Looking for the best stocks to buy in India for long term Investment which may give a steady return with minimum risk? Picking the best stocks to buy in India is a difficult jargon to solve. But you can pick stocks after making a proper analysis. Here we will recommend you best stocks to buy for the long term in India to get consistent returns.

How to Pick Best Stocks to buy in India

In order to pick the best stocks for consistent returns, you should check out the following parameters of a company before investing in a stock.

Revenue – Revenue or net sales of a company should be constant for at least 5 years. You may check that the company has been generating sales growth annually during the last 5 financial years of at least 10%.

Net Profit – The net profit of a company increases at least 15% on a year-on-year basis.

Earnings Per Share (EPS) – EPS is to be and grow at a rate of 10% for the last 5 years.

Price to Earnings Ratio (P/E) – P/E ratio should be low as compared to the other peer companies active in the same industry.

Price to Book Ratio (P/B) – P/B should be low as compared to peer companies operating in the same industry.

Debt to Equity Ratio – A debt-free company is desirable. If not so the ration must be low to 0.10 or 0.25.

Return on Equity (ROE) – should be greater than 20%

Dividend Yield – You can ensure about good dividend yield by the company.

Beta – Invest in stocks whose Beta is less than 1 which indicates that the share is theoretically less volatile than the market.

After checking out the above-said parameters of a company or stock, you need to take into consideration the following points,

Business model

Future potential

Management of the company

Moat i.e. competitive advantage

If you are confused about how to make the proper analysis of the above-said parameters, you may read the article Stock Picking Strategies.

I hope you must have got a fair idea that how difficult it is to identify the best stock for investment. Now we will discuss the best stocks to buy for long term growth.

Top 10 best stocks to buy for long term in India

APL Apollo Tubes Ltd.

APL Apollo Tubes Ltd. is the largest Electric Resistance Welded (ERW) steel pipes producing company. It is one of the largest section pipe & tube manufacturers in India. The company’s vast distribution network is spread across India with warehouses and branch offices in 25 cities. This vast distribution network enables it to be one of the leading Galvanised Iron (GI) pipe manufacturers in India. It caters extensively to the region and exports to over 20 countries globally. Let’s check out the above-said parameters,

Revenue Growth – 23.43%

Net Profit Growth – 20.16%

Earnings per Share (EPS) – Rs. 39.37

Price to Earnings Ratio (P/E) – 20.44

Price to Book Ratio (P/B) – 3.71

Debt to Equity Ratio – 0.18

Return on Equity (ROE) – 19.36%

Dividend Yield (%) – 0.93

Beta – 0.85

Asian Paints

Asian Paints was incorporated in the year 1945. It is a Large Cap company (having a market cap of Rs. 129002 Crore) operates in Paints and Pigments sector. The Company is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home decor, bath fittings. It also provides related services. Asian Paints is India’s largest and Asia’s fourth-largest paints company. Its Key Products/ Revenue Segments include Paints, Enamels, and Varnishes& Black.

Here are the key aspects of Asian Paints.

Asian Paints has performed a satisfactory growth of around 8% to 12% during the past 5 financial years.

Its business is double the size of any other paint company in India.

The company has spread its business in 19 other foreign countries and 26 manufacturing units around the world.

Asian Paints serves in over 65 countries occupying the position of fourth largest paint company in Asia.

Asian Paints operates in different segments like Industrial coatings, Decorative paints, Ancillaries, Asian Paints Royale, etc.

The company holds a wide brand value.

Asian Paints always conducts attractive and good marketing campaigns. Many renowned celebrities promote Asian Paints from time to time.

Let’s check out the above-said parameters,

Revenue Growth – 9.68%

Net Profit Growth – 12.14%

Earnings per Share (EPS) – Rs. 26.62

Price to Earnings Ratio (P/E) – 65.62

Price to Book Ratio (P/B) – 17.18

Debt to Equity Ratio – 0.00

Return on Equity (ROE) – 27.16%

Dividend Yield (%) – 0.59

Beta – 0.91

Berger Paints

Berger Paints was incorporated in the year 1923. It is a Large Cap company (having a market cap of Rs. 31345 Crore) operates in Paints and Pigments sector. The Company is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home decor, bath fittings. Berger Paints produces paints of different types like house paints, industrial paints, decorative paints, etc.

Here are the key aspects of Berger Paints.

Berger Paints is the second largest paint manufacturer in India.

Berger Paints is now a famous and familiar name in the market.

People are now very much aware of the products of Berger Paints. Their campaigns and advertisements have made them a household name.

They have their business in some international countries such as Nepal, Bangladesh, Russia, Poland, Cyprus and collaboration with Becker of Sweden and Nippon paints of Japan.

When it comes to repainting the house people resort to Berger Paints.

The company maintains a vast network throughout the country with seven manufacturing units, 85 depots, and many regional outlets.

The Berger Paints has shown constant growth in their retail values (RSP).

The Berger Paints has become a very big gun in the paint sector and has created a barrier for other new companies to enter the sector.

Berger Paints and Asian Paints together have occupied most of the market of paints. Berger Paints have extended its business into chemical production.

