Top 05 Stocks for 10 Years

Today in this article, we will discuss the Top 05 Stocks for 10 Years. Buy and hold these stocks for the next 10 years i.e. till 2031 and you will surely create wealth for yourself. So without wasting any time let’s go and check these top stocks for the next 10 years.

Top 05 Stocks for 10 Years

For evaluating stocks, we will use below research methodology.

  • Company & It’s Business
  • Competitive Strength & Risks
  • Financial Trend
  • Dividend Returns
  • Revenue and EPS trend
  • Cash flow
  • Assets & Liabilities
  • Promoters holding
  • Future growth prospect

ITC Ltd.

The firts of the top 05 stocks is ITC. ITC was established in 1910 with the name Imperial Tobacco Company in India. It was renamed ITC in the year 1974. The company has started its business almost 111 years ago. It is one of the oldest public listed companies in India. It is a big conglomerate with a presence across many business categories in India.

Strengths & Risks: The company has many business segments like cigarettes, FMCG, Hotels, IT sector, Stationary, Personal care, and so on. A cigarette is contributing to 50% of its revenue. ITC has captured 75% of the cigarette business in India.

Financial Trend: The financial trends are quite positive. If you look at the last 4 years total revenue, you can see that there is a constant increase in the revenue.

Net income and PBT is also increasing year on year. Over the last 5 years, revenue has grown at a yearly rate of 5.34%, vs industry avg. of 5.28%

Dividend Payout: ITC offers good dividend payout year on year. Last four dividend payout is 56%, 56%, 56$, 82%

Revenues & EPS:

If you look at the above graph, you can see that the revenue and profit both are increasing year on year. This is a good sign for any company that its revenues are increasing.

Cash Flow:

As you can see in the below table, the cash flow of the company is increasing. The free cash flow of the company is constantly increasing year on year.

Asset & Liabilities:

The company’s current assets are at 37805 Cr. while its liabilities it at 9559 Cr. in FY 2020. This means that the company has higher assets as compared to its liabilities.

Promotors Holding:

as on Dec 2020
  • Mutual Funds are holding 9.35%
  • DIIs are holding 33.56%
  • FIIs are holding 13.30%
  • Retail and Other Investors are holding 43.77%

Future Growth Prospect:

ITC is one of the leading company in India. It runs many famous brands in various business categories. It’s

  • The current price is less than the intrinsic value.
  • The stock has been generating a better return on equity than bank FD.
  • The stock offers good dividend returns
  • Good time to consider, as the stock is not in the overbought zone.
  • Low PE @ 17.20 as of 26th March 2021.

Tata Motors

Tata Motors is India’s leading four-wheeler-making company. Headquarter in Mumbai, it is a part of Tata Group, an Indian conglomerate. Its products include passenger cars, trucks, vans, coaches, buses, sports cars, construction equipment, and military vehicles. This one is my second of the top 05 stocks for next 10 years.

Strengths & Risks: The company is making commercial vehicles as its core product. It is one of the leading commercial vehicle manufacturers in India. The upcoming electric vehicles will help the company to capture a higher market share.

There are already many electric vehicles launched by Tata Motors in India. It has the largest electric manufacturing capacity in India. This will give Tata Motors an edge over other competitors.

Financial Trend: Though the financials for last two years is not so good for Tata Motors, but the future of electric vehicle will change the game in favor of Tata Motors.

The total revenue for the year 2020 had decreased due to the Corona Virus pandemic. The company is making all the efforts for generating higher revenues in the coming years.

Dividend Payout: Tata Motors is not paying any dividends since last four years. This is not a good sign for an investors.

Revenues & EPS:

The revenue for the year 2020 has decreased as compared to the year 2019. This was mainly because of the Corona Virus. The company is making a loss for the last two years.

Cash Flow:

The company is generating negative cash flow out of its operations. But changes in the working capital is seen a positive trend in last year.

Asset & Liabilities:

The company’s current assets are lesser than its current liabilities. But the company is changing its strategy and focusing on the electric vehicle segment to boost revenues in the coming years.

Promotors Holding:

Promotor’s total holding in the company is 46.40% as of Dec 2020. But if you look at the Mutual fund’s holding, they are reducing their stake in the company.

Future Growth Prospect:

The only positive thing for this stock is the future of electric vehicles. This will help the company to boost the revenue and will surely generate profits in the coming years.

L&T Technology Services Ltd

Third in the list of top 05 stocks is L&T Technology Services Ltd is an engineering servicing company based out of Vadodara, Gujarat. It is a subsidiary company of L&T. Founded in the year 2009, the company had generated $70 million in revenue in its first year of operation.

Strengths & Risks: The company has a good client base not only in India but also abroad. The company offers consultancy, design, development, and testing services across the product and process development life cycle. The company has over 16,700 employees spread across 17 global design centers, 28 global sales offices, and 49 innovation labs as of September 30, 2019.

Financial Trend:

The total revenue of the company has increasing trend year after year. Its EBITDA is increasing by more than 11% YOY. Company’s net income also has increasing trend year on year.

Dividend Payout: The company is giving healthy dividend of around 30% from last 4 years.

Revenues & EPS:

The revenue of the company is increasing year on year. Not only that, but its profit is also increasing at a steady pace. This is a good sign for the company.

Cash Flow:

The company’s cash flow has a healthy sign. Its free cash flow is increasing. The company has adequate reserves to meet any financial exigency.

Asset & Liabilities:

The company’s net current assets are higher than net current liabilities. This means the company is capable of managing any sudden financial needs. Its long-term liabilities are also lesser than the assets.

Promotors Holding:

The best part about this company is its promotors holding pattern. The promotors are holding as high as 74% of the total capital. The stake of the mutual funds has increased from 5.16% in Sep 2020 to 5.81% in Dec 2020.

Future Growth Prospect:

Since the company’s listing to date (4 years) the company has given 3x returns to its investors. The company holds many good clients in India as well as abroad. Its sales book is the increasing year on year. This stock has the potential to generate multifold returns for its investors.

Torrent Power Limited

Torrent Power Ltd. is one of the leading power generation and distribution companies in India. It has a distribution license in Ahmedabad, Gandhinagar, Surat, Dahej. It also has franchise licenses for Agra, Bhiwandi, Sheel, Mumbra, Kalwa. The company also has got a license in the Union Territory of Diu, Daman & Dadra Nagar haveli.

Strengths & Risks: Torrent power is distributing electricity in Ahmedabad, Surat, Gandhinagar in Gujarat state. It has around 3 million customers across various geography. The company is making good revenue year on year and paying a high dividend to its shareholders.

Financial Trend:

The company is generating higher revenue year on year. The net income for the company has increased from 898 Cr in FY 2019 to 1174 in FY 2020.

Dividend Payout: The company is giving a healthy dividend of around 30% for the last 4 years. The dividend payout was 47% in the year 2020.

Revenues & EPS:

The revenue of the company is increasing year on year. The profit is also on an increasing trend. In spite of the coronavirus, the profit of the company has increased.

Cash Flow:

The company’s free cash flow has increased year on year for the last 4 years. The company is expanding its business in the other geography of India. Surely a good stock to keep in your portfolio for the long term. This one is my personal favourite in the list of top 05 stocks in India for next 10 years.

Top 05 Stocks in India – Conclusion

So above is the list of the top 05 stocks in India for the next 10 years. If you have these stocks in your portfolio, I bet you will never go wrong. These stocks has an ability to generate wealth in the next 10 years. I personally have Torrent Power and ITC in my portfolio. Which stock do you have in your portfolio?

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