Long-term investment for stocks could be the period of more than 5/7 years (It could be different for each investor.). Now, fundamentals and other aspects of the company like financials, management, and efficiency play a critical role when looking for the best shares to invest in India for long term.
The stocks which we are going to discuss are stocks that one can accumulate with a long-term investment horizon that will accrue significant compounding benefits in the future so one can look to pass them on to there children as well. So. let see the best long-term stocks in India.
Best stocks to invest in India for the long term investment in 2022
- The Zydus Cadila group is the fourth-largest player in the domestic formulations market. It is the leader in the high-growth lifestyle segments such as gastrointestinal, cardiology, respiratory, and gynecology, which account for about 11%, 15%, 11%, and 8%, respectively, of it's domestic formulation sales. In fiscal 2019, the group strengthened it's marketing team by giving more thrust on strategies such as growth in the categories, integration of channel partners, supply chain, and procurement to improve revenue and cost synergies.
- This is reflected in better growth momentum in fiscal 2020, which is expected to sustain over the medium term on the back of established brands, large and therapeutic-focused field force, in-licensing agreements, and product launches. The group also has established a presence in the Rest of the World markets of Brazil, Mexico, and South Africa.
- This segment (including Latin America) grew by about 49% in fiscal 2020, on a lower base. The company also has a healthy pipeline of complex molecules and biosimilars in the domestic and emerging markets and will be the growth driver over the medium term.
- Smart's market position is reinforced by steady same-store growth and retail productivity, and short gestation for new stores. Strong procurement abilities, lower-priced products along strong cost control have led to strong footfalls in past. This leads to high inventory turnover and revenue per sq ft and translates into industry-leading retail store productivity. Aggregate revenue per square foot at about Rs. 32970 in fiscal 2020, is significantly higher than most retailers in the same segment.
- The operating profitability of the company had seen improvement over the years thoughfell to 7.6% in fiscal 2020 due to impact on operations in March 2020 due to COVID. Operating margin to moderate in current fiscal by up to 150 bps on account of sub-optimal fixed cost coverage and restriction on the sale of high margin non-food products during Q1FY21.
- Currently, ASL's operations are largely concentrated in West and South India. Expected large cluster-focused store addition over the next 3 years will benefit to diversify the geographic reach of the company.
Kotak Mahindra Bank
- The strong capitalization levels, which, in turn, were strengthened by a large capital raise of Rs. 7,442.5 crore and steady internal accruals in FY2021. Further, the increasing share of low-cost current and savings account (CASA) deposits coupled with the narrowing of the interest rate differential with peer banks resulted in the gradual lowering of the cost of funds and a steady improvement in the lending spreads.
- This, coupled with better cost-efficiency levels, supported an improvement in the operating profitability levels in FY2021 despite the lower growth in advances. The strong operating profitability is expected to provide sufficient cushion against the asset quality shocks stemming from the second wave of Covid-19 and keep the overall internal capital generation healthy.
- Supported by stringent underwriting standards and strong risk management systems, Kotak Mahindra Bank had maintained healthy asset quality metrics in the past. However, the asset quality weakened in FY2021 in relation to past levels due to the impact of Covid19, although it remains at satisfactory levels.
Tata Consultancy Services
- FY21 was a defining year for the IT industry as it saw strong structural drivers getting in place and IT vendors all set to ride the wave of transformation. Tata Consultancy Services Ltd. itself has highlighted that it is well-positioned to take on the growth and transformation opportunities with it's contextual knowledge of clients and strong research and development efforts driving innovation and new ideas.
- As per the Chief Executive Officer; two key drivers for this multi-year transformation are: need to improve customer journey (front and back end) organizations realizing the need to invest in tech (no more deferment).
- Analysis of the FY21 annual reports of Tata Consultancy Services Ltd. and Infosys Ltd. highlights two big industry trends: The need for across-the-board digital transformation as enterprises move towards contactless business. The rapid adoption of digital technologies by companies forces a re-examination of there to cost structures, increase business resilience, and agility.
- As witnessed in 9MFY21, recovery in JLR volumes was reported on a sequential basis in all regions except for the UK, while in China, the volumes have improved both on a QoQ as well as a YoY basis though have not reached pre-COVID levels. The volumes under the CV segment are reporting an increase every quarter; however, on a YoY basis, the volume growth continued to be negative in 9MFY21.
- Nevertheless, TML is on a positive growth trajectory in the CV segment. In the PV segment, Tata Motors reported robust volume growth with a 39% YoY volume increase in 9MFY21 as compared to negative volume growth reported by the industry during the same period. Tata Motor’s market share in the PV segment improved from 4.8% at the end of March 2020 to 7.8% at the end of December 2020. The improvement in market share was led by new launches in the last couple of years (including Harrier, Altroz, and Nexon). The company is also gaining traction in the nascent domestic market for electric vehicles vide the electric variants of Nexon.
- The company is one of India’s largest automobile Original Equipment Manufacturers (OEMs) coupled with it's strong market share in the domestic Commercial Vehicle (CV) industry, it's strong product portfolio under Jaguar Land Rover (JLR), which is one of the strongest brands in global luxury automobile segment and geographically diversified presence aided by large sales and distribution network.
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