Large cap stocks are the shares with a large market capitalization. There are many individuals who prefer buying into large cap stocks. They are much safer and less volatile. Read what is large cap stocks and difference between large cap, small cap and midcap stocks here
Why to buy large cap stocks in India?
There are many reasons to be buying into large cap stocks in India. The first is that these are the bluest of blue chips. These stocks tend to fall to a smaller extent as compared to stocks from the mid cap and small cap space. What this means is that you can protect your capital and prevent a damage to it, as compared to small and mid cap stocks. Secondly, they are more liquid and hence you can sell larger quantities. Thirdly, it is easy to get a loan against shares for stocks from the large cap space.
We like Coal India for a number of reasons. The first and the most important is that even if the stock falls, the dividend that ones gets easily compensates the stock loss. At the current market price of Rs 315, the dividend yield itself is a healthy 7.21 per cent. This is dividend is enough to compensate in case there is a loss. There are other reasons which make this stock among the best largecap stocks in India. Among these include the solid monopoly business that Coal India has. Apart from this, it is a high margin business, and the company is debt free. Continuity of business along with almost very little dangers to business, make it a great large cap stock to own.
Reliance Industries is another stock that is worth buying. Just take a look at the company's quarterly numbers. Reliance Industries reported a standalone net profit of Rs 8,022 crores for the quarter ending December 31, 2016. The retail, telecom, refining business and petchem are all firing. For example, in retail Reliance Fresh and Smart stores grew faster than the modern trade during the demonetization period and its share of trade went up from 26.2% predemonetization to 27.8% post demonetization. The telecom business is growing at a frantic and has now become the fastest growing technology company in the world. In less than 4 months from commencement of services, there were 72.4 million subscribers on the network.
Fundamentals of Reliance Industries
The company reported an EPS of Rs 25, for the quarter ending December 31, 2016, which takes the full year EPS close to Rs 100. The stock is trading at a p/e of just about 11 times one year forward earnings, which makes it a good pick. This is one of the best large cap stocks that has the potential to rally in the long term. Check stock quote of Reliance Industries here
Nobody is recommending IT stocks these days. The problem is that these stocks have been heavily oversold in the last few months. First, there are worries surrounding the unfavourable policies to the IT industry by new President of the US Donald Trump. Business has also been slowing and growth is taking a hit. However, if we analyze more deeply we realize that software stocks have bounced back in the past. But for a moment take a look at the valuations. They are very cheap currently. At a p/e of just 14 times earnings, we have not seen Infosys shares so cheap. It is time to buy the stock at the current levels. This is a good large cap stock that has stood the test of times.
A list of large cap stocks
The list of largecap stocks is pretty big and includes names like Reliance Industries, ITC, TCS, Infosys, ICICI Bank, Axis Bank and many other stocks. As mentioned the prices of some these are high, which is why their capitalization tends to be high. In any case here are some of the best large cap stocks that you could buy in India.