BlackRock views India as well-positioned for long-term growth, driven by emerging macro trends and the ability to navigate the US-China competition. Vivek Paul, Global Head of Portfolio Research and UK Chief Investment Strategist at BlackRock Investment Institute, highlights India’s strong growth prospects, which can support higher price-to-earnings (PE) ratios.
Although current PE ratios for large-cap Indian equities appear high compared to historical levels, BlackRock believes this comparison overlooks two key factors: India’s long-term growth potential and the expectation that interest rates will settle lower than the elevated levels of the past two decades. As a result, BlackRock considers Indian valuations less stretched than traditional metrics suggest, positioning the country for continued growth despite some expensive valuations in the market.
5 Nifty 50 Stocks to keep track of are:
Reliance Industries Limited (CMP 1,264)
Reliance Industries is a conglomerate with diverse business interests ranging from petrochemicals to telecom and retail. Presently Reliance is the largest company in the country in terms of market capitalization. The company has consistently grown over the years with an annual 5-year Sales CAGR standing at 10% while the net profit CAGR has gone up by 12%. During this period the stock has given a return of 14% CAGR.
Currently, the company plans to foray into some of the upcoming sectors like data centers, hydrogen power generation, manufacturing of semiconductor chips, AI software, and quick commerce.
Bharti Airtel (CMP 1,624.90 )
This company is the largest telecom service provider in the country of 1.4 billion people, with a market cap of 9.7 lakh crore Bharti Airtel has entered into the coveted list of one of the biggest companies in the country in the last 3 years. The company’s revenue in 5 years has gone up at 6% CAGR, while its net profit is up 122% during the same period.
Currently, the company plans to enhance its market share and reach beyond the border of India and bundle OTT products and other services like payments bank with its telecom service.
Larsen & Toubro Ltd (CMP 3,458.25 )
L&T is the biggest infrastructure and EPC company in the country with a presence in road construction to manufacturing of defence products. The company has given close to 20% CAGR returns over the last 5 years. During this period the company’s revenue and net profit have gone up by 10% and 8% respectively.
Currently, the company is planning to expand its market share and operating profit margin. As India focuses on enhancing its infrastructure network L&T is coming up to be one of the leading companies in this race.
ITC (CMP 461.55)
ITC is one of India’s leading conglomerates with a diversified presence across FMCG, hotels, paperboards, packaging, and agribusiness. The company has delivered steady returns over the past five years, with a consistent growth trajectory in both revenue and net profit amounting to 8% and 10% CAGR respectively. During this period, ITC’s share price has grown by around 15% annually.
The company is currently focusing on expanding its FMCG portfolio, increasing market penetration, and improving its profitability. As India’s consumer spending continues to rise, ITC is well-positioned to benefit from the growing demand across its segments, especially in food, personal care, and hotels, solidifying its position as a leader in the Indian market. Additionally, the company has demerged its hotel business with the idea of value unlocking.
HDFC Bank (CMP 1,692)
HDFC Bank is the country’s top private bank in terms of assets under management. Additionally, it is the largest company in the country in terms of free-float market capitalization. The shares of HDFC bank have given close to 6% CAGR return in 5 years while its Net profit has gone up significantly by 23%.
The company is currently pressing for higher market share with a primary focus on secured loan disbursal. Besides HDFC Bank also plans to expand its banking network to the hinterlands of the country.
Written By: Dipangshu Kundu
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