Riding the 2025 wave: Top 5 blue chip stocks to watch out for in the new year

BEL, Kotak Mahindra Bank, ONGC, Trent and Coal India were the top gainers on the Nifty.

As the calendar turns to 2025, investors are gearing up for an exciting year of market action, following the rollercoaster ride of 2024. The Nifty rallied strongly until September before sliding 10 percent from its peak, while the Sensex scaled fresh record highs only to face a similar sharp correction. As the dust settles and a new year of opportunities dawns, here are the top five blue-chip stocks poised to make waves in 2025.

HDFC Bank: India’s largest private sector lender commands a market share of 14.42 percent in advances and 11.41 percent in deposits. With a robust presence across core financial segments such as banking, insurance, asset management, and securities, the bank remains a key player in the country’s financial landscape. Despite marginal deterioration in asset quality during Q2, the bank’s overall financial health remains solid.

Both Gross NPA (GNPA) and Net NPA (NNPA) levels continue to be at the lower end of historical trends, reflecting strong risk management practices. The elevated CD ratio, while a hurdle, has been a key factor pressuring the bank’s margins and valuation multiples. However, as HDFC Bank continues to improve this ratio, margins are expected to recover gradually over the coming quarters.

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L&T: The company's transformative investments in green energy, data centres, digital platforms, and semiconductor design are set to enhance its digital and sustainability footprint, complementing its core business strengths. The management remains focused on the profitable execution of its robust order book and seizing emerging opportunities while limiting exposure to non-core areas. With its strong foundation and diversified portfolio, L&T is well-positioned for sustained growth in a stable business environment.

In the second quarter of FY25, L&T secured orders worth Rs. 80,045 crore at the group level, marking a 10 percent year-on-year growth. These orders spanned diverse sectors, including renewables, urban transit, roads, nuclear power, hydropower, precision engineering, and offshore hydrocarbons. International orders accounted for Rs 32,057 crore, comprising 52 percent of the total inflow.

Also read: Trent, M&M steal spotlight as top Nifty gainers in 2024; IndusInd Bank, Asian Paints lead the laggards pack

Shriram Finance: The company is well-positioned for robust growth, with expectations to increase its market share in the used commercial vehicle (CV) financing segment by 6-8 percent over the next decade, Axis Securities said. This growth will be fuelled by the under-penetration of organised players in the market, a financing opportunity worth Rs 1,800 billion due to replacement demand for 1.45 million new and pre-owned trucks, and anticipated freight capacity growth outpacing GDP growth. The company’s diversified portfolio, following its merger with e-SHTF and e-SCUF, now includes Gold Loans, 2-wheeler Loans, MSME Loans, and Personal Loans, reducing its reliance on the cyclicality of the CV financing business.

Its asset quality is expected to remain strong, even with its significant exposure to the used-CV segment, thanks to its structured recovery mechanism and a solid personal loan portfolio. The company faces challenges from macroeconomic factors such as lower government capex and slower urban consumption but is confident in maintaining steady credit costs.

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Bharti Airtel: The company is well-positioned in India, with its comprehensive portfolio that includes fibre optic cables, mobile phones, and desktop telephones. Airtel leads the telecom industry in Average Revenue Per User (ARPU), currently at Rs 233, surpassing Reliance's Rs 195. The company expects further ARPU growth, driven by a richer customer mix, stronger 2G-to-4G/5G conversion, and rising rural penetration. Its 5G customer base has seen impressive growth, reaching approximately 105 million. In addition to ARPU, Airtel’s EBITDA is also on the rise, showing a significant improvement both quarter-on-quarter and year-on-year.

The company has substantial revenue and profit growth potential, fuelled by expanding its rural distribution, continued network investments, and broader 4G/5G coverage, Axis Securities said in a note. Strategic moves, including tower sales, minority investments, and potential IPOs in mobile money, add further upside. Airtel’s digital portfolio is gaining momentum, and the company is maintaining a strong share of net 4G/5G customer additions.

ICICI Bank: One of India’s largest private-sector banks, ICICI continues to demonstrate robust growth across its diversified portfolio of financial products and services catering to retail, SME, and corporate customers. With a vast network of over 6,600 branches and 16,120 ATMs as of September 2024, the bank is also leveraging its advanced digital platforms to enhance customer experience. ICICI Bank expects margins to remain stable, supported by low credit costs. However, risks such as economic slowdown and potential deterioration in asset quality remain. With its focus on digital adoption and risk-calibrated growth, the bank is well-positioned for continued expansion and profitability.

Following its second quarter, a host of brokerages - international and domestic - issued bullish calls on the stock. Despite the margin compression during the quarter, the bank’s management remains optimistic, believing that the worst of the margin pressure is over. "Although NII is expected to stabilise over the year, gross non-performing loans (NPL) remained steady, and credit costs were well-controlled. These factors position ICICI Bank and HDFC Bank as standout performers among private lenders," CLSA noted. Motilal Oswal raised the bank’s EPS estimates by 2.8 percent for FY25 and 1.8 percent for FY26, projecting a return on assets (RoA) of 2.19 percent and return on equity (RoE) of 17.4 percent by FY26.

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