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Friday, August 1, 2008

Best Indian Stocks

Decade is a very long period in the globalised business environment. Top companies which fail to adopt to the ever changing business dynamics will be replaced by new companies with strong dynamic management. "Looking back" sometimes gives valuable information about future trends. I compared the top Indian companies by market capitalization in 2008 Vs 1998. Except Reliance and ONGC, none of the top 10 companies in 1998 made it to the top 10 list in 2008. It is surprising to see how fast the emerging companies are replacing the old giants! We as investors always look to find out those companies to make big gains over long term. Blind long term investment without proper strategy will only ruin your financial health.


Important statistics about 1998:

1. Inflation was around 3.5%.
2. Third most attractive investment destination after Brazil and Mexico – Morgan Stanley.
3. 1 Dollar= 39 rupees.
4. India was preparing for Parliamentary polls.
5. Asian countries like Korea and Japan are reeling under currency crisis.
6. China was nowhere in sight.
7. Infosys was just listed in the exchanges.
8. Big companies successfully recovered from the economic slowdown in 1996-97.

Top 10 companies in 1998

1. ONGC
2. IOC
3. Reliance Industries
4. GAIL
5. HPCL
6. TELCO
7. BPCL
8. SAIL
9. TISCO
10. L& T.

Only 2 companies from the 1998 list (Reliance and ONGC) succeeded in making to the 2008 list. So probably 3-4 companies from the 2008 list may make it to the 2018 list. Long term investors should always look to find out those emerging giants. Those investors will only become millionaires by 2018 but not the day traders.

How many investors put their money in IT and Telecom stocks in 1998-2002? How many of us can really think and invest with such a vision? Most of the new age investors have neither vision nor patience.


Top stocks by market capitalization on July 31st 2008:

1. Reliance Industries
2. ONGC
3. Bharti Airtel
4. NTPC
5. NMDC
6. MMTC
7. Reliance Communications
8. Infosys Technologies
9. SBI
10. DLF
11. BHEL
12. TCS
13. L& T
14. RPL
15. ITC
16. ICICI Bank

25. Sterlite Industries.

28. Suzlon Energy

29. Reliance Capital

42. Reliance Infra

50. GMR Infra.


Top 10 companies in 2018: If you can able to imagine them, you will become another Rakesh Jhunjhunwala.

My views on top Indian stocks by 2018:

1. Alternative energy stocks like Suzlon or Infrastructure stocks like Reliance Infra or GMR Infra may replace IT stocks.
2. Finance stocks like Reliance Capital are also serious contenders along with stocks like Reliance Power and RPL.
3. Metal stocks like Sterlite are also dark horses.
4. 1 or 2 MNCs may also find place in the list.
5. Public Sector companies may bounce back if disinvestment process will be executed.
 
Credit
Author: Dr. Krishna (stockmarketguide)

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