Any investor will want to invest in a company that has been profitable for decades. Even if they aren’t always among the most popular stocks, blue chip stocks aim to make money for shareholders in the long run. As a result, these are excellent investments for those who are willing to stick with them through good and bad times. Their strong financial position, consistent growth rate, excellent management team, brand recognition, and reputation keep them afloat during challenging business cycles and industry trends.
As a rule of thumb, most bluechip companies in India have a market capitalization of more than Rs 20,000 crores. Debt-free stocks are the bluest of the blue chips. Blue chip companies, on the other hand, are distinguished by a lower and more stable debt-to-equity ratio. Blue chip companies also have a high ROE, a high-interest coverage ratio, and a low price to revenue ratio.
1. Tata Consultancy Services
Market Cap: Rs 11.86LCr
P/E: 36.97
Dividend Yield: 1.19%
TCS is one of the company’s most recent and emerging innovations. BFSI is the company’s largest revenue division, accounting for approximately 31% of total revenue, and is led by Retail and CPG, Communications, Media and Technology, Manufacturing, Life Sciences and Healthcare, and Energy and Utilities under Public and Others. North America generates approximately 51 percent of TCS’s revenue, with the UK and Europe ex-UK accounting for approximately 15 percent and India accounting for only 5.7 percent.
2. HDFC Bank
Market Cap: Rs 8.16LCr
P/E: 25.66
HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai, Maharashtra. In terms of assets and market capitalization, HDFC Bank is India’s largest private sector bank as of April 2021. It is the third-largest firm by market capitalization on the Indian stock exchanges. Brokers have raised their recommendation or target price in the last three months. Stock with medium financial results and average price momentum and valuation. These stocks are potentially cheap, and they have piqued the interest of some investors. HDFC Bank is a Zero Promoter Pledge Company.
3. Infosys
Market Cap: Rs 6.04LCr
P/B: 6.78
P/E ratio: 31.26
Dividend Yield: 1.90%
Infosys Limited is an Indian multinational corporation specializing in business consulting, information technology, and outsourcing. The company’s headquarters are in Bengaluru, Karnataka, India. According to Forbes Global 2000, Infosys is the second-largest Indian IT company after Tata Consultancy Services and the 602nd largest public company in the world by 2020 sales estimates. Stock with strong financial results and a reasonable to expensive valuation but no market momentum, as technical indicators suggest. Solid cash-generating capacity from the core sector – Improving Cash Flow over the last two years. ROA has been declining over the last two years as a result of inefficient asset utilization to generate profits.
4. ITC
Market cap: Rs 252,762
P/B: 3.97
ITC’s diverse industries include cigarettes, FMCG, hotels, packaging, paperboards and specialty papers, and agribusiness. In 2010, the company celebrated its 100th anniversary, with annual revenue of $10.74 billion in 2019-20 and a market capitalization of $35 billion. It is a Forbes 2000 company with over 36,500 employees spread across 60 locations in India. ITC is a debt-free company. The company has paid out high dividends with increasing dividend yields over the last five years. For the past two years, the company has increased its net cash flow. Brokers’ recommendations or target prices have also been upgraded in the last three months.
5. Coal India
Market Cap: Rs 84,336
P/B: 2.59
Coal India Limited (CIL) is a government-owned coal mining and refining company headquartered in Kolkata, West Bengal, India. The Ministry of Coal, Government of India, owns it. It is the world’s largest producer of coal and a Maharatna public sector enterprise. Book value per share It has gotten better over the last two years. Price strength is indicated by the RSI. Poor cash flow from core business – For the past two years, Cash Flow from Operations has been declining.
6. Reliance Industries
Market Cap: Rs 1,245,031
P/B: 2.20
The primary businesses of the company are oil exploration, petroleum refining, petroleum marketing and distribution, and petrochemical activities. The company’s goal is to be carbon neutral by 2035, so it is focusing on diversifying through energy and other sectors while continuing to invest in the oil industry. Increased participation by FIIs/FPIs or Institutions. Stock with strong financial results and a reasonable to expensive valuation, but no market momentum as indicated by technical indicators. The price is lower than the Short, Medium, and Long Term Averages, indicating a lack of momentum. Inefficient use of shareholder capital – ROE has been declining over the last two years.
7. Larsen & Toubro Ltd
Market Cap: Rs188,589
P/B: 2.49
The company is also ranked as one of the top five construction firms in the world. The company’s business interests include basic and heavy engineering, construction, real estate, capital goods manufacturing, information technology, and financial services. As of 2020, the L&T Group had 118 branches, 6 partners, 25 joint ventures, and 35 joint operations companies. The Price to Book Ratio is one of the highest in the industry. Companies with low Piotroski scores have poor financial performance. A stock with a high analyst rating and at least a 20% potential upside.
8. Asian Paints
Market cap: 244,753
P/B: 23.23
Asian Paints controls half of the organized domestic paints market. Asian Paints controls 60 percent of the decorative paints market, which accounts for 70-75 percent of the Indian paint industry. Because of its leadership position, the company has a healthy operating margin of more than 22.20 percent, which is higher than its competitors. The debt-to-equity ratio has remained constant at 0.1 for the last five years. The Price to Book Ratio is one of the highest in the industry. Companies that have a high Piotroski score have strong financials. The core sector has a high cash-generating capacity.
9. Maruti Suzuki
Market Cap: Rs 202,485
P/B: 3.86
Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is a subsidiary of Suzuki, a Japanese automaker. It was owned and operated by the Indian government between 1981 and 2003. The Government of India sold it to Suzuki Motor Corporation in 2003. As of July 2018, it controlled 53% of the Indian passenger car market. The price-to-book ratio is greater than the industry average. Stocks with a high price-to-earnings ratio (P/E ratio greater than 40). The promoters’ stake remained unchanged at 56.37 percent in the first quarter of 2021. Mutual funds reduced their assets from 7.83 percent to 7.49 percent in the first quarter of 2021.
10. Avenue Supermarts
Market Cap: Rs 187,563
P/B: 16.93
Avenue Supermarts Limited, DMart, is a retail company in India that owns and operates a hypermarket chain. It was founded in 2002 by Radhakishan Damani, with its first branch in Powai’s Hiranandani Gardens. Avenue Supermarts is a strong candidate for a significant increase in geographic diversity and sales channel mix, resulting in a broader scope of operations and improved operational performance over time. The Price to Book Ratio is one of the highest in the industry. FII/FPI holdings increased from 10.09 percent to 10.17 percent in the first quarter of 2021.
Should you consider investing in BlueChip Stocks?
Because blue chips operate in the large-cap space, a single share will be expensive. You won’t make a fortune because you bought blue chip stocks decades ago. These are, for the most part, mature businesses that have outgrown their days of rapid growth. Blue chip stocks may not appear to be a good short-term investment, but they have a high long-term value due to their consistent growth and returns. It can easily recover from adversity due to its solid financial foundation.
