ICICI Bank, ITC, Bharti Airtel, BEL: Motilal Oswal’s top picks for safe & stable returns

Motilal Oswal Wealth Management has shared its FirstStep Bluechip Basket for the investors who seek a balance between stable long-term growth and the safety of investing in leading blue-chip stocks. The wealth management player has picked up four stocks, based on their fundamental strength.

According to Motilal Oswal, these four fundamentally strong players are industry leaders, having a competitive edge and a healthy balance sheet. The constituent companies are diversified across leading sectors like banking, consumption, telecom, capital goods and defence, it said, giving an investment horizon of 1-2 years for the counters.

It has picked Bharti Airtel Ltd, ICICI Bank Ltd, ITC Ltd and Bharat Electronics Ltd (BEL) in equal 25 weightage for the investors. Explaining the rationale for equal weightage to all the stocks in the basket, Motilal Oswal said as it expects equal growth opportunity in each of these Nifty50 counters.

Bharti Airtel’s strong free cash flow (FCF) generation, driven by tariff hikes in the India wireless segment, has significantly strengthened its financial position. With capex intensity moderating and the impact of tariff increases, it is expected to generate Rs 1.3 lakh crore in FCF over FY25-27. Having largely repaid high-cost debt, Bharti now has leverage under control, said Motilal.

Commenting on ICICI Bank, Motilal Oswal said that the lender is expanding its digital ecosystem and managing rising unsecured loan delinquencies. It maintains a stable deposit base, ensuring liquidity strength. "We estimate 17 per cent loan CAGR over FY24-27E. With steady RoA and RoE projections along with stable NIMs and investment in technology, ICICI Bank remains a top pick for its resilient performance and growth potential," it said.

ITC’s core business of cigarettes has shown steady performance. With stable taxes on cigarettes, we anticipate sustainable growth in this business. In the FMCG space, ITC enjoys industry-leading growth over peers due to its strong category presence, large unorganized mix, under-penetrated etc, said the wealth manager.

"Bharat Electronics is well-positioned to benefit from defense electronics opportunities, with key orders expected from QRSAM, MRSAM, next-generation corvettes, and P75/P75I. We forecast a 19 per cent CAGR in revenue over FY24-27, driven by increased market share and indigenized offerings," it added.