Top 10 Companies to Invest in India on the Basis of Market Value

Market value, commonly referred to as market capitalization, depicts the total value of a company's shares. The market value is computed by multiplying the number of outstanding shares by the current market price of the stock.

Let us see some of the top companies by market value in India in the past couple of months.

Best Company to Invest in Share Market

Factors to Consider Before Investing in Top Indian Companies by Market Cap

Here is a list of some prominent factors one must consider before investing in the top 10 company in share market-

• Stability

It is highly necessary for a company to have a stable performance over the past many years. Though fluctuations are natural and inevitable, but stability often affects a company’s stocks. Hence, while researching the best companies to invest in India, make sure to check the company’s stability.

• Sentiments of the Market

While considering and dwelling upon the question - In which company should I invest, it is important to assess the market sentiments about the company. If the market sentiments seem good, it is a green signal to go ahead and invest in the company. Otherwise, it is better to avoid it.

• Previous Trends

Past performance and past trends of the company are highly important to be checked before investing. This helps in assessing the year-on-year profitability and the core fundamentals of the company.

• Financial Ratios

Financial ratios like the price-to-earnings ratio and debt-to-equity ratio are critical when analyzing a company’s performance. If the ratios seem to be well in balance, you can consider investing in a particular company’s stocks.

Overview: Best Companies to Invest in India

Here are some of the best companies to invest in as per the market capitalization -

1. Reliance Industries Ltd

Reliance Industries Ltd (RIL) is an Indian conglomerate with a business interest in energy, petrochemicals, textiles, natural resources, retail, and the telecommunication sector.

The company is India's largest company by market value and is majorly owned by Shri Mukesh D. Ambani - India's richest individual. The company has been consistent for years and is usually one of the top choices of stock investors.

2. Tata Consultancy Services Ltd 

Tata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT) service and consulting company.

The company is a subsidiary of Tata Group and operates in 46 countries. TCS is the second largest Indian company by market value and is ranked second after Reliance Industries Ltd. TCS is among the most valuable IT services brands worldwide and a favourite of stock traders.

3. HDFC Bank Ltd

HDFC Bank Ltd (HDFC Bank) is the country's largest private sector bank by assets. The bank has a distribution network of 4,963 branches and 13,160 ATMs spread across 2,727 cities/towns in the country.

The bank is well placed to harness both the retail and corporate segments and also gives the credit squeeze to NBFCs and consolidation of PSU Banks.

4. ITC Ltd

ITC Ltd (ITC) is an Indian cigarette company that has now diversified into segments such as Fast-Moving Consumer Goods, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology.

With improving volume in the core cigarette business along with improving fundamentals of the FMCG business, the stock is attractive from a long-term perspective.

5. Hindustan Unilever Ltd

Hindustan Unilever Limited (HUL) is a British-Dutch manufacturing company that manufactures foods, beverages, cleaning agents, personal care products, water purifiers, and consumer goods. The company has a portfolio of 35 product brands in 20 categories and employs over 18000 employees. 

With the combination of healthy volume growth v/s peers, better earnings growth v/s its past performance, and the synergies from the acquisition of the GSK Consumer Healthcare business, the company continues to remain a favourite pick in the sector.

6. Wipro

Wipro is one of the leading multinational corporations in India. It was founded in the year 1945.

The company offers diverse services related to information technology, consulting, business process services, analytics, robotics, cloud computing, and many more. The company currently has more than 1,75,000 employees working globally.

Given its consistently high growth, Wipro is often on the list of top companies to invest in India.

7. Infosys Ltd

Infosys Limited (Infosys) is an Indian multinational corporation that is engaged in the business of consulting, information technology, and outsourcing services. The company, headquartered in Bangalore, is India's second-largest Indian IT company by revenue.

The company has won a large deal that provides moderate revenue guidance for running the fiscal.

With a robust deal pipeline and investment in sales and marketing, the company is likely to sustain its momentum of large deals in the financial year. This results in India's second-largest company seeing a sweet spot in one's portfolio for the medium to long-term horizon.

8. State Bank of India

SBI is the largest bank in India, with over 20% market share. The bank has a strong presence with more than 22,090 branches in India and over 198 branches overseas spread across 37 countries. The loan growth for the bank has been healthy, with significant growth coming from domestic loans that account for the majority of the loan book.

The retail segment continued exhibiting strong growth led by strong growth in home loans. The increase in advances is likely to remain on the back of support from the retail segment.

The bank is one of the favourite picks in the PSU space, hence often on the list of the company with highest market cap in India.

9. Kotak Mahindra Bank Ltd

Kotak Mahindra Bank Ltd is the third largest private sector bank after HDFC Bank and ICICI Bank. Headquartered in Mumbai, the bank has a network of more than 1,370 branches across multiple locations.

The bank’s margins keep enhancing due to improving pricing power and a rise in the share of low-cost deposits. Sound asset quality, coupled with lower exposure to stressed sectors along with stable management quality and a high degree of governance practices, reckon premium valuations.

Thus, the stock remains a top pick in the private sector banking sector.

10. ICICI Bank Ltd

ICICI Bank Ltd (ICICI) is India’s second-largest private bank. The bank has a strong distribution network of around 4,867 branches and 14,367 ATMs.

ICICI's operating performance is improving with stressed asset resolution and growth pick-up and is showing signs of earnings normalization. With asset quality stabilizing, one can expect the credit cost to moderate, thereby supporting the return ratios. Thus, the stock can be looked at from the long-term horizon.

Conclusion

These are the biggest companies when it comes to market value. However, you must look closely at the fundamentals before you start investing in any of these.

Deciding the best company for investment in share market is not an easy job, as one is supposed to consider numerous factors before trading. Hence, take one step at a time and go for a safe and steady investment journey.

Happy Investing!

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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Research Analyst - Bavadharini KS