When you start your search for the best companies to invest in India, the first thing that you can notice is the Market value, also called market capitalization.
Market cap shows you the total value of a company’s shares. You can calculate the market value by multiplying the number of outstanding shares with the current market price of the stock.
Let’s start with the top top 25 companies to invest in India based on market capitalization. You would also learn how to identify the best companies for stock investment.
Top 25 Market Cap Companies in India
|Company||Industry||Current Price (Rs)||Market Cap (Rs M)||52-Week H/L (Rs)|
|Reliance Ind.||Multinational Conglomerate||2,572.00||17,402,136.6||2,855 / 2,066|
|TCS||Information Technology||3,344.10||12,236,233.8||4,046 / 2,953|
|HDFC Bank||Banking||1,466.50||8,150,642.0||1,724 / 1,272|
|Infosys||Information Technology||1,593.15||6,703,525.9||1,954 / 1,367|
|HUL||FMCG||2,631.05||6,181,892.2||2,859 / 1,902|
|ICICI Bank||Banking||849.30||5,910,187.4||860 / 642|
|SBI||Banking||516.25||4,607,330.8||549 / 401|
|HDFC||Financial Services||2,399.00||4,352,913.1||3,021 / 2,027|
|LIC||Financial Services||686.45||4,341,794.7||920 / 650|
|Bajaj Finance||Financial Services||7,154.00||4,331,240.5||8,044 / 5,236|
|Bharti Airtel||Telecom||714.40||4,254,623.0||782 / 573|
|ITC||FMCG||311.65||3,859,658.3||317 / 205|
|Adani Transmission||Energy||3,401.30||3,794,125.3||3,550 / 900|
|Adani Total Gas||Energy||3,325.85||3,657,803.4||3,471 / 843|
|Kotak Mahindra Bank||Banking||1,829.00||3,631,737.2||2,252 / 1,630|
|Adani Green Energy||Energy||2,167.50||3,433,390.4||3,048 / 860|
|Asian Paints||Paints||3,404.00||3,265,109.3||3,588 / 2,560|
|Adani Enterprises||Multinational Conglomerate||2,802.85||3,195,252.1||2,808 / 1,345|
|Avenue Supermarts||Retail||4,232.85||2,741,933.1||5,900 / 3,185|
|Maruti Suzuki||Automobile||8,855.95||2,675,206.3||9,195 / 6,540|
|L&T||Construction||1,860.00||2,613,655.6||2,078 / 1,457|
|HCL Technologies||Information Technology||951.60||2,582,323.7||1,377 / 877|
|Bajaj Finserv||Financial Services||15,630.00||2,489,560.5||19,320 /10,777|
|Wipro||Information Technology||428.20||2,348,165.6||740 / 391|
|Axis Bank||Banking||739.35||2,270,924.4||867 / 618|
10 Best Companies to Invest in India (Performance Overview)
#1. Reliance Industries Ltd
Reliance Industries Ltd (RIL) is an Indian multinational conglomerate that works in multiple sectors like energy, petrochemicals, textiles, natural resources, retail, and telecommunications.
RIL is India’s biggest company by market capitalization and has known for disrupting several sectors and benefitting common people. The way they disrupted the Indian telecommunications sector was by introducing Jio.
With Reliance’s huge investment in infrastructure, today we are enjoying fast 4G & fiber internet services.
RIL has been consistent for years making it an all-time favorite company to invest in.
#2. Tata Consultancy Services Ltd
Tata Consultancy Services Limited (TCS) is an Indian multinational corporation (part of TATA Group) operational in the information technology and consultation services sector that operates in 46 countries.
TCS is considered one of the most valuable IT services brands globally. TCS is at no. 2 after Reliance Industries on the basis of market capitalization.
#3. HDFC Bank Ltd
HDFC Bank Ltd (HDFC Bank) is India’s largest private sector bank by market value. The bank has a huge network of 4,963 branches and 13,160 ATMs spread across 2,727 cities/towns throughout the country.
The bank is doing well in both the retail and corporate segment and the bank also offers the consolidation of PSU Banks increasing its market cap as well as outreach to a new customer base.
#4. Infosys Ltd
Infosys Limited (Infosys) is another Indian MNC that is operating in the business of information technology including software outsourcing services and consulting.
Infosys is India’s 2nd largest IT company by market value after TCS.
The company has won a large deal of $150 to $200 mn with US financial services major Vanguard in 2020, which is also providing moderate revenues for running fiscal.
With strong sales and multiple deals in pipelines, the company is likely to sustain its momentum in the financial year making it a sweet spot in one’s portfolio with a long-term investment horizon.
