10 Best Long-Term Stocks to Buy in India – 5-yr CAGR Basis

Long-term investments typically involve holding stocks for several years or even decades, allowing investors to ride out economic cycles and take advantage of the market’s overall upward trajectory. Long-term investments allow investors to reap the benefits of compounding growth. One of the popular long-term investments is stocks.

Long-term stocks are essential for those seeking to achieve significant financial goals, such as retirement, purchasing a home, or funding education. In this article, we will explore some of the best long-term stocks you can consider to buy in India in 2024.

10 Best Long-Term Stocks in 2024 – 5-yr CAGR Basis

Note: The best stocks to invest in India for long-term in 2024 listed here are as of July 12, 2024. The stocks are selected from the Nifty 500 stock universe and sorted as per their 5-year CAGR.

Overview of 5 Best Long-Term Stocks in 2024

1. Lloyds Metals And Energy Ltd

Lloyds Metals and Energy is primarily involved in India’s steel industry. They mine iron ore, a vital raw material, and process it into sponge iron, another key ingredient. They even operate their power plant to ensure a reliable energy source for their steel production processes.

The company’s total income for Q4 FY24 was ₹15,624 million, representing a 74% increase compared to the previous year. For the full year, total income reached ₹65,746 million, up from ₹34,668 million in FY23, marking a 90% year-on-year growth. Additionally, the Profit After Tax (PAT) was ₹12,429 million, a significant improvement from a loss of ₹2,885 million in FY23.

Key financial metrics: 

• Debt to Equity: 0.29%
• 5-year Avg Net Profit Margin: 6.40%

2. Jupiter Wagons Ltd

Jupiter Wagons Ltd is a manufacturer of railway freight wagons, passenger coaches, and various components. Their products ensure the efficient transportation of goods and people across the vast Indian railway network.

In FY 2024, the company’s total income was ₹366,827.91 lakh, reflecting a growth of 77% from ₹207,333.45 lakh in FY 2023. The PAT was ₹33,101.74 lakh, an increase of 75% compared to ₹12,067.51 lakh in FY 2023.

Key financial metrics: 

• Debt to Equity: 21.39%
• 5-year Avg Net Profit Margin: 4.86%

3. Rattanindia Enterprises Ltd

RattanIndia Enterprises Limited is the flagship company of Rattanindia Group. The company comprises tech-focused new-age businesses, such as electric vehicles, drones, and e-commerce.

In Q4 FY24, the company’s total income stood at ₹1,301 crore, up from ₹1,109 crore in Q4 FY23, reflecting a growth of 17%. In FY24, the total income reached ₹6,192 crore, compared to ₹4,138 crore in FY23, marking an increase of 50%. The PAT for FY24 was ₹424 crore, a significant turnaround from a loss of ₹286 crore in FY23.

Key financial metrics: 

• Debt to Equity: 233.18%
• 5-year Avg Net Profit Margin: -1,930.76%

4. Adani Green Energy Ltd

Adani Green Energy Limited operates in renewable power generation businesses. It is primarily involved in renewable power generation and other related activities.

In FY24, the company’s total income touched ₹7,735 crore, compared to ₹5,809 crore in FY23, marking an increase of 33%. The cash profit for FY24 was ₹3,986 crore, a growth of 25% from FY23.

Key financial metrics: 

• Debt to Equity: 371.72%
• 5-year Avg Net Profit Margin: 7.02%

5. CG Power and Industrial Solutions Ltd

CG Power and Industrial Solutions provide comprehensive engineering solutions for the entire power sector, from designing and building power generation plants to creating efficient transmission and distribution networks.

In FY24, the company’s total income reached ₹8,152.24 crore, compared to ₹7040.30 crore in FY23, marking an increase of 15.8%. The profit for FY24 was ₹1,427.61 crore, up by 48.3%, compared to ₹962.97 crore in FY23.

Key financial metrics: 

• Debt to Equity: 0.58%
• 5-year Avg Net Profit Margin: 8.99%

Pros and Cons of Investing in Long-Term Stocks

Pros of Investing in Long-Term Stocks

• Potential for Growth: Long-term stocks often provide significant capital appreciation as companies grow over time, leading to higher returns on investment.
• Compounding Returns: Holding stocks for an extended period allows investors to benefit from compound growth, reinvesting dividends and earnings for greater returns.
• Reduced Volatility: Long-term investments can help mitigate the impact of short-term market fluctuations, providing a more stable investment experience.
• Dividends: Many long-term stocks pay dividends, providing a steady income stream while also benefiting from price appreciation.

Cons of Investing in Long-Term Stocks

• Market Risk: Long-term stocks are still subject to market risks, including economic downturns and changes in market conditions that can impact performance.
• Patience Required: Successful long-term investing requires patience, as it may take years to realise significant returns.
• Opportunity Cost: Funds tied up in long-term investments may miss out on more immediate investment opportunities or higher short-term returns.
• Changing Fundamentals: Companies can change over time, and what was once a strong investment may become less favourable due to poor management or shifts in the industry.

Conclusion

Investing in long-term stocks can be a powerful strategy for building wealth and achieving financial goals. However, it’s essential to consider your investment objectives and risk appetite before committing your capital. Talk to your financial advisor before making a choice.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.