Axis Bank’s strategic shift towards retail and SME lending, which has improved its loan mix and RoA, reaching 18 per cent in FY24. Although RoA is expected to moderate to around 16 per cent in FY25 due to cautious growth in unsecured retail loans, LKP expects NIMs to remain stable at 3.8 per cent, driven by better asset pricing and funding cost control. With the stock trading at 1.3x FY27E BVPS, below its three-year average of 1.9x, LKP assigns a ‘BUY’ rating with a target price of ₹1,251, indicating an upside potential of 21 per cent.

6. Bajaj Auto: LKP Securities says Bajaj Auto has witnessed a sharp recovery in exports, driven by strong growth in LATAM and a gradual recovery in Africa and Southeast Asia. LKP expects export volumes to grow by 20 per cent in the coming quarters. The domestic two-wheeler segment is also expected to grow by 6-8 per cent during FY25. LKP highlights the company’s expanding EV portfolio, with the Chetak EV gaining market share and achieving positive EBITDA. With the stock trading at 22x FY27E earnings, LKP assigns a ‘BUY’ rating with a target price of ₹9,177, which implies an upside potential of over 22 per cent.

7. Havells India: LKP Securities says Havells India has maintained consistent growth, driven by strong demand from infrastructure and industrial sectors. The company’s residential switchgear category grew due to rising real estate activity, while the power cables category also saw robust growth. With the stock trading at a P/E of 39.9x FY27E earnings, below its three-year historical average of 77.8x, LKP assigns a ‘BUY’ rating with a target price of ₹1,770, indicating an upside potential of 21 per cent.

8. NMDC: LKP Securities says NMDC’s EBITDA per tonne and realization per tonne rose 20.5 per cent and 13.6 per cent YoY, respectively, in 9MFY25, driven by higher domestic prices. LKP highlights that volume expansion, higher pellet sales, and value-accretive projects like the slurry pipeline are key growth drivers. With the stock trading at 6x EV/EBITDA FY27E, LKP assigns a ‘BUY’ rating with a target price of ₹88, indicating an upside potential of 35 per cent.

9. Ashok Leyland: LKP Securities expects Ashok Leyland’s MHCV volumes to recover in the near term, with strong growth anticipated in FY26, driven by bus and EV demand. LKP says rising export demand, robust spare parts business, and defence orders will support growth. With the stock valued at 18x FY27E earnings, LKP assigns a ‘BUY’ rating with a target price of ₹266, which implies an upside potential of 34 per cent.

10. AIA Engineering: LKP Securities says AIA Engineering remains attractive due to its leadership in high-chrome mill internals, serving industries like cement and mining. Despite near-term volume challenges, LKP highlights the company’s long-term growth prospects, driven by technological advantage and global expansion plans. With the stock trading at attractive valuations, LKP assigns a ‘BUY’ rating with a target price of ₹4,230, indicating an upside potential of 32 per cent.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.