Large Cap Stocks in India:
Large cap stocks in India will be always a better choice for the long term investors as they brings the stability for the entire portfolio along with stable returns. The large cap stocks will stabilize the portfolio even in the falling markets or in any external emergency conditions, such as wars, covid, inflation and many other external factors.
Large cap stocks in India or else anywhere in the world, will not give you the much pain, even in the tough conditions. Because the large cap stocks are always the better bets in the tough conditions. So every one will see the corrections in large cap stocks as an opportunity.
What are the Large cap stocks?
For your understanding, we’ll discuss the large caps in a very simple words. Usually the stocks, which are having the market cap of Rs. 65,000 Crores and more, will be considered as a large cap stocks. These stocks are well established and they had significant market share in their particular industry. In simple words these stocks will dominate the others or peers in their industry.
For Example, Reliance Industries, TCS, Bharti Airtel, HDFC Bank, ICICI Bank, ITC, L&T, SBI, Axis Bank, Kotak Mahindra Bank, Maruti Suzuki, Bajaj Finance, Infosys are some of the large cap stocks for your better understanding. You can also refer the Nifty 50 or Sensex 30 stocks to understand more of Large Cap Stocks in India.
Advantages of Large Cap Stocks in India:
High Liquidity: Large caps will always have a high liquidity as there are high no. of investors involves to trade particular stock. So that you no need to worry about buying or selling of particular stock in particular price.
1. Less Volatility: As I said earlier, investors will see every correction as an opportunity, so that they won’t correct more in the long term. Until unless there would be a big issue.
2. Quality Management: Such stocks will always have a quality management with integrity. This will help the company from fraudulent activities.
3. Transparent: As an investor, you will find huge and timely information about the large caps in the market. Which will help you to track the your invested stocks in a right way.
4. Wide Information: To analyze the large caps, it would be a easy job, as there would be a huge information available in the market.
5. Wealth compounders: If look at the past history of the quality large caps, they were consistently delivered good returns over the decades.
6. Stability: There would be stability in the large cap space as they will consistently delivers growth and improves their profitability and margins in a stable way. This kind of companies will compound your wealth in a significant way.
7. Margin of Safety: Maintaining margin of safety is most important, at this current market situations as markets are behaving highly volatile. So large cap stocks in india will give you that much margin of safety.
Disadvantages / Cautions / Understandings of Large Cap Stocks in India:
1. Don’t expect 100% or more returns from these stocks as they were already multibaggers.
2. One can invest, who is not expecting huge returns.
3. Expect only better returns than FD, without exposing to high risk.
4. In terms of valuations, such stocks will always trade with premium valuations, as they are industry leaders.
5. Investing your money in tranches would be always a better idea in large caps.
6. Though these stocks trading higher, but still in good buying zones. Better invest in multiple tranches.
Here we are not going to discuss about their business and all other things as they are already well established and well-known companies in India. But we discuss few triggers, that are giving scope and showing the path for the future growth.
Best Large Cap Stocks in India:
1. Reliance Industries Ltd.
As all you know very well, Reliance Industries Ltd is into the business of Retail – Reliance Retail, O2C – Reliance refineries, Telecom – Reliance Jio, E-Commerce – Jio Mart, Reliance Digital Online, FMCG – Reliance Independence, Finance – Jio financials.
Reliance Industries disruptively penetrated into telecom business as already you knows. In the same way they are strongly intended to penetrate into Renewable energy, FMCG, Ecommerce and Financial space. As they are already invested into these spaces and attracting new investors to raise capital.
As we are already seeing the strong investors are coming into Reliance Retail and Jio financials such as BlackRock, ADIA, QIC and many others. Also company focusing on budget electronics such as budget 4G Phone and budget laptops.
Reliance is already trying to establish the new era of the company by handing over the business to the young successors. So that we clearly understand that the company is focusing on futuristic businesses with the new management, which is a very good sign for the company.
But why stock price is not moving? The market is waiting for few key triggers such as Reliance retail and Reliance Jio IPOs as already Jio Financials IPO already hit the market. So that the proper value unlocking will be enabled in the company.
Reliance Industries is currently trading at 2344. Though it’s good demand zone, there is 2100 – 200 is the good buying zone for the long term investors as it’s one of best stock of large cap stocks in india.