#5. Hindustan Unilever Ltd
Hindustan Unilever Limited (HUL) is a global manufacturing company in the Fast-Moving Consumer Goods (FMCG) industry that manufactures cosmetics, personal care stuff, beverages, water purifiers, and many other consumer goods.
HUL has a portfolio of 35 brands in 20 categories and employs over 20,000 employees in India.
HUL has remained consistent in performance thanks to multiple factors like healthy volume growth against competitors, better earnings growth every year, and the acquisition of GSK Consumer Healthcare business, the company could be a favorite choice in the FMCG sector.
#6. ICICI Bank Ltd
ICICI Bank is India’s second-largest private bank after HDFC Bank. The ICICI bank has a strong market presence with around 5,000 branches and 15,010 ATMs.
ICICI has improved its present situation by well handling the bad loans, and now retail loan growth may seem to be normalized and will remain a profitable way of revenue generation for the bank.
So you can look for the stock from a long-term investment perspective.
#7. State Bank of India
SBI has over 20% market share in the banking sector making it the largest bank in India.
SBI has the strongest distribution network with more than 23,000 branches across the country and a robust overseas presence with over 198 branches spread across 37 countries.
SBI’s loan growth has remained robust thanks to the domestic loans as well as home loans that account for the majority of the loan book.
The retail segment is also getting support from an increase in advances that would likely remain on the same track in upcoming years.
#8. Asian Paints
Asian Paint Ltd. is the main leader in the paint industry. Asian Paint has a strong distribution network and is among the first company that set up direct to dealer delivery process.
By switching to direct delivery to dealers and removing the middlemen, Asian paint’s revenue increased multifold.
Asian paints are quite ahead of its competitors like Berger and Narolac and now focusing on new dimensions of the paint industry that include DIY projects, Color consultation which again becomes a way to rule the industry in the upcoming future.
#9. ITC Ltd.
ITC started its business operations as a cigarette company but has now diversified into multiple industries such as Fast-Moving Consumer Goods, Hotels, Papers, Packaging, Agri-Business, and even Information Technology.
With improving revenue in the core cigarette business along with growth in the FMCG business, the stock seems to be a good pick from a long-term perspective.
#10. Kotak Mahindra Bank
Kotak Mahindra Bank Ltd is the 3rd biggest private sector bank after HDFC and ICICI Banks. Kotak Mahindra bank has more than 1,370 branches in India.
The bank has launched several schemes to attract customers like Zero deposit savings accounts that result in a rise in the share of low-cost deposits and ultimately growth in the revenue.
Other promising factors are sound asset quality, lower exposure to stressed sectors, sound management, and good governance practices leading to premium valuations. So, the stock remains at top of the list in the private banking sector.
How to Identify Best Companies to Invest In India
Profit is an important metric for investors to shortlist a company. But what even matters more is profitability.
The financial ratios called ROIC (Return on Invested Capital) & ROCE (Return on Capital Employed) give an accurate picture of a company’s profitability.
#2. Future Growth
You can guess a company’s future growth by looking at various factors such as
- Net worth
and similar factors can give your a reasonable idea. A profitable business accompanied by faster growth can be a good pick.
#3. Top Management
A company’s strength lies in its top management making major decisions.
Top managers with good qualifications, experience, ethics, and aptitude play a vital role in the long-term success of a company’s business.
#4. Moat or Competitive Advantage
Competitive advantage is the feature that allows a company to stay ahead of its industry rivals to protect its long-term gains and market share. It’s also generally called Moat in the stock market language.
Factors like providing produced goods or better service at cheaper prices than its rivals result in a wider moat. These factors provide the upper hand to a company with generating more sales or superior margins as compared to its peers in the industry.
For example, Asian paints and Berger both are giants in the paint market. If I want to start my paint business today.
What would be my chances of success? Very low, right? My Moat or competitive advantage against these two giants will be like zero.
#5. Price Valuation
The above-discussed factors tell you if the underlying business of the shortlisted stock is good or not.
But it is also important to look at the price valuation of its stock. You can start with the market capitalization that would help you understand how strong the business entity is. Then you can move ahead for price valuation.
You can find correct price valuation using the 5 financial ratios – intrinsic value, price-to-book (P/B) ratio, price-to-earnings (P/E) ratio, price-to-earnings growth (PEG) ratio, and dividend yield.
Always remember that buying stocks of the greatest companies at an overvalued price will only lead you to lose your money.
An exceptionally good company’s stock available at overvalued price levels cannot be a good investment because the price would get some correction in the future.
But finding stocks of an average business, but available at an undervalued price could be a better investment option. So take steps wisely in stock investment.