Pankaj Pandey, head of research at ICICI Securities, has a blunt message for investors rattled by Friday’s late selloff: stop forecasting the index and buy quality on dips. His list of long-term stocks to buy runs to five names, from Tata Steel to Engineers India, with targets that imply gains of up to 36% over one to two years.
The picks landed the same week the Sensex shed 1,092 points in a single session, dragged by uncertainty over a US-Iran ceasefire. Pandey’s wager is that none of that should set the entry price for a two-year holding.
The Wager Behind a Buy-on-Dips Call
Friday, 29 May, was ugly for India’s benchmarks. The Sensex closed down 1,092 points, about 1.44%, at 74,775.74, while the Nifty 50 fell 1.50% to 23,547.75. The trigger was familiar by now: traders could not price a proposal to extend the ceasefire with Iran, with the reopening of the Strait of Hormuz and Tehran’s nuclear programme still unresolved. That is the same nervousness behind the recent selloff driven by US-Iran tensions.
Pandey’s read is that investors should not try to call the next move and should instead buy companies with earnings they can see coming. Look at the five names and a pattern shows up fast. Four of them rest on revenue that is already contracted or on capacity being built, not on a macro guess. That makes this less a market-timing trade and more a bet on execution over market timing.
- ₹17,235 crore order backlog at VA Tech Wabag, over four times annual revenue
- ₹15,109 crore record order book at Engineers India, up 29% year on year
- ₹3,500 per tonne EBITDA gain Tata Steel guides for in the first quarter of FY27
Five Stocks, One to Two Years, Up to 36% Upside
Here is the full screen, with last close, target price and the implied upside on each name. The horizon Pandey attaches to all five is the next one to two years, not a quarter.
| Stock | Sector | Previous close (₹) | Target (₹) | Upside |
|---|---|---|---|---|
| Artemis Medicare Services | Healthcare | 273.36 | 340 | 24% |
| VA Tech Wabag | Water and infrastructure | 1,527.80 | 1,930 | 26% |
| Tata Steel | Steel | 208.02 | 270 | 30% |
| Mahindra & Mahindra | Auto and farm equipment | 3,045.60 | 4,000 | 31% |
| Engineers India | Engineering consultancy | 231.70 | 315 | 36% |
Order Books Doing the Heavy Lifting
Two of the picks are almost pure visibility plays, where the case rests on a backlog that has to be executed rather than won. This is where Pandey’s preference for contracted revenue is clearest, and it mirrors the logic behind a separate basket of infrastructure stocks tied to India’s capex cycle.
VA Tech Wabag’s 4x Revenue Backlog
The water treatment specialist closed FY26 with an order backlog of about ₹17,235 crore (roughly $2 billion at current rates), up 26% year on year. That is more than four times FY26 revenue, well above the company’s own internal threshold of holding the book at around three times sales. Pandey notes the firm has stuck to selective bidding and technology-led work rather than chasing low-margin volume, a point reinforced in VA Tech Wabag’s FY26 results presentation.
Management has reiterated an EBITDA (earnings before interest, taxes, depreciation and amortisation) margin guidance of 13% to 15%, helped by a heavier mix of desalination, industrial water and operations and maintenance (O&M) contracts. Pandey models revenue and net profit growing at compound annual growth rates (CAGR) of 17.6% and 27% over FY26 to FY28.
Engineers India’s Record Pipeline
The state-owned consultancy ended FY26 with a record order book near ₹15,109 crore, up 29% year on year, led by consultancy inflows of about ₹6,010 crore plus large international wins. Company filings put the backlog at ₹151,093 million as of March 2026, with consultancy at roughly 72% of the book, the high-margin slice that Pandey leans on.
He expects FY27 revenue growth of 10% to 15%, with the consultancy line sustaining a 15% to 20% pace on refinery expansions, hydrocarbon capex and coal gasification orders. His model has revenue and profit after tax (PAT) compounding at about 16.2% and 17.8% over FY26 to FY28, while EBITDA margins widen from 9.1% to 16.2% across FY24 to FY28 as consultancy dominates the mix.
Tata Steel and Artemis Bet on Capacity Coming Online
Tata Steel’s Margin and Tonnage Story
Tata Steel turned in a healthy fourth quarter, with EBITDA gains of about ₹2,500 per tonne, supported by domestic prices that have climbed roughly ₹10,000 a tonne off the December 2025 low near ₹46,500. Pandey expects realisations to improve by about ₹6,000 a tonne in the first quarter of FY27, lifting EBITDA gains to around ₹3,500 per tonne, the strongest among domestic peers.
