Best Shares to Buy for Long Term

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Long-Term Investment Stocks in India:-

To pick investment-worthy companies from a pool of 2,540, start by setting clear investment goals and risk preferences. Then, analyze financial statements and trading patterns, evaluate market trends, and seek guidance from professionals. Make sure to carefully research and analyze the companies before investing by making your investigative efforts.

The stock market offers numerous high-quality shares that can experience substantial growth in the future. By investing in these shares strategically for the long term, and practicing value investing, you could earn significant profits.

Rakesh Jhunjhunwala is a famous Indian investor who is often called the “Warren Buffet of India” and is known for his successful investments in the Indian stock market. He is also a proponent of value investing, This approach, much like Benjamin Graham’s philosophy, entails choosing quality stocks that have the potential to experience substantial growth in the future, even if they are currently undervalued. Many investors in India look up to Jhunjhunwala for investment advice and follow his strategies.

As a value investor, you can’t randomly select any undervalued stocks on the stock market. Before selecting high-quality stocks, it’s important to carry out a procedure called fundamental analysis. Benjamin Graham, the Pioneer of value investing, believed that making an investment in a company without conducting proper research is a speculative move. To ensure profitable investments, It’s crucial to evaluate a company’s fundamental factors thoroughly before investing in it.

If we search on Screener, we can find many companies trading in the market. It can be challenging to choose good investment-worthy companies from this large pool of stocks. You can consider using certain filters like Revenue growth, Profitability, Debt-To-Equity Ratio, and so on to narrow down your choices.

This article covers the Best Shares to Buy for the Long Term in India that has been thoroughly analyzed and selected as good investment options. So, without any further delay, let’s get started with the list.

Looking to invest in the Indian stock market for the long term? Check out our top picks for the Best Share to Buy for the Long Term.

List of Best Shares to Buy for Long Term:-

In this article, we will talk about three stocks that have the potential to perform well in the long term, one of which is priced at only Rs 48. However, before we proceed, it is important to note that this article is for educational purposes only. Investing should be done at your own risk and never invest using loans as it can lead to major financial trouble.

(1) CRISIL Ltd.:- 

Let’s talk about the first stock which is a leading credit rating agency in India. This company provides research ratings and risk reports for other companies and provides policy advisory services. When a company wants to raise funds through bonds, this agency rates the bonds to determine their level of security. In simpler terms, the company checks if the borrowing company can repay the loan or not. 65% of this company’s revenue comes from its research business which is spread across four areas:-   

 1. India Research:- It is a leading independent research house and India’s most credible provider of economy and industry research.

The Company covers 77 sectors in India and works with 1200 Indian and global clients, including 90% of India’s banking industry by assets base, 15 of the top 25 domestic companies, and 4 of the world’s leading consulting firms.

2. Global Research and Analytics:- The company provides high-end risk, analytics, and research services to over 140 global and regional financial institutions. It serves leading investment and commercial banks, private equity players, hedge funds, and asset management and insurance companies globally and has centers in Argentina, China, Poland, London, Melbourne, Sydney,  and New York, supporting clients across time zones and languages.

3. Business Intelligence Services:- It Provides business intelligence services to 25+ corporates and investment banks across the global financial services industry.

4. Greenwich Associates:- 

Pros:- Now let’s discuss some pros of investing in this company. First, it is a SEBI registered Credit Rating Agency which is difficult to obtain due to strict regulations and norms that need to be followed. Additionally, this company is one of the oldest and most trustworthy CRAs in India, making it difficult for competitors to match their level of trust. Second, the business model of this company is asset-light, meaning that they don’t require large machines or assets to run their business. The main cost for this company is employee salaries, making their business model more efficient and less dependent on assets.

 Cons:- In terms of risks, it should be noted that the regulations set by SEBI for credit rating agencies                 (CRA) are very strict. While the company in question is highly experienced if there have been instances where they have not strictly followed SEBI’s regulations or made mistakes that resulted in heavy fines or even suspension of business in some cases. Therefore, it’s important to keep these risks in mind before making any investment decisions.

