Top 10 stocks in India as per market capitalisation

Investing in the stock market can be quite rewarding, especially when you take a long-term approach. While short-term investments can be unpredictable and volatile, focusing on long-term stocks allows you to capitalise on the growth potential of well-established companies. While fundamental analysis is ideal, many investors prefer investing in top stocks as per market capitalisation since they are market leaders and hence relatively insensitive to short-term market ups and downs.

What are long-term stocks?

Long-term stocks are stocks that investors hold for over a year as they have strong financial fundamentals, steady growth strategies and usually . These stocks are ideal for investment for a prolonged period as they are capital protection as well as return generation. Such investment tools cater to individuals having an aptitude for risk, as well as risk-averse investors. Stocks of small, mid and large-cap companies can be considered for long term investment purposes.

Top Long-Term Stocks in India for 2024 as per market capitalisation

Key Factors to Consider Before Selecting Stocks for Long-Term Investment

Here are critical considerations to keep in mind when planning to invest for the long term:

• Market Capitalization of the Stocks Should Exceed Rs 10,000 Crores

  Market capitalization serves as a key indicator of a company's overall value in the stock market. To ensure stability and mitigate risks, it is prudent to opt for companies with a market capitalization exceeding Rs 10,000 crores.

• Sustained Profit Growth Over the Long Term

  A company's consistent profit growth over an extended period is a testament to its financial robustness and potential for long-term gains. Prioritise companies that have demonstrated consistent profit growth over the long-term (five to ten years) signalling their promising prospects for the future.

• Diversification

  It is always advisable to diversify your investment portfolio across various industries and asset classes to spread risk. Holding a mix of stocks, bonds, real estate, and other investment vehicles can help cushion your portfolio from market fluctuations. Diversification can enhance the overall stability and potential returns of your long-term investment strategy.

• Research

  Conducting thorough research and due diligence before making any investment decisions is crucial. Understand the company's financials, growth prospects, competitive advantages, and potential risks. Analyse industry trends, market conditions, and regulatory factors that may impact the company's performance. Staying informed about the broader economic landscape can aid in making well-informed investment choices.

• Time Horizon

  Long-term investing requires patience and discipline. Define your investment time horizon based on your financial goals and risk tolerance. If you have a longer time frame, you may be able to take on more risk, whereas shorter-term goals may call for a more conservative approach. Understanding your time horizon will help you align your investment choices accordingly.

• Avoid Emotional Decision Making

  Emotions can influence investment decisions, leading to impulsive actions during market fluctuations. Avoid making hasty decisions based on fear or greed. Stick to your long-term investment plan and avoid frequent buying and selling, known as market timing. Emotional investing can hinder your ability to benefit from the compounding effect of long-term investments.

• Rebalance Your Portfolio

  Periodically rebalance your investment portfolio to maintain your desired asset allocation. Over time, the value of different assets may change, causing your portfolio to drift from its original allocation. By rebalancing, you can bring your portfolio back in line with your intended risk and return objectives.

Overview of the top long-term stocks in India as per market capitalisation

In this section, we will highlight the five stocks that are currently ruling India’s market capitalisation. These stocks have market capitalisation of more than ₹10,000 crores and have generated stable long-term return for their shareholders..

• Reliance Industries

  With a market capitalisation of ₹19,91,203 crore (as on 19th February 2024), Reliance Industries Limited is the biggest stock in Indian markets. A massive conglomerate headquartered in India with a diverse business portfolio, they operate in various sectors, including Oil to Chemicals (O2C), Oil and Gas, Retail, Digital Services, and Financial Services. Led by visionary Mukesh Ambani, Reliance Industries has been at the forefront of transforming India's telecommunications landscape with its flagship company, Reliance Jio Infocomm. Its retail arm, Reliance Retail, is also rapidly expanding, adding to its growth. With such a wide array of operations, Reliance Industries undoubtedly ranks among the best long-term stocks to invest in.

• Tata Consultancy Services (TCS)

  On second position in list of India’s top stocks as per market capitalisation is Tata Consultancy Services Ltd with a market capitalisation of ₹14,58,071 crore (as of 19th February 2024). TCS is a prominent Indian IT services company that has gained global recognition for providing information technology solutions and digital services. Renowned for reliability and excellence, TCS serves clients worldwide, spanning various industries. Their focus on innovation, cutting-edge technology, and customer satisfaction makes it a safe bet for long-term investors seeking stability and growth in the IT sector.

• HDFC Bank

  HDFC Bank Limited is next up on our list of top stocks in India as per market capitalisation with a market capitalisation of ₹11,04,238 crore (as of 19th February 2024). Headquartered in India, HDFC bank is a dominant player in the country's banking sector. With a vast network of branches and a wide range of banking services, HDFC Bank caters to both retail and corporate clients. Their consistent financial performance has been a big green flag for investors.

