Best Long Term Stocks in Indian Share Market 2024

Investing in stocks is an outstanding way of making a return over time. It’s important to have a long-term outlook as well as understand the advantages of stock investment. Purchasing the best long term stocks in India helps investors to benefit from compounding gains while surviving short-term market swings. In this blog, we will discuss some of the best stocks in India for the long term, how to choose them, and factors to consider before investing in the long term. 

Top Long Term Stocks India

When considering the best stocks to buy in India for the long term, it's crucial to conduct thorough research and analysis. Several factors contribute to the suitability of a stock for long-term investment, including the company's financial health, growth potential, industry trends, and competitive advantages. Here are some stocks that investors might consider for long-term investment in India:

Stock NameMarket Cap (Crore)Sales Growth (CAGR)Dividend Yield(%) Profit Growth (CAGR)
Bajaj Finance Ltd₹ 4,05,70828.020.4662.03
HDFC Bank₹ 11,03,02919.91.3119.34
Infosys₹ 6,73,03819.312.089.57
Reliance Industries₹ 19,30,03225.100.3213.39
ICICI Bank₹ 7,58,51834.60.7536.66
Hindustan Unilever₹ 5,41,58015.531.68  12.97  
Tata Consultancy Services₹ 15,18,47518.722.732.41  
Deepak Nitrite₹ 28,73620.813.460.36

 

Disclaimer: All the stock prices, market capitalization, sales growth, profit growth, and dividend yield mentioned above are accurate as of 18th March 2024. However, it's advisable to conduct thorough research before buying the best long term stocks in India. 

 

Overview of the Top Long Term Stocks in India as per Market Capitalization

Here are the overview of the top long-term stocks in India as per market capital:

  1. Bajaj Finance Ltd

    The primary business of Bajaj Finance is lending and it is widely present in both urban and rural India. Bajaj Finance Ltd offers a diverse loan portfolio to retail, SME, and commercial clients and in addition, it provides a range of financial services products to its clients and takes deposits from both individuals and businesses. For the last three years, the operating income of the company has grown to 14.42%. With its well-kept advances growth ratio of 16.45%, the corporation is quite proud, and 54.78% of the shares are held by the promoters.
  2. HDFC Bank

    The Reserve Bank of India (RBI) granted "in principle" clearance to the Housing Development Finance Corporation Limited (HDFC) to establish a bank in the private sector, making it one of the first. Founded in August 1994 under the name "HDFC Bank Limited," HDFC Bank is a publicly traded financial institution with its main office in Mumbai, India. Its activities encompass a variety of banking and financial services, such as wholesale, retail, and treasury operations banking. For the last three years, the bank has maintained a healthy ROA of 1.93% and has prominently managed its Non-Performing Assets, The Average NET NPA of the last 3 years is 0.33%.
  3. Infosys

    Infosys is the second largest IT company in India, it comes behind TCS. They have more than three decades of experience in managing the digital journey of their customers. They have done this by giving the organization access to an AI-powered core that aids in setting priorities for change implementation. As of now, the company has no debt and with an ROE of 30.60%, the company has an established record.
  4. Reliance Industries

    With a wide range of businesses in retail, digital, media, telecom, oil and gas, and retail, Reliance is the biggest conglomerate in India. It's ideal for long-term investors due to its stable payouts and good financial condition. For the last three years, the company has shown a good revenue growth of 16.17% and it has good cash flow management; CFO/PAT stands at 1.24. They have a high promoter holding of 50.30% and an efficient cash conversion cycle of -71.09 days.
  5. ICICI Bank

    ICICI Bank, with a market capitalization of ₹7,58,518 crore (as of March 18, 2024), is a close second to HDFC Bank. The main business activities of this bank include supply chain financing, wealth management, credit card sales, loan distribution, and savings. For the last three years, the bank has been maintaining a healthy ROA of 1.76% and is notably managing its non-performing assets; for the previous three years, the average NET NPA was 0.85%.
  6. Hindustan Unilever