FUNDAMENTAL ANALYSIS CRISIL Ltd.

Company Essentials

 

(2) KPIT Technologies Ltd.:-

Now, let’s move on to the second stock, which is a company providing software solutions and is the largest in India’s automotive technology sector. This company mainly focuses on developing technology for autonomous driving and ADAS, connected vehicles, vehicle engineering, and design. It is mainly engaged in developing technologies related to cars and other related technologies.

Revenue by Verticals

Passenger cars – 74%                                

Commercial Vehicles – 24%                     

Others – 2%                                           

 

Revenue by Practices

Powertrain – 37%                                                 

AD-ADAS (Advance Driver-assistance Systems) – 19%          

Connected Vehicle – 11%                                             

Others – 33%               

Pros: This company is working in the field of future technologies, and it operates in the SUNRISE INDUSTRY with very little competition. In addition, the company has an established client base, including TOP 20 GLOBAL OEM (Original equipment manufacturer) companies. Some of its major clients include BMW, Cummins, and Lafarge, among others. Furthermore, the company is taking advantage of global companies that are increasing their R&D expenses, and everything mentioned here is written based on a long-term basis.

Cons: Client Concentration More than 80% of its revenue comes from its top 21 clients, which poses a concentration risk. Furthermore, any slowdown in the automotive sector and a decrease in spending on technology by automotive companies could impact the company’s revenue.

Fundamentals Analysis KPIT Technologies Ltd.

Company Essentials

Overall, this company has a strong position in India’s automotive technology sector and is developing technologies for future vehicles. It has a solid customer base with major global clients, and while there is a concentration risk with its top clients, the company is well-positioned to take advantage of future trends in the industry.

 

(3) Easy Trip Planners Ltd.:- 

A Prominent Online Travel Agency

Easy Trip Planners Ltd is the second-largest and the only profitable online travel agency in India, belonging to the tourism sector. It provides various travel-related products and services, such as airline tickets, train & bus tickets, hotel & holiday packages, and value-added services like travel insurance and visa processing. However, the company’s primary source of revenue is airline tickets. Easy Trip Planners Ltd has the largest network of travel agents in India, with over 60,000 agents. The company is also expanding its business and has expanded to the Philippines, Thailand, USA, and Saudi Arabia in FY22. Easy Trip Planners Ltd has also acquired YOLO Bus, an Intercity Bus Mobility Platform, and Spree Hospitality, which has 45 properties including hotels and resorts.

Pros: Easy Trip Planners Ltd has exclusive partnerships with Fly Big, Spice Jet, and Just Dial, which is beneficial for its business. The company is profitable, and being an online business, expansion is easy.

Cons: The company does not have a competitive advantage or “Moat,” and customers in this industry can easily shift to other service providers.

Fundamentals Analysis Easy Trip Planners Ltd.

Company Essentials

 

Financial Trend:

Easy Trip Planners Ltd has shown consistent growth in revenue and profit in the past few years. In FY21, the company’s revenue increased by 48.5% compared to FY20, and the profit after tax increased by 179.4%. The company’s return on equity (ROE) in FY21 was 28.5%, which is a positive sign. However, the company’s debt-to-equity (D/E) ratio in FY21 was 1.07, which indicates that the company has higher debt than equity. The company’s price-to-earnings (P/E) ratio in FY21 was 43.22, which indicates that the stock was overvalued.

Conclusion:

Easy Trip Planners Ltd is a profitable online travel agency that has shown consistent growth in revenue and profit in recent years. The company is expanding its business and has partnerships with prominent players in the industry. However, the lack of competitive advantage and the risk of customers shifting to other service providers are concerns. Investors should perform their due diligence and carefully consider the company’s financials before investing.

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