Let’s check out the above-said parameters,

Revenue Growth – 10.19%

Net Profit Growth – 14.51%

Earnings per Share (EPS) – Rs. 4.88

Price to Earnings Ratio (P/E) – 86.32

Price to Book Ratio (P/B) – 18.82

Debt to Equity Ratio – 0.10

Return on Equity (ROE) – 22.78%

Dividend Yield (%) – 0.40

Beta – 0.89

Bajaj Finance

Bajaj Finance was incorporated in the year 1987. It is a Large Cap company that has a market cap of Rs 144899 Crore. It operates in the Finance sector. The Company is engaged in the business of providing loan facilities for buying two and three-wheelers, consumer durables, small business loans, personal loans, mortgage loans, loan against securities, etc. at an affordable interest rate.

Let’s check out the above-said parameters,

Revenue Growth – 33.88%

Net Profit Growth – 40.14%

Earnings per Share (EPS) – Rs. 77.08

Price to Earnings Ratio (P/E) – 48.68

Price to Book Ratio (P/B) – 12.25

Debt to Equity Ratio – 5.19

Return on Equity (ROE) – 21.06%

Dividend Yield (%) – 0.14

Beta – 1.69

Britannia Industries Limited

Britannia Industries Limited was incorporated in the year 1945. It is a Large Cap company that has a market cap of Rs 113612.18 Crore. It operates in the FMCG sector. The Company is engaged in the business of Bakery Products i.e. Biscuits or Cake. Britannia is an old and famous company that produces bakery items. It has been producing bakery products since a century ago. Its products are available for all income groups. The company has something to offer almost everyone. So, the company occupies the largest portion of the bakery market in the country.

The one and the first name people think about biscuits, cakes, bread, rusk or dairy products in India is Britannia. Due to its vast range of products and their quality, Britannia holds a recognized position among people. Britannia has reached to every person in the country. There is nothing to say about the quality of the products of Britannia. People like them very much.

Let’s check out the above-said parameters,

Revenue Growth – 9.84%

Net Profit Growth – 24.66%

Earnings per Share (EPS) – Rs. 55.56

Price to Earnings Ratio (P/E) – 31.86

Price to Book Ratio (P/B) – 18.33

Debt to Equity Ratio – 0.01

Return on Equity (ROE) – 37.11%

Dividend Yield (%) – 0.46

Beta – 0.81

Minda industries

Minda industries was incorporated in the year 1992. It is a Mid Cap company holds a market cap of Rs. 8663 crores. It works in the Auto Ancillaries sector. Its main Products/Revenue Segments include Switches, Horns, Lighting Products, Scrap, and LED Lights, air brakes, brake & fuel hoses, automotive batteries, clutch etc. Minda industries have a turn over beyond Rs.6152 crores. The company has established 52 manufacturing plants in India including many foreign countries like Indonesia, Vietnam, Spain, Morocco, Mexico, and Colombia. The company has design centers in Taiwan, Japan, and Spain and sales offices in the USA, Europe, Vietnam, and Spain.

Let’s check out the above-said parameters,

Revenue Growth – 28.20%

Net Profit Growth – 117.89%

Earnings per Share (EPS) – Rs. 5.36

Price to Earnings Ratio (P/E) – 31.86

Price to Book Ratio (P/B) – 4.36

Debt to Equity Ratio – 0.17

Return on Equity (ROE) – 22.10%

Dividend Yield (%) – 0.34

Beta – 1.06

Note: This is the few lessons from the book which I discovered from Christopher Browne’s brilliant book ‘The Little Book of Value Investing’. Buy the book from Amazon.

Pidilite Industries

Pidilite Industries was incorporated in the year 1969. It is a Large Cap company having market caps of Rs. 58482 crores. It operates in the Chemicals sector. Pidilite Industries is an Indian-based adhesives manufacturing company. It is basically an adhesive item producing company. It also sells art materials, construction chemicals, and other industrial chemicals. Pidilite produces some famous products like Fevicol, Fevikwik, Dr.Fixit, M-seal, Roff, Cyclo, Hobby Ideas, Acron and Ranipal. Here is the detailed fundamental analysis of Pidilite Industries.

The most famous product Fevicol has made Pidilite the market leader. Other products also maintain the best quality and are sold widely in the Indian market. Due to quality and branding, Fevicol and other products have won the hearts of the customers. These products have become the most trusted ones.

Pidilite Company produces many other items like sealants, waterproofing solutions, construction chemicals, industrial resins and even chemicals for arts and craft. These vast range products yield revenues for the company. The company is constantly busy or trying to launch new items. The company has set up a good distribution network over the country. Pidilite attends the customers aggressively and of course rapidly.