    In the FMCG industry, Hindustan Unilever mainly operates in the food and beverage, home care, and beauty and personal care sectors. The company sells mostly in India and has manufacturing plants around the nation.  For the past three years, the company has shown a good revenue growth of 15.10% and maintained a healthy ROE of 22.39%. This company is virtually debt-free and has a healthy Interest coverage ratio of 130.50.
  7. Tata Consultancy Services

    TCS, a division of the Tata Group, is the biggest global corporate conglomerate in India. It operates in 46 countries and employs more than 500,000 of the most highly skilled consultants worldwide.They have a good ROE track record of 48.19% and have an effective cash conversion ratio of 94.69. With an operating margin of 26.70%, the company is doing well and the business is essentially debt-free.
  8. Deepak Nitrite

    Deepak Nitrite is engaged in the manufacturing of chemicals and chemical-related goods. For the year that ended on March 31, 2023, the company's equity capital was Rs. 27.28 Cr. and its total operating revenue was Rs. 3033.55 Cr. Founded on June 6, 1970, Deepak Nitrite Ltd. is a publicly traded corporation with its registered office located in the Indian state of Gujarat. Over the last three years, the company has consistently maintained a respectable ROE of 21.40% and by 13.99 Cr, the company's debt has been substantially reduced.

Basics of Long Term Stock Investment

The word "long term" describes the prolonged period an investor owns an asset. Long term investments can be from 12 months to 30 years, it all depends on the investor's needs. Most investors keep long term assets for a minimum of five to ten years. Long term investments, however, have no specified holding duration. Let us understand everything related to the best long term stocks india. 

What is Long Term Stock Investing?

The assets that a person or organization has owned for more than a year are considered as long term investing. They can be anything like real estate, bonds, stocks, or other financial instruments. In comparison to short-term investments, which are likely to have their assets sold quickly, long term investments will likely have their assets held for many years. Investors may also decide not to sell them at all in certain situations.

Importance of Long Term Stock Investment

Let's examine some of the Importance of best long term stocks India :

Tax Advantage: As compared to short-term capital gains, long term capital gains are taxed at lower rates. People who hold their investments for a longer time are eligible for special tax treatment, this would help them to keep a larger percentage of their investment profits.

Compounding:

Purchasing shares over the long term enables you to benefit from compounding. As a result, a stock has more time to develop and appreciate the longer you keep on it. This would help in generating considerable profits in due course.

Possibility of Increased Profits: 

In the past, long term investments like equities and equity mutual funds have yielded larger returns than short-term ones. They provide the possibility of increased income and capital appreciation, particularly in times of economic expansion.

Achieving Financial Goals: 

Long term investments are a good fit for several financial objectives, including saving for retirement, purchasing a home, and paying for schooling. Investing gradually over time can help accomplish these objectives more successfully.

Why Long Term is Better than Short Term Investment

Let’s understand the difference between short term and long term investment:

Aspect

Short Term Investment 

Long Term Investment

Time FrameUsually less than a yearUsually longer than a year
Investment PlanSpeculative and active tradingBuy and hold, pay attention to the basics.
Possible GainsHigher yet more erratic at times.Generally stable and predictable in the long run
Risk LevelHigher risk level because of volatility in the market.Generally lower due to time diversification.
Tax EffectsThe tax rate on short-term capital gains is often higher.Lower tax rates are frequently applicable to long term capital gains.
Knowledge of the MarketDemands an in-depth knowledge of market dynamics that is ongoing.Requires knowledge of long term market trends

Advantages & Disadvantages of Long Term Stock Investment

Let’s understand the advantages and disadvantages of long term stock investment:

Advantages Long Term Stocks

Disadvantages Long Term Stocks

Potential for High Returns: Due to the market's ability to increase over time, long term investors have generally benefited from the possibility of substantial profits.Volatility: In the short run, stock values could vary a lot, perhaps leading to loss.
Compounding Growth: By allowing assets to increase over time and reinvesting dividends, compounding growth can result in exponential growth.Liquidity Risk: In the event of an emergency or unexpected financial necessity, stocks could be difficult to sell.
Benefits for Taxpayers: Long term capital gains tax rates are often lower than short-term rates, which may minimize investors' tax obligations.Company-specific Risks: Mismanagement, legal concerns, expiration of technology, and other company-specific problems might negatively impact individual stocks.

