Brokerage firm HDFC Securities recently recommended 21 stocks for a medium/long-term systematic investment plan (SIP). The brokerage believes that the thrust toward manufacturing-led growth in India will result in a virtuous cycle of productive growth of investment – job creation – income – saving – investment. It believes that India could be one of the few economies offering high nominal growth.
A stock SIP or SIP in stocks is a superior way to invest systematically. It helps investors to buy stocks periodically (weekly/ monthly) in a systematic manner and particularly helps long term investors. It helps them make the best of the unpredictability in the market by adopting a disciplined investing strategy.
Here are a few bluechip companies recommended by HDFC Securities to start an SIP:
Reliance Industries
Reliance Industries is one of the largest companies in India. It has forayed into new energy businesses in FY 22 to focus on renewable and clean energy. Moreover, its oil & gas business will benefit from the start-up of the MJ field which has the potential to further lift production by close to 60 percent at 29 mmscmd for FY24. Another growth driver for the company is the successful launch of its 5G services. The company’s shares closed at ₹ 2,367.50 apiece and it has a market capitalization of ₹ 15,65,437 crores.
Tata Steel
The Tata group company is a leading global steel company with a consolidated steelmaking capacity of around 34 million tonnes (MT) out of which around 20 MT is in India. It has a presence across the entire value chain of steel manufacturing from mining and processing iron ore and coal to producing and distributing finished products. With China reopening its economy, there is a revival in the demand for steel. It has a market capitalization of ₹ 1,34,863 crores and its shares closed at ₹ 112.05 apiece.
Infosys
The IT major provides consulting, technology, outsourcing and next-generation digital services, enabling clients to execute strategies for their digital transformation. It has a healthy cash-generating ability and a debt-free balance sheet for over a decade. It is expected to invest in niche acquisitions to strengthen its domain expertise in the medium term, according to the brokerage. The company’s shares closed at ₹ 1550.70 apiece and it has a market capitalization of ₹ 6,45,818 crores.
ICICI Bank
The private lender has a strong balance sheet with a granular, sticky liability base, lower stress levels, industry-best PCR (Provision Coverage Ratio) and adequate CAR (Capital Adequacy Ratio). Moreover, its subsidiaries are leaders in their respective fields and add strong value to the bank’s overall valuations, according to the brokerage. The company has a market capitalization of ₹ 5,85,872 crores and its shares closed at ₹ 839.75 crores.
Coal India
It is one of the largest coal producers in the world and it functions through its subsidiaries in 84 mining areas spread over eight states. The company has 318 working mines of which 141 are underground, 158 open cast and 19 mixed mines. The company reported the best ever production figure of 622.63 MT in FY22, registering a growth of 4.4%. The company’s shares closed at ₹ 214.90 apiece and it has a market capitalization of ₹ 1,30,557 crores.
A few other large-cap stocks recommended by HDFC Securities include Bharti Airtel, Cipla, Grasim Industries, ITC, Larsen & Toubro, Mahindra & Mahindra, NTPC, SBI Life Insurance, and the State Bank of India.
Written by Simran Bafna
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