Blue-chip stocks are stocks of well-known and established companies. These companies have proven in good and bad times and gained the respect of their clients and stockholders. Blue-chip companies consistently make a profit and often pay dividends.
With strong business models, blue-chip companies have generated long records of attractive stock returns, which makes them one of the most famous individual stocks for risk-averse investors. The National Stock Exchange’s NIFTY 50 is considered as the key benchmark that represents the weighted average of the top 50 blue-chip listed companies by market capitalization in India. Here are the best blue-chip stocks to buy in India.
Top blue-chip stocks in India
Certain blue-chip stocks in India are good for investors to buy, including:
- Bharti Airtel
- ICICI Bank
Bharti Airtel is a multinational telecommunications services company. The company provides 2G, 4G LTE, 4G+ mobile services, voice, and fixed-line broadband services based on the country of operation. It's the second-largest mobile network operator in India with more than 458 million subscribers.
In the December ended quarter, Airtel added 14.2 million net wireless subscribers compared to Jio’s 5.2 million. The company reported YoY sales growth of 24 percent and EBITDA growth of 38 percent, which was mainly driven by higher ARPUs and healthy subscriber additions. Airtel stock has a target price of Rs 710, which represents 31 percent growth from the last closing price.
Infosys is India’s second-largest provider of consulting and IT services to clients across the globe. In the December ended quarter, the company reported a record $7.13 billion deal wins. The outlook for Infosys remains positive. The company is on track to gain market share, along with a rise in the speed of digital transformation. Infosys stock has a target price of Rs 1,500, which represents a 15 percent growth from the last closing price.
ICICI Bank is a banking and a financial services company. It is one of the Big Four banks in India with an extensive network of 5,275 branches and more than 15,500 ATMs across India. ICICI Bank has been witnessing a steady improvement in net interest income driven by healthy advance growth. ICICI Bank stock has a target price of Rs 700, which represents a 16 percent growth from the last closing price.
How to invest in Blue-chip stocks in India
U.S. investors can invest in Indian stocks by investing in India-focused mutual funds or ETFs in the U.S. Also, investors can buy ADRs (American depositary receipts) on U.S. stock exchanges. To directly access the Indian stock market from the U.S., investors need to open a stock trading account with an international broker like Charles Schwab.
The outlook for Blue-chip stocks in India looks good.
The stock prices of the blue-chip companies in India have recovered significantly from the lows of March 2020. This was driven by a phase-wise lifting of lockdowns, infusion of FII (Foreign Institutional Investor) funds, the COVID-19 vaccine announcement, and growth in corporate earnings. The economy’s macro scenario is conducive for stronger growth aided by government policy support, including the Make in India initiative and production-linked incentives for multiple sectors.