Best stocks to buy in India for the long term in 2022
“If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” -Warren Buffett
During the pandemic, millions of young Indians take up stock trading, crossing expectations that the country’s interest in shares is finally increasing. According to data from the country’s two primary depositories, active investor accounts increased by 10.4 million in 2020. Angel Broking claimed that 72% of the 510,000 new customers it gained from October to December had never traded stocks before.
Long-term investing is a tried-and-true strategy for building wealth that rewards patience, commitment, and attention. Many analysts believe that if you hold high-potential equities for a long time, they will grow in value. They also recommend conducting a thorough study to find the greatest long-term stocks.
Read Also | Best Dividend Stocks to Buy India in 2022.
We’ve to follow some indexes for the best stocks to buy in India for long term in 2022 —
The return on a dividend is expressed as a percentage of the stock price. The annual dividend per share is divided by the price per share to arrive at this figure.
Two stocks, for example, each pay a ₹1 per share annual dividend. Company A’s stock is worth ₹50 per share, while Company B’s stock is worth ₹40 per share. The dividend yield of Company A is 2% (1 divided by 50), while Company B’s is 2.5%. (1 divided by 40). If all other factors are equal, the dividend yield can inform you how much cash flow you’re getting for your money.
Operating profits and OPM:
An organization’s operating profits are its gains from its core business. The operating profit margin is derived by dividing sales revenue by operating profit. It is a good measure of a company’s long-term financial health and sustainability.
Earnings per share (EPS)
EPS is the amount per share that a firm would get if it paid out all of its profits to its shareholders. The earnings per share (EPS) is computed by dividing the company’s total profit by the number of shares outstanding. Example: If a corporation makes $500 million in profit and has 10 million shares outstanding, the EPS is $50.
The earnings per share (EPS) of companies in the same industry can be used to compare them. Year after year, companies with stable earnings growth outperform those with fluctuating results.
The price-to-earnings (PE)
The PE ratio measures the connection between a stock’s current price and its earnings per share (EPS). The PE Ratio is a popular method for analyzing if a company’s stock is undervalued or overvalued. A company’s PE ratio can also be compared to the industry average.
Apart from this, investors have to look into market capitalization, the company’s relative strength, earnings growth, and dividend payout ratio (DPR) to enrich their portfolio with the best stocks of India for the long term in 2022.
Read the sections below to learn about the best stocks to buy in India for long term —
Along with fundamentals and qualitative elements like management quality and efficiency, financials must be considered from a long-term perspective while looking for the best stocks to purchase in India for the long run.
Tata Consultancy Services( TCS):
First Indian tech to cross the $200 billion milestones. The company is almost debt-free. It has a good return on equity (ROE) track record: 3 Years ROE 37.41%. The company has been maintaining a healthy dividend payout, and its market cap is ₹12.54 L cr. Its stock has 3 years return of 57.08% and a 5-year return of 173.4%. TCS distributed ₹33,873 crore to shareholders in dividends and buybacks in FY21, resulting in a payment of 95% of free cash flow.
The company earned a net profit of ₹ 9,926 crore in the fourth quarter of the fiscal year 2022, compared to a profit of ₹ 9,246 crore in the same quarter last year. According to JPMorgan, TCS stock is currently trading 31 times its one-year forward price-to-earnings, a premium of 11% over Infosys and 8% over Accenture. On a year-to-date basis, TCS shares have outpaced the Nifty IT by 9%, owing to repurchase support. Consistent growth history can easily keep its position top in ‘India’s best stock to buy 2022 for long term category.
State Bank of India :
This June, India’s largest public sector bank, State Bank of India (SBI), has overtaken HDFC with a market capitalization of ₹ 4,21,732 crore( before HDFC and HDFC bank merged). The State Bank of India (SBI) is the country’s largest bank. The bank has over 24,000 branches in India, with 190 branches abroad in 35 countries. After peaking at 5.73% of net advances at the end of March 2018, net NPAs have decreased in both financial years since then, falling to 3.01% at the end of March 2019 and 2.23% at the end of FY20.
It recorded a 62% increase in net profit for the quarter ending December 2021, to ₹ 8,432 crore, thanks to decreased provisions for bad loans. Total provisions and contingencies for bad loans were ₹ 6,974 crore in Q3FY21, down 33% from ₹10,342 crore the previous quarter. It has rich return history, 3 yr return of 36.54% and 5 yr scaled up by 61.86%. SBI’s Q4 net interest income reported ₹ 31,198 cr profit, and this is 15.26% higher than the ₹ 27,067 cr the company announced last year. Strong market capital and dropping NPA pushes it into the ‘India’s best stock to buy 2022 for long term’ club.
