Best Blue Chip Stocks under Rs 500: Investing in the stock market can be risky, and requires a careful selection of stocks to build a diversified and stable portfolio. Blue-chip stocks shave off some of that risk by giving consistent and stable returns.
Now let us first understand what is a blue chip stock.
These are Stocks from established companies, that are financially sound and have stable revenue growth. They continue to perform even under adverse conditions, as they have the liquidity requirements to weather storms.
Table of Contents
Best Blue Chip Stocks Under Rs 500
Today, we will look into 5 large Cap Companies with stable revenue and profitability growth. They pay dividends constantly and are available at an attractive price of under Rs. 500. We will understand when was the Company established, and a brief history of the Company.
We will also look at the business segments of the Company and understand which are its most important segments. Then we will understand how the Company performing in terms of Top Line and bottom line before finally concluding our article.
Best Blue Chip Stocks under Rs 500 #1 – ITC
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 442.65 | Market Cap (Cr.) | 555860 |
| EPS | 15.96 | Stock P/E | 27.92 |
| RoE | 30.07% | RoCE | 39.50% |
| Promoter Holding | 0% | Div Yield | 4.04% |
| Debt to Equity | 0 | Price to Book Value | 7.55 |
| Net Profit Margin | 25.45% | Operating Profit Margin | 36.23% |
ITC or India Tobacco Company is a multinational conglomerate that has businesses spanning from Fast Moving Consumer Goods (FMCG), Paperboards, and packing to Agri-Business and Information Technology. It was ranked as India’s most admired company, according to a survey conducted by Fortune India, in association with Hay Group.
The Company predominantly is a manufacturer of Tobacco products. It holds a near monopoly, by dominating a 78% market share. It is also a leading FMCG Marketer with a vibrant portfolio of 25+ Indian brands.
Aashirvaad is part of the Agri-Business, Classmate, and Paperkraft are part of the Paper segment while Sunfeast, Yippee!, Bingo!, B Natural, ITC Master Chef, Fabelle, Sunbean, Fiama, Engage, Vivel, Savlon, and Mangaldeep, all form part of the FMCG category.
~41% of ITC’s revenue comes from FMCG cigarettes, while 25.2% comes from FMCG-Others. The Agri Business is the 3rd largest segment bringing in 16.3% of revenues while its paper business brings in ~10%. Its Hotel segment is being de-merged from the holding Company contributes to just about ~3.5% of FY23’s revenue
This Blue Chip FMCG Company reported FY23 revenues of Rs. 70,937 Cr. growing by ~17% from Rs. 60,668 Cr. in FY22. It reported a healthy Profit after Tax of Rs. 19,191 Cr. with Net Profit Margins of ~25%.
Best Blue Chip Stocks under Rs 500 #2 – Wipro
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 430 | Market Cap (Cr.) | 225914 |
| EPS | 22.32 | Stock P/E | 19.38 |
| RoE | 16.01% | RoCE | 18.21% |
| Promoter Holding | 73% | Div Yield | 0.27% |
| Debt to Equity | 0.19 | Price to Book Value | 3.32 |
| Net Profit Margin | 12.56% | Operating Profit Margin | 18.07% |
Wipro Limited is a leading technology service Company founded by Mr. Azim Premji in 1945. It is a company focused on building innovative solutions that address complex digital transformation needs. It has a presence in 66 countries and an employment base of more than 2,50,000 employees spread across continents.
The Company recently has been on an acquisition spree acquiring multiple IT Companies all over the globe. Some of these companies are CAPCO, Edgile, Rizing, LeanSwift, and Convergence Acceleration Solutions (CAS).
Wipro provides a host of services such as consultancy, cybersecurity, Data Analytics, Business Processes, and Artificial intelligence. They have a client base that is in sectors from Aerospace & Defence to Banking, Communications, Consumer Electronics to Healthcare.
The Financial Services sector brings in ~35% of Wipro’s revenue, followed by the Consumer sector which consists of Electronics and other packaged goods. This brought in ~18% of FY23’s revenue. Healthcare, Energy, and technology contribute to ~12% of revenue each.
Wipro reported FY23 revenues of Rs. 90,487Cr growing by 14%, from 79,093Cr in FY22. Net Profit during the respective term fell by 7%, from Rs. 12,243Cr in FY22 to Rs. 11,366Cr in FY23 . This was due to a dip in Net Profit Margins from 15% in FY22 to 13% in FY23.
Best Blue Chip Stocks under Rs 500 #3 – Coal India
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 282.1 | Market Cap (Cr.) | 168858 |
| EPS | 44.3 | Stock P/E | 6.18 |
| RoE | 56.03% | RoCE | 71.76% |
| Promoter Holding | 63% | Div Yield | 11.35% |
| Debt to Equity | 0.07 | Price to Book Value | 2.59 |
| Net Profit Margin | 20.31% | Operating Profit Margin | 26.54% |
Coal India Limited (CIL) is a state-owned coal mining Maharatna Company, established by the Government of India in November 1975. It is the largest coal producer in the world with a production of 79 Million tonnes since inception.
Coal India was born on the back of two very important promulgations in 1972 & 1973, that gave the Government the access to take over 226 coking coal mines & 711 non-coking coal mines leading to the birth of CIL.
CIL produced 703.2 MT of coal in FY’23, registering a growth of 13% from FY22 production of 622 MT. It breached the 700 MT production mark for the first time on March 30th, one day ahead of the closure of 2022–23.