Let’s check out the above-said parameters,

Revenue Growth – 10.57%

Net Profit Growth – 16.09%

Earnings per Share (EPS) – Rs. 19.69

Price to Earnings Ratio (P/E) – 68.96

Price to Book Ratio (P/B) – 15.44

Debt to Equity Ratio – 0.00

Return on Equity (ROE) – 27.10%

Dividend Yield (%) – 0.49

Beta – 1.02

Titan Company

Titan Company was incorporated in the year 1984. It is a Large Cap company operating in Consumer Durables sector. Titan Company is the fifth-largest integrated own brand watch manufacturer in the world. Titan launched ‘Sonata’, India’s largest selling watch brand, which has established itself as a brand of great quality and unbeatable value for the customer. After Sonata, Titan Company launched Fastrack in 1998 and became an independent urban youth brand in 2005. The brand has carved a niche for itself within categories such as watches and eyewear amongst the youth.

In 2009, Fastrack extended its footprint into accessories with a range of bags, belts, and wallets. Titan Company launched ‘Tanishq’, India’s most trusted and leading jewelry brand. Titan Company operated via 1400 stores and a total retail area of over 1.8 m sq.ft. all over India. It has India’s largest specialty retail network over 240 towns. Today, Titan Company Limited is TATA’s largest company operating in consumer durables. It is India’s leading producer and retailer of watches, jewelry, eyewear, and accessories.

Let’s check out the above-said parameters,

Revenue Growth – 12.60%

Net Profit Growth – 13.81%

Earnings per Share (EPS) – Rs. 15.72

Price to Earnings Ratio (P/E) – 71.50

Price to Book Ratio (P/B) – 16.91

Debt to Equity Ratio – 0.01

Return on Equity (ROE) – 23.93%

Dividend Yield (%) – 0.43

Beta – 0.83

TVS Motor Company Ltd.

TVS Motor Company Ltd. was incorporated in the year 1992. It is a Large Cap company operating in Auto sector. Its key Products/Revenue Segments include automobiles i.e. 2 & 3 Wheelers, the sale of services, etc.

The company produces two-wheelers at a cheap rate. These two-wheelers are affordable for a much broader group of people. TVS bikes or vehicles are on high performance and less fuel consumption.

TVS Motors targets local people for business.

This is the first company to invent or launch some very useful two-wheelers like Moped, Scooty, etc. TVS Scooty was designed for women and old or weak men. This vehicle has brought a revolution in the two-wheeler sector and very popular among people. The brand name Scooty has become the product name. People are now used to naming that kind of two-wheelers Scooty. TVS always tries to launch modernized and updated versions of vehicles that fit styling, performance and fuel efficiency. The company is also conscious to develop eco-friendly vehicles that strictly adhere to compliance norms.

Let’s check out the above-said parameters,

Revenue Growth – 19.18%

Net Profit Growth – 32.06%

Earnings per Share (EPS) – Rs. 14.93

Price to Earnings Ratio (P/E) – 29.44

Price to Book Ratio (P/B) – 6.39

Debt to Equity Ratio – 1.55

Return on Equity (ROE) – 25.20%

Dividend Yield (%) – 0.76

Beta – 1.54

Read also: Top 10 Blue Chip Stocks to Buy in India

V I P Industries Ltd.

V I P Industries Ltd. was incorporated in the year 1968. It is a Mid Cap company having a market cap of Rs 7523 crores. This company operates in the Plastics sector. It is the world’s second-largest and Asia’s largest luggage maker of plastic molded suitcases, handbags, briefcases, vanity cases, and luggage. The company provides travel products, hard and soft-sided luggage, bags, backpacks, duffels, shoulder bags, waist pouches, sling bags, duffel trolleys, vanity cases, office bags and satchels, suitcases, briefcases, etc. The company offers its products primarily under the brand name of VIP, Carlton, Footloose, Alfa, Aristocrat, Sky bags, Moderna and Buddy.

Let’s check out the above-said parameters,

Revenue Growth – 13.63%

Net Profit Growth – 25.64%

Earnings per Share (EPS) – Rs. 7.48

Price to Earnings Ratio (P/E) – 53.14

Price to Book Ratio (P/B) – 10.71

Debt to Equity Ratio – 0.00

Return on Equity (ROE) – 23.63%

Dividend Yield (%) – 0.73

Beta – 1.31

V-Guard Industries Ltd.

V-Guard Industries Ltd. was incorporated in the year 1996. It is a Mid Cap company having a market cap of Rs 8984 crores. The company operates in the Electric Equipment sector. It is a major electrical appliances manufacturer in India and the largest one in the World. The company has an annual turnover of Rs. 21.50 billion (FY 2017-18). It manufactures voltage stabilizers, electrical cables, electric pumps, electric motors, geysers, solar water heaters, electric fans, and UPSs.

Let’s check out the above-said parameters,

Revenue Growth – 11.26%

Net Profit Growth – 18.77%

Earnings per Share (EPS) – Rs. 4.74

Price to Earnings Ratio (P/E) – 48.28

Price to Book Ratio (P/B) – 11.04

Debt to Equity Ratio – 0.00

Return on Equity (ROE) – 22.04%

Dividend Yield (%) – 0.34

Beta – 0.83

How Capitalante can help you

Are you confused about how to prepare an effective financial plan to achieve financial freedom? If yes, learn how to prepare effective financial planning.

If you have any questions regarding which are the best stocks to buy for the long term in India feel free to comment so that we have a discussion. If you found this post helpful don’t forget to share this post.