If you are willing to create wealth in the long run, you can participate in the growing economy of India by investing in Growth Stocks. These stocks belong to different sectors such as IT, banking, energy, etc.
In today’s blog post, we will give you an overview of the top growth stocks in India, along with the benefits and key factors to consider before investing in them.
What are Growth Stocks?
Growth stocks refer to the stock of companies that are likely to grow more than other companies and have a considerable possibility of growing in terms of revenue, profits and other important indicators. Growth companies generally do not pay dividends to their shareholders, but instead use the profits to expand the business.
Top Growth Stocks to Buy in India
- Reliance Industries Limited
- HDFC Bank Limited
- Bharti Airtel Limited
- TCS Limited
- ICICI Bank Limited
- SBI Limited
- Infosys Limited
- Bajaj Finance Limited
- L&T Limited
- Hindustan Unilever Limited
| Company | Current Market Price (INR) | Market Capitalisation (in INR crore) | 52-Week High | 52-Week Low |
|---|---|---|---|---|
| Company | Current Market Price (INR) | Market Capitalisation (in INR crore) | 52-Week High | 52-Week Low |
| Reliance Industries Limited | 1485 | 20,35,420 | 1611 | 1115 |
| HDFC Bank Limited | 950 | 14,60,300 | 1020 | 812 |
| Bharti Airtel Limited | 2080 | 12,54,000 | 2175 | 1560 |
| TCS Limited | 3195 | 11,91,000 | 4323 | 2867 |
| ICICI Bank Limited | 1435 | 10,21,000 | 1500 | 1186 |
| SBI Limited | 1000 | 9,27,540 | 1024 | 680 |
| Infosys Limited | 1630 | 6,65,250 | 1983 | 1307 |
| Bajaj Finance Limited | 970 | 6,03,175 | 1102 | 711 |
| L&T Limited | 4163 | 5,72,850 | 4173 | 2965 |
| Hindustan Unilever Limited | 2410 | 5,63,000 | 2705 | 2101 |
Read Also: 10 Fastest Growing Penny Stocks in India
Overview of Best Growth Stock to Buy in India
The overview of the best growth stocks to buy in India is as follows:
1. Reliance Industries Limited
Reliance Industries Limited, Mr Dhirubhai Ambani founded the company in 1966 as a textile company and it went public in 1977. It started to expand into the oil and gas sector later in 1980. Anil and Mukesh, Dhirubhai Ambani’s two sons, divided the business in 2005. Under Mukesh Ambani’s leadership, the business has expanded into multiple sectors, including communications and retail, and achieved record success. The company is also investing heavily in the field of renewable energy. The company has its headquarters in Mumbai. Jio and Reliance Retail are their current growth engines.
2. HDFC Bank Limited
HDFC Bank was established in 1994 and is headquartered in Mumbai. It received a banking licence from the Reserve Bank of India in 1994 and began operations in January 1995. The bank was listed on the Bombay Stock Exchange as well as the National Stock Exchange after launching its Initial Public Offering (IPO) in March 1995. Times Bank and HDFC Bank merged in 1999. To expand its branch network and client base, HDFC Bank acquired Centurion Bank of Punjab. Sashidhar Jagdishan took over as the bank’s managing director and CEO from Aditya Puri. HDFC Bank is among early adopters of digital-first banking innovations and provided services like missed call banking and instant account opening through e-KYC.
3. Bharti Airtel Limited
Sunil Bharti Mittal founded the company, which initially focused on producing telecom equipment manufacturing. It later introduced mobile services under the Airtel brand in 1995. In 2002, the company was listed on the Indian stock exchange. It acquired Zain’s mobile operator in African countries. Bharti Airtel is focusing on 4G and 5G services, digital platforms, cloud solutions, etc. The company has its headquarters in New Delhi.
TCS Limited
The company was founded in 1968 by Tata Sons Limited to provide punch card services to its related company, Tata Steel. In order to expand its global reach, the company started operations in Europe and the UK in 1993 after establishing India’s first software research and development centre in Pune in 1981. The company went public on the Indian Stock Exchange in 2004. The company has been expanding into additional cloud computing, AI, and other services. The company’s headquarters is situated in Mumbai.
ICICI Bank Limited
CICI Bank is one of the largest in the private sector in India. In 1955, the Industrial Credit and Investment Corporation of India (ICICI) was founded by the Indian government. ICICI Bank was established in 1994 as a subsidiary of ICICI Limited. Being the first Indian bank and company to float on the New York Stock Exchange outside of Japan, it created history. In order to enhance company efficiency, ICICI and ICICI Bank merged to form a new bank. Following accusations against Chanda Kochhar, the managing director of ICICI Bank, in 2018 about illegal lending practices, Sandeep Bakhshi took the job as a MD and CEO. This bank was the first to provide contactless credit and debit cards. The bank’s head office is in Mumbai.
SBI Limited
SBI is the largest Indian public sector bank and a major competitor in the Indian banking industry with the highest market share. In 1955, the Indian government nationalised the Imperial Bank of India and changed its name to the State Bank of India. SBI later acquired several state-owned and commercial banks. State Bank of India- State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and Bhartiya Mahila Bank- To make them more efficient, the five affiliated banks merged in 2017. SBI was a key player in offering financial services to rural people. SBI Head Office is located in Mumbai.
