Long-term investing is a powerful strategy that can help investors achieve two key objectives: capital appreciation and the benefits of compounding. By holding investments over an extended period, you can potentially build significant wealth as your investments grow and compound over time. In this detailed article, we’ll explore the best long-term Indian stocks to consider in September 2024, based on key metrics like 5-year Compound Annual Growth Rate (CAGR), market capitalization, and financial health. We’ll also discuss which stocks are likely to boom in 2024 in India, the best large-cap stocks to buy, shares that are ideal for the next five years, and top penny stocks to consider.
Topics Covered
- Best Long-Term Stocks Based on 5-Year CAGR – September 2024
- Overview of 5 Best Long-Term Stocks
- Benefits of Investing in Long-Term Stocks
- Which Stock Will Boom in 2024 in India?
- What Are the Best Large-Cap Stocks to Buy in India?
- Which Share is Best for the Next 5 Years in India?
- What Are the Top 5 Penny Stocks to Buy?
Best Long-Term Stocks Based on 5-Year CAGR – September 2024
Investors often look for stocks with a strong 5-year CAGR, which indicates consistent growth over time. Here’s a list of the top long-term Indian stocks for September 2024 based on their 5-year CAGR:
| Company Name | Market Cap (₹ Crore) | 5Y CAGR (%) | Net Profit Margin (%) | Debt to Equity (x) |
|---|---|---|---|---|
| Lloyds Metals And Energy Ltd | 40,694.39 | 143.69 | 18.91 | 1.18 |
| CG Power and Industrial Solutions Ltd | 1,12,808.66 | 143.06 | 16.26 | 0.58 |
| Elecon Engineering Company Ltd | 13,692.88 | 112.75 | 17.89 | 4.39 |
| Godawari Power and Ispat Ltd | 12,911.89 | 97.83 | 16.77 | 8.02 |
| BLS International Services Ltd | 17,510.58 | 85.27 | 18.23 | 2.12 |
Overview of 5 Best Long-Term Stocks
1. Lloyds Metals & Energy Ltd
Sector: Metals & Mining
Key Metrics:
- Return on Equity (ROE): 56.6%
- Return on Capital Employed (ROCE): 78.3%
Lloyds Metals & Energy Ltd is a leading player in the production of sponge iron and power, and its involvement in mining activities has driven significant revenue growth. In Q1 FY25, the company achieved its highest-ever quarterly iron ore volumes, reflecting strong demand and operational efficiency. The company’s robust financials make it an attractive long-term investment.
2. CG Power & Industrial Solutions Ltd
Sector: Industrial Solutions
Key Metrics:
- ROE: 57.8%
- ROCE: 46.6%
CG Power & Industrial Solutions Ltd is a global enterprise providing sustainable electrical energy solutions. The company’s order book grew by 44% to ₹7,000 crores, demonstrating strong demand in the power business. With a solid order pipeline and excellent financial health, CG Power is poised for long-term growth.
3. Elecon Engineering Company Ltd
Sector: Engineering
Key Metrics:
- ROE: 24.5%
- ROCE: 31.3%
Elecon Engineering specializes in power transmission and material handling equipment. Although the company faced a dip in revenue from its Gear division due to election-related order inflow delays in Q1 FY25, it anticipates a strong recovery in the remaining quarters of FY25. The company’s long-term prospects remain bright, supported by its diversified product portfolio.
4. Godawari Power & Ispat Ltd
Sector: Steel & Mining
Key Metrics:
- ROE: 22.3%
- ROCE: 29.7%
Godawari Power & Ispat Ltd is involved in mining iron ore and manufacturing various steel products. The company witnessed a significant increase in production volumes across its product range in Q1 FY25. The company’s consistent growth and expanding production capabilities make it a strong candidate for long-term investors.
