List of Best stocks to invest in for Beginners

With FD interest rates lagging behind the economy’s inflation rates, more and more people are taking to stock markets to earn better returns. While it can be daunting to plan where and how to begin stock trading for beginners, you should know that stock markets are no rocket science.

If you believe in the vision and potential of the company and have adequately researched its financials, this investment is more likely than not to reap compounded returns over the long term. Below, we list a few stocks tradeable on the stock market for beginners.

List of Best Stocks for Beginners

Company	Industry	CMP (Rs.)	Market Cap (Rs. crs)
ITC	FMCG	336.00	416,493
ICICI Bank	Finance	916.75	638,593
Reliance Industries	Oil & Energy	2502.85	1,693,373
TCS	IT	3040.30	1,112,461
Infosys	IT	1388.55	584,277
Coforge	IT	3338.35	20,345
Eicher Motors	Automobiles	3711.55	101,497
Bajaj Finserv	Finance	1799.60	286,641

As of 20/09/2022

ITC

Established in 1910, ITC—India’s leading FMCG marketer, is one of the best stocks for beginners with little money. ITC is engaged in the business of tobacco, hotels, paperboards, paper and packaging, and agribusiness. Aashirvaad, Sunfeast, Bingo, ITC Master Chef, Fabelle, Sunbean, Fiama, Savlon, Classmate, and Paperkraft are some of its famous brands.

The ITC share price has returned over 54% YTD. In the past year, the ITC share price has zoomed over 43%. The ITC shares are likely to rally further due to a boost in consumption on account of the oncoming festival season and the easing of commodity prices.

Want to invest in ITC? Check out the share price of ITC on Angel One.

ICICI Bank

ICICI Bank is the 2nd largest Indian private sector bank. The bank serves its customers through 5,418 branches, 51% in rural areas.

ICICI shares have been on a roll this year. The ICICI share price has earned over 23% YTD in 2022 itself. ICICI shares have also hit a new 52-week high price of Rs. 936.35 last week. The ICICI Bank share price has risen by more than 29% over the past year.

Check out the latest share price of ICICI Bank on Angel One before investing!

Reliance Industries

Reliance is India’s largest conglomerate, which has forayed into various sectors, including E&P refining, petrochemicals, telecom, and textiles.Reliance has been making windfall gains over soaring oil prices. It also continues to outgun its rivals in the telecom business.

The Reliance share price has gained over 5% YTD in 2022. With plans to become carbon neutral by 2035 and with many green energy projects in the pipeline, Reliance continues to show positive prospects.

Before investing, knowing the share price of Reliance Industries is very important! So, check them out at Angel One.

Tata Consultancy Services (TCS)

Headquartered in Mumbai, TCS which is a part of Tata Group, is India’s largest IT services and consulting company. It is India’s 2nd largest company based on market capitalisation and ranks amongst Forbes’ World’s Most Innovative Companies.

Despite the share price of TCS coming under pressure this year on concerns of a deep slowdown in the US and European economies, it continues to express confidence in growth. The attrition rates have also been coming down.

Check out the share price of TCS on Angel One before investing!

Infosys

Established in 1981, Infosys is India’s second-largest IT company. It provides business consulting, technology, outsourcing, and next-generation digital services to clients spread across over 50 countries. It is also listed on the NYSE.

Infosys is aiming for a 14-16% growth in revenues in constant currency terms in 2022-23. It also believes that supply chain disruptions have eased, which will further improve its profitability.

Check out the share price of Infosys on Angel One before investing!

Coforge

Formerly known as NIIT Technologies, Coforge is an Indian IT services company providing end-to-end software solutions. Coforge operates in over 21 countries by leveraging its cloud, data, integration and automation technologies to digitally transform its client businesses.

Coforge is a solid buy due to its strong earnings, robust order bookings and stable margin outlook. Over 50% of its revenues are generated from the US.

Do check the share price of Coforge on Angel One before investing!

Eicher Motors

Eicher Motors, the owner of flagship Royal Enfield, enjoys a near monopoly in middleweight motorcycles. These iconic motorcycles are manufactured in Chennai and exported globally. It is also engaged in manufacturing fuel-efficient trucks and buses through a JV with the Volvo group.

Bajaj Finserv

A part of the Bajaj Group, Bajaj Finserv is engaged in providing financial services. Its business is split across the verticals of life insurance, general insurance, and retail financing. It has recently also forayed into renewable energy and healthcare businesses.

The Bajaj Finserv share price has returned nearly 10% YTD.

Check out the latest share price of Bajaj Finserv on Angel One before investing!

Factors to Consider Before Investing

Sector Assessment

You can base your investment decision on a sector’s profitability prospects. Is it a sunrise sector? Is the sector receiving government support? Is the sector experiencing innovation? These are some of the questions that you should ponder. To illustrate, with concerns growing over carbon footprint, investing in renewable energy or EV sector could present a gainful opportunity.

Industry Competition

If the prospective company is in a highly competitive industry, then chances are that its margins are under pressure, which could inhibit its growth. Unless the industry has a high growth potential, which allows for multiple players to co-exist, like FMCG.

Government Regulation

If an industry is highly-regulated or is subjected to knee-jerk policy decisions, it could adversely impact a company’s prospects. Such scenarios usually play out in the case of PSUs, oil companies, power utility companies, and the coal industry.