• ICICI Bank

  A close second to HDFC Bank, ICICI Bank comes with a market capitalisation of ₹7,36,072 crore (as on 19th February 2024). Bank’s core business activities include savings, loan disbursement, credit card business, wealth management, supply chain finance and more. Company’s total deposits increased from ₹10,645 crore to 11,808 crore as per annual report 2022-23.

• Infosys

  Following TCS is India’s second largest IT company, Infosys. A global leader in consulting, technology, and next-generation digital services, Infosys has a market capitalisation of ₹6,99,012 crore (as of 20th February 2024) With a strong focus on digital transformation and innovative solutions, Infosys continues to drive digitalization across industries. The company's robust financial performance and widespread global presence make it a compelling option for long-term investment in the digital services and consulting domain.

• Hindustan Unilever

  Established in 1933, Hindustan Unilever Limited (HUL) is one of India's top fast-moving consumer goods (FMCG) company. HUL boasts of a market capitalisation of over ₹5,64,000 crore (as of date 28th May 2024). It is a part of one of the largest global consumer products company, Unilever. The corporate headquarters are in Mumbai, India. The company has a sizable distribution network throughout India. In addition, the business has a substantial presence in rural India, significantly boosting its earnings. Therefore,

• Bajaj Finance

  Established in 1987 as a non-banking financial company (NBFC) focussed on two-wheeler and three-wheeler finance, Bajaj Finance Limited has come a long way in terms of cementing its position as a strong brand under the Bajaj group and a market cap of ₹4,25,000 crore (as of date 28th May 2024). In fact, if we see the loan portfolio mix, we see that BFL is quite diversified, engaged in lending across Consumer (Retail), SMEs, Commercial customers, Rural customers and has recently also added mortgage lending to its loan portfolio. The company focuses on the mass affluent segment, which is only going to increase in size in the next 20 years. Over the past decade, Bajaj Finance has established a strong position in the underpenetrated consumer financing segment by strategically adding product lines, targeting affluent customers, and underwriting risk via technology platforms. It is, therefore, a strong option for long-term investors to add into their portfolio.

• Larsen & Toubro

  Larsen & Toubro (L&T) is an Indian company founded in 1946 by two Danish refugees, Henning Holck-Larsen and Soren Kristian Toubro. L&T is one of the top 5 construction companies in India. The company has widened their focus to include other products and services such as defence manufacturing, IT, and financial services. With a market cap of ₹5,01,895 crore (as of date 28th May 2024), and a low debt-equity ratio with a steadily growing return on equity, the company's fundamentals are strong. This is another company that investors have turned to for long-term investments.

• ITC

  ITC Limited is an Indian conglomerate that was incorporated in 1910. With a strong presence across the country, it has a strong brand value and recall and a market cap of ₹5,35,000 crore (as of date 28th May 2024). ITC's core business is the FMCG market, which includes famous names such as Aashirvaad, Sunfeast, Bingo, and Classmate. The company has a robust delivery network and a deep knowledge of customer tastes, allowing it to keep its market position in different product categories. In addition, ITC has aggressively broadened its business base, moving into hotels, paperboards, and agri-business areas. This diversity approach lowers the company's reliance on any specific sector and provides a hedge against seasonal downturns in specific industries.

• Godrej Consumer Products

  Godrej Consumer Products Limited (GCPL) was incorporated in 2001 as a part of the Godrej Group. GCPL’s product categories include soap, hair colourants, toiletries, and liquid detergents.
  With a market cap of ₹1,35,000 crore (as of date 28th May 2024), the company’s renewed strategy is set to increase this number in the next 10 years. GCPL’s extensive distribution system known as “Sampark” has allowed for inventory reduction and better sales.

Note: This list is not a recommendation but purely informational. You are advised to conduct your own market research to identify stocks that align with your financial objectives, risk tolerance, and trading strategy.

Why Should You Buy Indian Stocks for the Long Term?

• Chance for returns to grow over an extended length of time
• Chance to gain from India's long-term economic growth as an emerging market
• Chance to diversify across sectors that are showing stable growth such as banking, fintech, real estate, healthcare and infrastructure

The Indian economy is going steady in terms of growth and therefore investing in long-term stocks allows buyers to share in the country's growth story. India's diverse demographics, growing middle class, and rising pocket size allows for businesses in various fields to thrive. By investing in long-term stocks in 2024, investors can benefit from the potential growth of India.

Conclusion

Investing in the stock market can be a rewarding journey if done with careful planning and a long-term perspective. The top stocks as per market capitalisation listed in this blog are well-established companies with proven track records of growth and sustainability. However, remember that investing always carries some level of risk, and it's essential to align your investment strategy with your financial goals and risk tolerance.

While diversifying your portfolio across these top stocks can help spread risk, it's equally important to conduct thorough research and consult with financial experts if needed. Keep in mind the significance of long-term investing, allowing compounding to work in your favour over time. Lastly, review your portfolio periodically, making adjustments when necessary to stay on track with your investment objectives.