Market volatility triggered by geopolitical tensions has pushed several stocks lower, creating potential buying opportunities for long-term investors.
Market expert Gaurang Shah believes the recent correction has made select fundamentally strong companies attractive for fresh investments.
Larsen & Toubro Seen as a Strong Long-Term Bet
Speaking during a market discussion, Shah highlighted that Larsen & Toubro continues to remain a strong long-term investment despite concerns linked to the Middle East conflict. According to him, nearly thirty-five to thirty-seven percent of the company's order backlog comes from projects in the Middle East region.
However, Shah believes this exposure does not weaken the company's investment case. The engineering and infrastructure major, which has a legacy spanning more than seven decades, has consistently generated value for long-term investors. Over the years, the company has also rewarded shareholders through bonus issues and strong business growth.
He added that once the geopolitical tensions ease, reconstruction work across affected regions could create fresh demand for infrastructure projects. Companies with large engineering capabilities such as L&T are expected to play a key role in rebuilding damaged infrastructure.
Given these factors, Shah maintains a 'buy' view on the stock and believes it could move towards the Rs 4500-Rs 4550 range over the next twelve to fifteen months. He advised investors to accumulate the stock gradually on market dips rather than trying to perfectly time the market.
Tata Power Gains from Rising Electricity Demand
Shah also highlighted opportunities in the power sector, particularly in Tata Power. He pointed out that disruptions in the supply of fuels such as LNG and LPG have started raising concerns about shortages, while rising temperatures are expected to push electricity consumption higher.
Unusually high temperatures have already been recorded in parts of India even before the peak summer season begins. Forecasts suggest that the upcoming months could witness an intense heatwave across several regions, which would naturally increase electricity demand from households and businesses.
In such an environment, companies involved in power generation are relatively insulated from volatility seen in global crude oil and gas markets.
Shah described Tata Power as a fundamentally strong company with long-term growth prospects, driven by rising energy demand and its expanding renewable energy portfolio. He believes the stock could potentially move towards the Rs 485 level in the medium term.
Defence and Pharma Sectors Also in Focus
Apart from infrastructure and power, Shah noted that sectors such as defence and pharmaceuticals may continue to remain in focus as global uncertainties persist. These industries often benefit from steady government spending and relatively stable demand cycles.
He emphasised that periods of market volatility often provide investors with an opportunity to accumulate quality stocks at more reasonable valuations. Maintaining a long-term investment approach, he said, remains the key to navigating uncertain market conditions.
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