What Are Blue Chip Stocks? – SMC Global Securities

Blue-chip stocks are high-quality shares of reputable companies with an established history of solid financial performance and ongoing growth. Blue chip companies are defined by their persistent competitive benefits, solid balance sheets, and extensive record of generating fortune for shareholders. Their stability during market downturns makes them a preferred choice for long-term investment plans.

Conservative investors highly favour blue-chip companies due to their appealing risk-reward profiles. However, investors who are even more willing to take on risk can definitely consider adding blue chip stocks to their portfolios. If you’re worried about “are blue chip stocks safe”, then do not worry because they are a way to diversify and stabilise your portfolios during periods of high market volatility.

What Are Blue Chip Stocks in India?

The shares of reputable companies with market capital in billions and excellent reliability and stability track records are known as “blue chip stocks.” These companies are market leaders with consistent profitability and a remarkable market presence.

In the stock market, blue-chip companies are held in high regard. These companies typically have high stock prices since they are well-known and frequently dominate their respective markets.

These companies are recognised as the foundations of investment portfolios, drawing both novice and seasoned investors looking for stability. Investors prefer blue chip stocks for their long-term strength and durability, even if they might not have the same potential for rapid development as smaller companies.

Top 10 Blue Chip Stocks India

Now that you know what are blue chip stocks, let’s look at the top 10 blue chip stocks India that you should definitely consider adding to your portfolio.

TCS

With its headquarters in Mumbai, TCS, also known as Tata Consultancy Services, is a multinational Indian provider of IT services and consulting. TCS is a corporate giant in India that represents longevity and stability.

Infosys

Infosys is a global Indian titan that offers information technology, outsourcing, and business consulting services. Infosys is anticipated to increase sales and earnings by 7.5% and 10.1% annually, making it an attractive investment option.

Coal India

For Indian investors, Coal India continues to be a reliable blue-chip stock option. It has a strong market position as the world’s biggest producer of coal, supported by the strong demand for coal across many industries.

Bajaj Auto

Based in Pune, Bajaj Auto Limited is a global manufacturer of automobiles in India. It produces auto rickshaws, scooters, and motorbikes. With its emphasis on sustainability and innovation, Bajaj is well-positioned to benefit from new market trends. Bajaj Auto is expected to have annual sales and profit growth of 11.7% and 12.3%, respectively.

Hero MotoCorp

Hero Motocorp has a long innovation and market leadership history, continuously producing strong financial results. Because of the company’s consistent price increases, premiumisation, and advantageous model mix, its ICE motorbike portfolio has a 16% profitability rate.

Oil and Natural Gas Corporation Ltd (ONGC)

About 70% of India’s domestic crude oil and 84% of its natural gas is produced by ONGC, the nation’s largest government-owned oil and gas exploration and production company. ONGC’s commitment to technical innovation and diverse portfolio offers long-term value amid global energy transformations.

HDFC Bank

HDFC Bank is a significant player in the Indian financial sector, having demonstrated consistent development and stability over a long period. It is well-positioned for long-term success because of its robust branch network, varying product lines, and excellent management. Revenue and profits growth for HDFC Bank are anticipated to increase by 8.6% and 14.3% per year, respectively.

Bharat Petroleum Corporation Limited (BPCL)\

BPCL is a prominent player in the energy industry, providing both stability and prospects for expansion. It can withstand fluctuations in the market by including petrochemicals, marketing, and refining in its diverse portfolio. Bharat Petroleum is projected to have a 40.8% yearly fall in earnings and a 0.08% annual growth in sales. In three years, the return on equity is predicted to be 16.4%, while EPS is expected to decrease by 35.5% annually.

ITC

ITC has a strong track record and a stable portfolio of business sectors, including paperboards, agriculture, hospitality, and FMCG. Its extensive distribution network and powerful brand portfolio ensure a long-lasting market presence. Future share market trends will probably continue in the same direction for ITC. Despite some volatility, the firm’s stock price might rise to ₹496.83 per share by the end of 2024.

Adani Ports & Special Economic Zone

Adani Ports is a significant participant in the infrastructure and logistics industry, controlling and operating ports throughout India. The company is vital in promoting trade and business across the country. Adani Ports is predicted to have a 10% increase in volume and a compound annual growth rate (CAGR) in revenue, EBITDA, and PAT of 15%, 16%, and 18%, respectively, over the FY 24–26 period.

Are Blue Chip Stocks Safe?

If you’re considering investing in Blue chip stocks, the query “Are blue chip stocks safe?” might worry you. Blue-chip stocks are considered safe investments as they are not very volatile and can withstand economic downturns. They also provide a possibility for somewhat modest but steady growth. Note that when investing in individual stocks, it is recommended to diversify your portfolio to reduce company risk.

Blue chip stocks in India have the potential to expand consistently over the long run and provide stability for investors. Regular dividend payments from these companies give investors a reliable source of income.

However, always remember that no investment is entirely risk-free. Economic uncertainty and market swings can still affect blue-chip stocks. So, even though blue-chip stocks are typically considered safer than many other types of investments, new investors should still research and consider what level of risk they can handle.

Conclusion

Blue chip stocks offer investors security from market volatility by concentrating on large-cap corporations. Thus, blue-chip stocks can be a perfect investment approach for investors seeking to benefit from substantial capital returns and consistent periodic income generation.

Additionally, these stocks are excellent choices for retirement savings due to their high valuation and superior long-term investment potential. Now that you have a clear understanding of what are blue chip stocks in India, start making your investments wisely!

Reference: 
https://www.investopedia.com/

https://en.wikipedia.org/wiki/Blue_chip_(stock_market)

Author:
All Content is verified by SMC Global Securities.