The longer thesis is tonnage. Pandey points to a domestic crude steel target of roughly 45 to 50 million tonnes per annum (MTPA) by FY32, against about 27.4 MTPA now, while Europe gets a lift from the Carbon Border Adjustment Mechanism (CBAM, the EU’s carbon levy on imports) and import quota curbs across the Netherlands and UK plants. The company’s own roadmap is a touch more conservative; Tata Steel’s documented India capacity plan sets a 40 MTPA target by 2030.
Artemis Medicare’s Bed-Count Triple
Artemis is the healthcare venture floated by the promoters of the Apollo Tyres Group, and it carries an industry-leading average revenue per occupied bed (ARPOB) of ₹82,435 a day, with close to 32% of revenue from international patients. The growth lever is straightforward: triple the bed count.
From a 700-bed super-speciality hospital in Gurugram, the company plans to reach 2,000-plus beds within three to four years through brownfield expansion and O&M agreements. Pandey models revenue compounding near 28% over FY26 to FY28, with valuation improving as the heavy revenue concentration in a single site eases.
Mahindra, the Demand-Visibility Outlier
Mahindra & Mahindra is the conglomerate of the group, spanning autos, information technology and financial services. It is India’s largest tractor maker, with a 43.6% share in FY26, and the second-largest player in both commercial and passenger vehicles, at 28.2% and 14.2% respectively. The pitch here is less about a backlog and more about a product pipeline the market can already see.
Pandey credits the continued outperformance of the SUV portfolio and a revival in light commercial vehicles (LCVs, sub-3.5-tonne goods carriers) for the trajectory.
M&M’s auto business remains on a strong trajectory, driven by the continued outperformance of its SUV portfolio and revival in LCVs. It presents a compelling investment case driven by a rare combination of strong demand visibility and a deep product pipeline.
That demand has shown up in the numbers. The carmaker’s FY26 results disclosure reported full-year profit after tax of ₹17,099 crore, up 35% year on year, with capacity additions in the SUV space still being built out. Pandey stays positive on the stock for its capital efficiency.
Where the Thesis Cracks
A bet on execution is only as good as the execution, and a one to two year horizon leaves plenty of room for the macro to intrude. The risks worth weighing sit across geopolitics, delivery and valuation.
- Oil and geopolitics: a flare-up over the Strait of Hormuz could spike crude, squeezing steel and auto margins and souring sentiment well before any company-level catalyst lands.
- Execution risk: Wabag and Engineers India trade on backlog conversion. A slip in project ramp-up turns a four-times-revenue order book into a timing problem.
- Valuation re-rating: several targets assume the multiple expands, from Artemis as concentration eases to Engineers India as margins widen. Re-rating is never guaranteed.
- Estimate risk: the FY26 to FY28 CAGR figures are forecasts, sensitive to steel-price reversals and the CBAM regime holding up in Europe.
This is not the only screen built for a jumpy tape; investors have also been handed a five-stock list built around tariff-driven volatility. If domestic steel prices and order-book delivery hold through the first quarter of FY27, Pandey’s targets have room to print; if oil jumps on a Hormuz scare, the same five names get repriced before the thesis ever gets a fair test.
Frequently Asked Questions
Which stock has the highest upside in Pankaj Pandey’s list?
Engineers India carries the highest implied upside at about 36%, with a target price of ₹315 against a previous close of ₹231.70. The case rests on a record order book and an expanding consultancy mix.
What is the investment horizon for these five picks?
Pandey frames all five as one to two year holdings, not short-term trades. The targets assume earnings and order-book delivery play out over FY26 to FY28.
Why does ICICI Securities like VA Tech Wabag?
The draw is an order backlog of about ₹17,235 crore, more than four times FY26 revenue, paired with EBITDA margin guidance of 13% to 15% and a growing share of high-margin desalination and O&M work.
Are these stocks a guaranteed buy?
No. The target prices are estimates that depend on execution, steel prices and global cues, and a Strait of Hormuz escalation could derail several of them. Investors should treat the list as one analyst’s view and seek certified advice.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Equity investing carries market risk, and the target prices cited are analyst estimates that may not be achieved. Readers should consult a qualified financial adviser before making investment decisions. Figures are accurate as of publication.
