One of the key principles of investing or wealth creation in the stock market is to buy right stocks at the right price which is at times difficult to achieve in a market that keeps moving up and down. People often read stock market rich stories before getting into an investment which is a good habit but should be used for just motivation only.
No doubt the stock market can provide you big money and always which is the reason why most of the investors are drawn towards the stock markets and want to know the path to how to become rich by investing in the stock market. However, making money in the equity markets is not that easy as it sounds. Apart from knowing the basics of investing, one should also have a sound understanding of the market and the stocks that can make them good money in the long run. If not, then instead of making any profit, you will end up incurring losses in the market. In this article, we will be discussing how to invest in stocks which will definitely make you a winner choosing the right company.
1. Kotak Mahindra Bank
Kotak Mahindra Bank is counted among the leading banks in India, despite being much younger than many other banks. Kotak Mahindra has shown exponential growth, since its inception in 2003.
In terms of market capitalization, Kotak is the third-largest bank after HDFC and ICICI.
We believe Kotak Mahindra bank will emerge to the next heights in the years to come and will take full benefits from the growth of India INC and the digital banking space.
Currently, it is traded at around Rs. 1340 and the market cap is Market Cap Rs. 263,951.52 crores
- Increasing Net Cash Flow and Cash from Operating activity
- Return on equity (ROE) has been improving since last 2 year by effectively using Shareholders fund
- The strong cash-generating ability from the core business and also improving Cash Flow from operation for the last 2 years
- Annual Net Profits improving for the last 2 years
2. Infosys Ltd
Infosys Ltd is one of the top companies in the information and technology sector of India. The company has a market cap of RS. 271,037.19 crores. The dividend yield of the company is 1.85% and has been a wealth generator for shareholders over the years and it continues to do so. If someone is looking for the best dividend-paying stocks for the long term, Infosys is the right choice. It is currently traded at Rs. 960 and has a market cap of Rs. 402,333.14
- Substantial growth in the Quarterly Net Profit with an increasing Profit Margin (YoY)
- A company which has no debt
- Increasing quarterly Revenue for the past 4 Quarters
- Strong ability to generate cash generating from core business – Improving Cash Flow from operation for the last 2 years
3. Reliance Industries Ltd
Reliance Industries Ltd is one of the most trustworthy and profitable Indian company stocks for the long term. The long track record of distributing dividends among its shareholders makes it a top dividend-paying stock.
RIL is a significant global player in the integrated energy value chain while establishing leadership positions in the retail and digital services business in India. The company is ranked on 106th position in the Fortune Global 500 list of the world’s biggest corporations as of 2019. Reliance Industries is known as a wealth creator for investors. If you are thinking of investing in stocks and making good profits, RIL is one of the best choices you have.
- Promoters have been constantly increasing shareholding
- Net Cash Flow is on the rise and also the cash from Operating activity
- Substantial Growth in Net Profit with increasing Profit Margin (QoQ)
- Growth in Net Profit each quarter with increasing Profit Margin (YoY)
4. Tata Consultancy Services
Tata Consultancy Services Limited is the largest IT sector company in India and had recently crossed $ 100 bn market value. Also, in the past few it has consistently delivered growth in double-digit.TCS is the largest contributor to the Tata Son Group of business.
Long term investors might be skeptical about investing in the TCS stock, as some may say that the company has reached its saturation stage.
But keeping in mind the company has delivered double-digit growth since 2014 and will continue to have strong fundamentals, this is an ideal stock to invest. Also, TCS is the second-largest Indian company by market capitalization. It is currently traded around Rs. 2290 and has a market cap of Rs. 867,926.58
- It uses its capital effectively to generate profit – RoCE (Return on capital employed) improving in the last 2 years
- Effectively using Shareholders fund – Return on equity (ROE) improving since last 2 years
- A company with No Debt
- Strong ability to generate cash from core business – Improving Cash Flow from operation for the last 2 years
5. Bajaj Finserv
The renowned Bajaj Holdings & Investments Limited has also a part which is an Indian financial services company focused on lending, asset management, wealth management and insurance named Bajaj Finserv. It has a Market capitalization of Rs 128,585.32 Cr. Bajaj Finserv Ltd has provided outstanding returns in recent years.
Back in 2010, the company’s stock was traded at Rs. 350. Today, the value of the stock is around Rs 6270. Just imagine the profits a stock investor in 2010 would have made by now. The company has been successfully making profits because of the innovative credit or loan product it offers to the customer, making the shopping experience hassle-free. The business model seems sustainable and is poised to make further business given India’s growing economy and disposable income.
- Increasing Net Cash Flow and Cash from Operating activity
- Growth was seen constantly in Net Profit with increasing Profit Margin (QoQ)
- Company successfully able to generate Net Cash – Improving Net Cash Flow for the last 2 years
On a closing note
Investing is an art which is easy to master if you have the right strategy and perseverance. If you know how to invest, how the market works and what stocks are the rich buying, then you can become a good investor and make tons of money. There are many people who made a fortune by investing in the share market and there are many who have lost all their money in the stock market. The Stock Market is a great place to grow your money and become rich but it is also a place where you can become Poor if not invested properly as there is nothing like a stock market millionaire overnight; only experience, constant efforts and perseverance will reap the fruits for you.