Penny stocks to buy: Investing in the stock markets needs skill, foresight and a lot of patience. While timing the markets to catch the falling knife is not easy, one truly needs foresight to evaluate a company, its business model and the potential.
These three stocks top the 10-year return chart amongst the counters that comprise the Nifty 50 index now. Eicher Motors, Asian Paints, Adani Enterprises, Divi’s Laboratories, Britannia Industries and Apollo Hospitals are some of the other stocks that comprise the Nifty 50 index now, and have given a phenomenal return during the last decade, ACE Equity data shows.
By comparison, the Nifty 50 index has gained 1,455 per cent during this period.
A common thread in the last 10 years, analysts said, is that they were ‘consistent growth stories’ of their time and were more focused on India rather than foreign markets for this growth.
“India grew at a brisk pace in the last 10 years at around 6 – 7 per cent and these companies were well-positioned to capitalize on this. JSW Steel, for instance, focused on its India operations, built capacity at the right time and ended up a winner. Similarly, Titan Company and Bajaj Finance are solid growth stories that were more focused on building India operations in the last 10 years,” said G Chokkalingam, founder and head of research at Equinomics Research.
Titan Company – a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO) – is the fifth largest integrated own brand watch manufacturer in the world, reports suggest. It is widely known for transforming the watch and jewellery industry in India in the last decade, and also has a presence in the eyewear segment.
“Focus on manufacturing, rise in demand that was met by volume growth worked well for JSW Steel. What worked well for Titan was expansion into other business segments besides watches, such as jewellery and eye care and acquisitions like Caratlane. Bajaj Finance’s success story shows the demand for credit in a booming economy, and the rural penetration that the company built over the years. We have a ‘buy’ rating on all these stocks even at the current levels,” said Gaurang Shah, head investment strategist, Geojit Financial Services.
While the last 10 years have seen phenomenal growth in these companies and its stocks, analysts caution that replicating this story in the next 10 years can be an uphill task.
“It will be difficult for these companies to replicate this pace of growth of the last 9 – 10 years in the next 10 (years). Stocks of these companies also benefited from expansion in price-earnings (PE) multiple as well. There is not much room for further expansion in valuation multiples. The base of the business has also grown a lot in the last 10 years, which may be difficult to expand going ahead, but not impossible,” Chokkalingam said.
First Published: Aug 26 2024 | 12:19 PM IST
