5 Best Blue Chip Company in India

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        Corona Virus had made a great impact on share market. People are afraid of losing money and are searching for blue chip companies for safe and consistent return in this crisis. So, in this post, I would explain what is blue chip companies and five best blue chip companies which I consider would never disappoint their investor.
             
         Blue chip companies are well known, well established and well capitalized companies. They are safe, stable , profitable and long lasting companies with a history of consistent performance. In other words, they are fundamentally strong companies.

I have selected 5 companies on basis of 
  • Enterprise value is above 50000Cr
  • Average Return on Equity 5 years is above 20 %
  • Average Return on Capital Employed 3 years is above 20%
  • Virtually debt free
  • Current share price is below 2500rs.
  • Promoter holding is above 50% (except ITC limited)
  • Compounded Profit growth in 5 years is above 10%
  • Compounded Sales growth in 5 years is above 5%
  • Pays dividend every year. 

1. HINDUSTAN UNILEVER LIMITED (HUL) : 

           It is a consumer goods company with a historical presence in India of over 85 years. It manufactures and sell home and personal care, food and refreshment products. Some of its famous brands are Dove, Axe deodorantrs, Laxme, Lifebuoy, Surf Excel, Active Wheel, Lipton, Kwality Wall's, Knorr soups, Lux, Fair & Lovely etc.  

 Future Prospect :
  • Growing awareness, easier access and changing lifestyles have been the key growth drivers for the sector.
  • Demand for quality goods and services have been going up in rural areas of India.
  • One major factor driving the demand for food services in India is the growing youth population.

 2. TATA CONSULTANCY SERVICES (TCS) : 

           It is a multinational information technology service & consulting company in India since 1968. It hold India's passport project, India's Post digital and financial inclusion project and Income tax e-filing. LIC of India hold 4% of company share and many mutual fund hold this company in their portfolio.

 Future Prospect :
  • Information technology sector is a field which is undergoing rapid evolution and is changing the shape of Indian business standards.
  • Major areas of investment under the IT and ITES umbrella lies in Artificial Intelligence, Blockchain, Robotic Process Automation, and other diverse fields under the same folds of technology.


3. ASIAN PAINT : 
          
          It is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home decor, bath fittings and providing related services. Founded in 1942.

 Future Prospect :
  • The market for India paints and coating is expected to expand at a CARG of 8.56% during the forecast period of 2020-2024.
  • Government's focus on infrastructure development would support the industrial coating demand.
  • Huge domestic demand with rapidly increasing middle class population.

 4. PIDILITE INDUSTRIES : 

           It is engaged in manufacturing and selling of Adhesives & Sealants, Construction chemicals, Art & Craft Materials. Some of its famous brands are Fevicol, Dr. Fixit, M-Seal, Fevistik, Fevikwik, Fevicryl, etc. Founded in 1959.

 Future Prospect :
  • Increasing demand form packaging industry is expected to drive this sector.
  • Government initative for infrastructure development can lead to rise in demand.

 5. ITC LIMITED : 

           It has a diversified presence in FMCG, Hotels, Packaging, Paperboards & Specialty Papers and Agri - Business. Founded in 1910 (106 years). Some of its famous brand in cigarettes are Wills Navy Cut, Gold Flake, Bristol, Classic, Insignia, etc. Other famous brands it includes are Classmate, Paperkraft, Sunfeast, Bingo, Yippee, etc.

 Future Prospect :
  • Its going to expand its FMCG sector as all it is one of the demanding sector.
  • Global cigarettes consumption is growing steadily.
  • Packaging industry growth is highest.

         Apart from above companies, one more company which I consider as the best blue chip company is AVENUE SUPERMART (DMART). For more detail about this company you can check my blog of best long term share.

 These are my views so please do your study and than invest.


Comments

  1. Unknown16 April 2020 at 05:31

    Woww... So much of assumption... Liking it. 'thankyou for sharing

    ReplyDelete

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