2. Axis Bank Ltd / ICICI Bank Ltd
You can pick one from the above both stocks, as these both banking large caps are enough capable to deliver further returns in coming quarters. If you observe past one year large caps, especially banking large caps are underperforming.
If you observe the latest quarters business data every bank posing a very good business data. In terms advances, deposits and cd ratio, which are the key parameters to monitor the banks. Any CASA is little down because FD rateas are higher than the previous. Investors moving their money to the safe asset class such as FDs.
As india is growing economicailly and trying to become manufacturing hub, every company needs to go for capex, the biggest beneficiaries are the banks. As they provide the loans to companies which goes for capex in the future, also banking system is the key for any developing or developed nations.
Axis Bank Ltd is currently trading at the 994 levels. But if you can wait 930 is the very important support level, if it triggers, we can see good movement in the bank. Same applicable for the ICICI Bank and it’s currently trading at 1334.
3. Bajaj Finance Ltd.
Bajaj Finance Ltd which is a market leader in the NBFCs. If you observe the company was delivered just 9% returns past one year. But analysts are believing that the company has enough capability to deliver descent returns in coming years.
Company is saying that the company’s earnings, profitability, margins and the revenues are going to increase significantly in coming years as they are still holding market leading position in their segment. Company is already announced that they are going to raise rs 10,000 cr through QIP and preferential issues.
The recent QIP of 10,000 cr is clearly showing that they are looking for extended growth. This company is currently trading at 8,000. But the 7000 – 7500 levels are good for long term investment.
4. Grasim Industries Ltd
Grasim Industries Ltd. Has the diversified product portfolio and also it has the markable presence in their segments such as textiles, yarn production and set up the B2B marketplace for industrial materials.
Grasim Industries Ltd has very big subsidiaries such as cement leader UltraTech, and the Financial services leader Aditya Birla Capital. Also now entering into the paints business, entering is not the matter but the comments the management has made is the matter.
The company management wants to become the second largest player in the paints industry after the Asian paints. Which is very very Biggg. This trigger is driving the stock price as it’s currently trading at 1900.
5. Varun Beverages Ltd
As you all know the Varun Beverages Ltd is managing the Pepsico India business in our country. But the key trigger is Elnino effect in India. due to this effect, lower rain fall and higher temperatures registered in india.
Because of these reasons, the summer was extended and the consumption of cool drinks was increased. So the market expecting good numbers of sales, earnings and profitability. These points are driving stock now. This stock is currently trading at 928.
6. Max Healthcare Ltd.
Max Healthcare Ltd. Is another large cap stocks in India. if you look at the profit growth, shown 115% which is very good and debt free company. Also 21% sales growth registered in the company. If you look at the entire healthcare, the demand is gradually increasing.
As our latest or modern lifestyle, making us more sick. Which is positive for healthcare sector and that to Max healthcare. In simple words our illness will make thiscompany a multibagger. This stock is currently trading at 680.
7. IRCTC Ltd
IRCTC is the monopoly company in the railway ticketing and the catering services in trains. Also they sells Rail Neer water bottles in the trains, which is a additional revenue source for the company. If you can see the latest changes, coming in the indian railways is a very good positive for the company.
The latest Vande Bharat trains and the extension of tracks and trains, are attracting the people to travel through the trains and again it’s positive for the company in the long term. IRCTC is currently trading at 704.
8. P I Industries Ltd.
P I Industries Ltd is an agro chemical company and the market leader in the agro chemical industry. If you look at the company’s financials, the company is a debt free company and having very good and healthy return ratios. Sales growth and margins are good for this company. This stock is currently trading at 3480.
9. SRF Ltd.
SRF Ltd is a market leader in the textile chemical sector. Stock is consolidating from last one year as stock delivered phenomenal returns in the past years. This company has the strong potential to grow further. SRF ltd is currently trading at 2250.
10. Polycab Ltd.
Polycab Ltd already become multibagger. If you look at the company, it’s the leader in the wires and cables industry. This industry is going to play a key role in the developing indian infra as it’s a mandatory thing for new buildings and constructions. This stock is currently trading at 5,318.
Conclusion:
As we already mentioned, these large cap stocks in India are clearly for long term investment and for the risk free investors. For whom who is expecting a lower but stable return with a lower risk, could be suitable. And one more point that the investors should remember is, you should invest in multiple tranches as they are large cap stocks in India. and the margin of safety is most important at this current situation.
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