Top 10 Shares for Long-Term Investment: A Comprehensive Guide

Top Shares to Buy Today for Long-Term Growth

If you wish to achieve financial stability, you must invest for the long term. However, identifying fundamentally strong companies with consistent performance is easier said than done. To help you pick the right investments, we have come up with a list of the best long-term stocks to buy in India, their current market prices, and total market capitalisation as of October 18, 2024. 

• Tata Consultancy Services Ltd.

A global information technology services leader, Tata Consultancy Services Ltd. consistently features among the top 10 long-term investment stocks. The company’s business model centres around digital transformation and IT consulting for clients across the world. A strong focus on emerging technologies like AI, cloud computing, and cybersecurity ensures that the future prospects of the company remain promising.

TCS’ operating profit margin (OPM) of 28.53% reflects superior efficiency in managing costs, whereas its high return on equity (ROE) of 51.04% underscores its ability to generate shareholder value. The company’s debt-free financial structure makes it one of the best long-term stocks to buy in India. 

• ICICI Bank Ltd.

A powerhouse in the Indian private banking sector, ICICI Bank Ltd. is among the best long-term stocks to buy in India. The company’s growth is driven by its digital banking initiatives, a strong retail and corporate lending portfolio, and a robust CASA (current account, savings account) base.

ICICI Bank’s fundamentals are encouraging, with a manageable debt-to-equity ratio of 0.82 and an operating profit margin of 37.89%. This, combined with an ROE of 19.47%, indicates strong operational performance and efficiency. As one of the top 10 long-term investment stocks, the bank is well-positioned to benefit from India’s expanding financial ecosystem. 

• Bajaj Finance Ltd.

Bajaj Finance Ltd. is one of India's leading non-banking financial companies (NBFCs) and features in the top 10 long-term investment stocks list. A strong retail lending portfolio and a focus on digitisation to enhance customer experience have been two of the primary growth drivers for the company. 

Known for its innovative financial products and wide consumer base, the company recorded an impressive operating profit margin (OPM) of 70.71% in FY24, which signifies exceptional operational efficiency. Although the debt-equity ratio of 3.88 is high, Bajaj Finance continues to be one of the best long-term stocks to buy in India as it leverages the rising demand for credit in the consumer and SME segments.

• Godrej Consumer Products Ltd.

A major player in the fast-moving consumer goods (FMCG) sector, Godrej Consumer Products Ltd. is among the best long-term stocks to buy in India due to its focus on sustainable innovation and product diversification. The company’s future prospects are driven by expanding market penetration in rural areas, premium product lines, and global operations. 

Despite being in a product-oriented business, Godrej Consumer Products has managed to maintain a high operating profit margin of 20.88%. This indicates a strong focus on ensuring efficiency and profitability. Another positive for the company is its low debt-to-equity ratio, which is just 0.25. For investors looking to tap into India's booming FMCG market, this is one of the top 10 long-term investment stocks.

• ITC Ltd.

ITC Ltd. is a diversified conglomerate with business interests spanning FMCG, hotels, paperboards, agriculture, and information technology. Premiumisation of its products, dominance in the FMCG sector, and strong rural demand are a few of the factors behind the company being one of the top 10 long-term investment stocks. 

ITC’s operating profit margin of 37.76% and debt-free status reflect a stable and profitable financial structure. The high ROE and ROCE of 29.14% and 37.88% indicate its efficiency in effectively using its funds to generate revenue. The company’s aggressive push into non-tobacco FMCG and sustainability initiatives make it a must-have in any list of the best long-term stocks to buy in India.

What is Long-Term Investment in Shares?

Long-term investment in shares involves buying stocks with the intent to hold them for an extended period. The tenure is usually 5 or more years. This strategy focuses on potentially profiting from the company’s growth, consistent dividends, and/or capital appreciation over time. 

If you are planning to invest in the best long-term stocks to buy in India, you must ignore short-term market fluctuations and rely on fundamental analysis to find quality stocks. By remaining invested in the best long-term stocks to buy in India, you can leverage the power of compounding, where your returns, when reinvested, could generate more earnings. 

In case you have limited capital at your disposal, you can look for the best stocks to buy today for the long term under 100 rupees. However, ensure that you evaluate the growth prospects of these companies thoroughly.

How to Select Shares for Long-Term Investments?

Not sure which stocks you should buy for the long term? These techniques and focus points can help you make informed choices in your journey to find the best long-term stocks to buy in India. 