5. BLS International Services Ltd
Sector: Services
Key Metrics:
- ROE: 31.1%
- ROCE: 31.0%
BLS International Services Ltd is a global leader in visa application outsourcing. The company reported a 28.5% YoY increase in revenue in Q1 FY25, driven by strong demand for its services. With its diversified service offerings and global presence, BLS International is well-positioned for long-term success.
Benefits of Investing in Long-Term Stocks
1. Compounding Growth:
One of the most powerful advantages of long-term investing is the ability to benefit from compounding. As your investments generate returns, those returns can be reinvested to generate even more returns. Over time, this compounding effect can significantly increase your wealth.
2. Smoothing Out Market Fluctuations:
The stock market is known for its short-term volatility, with prices often fluctuating due to economic data, geopolitical events, and investor sentiment. However, over the long term, the market tends to trend upward, rewarding those who remain invested.
3. Lower Risk of Loss:
While no investment is without risk, the longer you hold onto your stocks, the lower the risk of experiencing a loss. Historically, holding a diversified portfolio of stocks for 10 years or more has resulted in positive returns, even after accounting for market downturns.
Which Stock Will Boom in 2024 in India?
For investors looking to capitalize on stocks that are likely to boom in 2024, companies in the technology, renewable energy, and consumer sectors are worth considering. One stock that stands out is Reliance Industries Ltd. With its diversified business interests spanning from petrochemicals to telecommunications and retail, Reliance is well-positioned to benefit from India’s economic growth. The company’s ongoing investments in green energy and digital services could drive significant growth in 2024.
What Are the Best Large-Cap Stocks to Buy in India?
Large-cap stocks are typically well-established companies with a market capitalization of over ₹20,000 crores. These companies are often industry leaders and offer stability and consistent returns. Some of the best large-cap stocks to buy in India include:
- HDFC Bank Ltd: India’s largest private sector bank with strong financials and a robust lending portfolio.
- Infosys Ltd: A global leader in IT services and consulting, known for its consistent revenue growth and innovation.
- Tata Consultancy Services (TCS): A major player in the global IT services sector with a strong client base and high profit margins.
- ICICI Bank Ltd: A leading private sector bank with diversified financial services and strong growth prospects.
- Bharti Airtel Ltd: One of India’s largest telecom operators, benefiting from the growing demand for mobile and internet services.
Which Share is Best for the Next 5 Years in India?
When considering the best shares to hold for the next five years, it’s important to look for companies with strong fundamentals, growth potential, and a track record of consistent performance. Asian Paints Ltd is one such company that stands out. As the leading paint manufacturer in India, Asian Paints has consistently delivered strong financial results and expanded its market share. The company’s focus on innovation and expanding product lines positions it well for continued growth over the next five years.
What Are the Top 5 Penny Stocks to Buy?
Penny stocks are typically low-priced stocks with a small market capitalization, often considered high-risk but with the potential for high rewards. Here are the top 5 penny stocks to consider in India:
- Rail Vikas Nigam Ltd (RVNL): Involved in infrastructure development projects, including railway lines and bridges.
- IRCON International Ltd: A government-owned engineering and construction company specializing in infrastructure projects.
- Vodafone Idea Ltd: A telecom company with the potential for a turnaround as it stabilizes its financials and market position.
- Ujjivan Small Finance Bank Ltd: A small finance bank focused on serving underbanked and unbanked populations in India.
- Subex Ltd: A software company specializing in digital trust solutions, with potential for growth as the demand for cybersecurity increases.
Conclusion
Investing in long-term stocks is one of the most effective ways to build wealth over time. By focusing on companies with strong financials, growth potential, and industry leadership, investors can capitalize on the power of compounding and mitigate the risks associated with short-term market fluctuations. The stocks highlighted in this article represent some of the best long-term investment opportunities in India for September 2024. Whether you’re looking for large-cap stability, growth stocks with high potential, or even penny stocks with the possibility of high returns, these options provide a well-rounded portfolio for long-term success.