Hindustan Unilever (HUL):
HUL is one of India’s leading fast-moving consumer goods (FMCG) corporations. Glow & Lovely (formerly Fair & Lovely), Lifebuoy, Clinic Plus, Vim Bar, Bru Coffee, and others are among the HUL brands. In 1933, the company was established. As of March 21, 2022, the company has crossed Sensex by more than 400%, while Sensex has returned roughly 220% over the same period.
It recorded a 17% increase in net profit for the quarter ended December 31, 2021, to ₹2,243 crore, as it gained market share in both urban and rural areas as India recovered from coronavirus-related lockdowns.HUL beats estimates in Q4 result; net profit for the quarter ended March 2022 stood at ₹ 2,327 crore, up 8.58% from Q4 2021. It can easily join the ‘best stock to buy India for long term in 2022’ club.
With a strong market capital of $108 billion, the HDFC bank is the best choice for investors in the long term. As of April ‘2022, it is the third-largest firm on the Indian stock exchange by market capitalization. Over the last five years, the company has grown at a healthy pace of 19.98% compound annual growth rate (CAGR). The company’s median sales growth in the last ten years has been 18.67%. Its present worth exceeds its intrinsic value. This is one of the best stocks to buy in 2022.
The bank’s net revenues, which include net interest income and other income, climbed by 12% to Rs 26,627 crore in Q3 FY 21 from Rs 23,760.8 crore, and Q4 profit jumped to 23%, as per April 2022 report.
Infosys is one of the best-performing stocks in the technology sector right now. The stock’s recent price increase reflects the company’s strong fundamentals. As a result, if you haven’t already taken advantage of the stock’s price rise, now is the time to do so. Over the last year, the company has performed admirably. It can keep the momentum going in the coming days. It has a record of a 3-year return of 104.98% and a 5-year return of 219.42%.
In fiscal 2021, Infosys’ digital revenues increased 31.3% year over year (29.4% at cc) to $6.58 billion, accounting for 48.5% of overall revenues. Infosys announced a 12% year-on-year increase in its consolidated net profit (after minority interest) of Rs 5,686 crore for the fourth quarter ending March (Q4).
In Q4FY22, revenue increased by about 23% to Rs 32,276 crore, compared to Rs 26,311 crore in Q4FY21. It has full potential to join the row as the best stocks of India for long term in 2022.
Larsen & Toubro:
L&T is a worldwide engineering, manufacturing, and financial services company. The current price exceeds the worth of the asset. The stock has consistently outperformed bank FDs in terms of return on equity. The stock is not in an overbought zone; therefore, it’s a good time to think about it.
As of March 21, 2022, the stock has returned about 200% over the previous ten years. Higher raw material and fuel prices reduced margins, resulting in a 17% drop in consolidated net profit to ₹2,055 crore for the quarter ending December 31, 2021. It is the best time, and L&T is the best stock to purchase in 2022 and for the long term. Last Q4 net profit rises by 10% YoY to ₹ 3,620 cr. Consistent performance makes it eligible to emerge as the best stock of India for long term in 2022.
In the early 1950s, Asian Paints began as a small corporation. Now, nearly seven decades later, it has a stronger presence in our country and 20 other countries.
As of March 21, 2022, the stock has returned more than 900% in the last ten years. The company’s success has been aided by several things, including efficient financial management and repainting income, which have kept it safe from real estate problems if it had relied on a new painting. For the quarter ending December 31, 2021, it recorded an 18% drop in consolidated net profit to ₹1,016 crore. Asian Paints Q4 results show net profit at ₹ 850 cr, revenue up 18% YoY; clearly indicates why it is chosen as the best stock of India in 2022 for the long term.
With advancements in technology, such as the growth of low-cost trading applications and social media—YouTube influencers, Twitter, and Telegram stock-tipping chat groups—hundreds of day traders have flocked to bargain brokers.
Your rewards will multiply over time if you wait long enough. If you do not take out your returns in the middle, your returns will compound on an aggregate number rather than just your principle. We can rule out volatility and short-term threats by using time. After all, ‘Time is Money.’
You can choose from the above, including Reliance, Adani green energy, Bajaj Finance, and Wipro.
There is a saying in the market that if all falls, ITC is the Phoenix bird to survive the odds. In pandemic times, it is proven by the FMCG giant.
For long-term players, good research can always make it a good time when they start to manage and diversify their portfolios.
This entire article suggests you buy best stocks of India in 2022 for long term; we find the best for investors in present situation.
Green energy, IT, AI, and always the infra sector.
Including the 7 stocks mentioned above, you can include HCL Technologies, Marico, and Tata Metaliks Ltd.
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All the information are used for education purpose only. Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. InvestoAxis is not liable or responsible for any losses caused as a result of decisions based on the article.