• Analyse the Company’s Fundamentals

Focus on companies with strong financial health. You can look for indicators like consistent revenue growth, manageable debt levels and positive cash flow. The best long-term stocks to buy in India also belong to companies with competitive advantages, which ensure they can withstand market challenges and grow steadily over the long term.

• Examine Industry and Sector Trends

Invest in sectors with long-term growth potential — like technology, healthcare or renewable energy — and study emerging trends and regulatory changes that may affect the industry. To find which stocks you should buy for the long term, look for companies within these sectors that have a proven track record.

• Consider Dividend-Paying Stocks

Dividend-paying companies are often among the top 10 long-term investment stocks. They can offer consistent income while you wait for your capital to appreciate. So, focus on companies with a history of stable or increasing dividend payouts. Reliable dividend payers are often financially strong and have established businesses.

• Look at Historical Performance and Valuation

Analyse the stock’s historical performance to understand its resilience during market downturns. You must also compare its valuation metrics — like price-to-earnings ratio, operating profit margins, price-to-book ratio, ROE and ROCE — with industry peers. Choose stocks trading at reasonable valuations relative to their growth potential.

What Strategies are Successful for Long-Term Share Investments?

Once you determine which stocks you should buy for the long term, you need to invest in them according to a calculated and predetermined plan. These investment strategies can come in handy if you are interested in the best stocks to buy today for the long term under 100 rupees (or any other price range). 

• Buy and Hold Strategy

Adopt the buy-and-hold approach by investing in fundamentally strong companies and holding onto their shares for years. This strategy allows you to benefit from compounding returns, dividends and long-term capital appreciation. 

• Focus on Growth Stocks

Invest in companies with rising revenues and expanding markets. Some of the best long-term stocks to buy in India may not offer dividends if they are growth-oriented, but they may provide significant capital appreciation over time. 

• Reinvest Dividends

Opt for dividend-paying stocks and reinvest those dividends into purchasing more of the best long-term stocks to buy in India. This strategy leverages the power of compounding, as reinvested dividends grow over time and generate additional returns.

• Diversify Across Sectors and Markets

Spread your investments across various industries and geographical regions to reduce the risks associated with economic downturns or sector-specific challenges. Diversification across the best long-term stocks to buy in India can stabilise both returns and risks.

• Invest in Blue-Chip Companies

Prioritise companies that are well-established and financially sound, preferably with a long history of stability and consistent growth. These blue-chip companies, often considered the best long-term stocks to buy in India, provide reliability in volatile markets.

• Regularly Monitor and Rebalance Portfolio

Though long-term investing does not involve frequent trading, it is essential to review your portfolio periodically. You should track the performance of the stocks you’ve purchased, check industry trends, and monitor market conditions. 

Do Market Trends Matter in Long-Term Share Investments?

Market trends do matter when you invest in the best stocks to buy today for the long term under 100 rupees (or any other price range). While you can ignore short-term fluctuations, it is crucial to understand long-term trends like sectoral growth, technological advancements, and even demographic changes. 

These trends help you identify which industries and companies have sustained growth potential. As a result, you can make smarter decisions about portfolio allocation and diversification across sectors or stock categories.

The downside to ignoring long-term trends is that it may lead to missed opportunities. It could also expose your portfolio to declining industries. For instance, if you recognise trends like the shift towards renewable energy or the rise of digital technology, you can invest in the top 10 long-term investment stocks in the relevant sectors. 

A Model Portfolio of Best Long-Term Stocks

If you are planning to invest for the long term, it is crucial to include a mix of high-growth stocks and stable companies in your portfolio. Having a well-diversified portfolio can not only grow your wealth but also mitigate risks and the impact of volatility. Here is a model portfolio of the best long-term stocks to buy in India you can emulate. 

Now, it is important to remember that these entities are not the best stocks to buy today for the long term under 100 rupees. On the other hand, these are stocks with high share prices. Therefore, to create this portfolio as of October 18, 2024, you would need to invest about Rs. 47,855.95.   

A Detailed Table of the Best Long-Term Stocks to Buy

For investors seeking clarity on which stocks to buy for the long term, a comprehensive table highlighting key metrics can make decision-making easier. At Samco Securities, we strongly believe that informed choices drive better investment outcomes. Our detailed table covers the best long-term stocks to buy in India and their key fundamentals. You can get the latest market data on these stocks on the Samco Trading App.