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Build a prosperous portfolio for 2024 with these top 5 stock picks

09 Feb 2024

As we approach 2024, it's a great time to plan your investments, and if you're new in the stock market, it's an ideal time to start your investment journey.

The Indian stock market has demonstrated strong fundamentals and a resilient earnings outlook, with anticipated growth extending into 2024. India's stock market valuation has now surpassed Hong Kong's, making it the world's seventh-largest stock market.

HSBC projects an impressive earnings expansion of 17.8% for India in 2024, positioning it among the fastest-growing economies in Asia. Specifically, sectors like banking, healthcare, and energy, which have already exhibited robust performance in the current year, are also likely to grow further in 2024, as per HSBC's analysis.

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Additionally, sectors like automotive, retail, real estate, and telecommunications also hold favourable positions for the upcoming year. 

In this blog, we will explore investments you should consider for the new year in the stock market. These stocks span various sectors and exhibit strong fundamentals, making them attractive choices for those looking to build a well-rounded investment portfolio

Tata Consultancy Services

TCS offers various IT, business, and digital solutions across various industries such as banking, insurance, manufacturing, retail, finance, consumer goods, communication, media, technology, life sciences, and healthcare. 

The company has minimal debt, maintains a healthy dividend payout of 61.4%, and has reduced its working capital requirements. TCS also boasts a strong track record with a 3-year ROE of 43.3%.

HDFC Bank

HDFC Bank is a leading private-sector bank in India. They provide comprehensive banking services, including commercial and investment banking in its wholesale division and transactional and branch banking in its retail division. 

The bank has a history of delivering good profit growth, maintaining a healthy dividend payout of 19.0%, and is expected to perform well in the coming quarters.

Easy Trip Planners Ltd

It operates under the brand 'Ease My Trip', and offers travel-related services like airline tickets, hotels, holiday packages, rail tickets, bus tickets, taxis, travel insurance, and visa processing. 

It has shown robust profit growth of 103% CAGR over the last five years and maintains a strong 3-year ROE of 48.7%.

Indian Energy Exchange Ltd

Indian Energy Exchange Ltd is the first power exchange licensed by the CERC (Central Electricity Regulatory Commission) for electricity trading in India. The company operates a platform for trading in electricity units.

It is almost debt-free, has delivered significant profit growth of 19.1% CAGR over the last five years, and has a 3-year ROE of 43.7%. It also maintains a healthy dividend payout of 48.6%.

Aptus Value Housing Finance India Ltd

Aptus Value Housing Finance India Ltd is a housing finance company primarily serving low and middle-income self-employed individuals, focusing on semi-urban and rural areas. The company targets first-time homebuyers, with collateral being self-occupied residential property. 

Aptus has experienced robust profit growth, with a CAGR of 49.8% over the last five years, catering to customers with limited income documentation and limited access to funding from larger institutions.

How to choose the right stock?

Here are some key aspects to keep in mind when choosing stocks for investment purposes:

Company financial health: Seek out companies with robust financials, including a strong balance sheet, positive cash flow, and consistent earnings growth.

Effective management team: A capable management team with a proven track record is essential for a well-managed company, making it a suitable choice for long-term investment.

Competitive edge: Look for companies with a competitive advantage, such as a strong brand, unique products, or proprietary technology that sets them apart in the market.

Market trends: Identify companies positioned to benefit from prevailing market trends, whether it's the shift towards renewable energy or the growth of e-commerce.

Diversification: It plays a pivotal role in any long-term investment strategy, particularly when selecting the best stocks. Diversification entails spreading your investments across various asset classes and sectors to mitigate risks effectively.

To wrap up, investing in stocks offers a reliable avenue for wealth accumulation, albeit requiring patience and a forward-looking approach. By carefully choosing robust companies with established growth histories and maintaining a diversified portfolio, investors can mitigate risks while capitalising on enduring market trends. 

 

Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account 

 

Popular Stocks:  HDFC Bank share price | ICICI Bank Share Price | UPL Share Price | Tata Consumer Share Price | Divislab Share Price

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