Factors to Consider Before Investing for the Long Term

Here are the factors you need to consider before purchasing the best long term stocks India:

  1. Market analysis

    You need to understand the overall market trend, including past performance, current market conditions, and future growth prospects. Analyze the market valuation metrics such as price-to-earnings ratio (P/E ratio), price-to-book ratio (P/B ratio), and dividend yield to assess whether the market is overvalued or undervalued. You need to keep track of market sentiment, investor behavior, and geographical factors that may influence market conditions.
  2. Company fundamentals

    Examine each company you're thinking about investing in separately, both financially and operationally. Review important financial data of the company like cash flow, debt levels, profitability margins, sales, and profit growth. Consider looking into the company's competitive position in its industry and also make sure to take into account qualitative elements like market leadership, innovation, and brand reputation.
  3. Economic indicators

    To understand how the economy is doing overall keep a close eye on GDP growth, inflation, unemployment, and interest. Review central bank policies, government policies, and geopolitical developments that may have an impact on future growth and economic stability.
  4. Sector analysis

    To find excellent investment possibilities review different economic sectors. To diversify your holdings make sure to invest in a variety of industries, this will also help to lower risk of concentration and take advantage of growth possibilities across the economy. Examine industry-specific elements such as supply dynamics, demand trends, the regulatory framework, technology developments, and the competitive landscape.

Strategies to Select Best Stocks for Long Term Investment

Following are the tips for best penny stocks to buy today India for long term: 

  1. Spend your money wisely:

    It is not advisable to rashly go above your investing budget to best long term stocks in India.  You need to invest a certain amount in several high-performing equities rather than focusing on just one. Investing intelligently will help you reduce unnecessary risk and improve your chances of long term development.
  2. Never follow market suggestions blindly:

    No matter how reliable the source is, never act on stock market suggestions blindly as this could be dangerous. Do a thorough analysis and study on stocks before deciding which ones to buy for long term investing. While some suggestions provide a high profit potential, others carry a high potential for loss.
  3. Eliminate stocks that aren't working for your portfolio:

    Understand that the past depreciation of a stock does not always imply a future increase. To prevent more losses, be realistic about the potential for the market and quickly sell any underperforming stocks in your portfolio. Making logical decisions is essential when selecting the finest shares to invest in over the long run.
  4. Decide and then follow your investment plan:

    Select a reliable investing plan that is in line with your objectives and follow it regularly. Use stock screeners, do in-depth research and technical analysis, and make well-informed judgments. Following a disciplined strategy improves your ability to choose the finest stocks for long term stock performance.

Conclusion
Investment in the stock market can be fruitful if done carefully with a long term view plan. 
The best long term stocks India mentioned in this blog are reputable businesses with a track record of expansion and sustainability. But keep in mind that there is always some risk involved in investing, so it's critical to match your investment plan to your risk tolerance and financial objectives. Always remember to research thoroughly and make smart decisions, and you’ll be able to maximize profits from your investments. Finally, before making any investment decision, it is important to open a Demat account with a reliable stock market app.

Disclaimer - The stocks mentioned above are based on current market trends and may fluctuate in value. Before investing in any of these stocks, it is important to conduct thorough research or consult with a financial analyst. Investors are advised to exercise caution and diligence when making investment choices.

FAQs on Best Long Term Stock

Long-term investment is the right choice for people who have long-term investment horizons and can tolerate short-term swings. 

By making long-term investments you get the benefit of compounding and survive short-term market fluctuations. 

To minimize risks in the stock market, diversify investments, conduct thorough research, use risk management tools, and stay informed about market news and developments.

It’s a decent choice to buy best long term stocks india investment as it will allow you to experience the ups and downs of the market without affecting your portfolio. 

You can evaluate your portfolio every quarter or every half-year. This helps to evaluate the effectiveness of your assets and make any required changes.