Best Monopoly Stocks in India in September 2024- 5-yr CAGR Basis

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Monopoly stocks are shares of companies that hold a dominant position in their industry or sector, usually facing very little competition. Monopoly stocks can be found in the utilities, telecom, and transportation sectors. These companies tend to have strong pricing power, allowing them to set industry standards. This makes their stocks appealing to investors looking for stable and reliable returns. In this article, let’s look at the best monopoly stocks in India in September 2024 based on the 5-year CAGR.

Best Monopoly Stocks In India In September 2024 – 5-Yr CAGR Basis

Note: The best monopoly stock list in India has been sorted based on 5-yr CAGR as of September 12, 2024.

Overview Of Best Monopoly Stocks In India

• Hindustan Aeronautics Limited

Hindustan Aeronautics Limited (HAL) manufactures helicopters and aircraft and provides repair and maintenance services. It has a diverse customer base, mainly serving the defence sector, including the Indian Air Force, Army, Navy, and Coast Guard. Civil clients include the Border Security Force, ONGC, and the Government of Karnataka. HAL also exports its products and services to international clients like Airbus in France, Boeing in the USA, and the Coast Guard in Mauritius. 

For the quarter ended June 2024, the company’s revenue decreased to ₹4,347.57 crore from ₹14,768.78 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹1,435.59 crore from ₹4,292.04 crore in the previous quarter. 

Key metrics: 

• Earning per share (EPS):₹122.86
• Return on equity (ROE): 28.29%

• Praj Industries Ltd

Praj Industries Ltd, established in 1983, is a global leader in biotechnology and engineering. The company provides sustainable solutions in areas like bioenergy, water purification, process equipment, breweries, and wastewater treatment. Praj focuses on environmental protection, energy efficiency, and farm-to-fuel technology. It has international offices in Thailand, the Philippines, and the USA. 

For the quarter ended June 2024, the company’s revenue decreased to ₹600.66 crore from ₹839.28 crore in the preceding quarter. Meanwhile, the net profit increased to ₹91.84 crore from ₹75.52 crore in the previous quarter. 

Key metrics: 

• EPS: ₹17.58
• ROE: 25.62%

• Indian Energy Exchange Ltd

Founded in 2007, Indian Energy Exchange Ltd (IEX) provides an automated platform for trading electricity units for physical delivery. As the first power exchange licensed by the Central Electricity Regulatory Commission (CERC), IEX facilitates spot trading in electricity as well as the trading of Renewable Energy Certificates (RECs) and ESCerts. Its platform improves price discovery, increases market transparency, and enhances the speed and efficiency of trades in the Indian power market. 

For the quarter ended June 2024, the company’s revenue increased to ₹123.56 crore from ₹121.28 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹93.42 crore from ₹95.10 crore in the previous quarter. 

Key metrics: 

• EPS: ₹4.05
• ROE: 38.04%

• Coal India Ltd 

Coal India Ltd primarily focuses on the mining and production of coal and also manages coal washeries. Its main customers are the power and steel industries, while other sectors, such as cement, fertilizers, and brick kilns, also rely on its products.

For the quarter ended June 2024, the company’s revenue decreased to ₹389.71 crore from ₹488.05 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹87.46 crore from ₹3,336.22 crore in the previous quarter. 

Key metrics: 

• EPS: ₹24.24
• ROE: 86.21%

• Indian Railway Catering and Tourism Corporation Ltd 

Founded in 1999, IRCTC is a Mini Ratna (Category 1, Central Public Sector Enterprise) and the sole entity authorised by the Indian government to offer online railway ticketing, catering services, and packaged drinking water at railway stations and on trains across India.

For the quarter ended June 2024, the company’s revenue decreased to ₹1,120.15 crore from ₹1,154.77 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹307.68 crore from ₹284.37 crore in the previous quarter. 

Key metrics: 

• EPS: ₹14.83
• ROE: 36.74%

Things To Keep In Mind When Investing In Monopoly Stocks

• Monopoly companies often operate in industries with strict regulations. Changes in government rules or policies can affect their operations and profits.
• These companies may rely heavily on one market or product. If demand drops or consumer preferences shift, it can hurt their performance.
• With little competition, monopoly companies might become less innovative, leading to outdated products or services, which could weaken their market position over time.
• Even monopoly companies can struggle during economic slowdowns. Reduced consumer spending can affect their revenues and profits.

Who Should Invest in Monopoly Stock in India?

• Conservative Investors: Those who prefer stable and predictable returns may find monopoly stocks attractive because of their steady income and strong profit margins.
• Long-Term Investors: People who are focused on long-term growth and willing to hold their investments for a longer period can benefit from monopoly companies’ stability and growth potential.
• Diversified Investors: Investors who want to add stability to their portfolios can consider monopoly stocks to balance out higher-risk investments.

Conclusion

Apart from these monopoly stock lists, there are other monopoly stocks as well. Make sure to check their financials and past returns to make informed decisions.  However, it’s important to be mindful of risks like changes in regulations or over-reliance on specific markets and to make sure your portfolio is well-diversified.

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.