Large cap stocks are the shares with a large market capitalization. There are many individuals who prefer buying into the 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 254, the dividend yield itself is a healthy 7 per cent. This 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. The stock is now available at a near 52-week low of Rs 254.
Reliance Industries is another stock that is worth buying. Just take a look at the company's quarterly numbers. Reliance Industries reported a consolidated net profit of Rs 8,046 crores for the quarter ending March 31, 2017. The retail, telecom, refining business and petchem are all firing. Reliance Retail has displayed encouraging performance for the quarter ending March 31, 2017 with revenues growing by 60.2% and EBITDA by 40.4 % on YoY basis. The telecom business is growing at a frantic and has now become the fastest growing technology company in the world. Gross refining margins recorded an eight-year -high of $ 11.0/bbl whereas petrochemicals and the EBIT
margin were at five year high level of 14.0%.
Fundamentals of Reliance Industries
The company reported an EPS of Rs 27.3, for the quarter ending March 31, 2017, which can takes the full year EPS in the next year close to Rs 110. The stock is trading at a p/e of just about 13 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
Tata Motors is always a great large cap stock to own. Recently, the stock of the company has been languishing very close to its 52-week lows. In fact, the Tata Motors DVR is now trading at Rs 261, against its 52-week low price of Rs 257, while the stock is trading at Rs 446. There are a number of positives that could work in favour of the Tata Motors in the coming quarters. The first is that the there could be faster economic growth that could happen thus pushing demand for the company's commercial vehicles higher.
In fact, for the month of July Tata Motors domestic sales of commercial and passenger were at 42,775 units, a growth of 13 percent over 37,789 units sold in same month last year.
Also, one is increasingly seeing decent economic growth in countries like the US and China, which are amongst the largest markets for Tata Motors' Jaguar Landrover (JLR) range of vehicles. A faster pace of launches and the improved product mix could see improved margins in the coming quarters. The Tata Motors stock could easily see an uptick of at least 20 per cent in the coming quarters, given that the company has hardly participated in the recent Sensex rally.
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.