Infosys Limited
Infosys Limited, Mr N.R. Narayana Murthy founded Infosys in 1981. The company decided to go public in 1993 to expand its operations. In 1999, it was the first Indian company to be listed on the NASDAQ Stock Exchange. Over 500 customers are served by the company, some of whom are Fortune 500. It is headquartered in Bangalore, India.
Bajaj Finance Limited
When Bajaj Finance was first established in 1987 as Bajaj Auto Finance Limited, it focused primarily on financing two-wheelers and three-wheelers. It was later renamed Bajaj Finance Limited in 2010 and expanded into other financial services models. During the 2008-2014 it aggressively expanded itself through EMI financing at the point of sale. In recent years, Bajaj Finance started lending through digital platforms. The headquarters of the company is situated in Pune, Maharashtra.
L&T Limited
The company was founded in Mumbai by two engineers in 1938. Initially, importing machinery from European nations was its primary objective. Eventually, during World War II, L&T began producing various types of equipment and technology. Currently, the company is in the production of roads, bridges, buildings, dams, and other infrastructure and it is India’s largest EPC player. The business entered the banking and finance industry to expand its range of products. Additionally, government infrastructure investment rises at the end of the fiscal year, which makes it favourable for investors. Mumbai is home to the company’s headquarters.
Hindustan Unilever Limited
HUL was initially established in 1931 and was initially known as Hindustan Vanaspati Manufacturing Company. Lever Brothers India Limited made its official entry in India in 1933. In 2007, the company was renamed to Hindustan Unilever Limited in order to align with its parent company Unilever. And over time, it has become a household name in India and has become one of the largest FMCG companies. The company’s head office is situated in Mumbai.
Key Performance Indicators (KPIs)
The key performance indicators of the best growth stocks to buy in India are as follows:
| Company | ROE (%) | ROCE (%) | Operating Profit Margin (%) | Net Profit Margin (%) |
|---|---|---|---|---|
| Reliance Industries Limited | 8.25 | 8.70 | 13.50 | 8.37 |
| HDFC Bank Limited | 13.56 | 2.62 | 25.58 | 21.83 |
| Bharti Airtel Limited | 25.58 | 14.72 | 28.42 | 19.52 |
| TCS Limited | 51.24 | 62.01 | 25.89 | 19.11 |
| ICICI Bank Limited | 16.45 | 3.13 | 26.47 | 29.20 |
| SBI Limited | 16.87 | 1.91 | 21.80 | 16.09 |
| Infosys Limited | 27.87 | 35.85 | 23.32 | 16.41 |
| Bajaj Finance Limited | 17.20 | 46.79 | 67.20 | 24.05 |
| L&T Limited | 15.39 | 14.89 | 10.33 | 6.91 |
| Hindustan Unilever Limited | 21.55 | 22.91 | 22.99 | 16.91 |
Read Also: Best Material Stocks in India
Benefits of Investing in Growth Stocks
The key benefits of investing in growth stocks are as follows:
- Growth Potential: Investing in growth companies offers the opportunity to create wealth in the long run. Their stock price rise helps in capital appreciation.
- Higher Growth: These companies generally reinvest their profit back into the company for expansion. This helps companies in maintaining consistent growth over time.
- Competitive Advantage: As growth companies are market leaders therefore they enjoy a competitive advantage over other companies and have pricing power along with a scalable business model.
Factors to Consider Before Investing in Growth Stocks
The key factors to consider before investing in growth stocks are as follows:
- Financial Performance: Before investing in growth stocks, one should check their financial performance and choose the company with high growth potential.
- Business Model: One should select the companies with a scalable business model. It allows a company to increase its profit without increasing costs.
- Management: A company’s management plays an important role in the company’s growth. Ethical management is required for the long-term growth of the company.
Future of Growth Stocks
Growth stocks in India have a very bright future due to various reasons such as increased disposable income, adoption of digital, economic reforms, etc. All industries, including the renewable energy industry, the financial sector, and infrastructure, have greatly helped in the development of the country. Nevertheless, such companies may be volatile in the short run, yet their growth prospects are high. Therefore, it is possible to invest in growth companies to generate long-term wealth.
To invest in the growing companies in India, one can open a free demat account at Pocketful, which also provides free brokerage on the delivery trades.
Read Also: Best Manufacturing Stocks in India
Conclusion
On a concluding note, growth companies play a significant role in the development of the Indian economy. They primarily benefited from the economic expansion, increasing consumer demand, digitalisation, etc. In this case, a capable company with stable management can perform better in the long run. However, these companies have strong growth potential, but it can be volatile in the short run; therefore, it is advisable to consult your investment advisor before making any investment decision.
Frequently Asked Questions (FAQs)
What are growth stocks?
Growth stocks are the shares of companies that primarily reinvest their profit back in the company instead of distributing them to their shareholders and have high growth potential in the long run. They generally tend to perform better than other companies.
Are dividends paid by growth stocks?
Growth stocks pay low dividends as they generally reinvest their profits in the company for expansion.
What are the risks involved while investing in growth stocks?
The risks that come with investing in growth stocks include competition, higher valuations, and lower earnings.
Name a few Indian stocks with high-growth potential?
Reliance Industries Limited, HDFC Bank Limited, Bharti Airtel Limited, TCS Limited, ICICI Bank Limited, and other companies are examples of high-growth stocks.
Is it the right time to invest in growth stocks?
Yes, it is the right time to invest in growth stocks to create wealth in the long run. To invest in growth stocks, you can open a lifetime free demat account with Pocketful, as it also offers zero brokerage on delivery trades.
