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Jun 21, 2018

Best Stocks to Invest in India for Long Term 2018

In this article, you will find Best Stocks to Invest in India for Long Term

It is a well-known fact that investing in equity securities is among the most popular ways to grow wealth. If chosen wisely, stocks can move on to make tremendous gains over a long period of time. In India, there are plenty of quality stocks to choose from; thus making it a rather tricky job to pick the right ones for your portfolio. To help you in this process, we have prepared a list of best stocks to invest in India for the long term. Investors should ideally accumulate these stocks during dips and regularly monitor their performance.

Best Stocks to Invest in India for Long Term

● HDFC Limited

HDFC Limited is a leading in the housing finance sector. The company’s performance has improved year-after-year owing to its excellent management. In its financial results for the year ended on March 31, 2018, HDFC Limited reported a consolidated staggering profit of Rs.16,255 crore - an increase of over 45% over the previous financial year. The company also saw its loan book swell by 18%, while its individual loan segment grew by 26%. Its non-performing assets count is also among the least in the industry - 1.11% of the entire loan portfolio.

Considering the performance of its stock, as of June 2018, the stock has gained 46% in value since January 2017 - an increase which is well in line with the financial performance of the company. Needless to mention, you should add this script to your portfolio. Alternately, you can also look into mutual funds houses with holdings in this stock.

● Maruti Suzuki India Limited

This company needs no introduction. Maruti Suzuki has been a market leader in the automobile sector for many years now. It has outperformed its competition by convincing numbers and has handsomely rewarded its investors for their faith and confidence in the company. Over the course of last one year, the Maruti Suzuki scrip has improved by a little over 30% to reach its present levels at around Rs.9,000. This rise was consistent with the financials of the company - its net sales and profit after tax has increased like clockwork over the last five fiscals.

Maruti Suzuki has also broadened its product offerings in the same period and further plans to develop its hybrid and electric vehicle segment in the coming years. The automobile giant owing its massive market presence is placed strategically to adapt to greener technologies and implement the same efficiently.

● ITC Limited

Learn to trade with GapsITC Limited is one of the largest conglomerates in India which specializes in five sectors - fast moving consumer goods (FMCG), hotels, paper and packaging, agriculture and information technology. Interestingly, cigarette sales contribute more than 70% to the overall revenue of the company while at the same time, ITC has invested more than 70% of its capital in the non-tobacco business. The company has been in India for more than 100 years now and fundamentally speaking, it is one of the strongest groups in the country. Its financials have improved steadily over the last few years, although its stock price hasn’t reflected this growth. As of June 2018, it is trading at levels above Rs.250 which makes it an attractive buy as a long-term investment.

Another reason to consider this company is that of its market share in cigarettes. Even if its other operations fail to do well, ITC Limited is bound to have impressive numbers for its FMCG and cigarettes sales. Furthermore, companies such as these are likely to prevail in the long-run, despite the volatility that stems from bear markets.

● Motherson Sumi Systems Limited

Motherson Sumi Systems Limited is one of the leading manufacturers and suppliers of the wiring harness, passenger car mirrors, modules and machined components to the automotive industry. Since the start of 2016, its share price has gained more than 60% and is presently trading at levels above Rs.300. This substantial rise is corroborated by the financial performance of the company. In its report for the FY 2017-18, Motherson Sumi Systems Limited reported its consolidated sales to have improved by 33% over the last year. Correspondingly, its profit after tax also improved by 25%. It has also undertaken various acquisitions and joint ventures in the same period to strategically boost its capabilities and market share.

From a technical point of view, its P/E ratio is around 28.6 while the industry P/E ratio is at around 72. This implies that the stock is heavily undervalued, although this factor should not be considered all by itself. At present valuations, the stock certainly appears to be an attractive buy though one may want to wait for dips to accumulate it.

● Reliance Industries Limited

Reliance is undoubtedly one of the most popular names in India. Its businesses are spread over a broad spectrum, ranging from hydrocarbon exploration, production, refining, and marketing to textiles and communications. In its most recent financial report, the conglomerate reported a record annual net profit of Rs.36,075 crore - an increase of 20.6% over the previous financial year while its consolidated revenue was up by 30.5%. These impressive numbers speak scores about the company’s financial performance and fundamentals.

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The company is performing extraordinarily in the refining sector. It further received a boost when it ventured into the Telecom segment through Jio. Needless to mention, it turned out to be a breathtaking success owing to its excellent model and clever marketing strategies. Reliance Industries is taking Jio brand forward by expanding into media & entertainment sector with JioMusic and JioTV. It is only a matter of time before Reliance manages to unlock the true potential of Jio.

● Indiabulls Housing Finance Limited

Indiabulls Housing Finance Limited is one of the largest housing finance companies in the country. As a non-banking finance company, Indiabulls Housing is known for its comprehensive portfolio of home loan products. For the fiscal year 2017-18, its total revenues have improved by 25.1% while profit after tax has witnessed a 32.4% rise over the previous financial year. These metrics are quite likely to keep increasing in the future, mainly because of an increase in demand for housing in India. The demand has improved primarily because of the Government’s push through Housing for All by 2022, the RERA Act, 2016, tax incentives and urbanization.

As a market leader in the home loan segment, Indiabulls is well-placed to meet this growing demand for home loans. From a long-term perspective, this script serves as an attractive buy.

Before investing in these securities, it is strongly recommended that you do your own fundamental research. You should look into important financial metrics, products, and services offered, future prospects, unique selling points among other factors in order to analyze a company’s stock. There are sites like Bankbazaar India which can help you analyze a company better.

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