Stocks to buy today: Analyst at Kotak Sec bets on ICICI Bank, Lupin

Stocks to buy today: Shrikant Chouhan of Kotak Securities suggests placing bets on ICICI Bank and Lupin; here's why

Stocks to buy recommended by Shrikant Chouhan, Kotak Securities:

Lupin – Add

 

CMP – ₹2,219

 

FV – ₹2,425

 

Resistance – ₹2,375/2,425

 

Support – ₹2,200/2,050

 

Lupin’s Q3FY26 sales were driven by a strong performance in the US and other growth markets, while its domestic prescription business posted a healthy 10.9 per cent year-on-year growth. In India, the company expects to outperform the IPM by 1.2–1.3x over the next few years, supported by new product launches, and remains positive about delivering double-digit growth during this period. It also plans to introduce several innovative products in the Indian market over the next three to four years. 

 

 

Lupin expects to maintain US sales at around $1 billion over the next two years, supported by a steady stream of new product launches. The company has several launches lined up across injectables, respiratory therapies, and biosimilars. Over the next three to five years, its US institutional business and biosimilars portfolio are expected to emerge as material contributors. Within its biosimilars portfolio, Lupin plans to launch Pegfilgrastim in the near term and is targeting the launch of Ranibizumab in FY27E. The company has also made solid progress on its on-body Pegfilgrastim. 

 

Together, these three products have a combined sales potential of around $100 million. Lupin expects biosimilar revenues to pick up in FY27E. Lupin’s Earnings before interest, tax, depreciation and amortisation (Ebitda) grew 62 per cent year-on-year (Y-o-Y) and Ebitda margins expanded by 710 basis points (bps) to 30.8 per cent. The company now expects to deliver Ebitda margins of 27–28 per cent in FY26E, compared with its earlier guidance of 25–26 per cent. For FY27E, Lupin expects revenue momentum to continue, with continued emphasis on cost efficiency. However, Ebitda margins are likely to see a yoy decline due to competition in some key products. The company is conservatively guiding for Ebitda margins of 24–25 per cent in FY27E. 

 

That said, Lupin has several molecules lined up for launch, which should help cushion the impact and limit the earnings dip in FY27E, following an exceptionally strong FY26E. We estimate a healthy 12 per cent earnings per share (EPS) compound annual growth rate (CAGR) for the company over FY25-28E. We have an Add rating with a fair value of ₹2,425.

 

ICICI Bank – Buy

 

CMP – ₹1,413

 

FV – ₹1,800

 

Resistance – ₹1,440/1,550

 

Support – ₹1,390/1370

 

ICICI Bank is one of India’s leading private sector banks, with a diversified presence across retail banking, corporate banking, SME lending, treasury operations, and life and general insurance subsidiaries. Over the past decade, the bank has transformed from a corporate-heavy lender to a granular, retail-focused franchise, strengthening its liability profile and underwriting standards. Its product suite spans home loans, auto loans, personal loans, credit cards, working capital finance, trade services, and digital banking solutions, positioning it to capture both consumption-led and investment-led growth in India.

 

From a financial standpoint, ICICI Bank stands out for its consistent improvement in core operating metrics. Loan growth has remained healthy in the mid-to-high teens, driven primarily by retail and SME segments, while maintaining prudent risk selection. Net interest margins (NIMs) have been resilient despite a competitive deposit environment, supported by a strong CASA (current and savings account) ratio and improving mix. Return ratios are now structurally higher, with return on asset (ROA) around 2 per cent and return on equity (ROE) in the mid-to-high teens, reflecting operating leverage and lower credit costs. Asset quality has materially strengthened, with gross and net NPAs trending downward over recent years, alongside robust provisioning buffers. The capital adequacy ratio remains comfortable, providing headroom for growth without near-term dilution.

 

The long-term investment thesis is closely tied to India’s macro trajectory. As one of the best-capitalised and efficiently run private banks, ICICI Bank is well placed to benefit from formalisation of the economy, rising financial penetration, digitisation, and increasing credit demand across the retail and MSME segments. Structural drivers such as urbanization, rising per capita income, infrastructure spending, and manufacturing push (including supply-chain diversification) should sustain credit growth at levels above nominal gross domestic production (GDP) over the medium term.

 

Importantly, ICICI Bank’s disciplined underwriting cycle and strong liability franchise differentiate it from past cycles of aggressive expansion. With improving operating efficiency, controlled credit costs, and diversified revenue streams, including fee income, the bank offers a balanced play on India’s structural growth story. Over the long term, compounding in earnings, stable return ratios, and prudent balance sheet management make it a compelling core holding in the Indian financials space.  (Disclaimer: This article is by Shrikant Chouhan, head equity research, Kotak Securities. Views expressed are his own.)