Indian equity markets saw exponential growth since March 2020 lows to approximately see a two-fold increase (nearly all-time high levels). A range of stocks from mid-cap and small-cap space turned into multi-baggers and provided multi-fold returns to the investors. At current levels of Indian equity markets, domestic investors preferring to reduce risk can potentially go for some of the top Bluechip Stocks. The top bluechip stocks are stocks of the companies that are mainly market leaders in their respective segment and have strong financials, healthy management, minimal / no debt on balance sheet and proven sales track record. 

Such companies tend to have really high brand value and they are household names throughout India given the quality of product/service which they offer. Best blue-chip stocks have lower risk and provide consistent returns and they have weathered multiple economic downturns in the past. These companies are known for the fact that they can grow with profitability irrespective of global economic conditions. Bluechip investments are suitable for investors who have lower risk appetite but they want their money to act as a compounding machine. It is always advisable to invest in renowned and top bluechip stocks as these stocks have the potential to outperform market index in the long term. 

With this in mind, let us quickly have a look at top bluechip stocks to invest.

1. Reliance Industries Limited

Reliance Industries Limited was able to evolve from being textiles and polyester company to an integrated player throughout energy, materials, retail, entertainment and digital services. 

In 1Q24, gross revenue of the company came in at INR231,132 crore ($28.2 billion), exhibiting a fall of 4.7% year-over-year because of significant fall in O2C revenues with 31% decline in crude oil prices. However, this was partially offset by growth in consumer businesses and rise in volumes from O2C and Oil & Gas business. 

EBITDA of the company saw an increase of 5.1% year-over-year to INR41,982 crore ($5.1 billion). EBITDA growth stemmed from consumer and upstream businesses, offsetting decline in O2C earnings. O2C earnings were impacted because of significant decline in fuel cracks from exceptionally high levels in 1Q23. Higher subscriber base and customer engagement supported revenue and profitability growth for digital services. Retail earnings exhibit expanded footprint and better profitability with operating leverage. Increased production and realizations resulted in growth in Oil & Gas EBITDA.

Profit of the company fell 5.9% year-over-year came in at INR18,258 crore ($2.2 billion) on account of increased finance cost and higher depreciation. The company’s strong operating and financial performance in 1Q24 exhibits resilience of its diversified portfolio of businesses which cater to demand throughout industrial and consumer segments. 

Reliance Retail Ventures Limited made an announcement that Qatar Investment Authority, with the help of its wholly-owned subsidiary, will invest INR8,278 crore into RRVL, which is a subsidiary of Reliance Industries Limited. Investment values RRVL at pre-money equity value of INR8.278 lakh crore.

2. Asian Paints Limited

The company manufactures wide range of paints for decorative and industrial use. It provides wall coverings, water proofing, adhesives and services in its portfolio. The company has presence in home improvement and decor segment and provides bath and kitchen products. 

The company’s business saw healthy growth during FY23, leveraging network and product expansion initiatives which were undertaken in past to touch sales of INR406 crores at 15% growth. Agenda of premiumisation was taken ahead with new-to-industry CANVAS range of products. 

During FY23, COVID-related restrictions were completely lifted throughout economies in which the company operates. This helped in resumption of global travel and assisted in better collaboration throughout group entities. During same time, businesses saw multiple headwinds, and most significant was inflationary environment which impacted procurement of raw material and packing material other operating costs. 

The company delivered on its promise of industry-beating growth for FY23 despite tough conditions with demand facing headwinds through extended monsoons and lesser festive season period.

3. Avenue Supermarts Ltd 

DMart is one-stop supermarket chain which targets to provide customers a wide range of basic home and personal products. All these products are provided under one roof. Each DMart store has home utility products – which includes food, toiletries, beauty products, garments, kitchenware, etc. and these are available at competitive prices. Core objective of the company is to provide customers good products and that too at a great value.

Avenue Supermarts Ltd. has released its standalone and consolidated financial results for quarter ended June 30, 2023. 

Total revenue of the company came in at INR11,865 crore in comparison to INR10,038 crore in same period of the last year. Earnings before interest, tax, depreciation and amortization (EBITDA) came at INR1,035 crore in 1Q24 against INR1,008 crore in corresponding quarter of previous year. 

EBITDA margin of the company was 8.7% against 10.0% in 1Q23, with net profit coming at INR659 crore against INR643 crore in corresponding quarter of previous year. PAT margin was 5.5% in 1Q24 compared to 6.4% in 1Q23. 

Overall gross margins were lower in comparison to same period of previous year mainly because of lower sales contribution of apparel and general merchandise. However, general merchandise contribution continues to recover which should help the company. It was able to open 3 new stores during 1Q24. Total store count is now at 327. 

The company’s operations are expected to be supported by network of distribution centres and packing centres. As of 31^st March 2023, it had 49 distribution centres and 10 packing centres. 

Conclusion

While above are some of the top bluechip stocks which investors should invest, there are several other promising companies which are leaders in their respective industries. Some of the other bluechip stocks include HDFC Bank, Larsen & Toubro, Maruti Suzuki, Hindustan Unilever Ltd, etc. 

It is a proven fact that these companies have the ability to withstand economic downturns and challenging economic conditions. Since the stock market is highly volatile, there will be instances where these stocks will experience a downtrend. However, long-term investors should see this as an opportunity and these should consider buying even more quantity. 

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