Coal India reported a spectacular year with Revenue’s growing by ~26%, from Rs. 1,09,941 Cr. in FY22 to 1,38,506 Cr. in FY23. It also maintained a healthy Net Profit Margin of ~20%. The Company currently has a Return on Equity of 56%, with a dividend yield of 11.35%. To top it all it trades at a Price-to-earnings ratio of just 6.2x.
Best Blue Chip Stocks under Rs 500 #4 – ONGC
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 201.55 | Market Cap (Cr.) | 1,90,383 |
| EPS | 29.92 | Stock P/E | 6.07 |
| RoE | 12.14% | RoCE | 13.56% |
| Promoter Holding | 59% | Div Yield | 7.45% |
| Debt to Equity | 0.46 | Price to Book Value | 0.77 |
| Net Profit Margin | 5.18% | Operating Profit Margin | 9.03% |
Oil & Natural Gas Corporation or ONGC is a Maharatna Company, and the largest crude oil and natural gas Company in India, contributing around 71% to Indian domestic production.
Crude oil is the raw material used by companies like IOC, BPCL, and HPCL to produce petroleum products like Petrol, Diesel, Kerosene, Naphtha, and Cooking Gas LPG.
ONGC was set up under the leadership of Pandit Jawahar Lal Nehru, in 1955. It began its journey as a Directorate, which was then converted into a Commission and finally into a Corporation in 1994. The Company was awarded the Maharatna status in 2010.
ONGC owns and operates multiple segments such as upstream and downstream drilling, refinery, Petrochemical, Liquified Natural Gas, Renewables, and other segments. It owns Companies like HPCL, MRPL, Petronet LNG, Prize Petroleum, etc..
ONGC’s revenues grew by ~29%, from Rs. 4,91,300 Cr. in FY22 to 6,32,326 Cr. in FY23. However, its Net Profit fell by 22% from Rs. 45,522 Cr. in FY22 to 35,440 Cr. in FY23. This was due to the sudden rise in Production and transportation costs that grew by 47.22% and costed ~47% of FY23’s revenue.
The Company has a Return on Equity of 12.14%, with a dividend yield of 7.45% and it trades at a price of 6.16x of its earnings and 0.78x its actual book value.
Best Blue Chip Stocks under Rs 500 #5 – PowerGrid
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 201.55 | Market Cap (Cr.) | 1,90,383 |
| EPS | 29.92 | Stock P/E | 6.07 |
| RoE | 12.14% | RoCE | 13.56% |
| Promoter Holding | 59% | Div Yield | 7.45% |
| Debt to Equity | 0.46 | Price to Book Value | 0.77 |
| Net Profit Margin | 5.18% | Operating Profit Margin | 9.03% |
Power Grid Corporation of India Limited (POWERGRID), is a ‘Maharatna’ Enterprise of which was incorporated on 23rd Oct 1989 under the Company Act, 1956. It is also India’s largest electrical power Transmission Utility Company. PowerGrid was listed in 2007, with GOI currently holding a 51.34% stake in the Company.
During FY23, PowerGrid added 2,972 circuit km of Extra High Voltage transmission lines, 28,990 MVA of transformation capacity, and 9 new substations. It also made a Capital Expenditure of Rs. 9,212 crore and capitalized assets of Rs. 7,413 crore on a consolidated basis during the year.
PowerGrid’s business can be divided into a Transmission Segment, a Telecom Segment, a consulting business, and Battery Energy Storage Systems (BESS).
PowerGrid’s revenue grew by a modest 9.51%, from Rs. 45,581 Cr. in FY22 to 41,622 Cr. in FY23. However, its profitability fell by 8.36%, from Rs. 16,824 in FY22 to Rs. 15,417 in FY23. Its Net Profit Margins remained at ~34%.
The Company currently trades at a PE valuation of 11.73x, which is slightly higher than its peer Maharatnas. It has a Return on Equity of 19.36% and a dividend yield of 6.54%.
List of Blue Chip Stocks Under Rs 500
The list below puts together 10 best blue chip stocks available under Rs 500 in India.
| Name | CMP | Mkt Cap | Div Yld |
|---|---|---|---|
| ITC | 442.65 | 555860 | 4.04% |
| Wipro | 430 | 225914 | 0.27% |
| Coal India | 282.1 | 168858 | 11.35% |
| ONGC | 184.45 | 228394 | 7.45% |
| PowerGrid | 258.65 | 179234 | 6.54% |
| PFC | 303.75 | 71823 | 8.73% |
| REC | 269.3 | 64645 | 10.91% |
| IRFC | 76.3 | 95622 | 5.64% |
| NTPC | 240.25 | 227047 | 4.14% |
| Tata Power | 269.25 | 84229 | 1.05% |
Conclusion
Now we approach the end of our article having given you a list of fundamentally strong stocks. These stocks have a long history that dates back to many years. Three out of five stocks mentioned in the list below are Maharatnas.
The stocks mentioned above are by far very safe Companies with stable management and constantly reward investors for being a part of their journey. However, readers should be aware that since they are massive in size, their growth might not be on par with fellow mid-caps.
Keeping this in mind, do let us know what would you prefer. A risky mid-cap with great growth potential or a well-established large with restricted but sustainable growth?
Written by Mohammed Nasir Hussain
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