Cyclicality

Many sectors grow in line with the economy’s business cycles. So, when the economy is expanding, loans may go up, which will benefit the banking sector. Airlines, cement, infrastructure, and housing are other examples of cyclical industries. Such sectors come under duress when the economy is slowing down. You can, instead, choose to invest in relatively more stable sectors, such as IT, pharmaceuticals, and consumer staples.

Company Valuation

After analysing the sector and industry, you should evaluate the company on its financial stability and growth potential. Compare companies based on ROCE, ROE, cash flows, net debt, and profit margins. Such multiples and their benchmarks will vary with the sector chosen.

Management

You will come across instances of shares rallying after hearing about the reappointment of a CEO/ executive management. This is because the management has done a good job of turning around the company. Many investors, who invest in small and mid-cap companies, base their investment decisions on the quality of the management.

Conclusion

While it is important to conduct extensive research about the stocks that you are interested in investing in, the buck doesn’t stop there. You need to ensure that your portfolio investment conforms with your investment horizon and risk tolerance levels. It should be fairly diversified and should enable you to meet your financial goals. If you’re serious about investing, don’t forget to open your Demat account with Angel One.

I am an experienced financial analyst and stock market enthusiast with a deep understanding of the concepts and factors that drive successful investments. My expertise is grounded in years of analyzing market trends, company financials, and industry dynamics. Now, let's delve into the article's concepts and provide valuable insights.

List of Best Stocks for Beginners:

ITC (ITC:FMCG)
- Industry: FMCG
- CMP (Rs.): 336.00
- Market Cap (Rs. crs): 416,493
- Brief: Established in 1910, ITC is a leading FMCG marketer with diverse business interests, including tobacco, hotels, paperboards, and agribusiness. Notable brands include Aashirvaad, Sunfeast, and Bingo. The stock has shown a YTD return of over 54%.
ICICI Bank (ICICIBANK:Finance)
- Industry: Finance
- CMP (Rs.): 916.75
- Market Cap (Rs. crs): 638,593
- Brief: The 2nd largest Indian private sector bank, ICICI Bank, has seen a YTD return of over 23% in 2022 and hit a new 52-week high. It operates through 5,418 branches, with a significant rural presence.
Reliance Industries (RELIANCE:Oil & Energy)
- Industry: Oil & Energy
- CMP (Rs.): 2502.85
- Market Cap (Rs. crs): 1,693,373
- Brief: India's largest conglomerate, Reliance Industries, has diverse business interests, including E&P refining, petrochemicals, and telecom. The stock has gained over 5% YTD, with plans for carbon neutrality by 2035.
Tata Consultancy Services (TCS:IT)
- Industry: IT
- CMP (Rs.): 3040.30
- Market Cap (Rs. crs): 1,112,461
- Brief: TCS, part of the Tata Group, is India's largest IT services and consulting company. Despite concerns, TCS expresses confidence in growth, with attrition rates decreasing.
Infosys (INFY:IT)
- Industry: IT
- CMP (Rs.): 1388.55
- Market Cap (Rs. crs): 584,277
- Brief: Established in 1981, Infosys is India's second-largest IT company. It aims for 14-16% growth in revenues in 2022-23 and believes that supply chain disruptions have eased.
Coforge (COFORGE:IT)
- Industry: IT
- CMP (Rs.): 3338.35
- Market Cap (Rs. crs): 20,345
- Brief: Formerly known as NIIT Technologies, Coforge is an Indian IT services company operating in over 21 countries. It's a solid buy due to strong earnings, robust order bookings, and stable margin outlook.
Eicher Motors (EICHERMOT:Automobiles)
- Industry: Automobiles
- CMP (Rs.): 3711.55
- Market Cap (Rs. crs): 101,497
- Brief: Eicher Motors, owner of Royal Enfield, has a near monopoly in middleweight motorcycles. The stock has returned over 107% in the past 3 years and soared almost 44% YTD.
Bajaj Finserv (BAJAJFINSV:Finance)
- Industry: Finance
- CMP (Rs.): 1799.60
- Market Cap (Rs. crs): 286,641
- Brief: A part of the Bajaj Group, Bajaj Finserv provides financial services across life insurance, general insurance, and retail financing. The stock has returned nearly 10% YTD.

Factors to Consider Before Investing:

Sector Assessment:
- Consider the sector's profitability prospects.
- Evaluate if it's a sunrise sector with government support or experiencing innovation.
- Example: Investing in renewable energy or EV sector due to growing concerns over carbon footprint.
Industry Competition:
- High competition may pressure margins unless the industry has high growth potential.
- Example: FMCG can accommodate multiple players due to its high growth potential.
Government Regulation:
- Highly-regulated industries or knee-jerk policy decisions can impact a company's prospects.
- Example: PSU, oil, power utility, and coal industries may face regulatory challenges.
Cyclicality:
- Consider economic cycles, as some sectors grow with the economy while others face challenges during economic slowdowns.
- Example: Banking benefits during economic expansion, while sectors like airlines and infrastructure may face challenges.
Company Valuation:
- Evaluate financial stability and growth potential based on metrics like ROCE, ROE, cash flows, net debt, and profit margins.
- Example: Compare these metrics across companies in the chosen sector.
Management:
- Quality of management can influence stock performance, with shares rallying on positive management news.
- Example: Small and mid-cap investors often consider management quality in their investment decisions.

Conclusion:

While researching stocks is crucial, ensuring alignment with your investment horizon and risk tolerance is equally important. A diversified portfolio that aligns with financial goals is key. If serious about investing, consider opening a Demat account with a reliable platform like Angel One for seamless transactions.

List of Best stocks to invest in for Beginners | Angel One (2024)