Stocks to buy today: Kotak Sec picks ICICI Bank, Vedanta as preferred bets

Stocks to buy, March 4: Kotak Securities Equity Research Head suggests placing bets on ICICI Bank and Vedanta. Here's why

Stocks to buy recommended by Shrikant Chouhan, Kotak Securities:

ICICI Bank – Buy

CMP – ₹1,375

FV – ₹1,800

Resistance – ₹1,390/₹1,405

Support – ₹1,365/₹1,350

 

ICICI Bank is one of India’s leading private sector banks with a well-diversified franchise spanning retail, business banking, corporate banking and treasury operations. As of December 2025, total advances stood at ₹14.7 trillion, while deposits were ₹16.6 trillion, reflecting a strong liability base and consistent balance sheet expansion. The bank operates through an extensive domestic network supplemented by select overseas presence (2.4 per cent of advances), providing both geographic and segment diversification .

 

The loan mix remains balanced, with retail loans forming 51 per cent of the domestic portfolio, led by mortgages (63 per cent of retail book), vehicle loans and personal loans. Business banking has emerged as a key growth driver, growing 23 pe cent Y-o-Y, while corporate loans have seen steady expansion. On the liabilities side, CASA deposits contribute 40 per cent of total deposits, underlining the strength of its granular and low-cost funding franchise. This superior liability profile supports stable margins even in a competitive environment.

 

 

Financially, the bank reported NIM of 4.3 per cent, RoA of 2.1–2.3 per cent and RoE of 14–16 per cent, reflecting healthy profitability metrics. Asset quality remains robust, with gross NPA at 1.5–1.6 per cent and net NPA at 0.4 per cent, alongside a provision coverage ratio of 76 per cent. While Q3FY26 earnings saw a temporary dip due to one-off standard asset provisions following RBI’s supervisory review, core operating performance and credit metrics remained steady .

 

The crux of the investment case lies in ICICI Bank’s strong liability franchise, disciplined underwriting, stable asset quality and consistent profitability delivery. Management has chosen to protect margins over aggressive growth in a competitive cycle, prioritizing NIM resilience and balance sheet strength . With CET-1 at 16.5 per cent and comfortable capital buffers , the bank is well-positioned to capitalize on growth recovery while sustaining 15 per cent RoE over the medium term.

 

Overall, ICICI Bank combines scale, profitability and asset quality discipline, making it structurally well-placed within India’s banking landscape.

 

Vedanta – Buy

CMP – ₹723

FV – ₹890

Resistance – ₹735/₹755

Support – ₹705/₹690

 

Vedanta Limited delivered a strong Q3FY26 performance, with consolidated adjusted Ebitda at ₹146 billion (+31 per cent Y-o-Y, +32 per cent Q-o-Q), ahead of estimates, led by robust performance in the India aluminum and zinc segments. The aluminum division, contributing 50 per cent of earnings, reported Ebitda of ₹70.2 billion (+54 per cent Y-o-Y, +36 per cent Q-o-Q), supported by lower alumina costs and higher aluminum prices. Zinc India (ZI) Ebitda improved 11.3 per cent Q-o-Q (+17 per cent Y-o-Y), while the O&G segment saw a 4 per cent Q-o-Q Ebitda decline due to lower volumes.

 

The company is well positioned to benefit from the ongoing rally in base and precious metals, with 85 per cent of FY2027E Ebitda expected from aluminum (50 per cent), zinc (20 per cent) and silver (15 per cent). Aluminum remains the key earnings driver, supported by capacity expansions, commissioning of captive coal and bauxite mines, and improving commodity prices. VEDL has commissioned 0.43 mtpa aluminum and 1.5 mtpa alumina capacity, taking total capacity to 2.8/5 mtpa. Over FY2027-28E, the balance coal and bauxite mines are expected to be operational, along with 0.3/1 mtpa debottlenecking in aluminum/alumina capacity. Estimated margins stand at $1,162/1,329/1,378 per ton for FY2026/27/28E.

 

On the corporate front, the proposed demerger into five entities is progressing and is expected to conclude by Q1FY27, with regulatory approvals targeted by end-Q4FY26. The listing of newly created entities is expected in Q1FY27. NCLT approvals have been received for all divisions (excluding power) in December 2025 and for the power division in January 2025. Reported financials now classify aluminum/O&G/ferrous as discontinued operations, with power likely to follow in Q4FY26.

 

At the holding company level, Vedanta Resources has deleveraged meaningfully, with brand fees and dividends sufficient to cover FY2027 dues. Additionally, 1.1 per cent stake sale in HZ for ₹30 billion supports faster deleveraging.

 

We raise consolidated Ebitda estimates by 1 per cent/3 per cent/6 per cent for FY2026E/27E/28E, driven by higher base metal and silver prices, and revise FV to ₹890 (from ₹780) based on SoTP rollover to March 2028E. At 5.7x FY2028E EV/Ebitda with 5 per cent/9 per cent dividend/FCF yield, risk-reward remains attractive. Maintain BUY.  Disclaimer: Shrikant Chouhan is the head of equity research at Kotak Securities. Views expressed are his own.