5 Best Performing Large Cap Companies in FY 23-24: Worth investing to get high returns

5 Best Performing large cap
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Large Cap Companies for Worth investing to get high returns. See, you must have heard the word index in the stock market, it is a group of different types of companies, like Nifty 50, it has a group of India’s top 50 companies, the same Nifty IT has India’s top IT companies. Everyone knows Warren Buffett, he is such a person who is the most successful personality in the stock market.

They say that if you want to invest safely in the stock market for the long term, then the index is the best option.  Index funds are passive index funds in which the returns are overflowing compared to mutual funds. That means you get more returns than the average. Nifty 50 has given returns of about 75% in the last 5 years, which means an average of 15% returns in a year.

The Right Way to Invest in the Stock

The question comes that there are many stocks in the stock market which give even higher returns in less time, then why is index a better option for investment?

Because index is made up of group of very top class companies of India in which share price may fall for short term but share value can never be zero while other stocks prices fall so much that value of your investment  It becomes zero. Therefore, apart from giving good returns in the long term, Nifty also gives you surety that your money will never go to zero or very low level.

The Potential of Small Cap Index: Mitigating Risks and Maximizing Returns

Now it comes to small cap index, yes like there are groups of big companies, similarly small cap companies also have index. Now you must be feeling from the name that there is a lot of risk in small cap, then you are thinking right, but we can use this small cap index in a very right way, which will give you the least chances of loss.

See, understand that some small cap companies have full potential for growth, whenever the market is high, then their stock prices also go high and give you more than expected returns and if the same market is at a low, then the small cap is equally fast.  Stocks also go down. So we can do this, if you have knowledge that in which year the market will be at its high and when it will be at its low, then you can invest in small cap index accordingly. Suppose the market is very good in 2023, there is no recession, then you can get very high returns by investing in small cap index with good growth in this one year.

 HDFC Small Cap Fund:

The Direct Plan of HDFC Small Cap Fund has given a return of 48.84% in one year while the Regular Plan has given a return of 47.39% during the same period.

 Nippon India Small Cap Fund:

Direct Plan of Nippon India Small Cap Fund  Has given a return of 42.89% in one year, while the regular plan has given a return of 41.61% during this period.

Expanding Your Portfolio: Including International Indexes

Now you can also include S&P 500 in your portfolio, this is a USA based index, so you know that it is USA index, then you will get returns in dollars and in India 1 dollar = ₹ 84.48, it means That you will get money from the actual rate of return and also because of the low value of Indian currency, you will get extra return.

Nasdaq100 This is a group of top 100 IT companies.  Now you know that in the coming years, technology will be on its pick and in India also so many works related to tech are being done, then in such condition these IT companies can never be closed and at the same time they will grow and share with growth.  Prices will increase on which you will be given good returns.

Implementing a Buying on Dips Strategy for Higher Returns

Strategy to invest in share market is If you are looking for more than average returns from the index of the stock market, then you can adopt a buying on dips strategy.

In this, you will have to actively give few minutes to the stock market every day. In this strategy, you will only have to see whether the stock price of the index is in loss or profit and you will have to invest on its dips in the index.

For example, If you invest 2k on its dip today, the next day the index is on high, then you will not invest.  Now even on the third day the index is on high, still you will not invest.  Now on the fourth day the price is low, so now you will invest 2k along with 2k and 2k of the last two days, that means you have invested 6k on the fourth day. In this way you can get extra profit up to 6% from the average return rate.

Also Read : FII stake is increase in 10 mid cap stocks : Chance to invest

5 large cap  companies whose performance in the first quarter of FY2023-24 has been very good :

Adani Total Gas

Adani Total Gas has reported a consolidated net profit of Rs 150 crore for the first quarter of FY23-24.  Revenue from operations grew 2% year-on-year to Rs 1,135 crore.

TVS Motor

TVS Motor on Monday stated a 46% increase in its standalone net profit at Rs 468 crore for the quarter ended June 2023. The equal stood at Rs 321 crore in the year-ago period. Revenue from operations all through the reporting quarter rose 20% year-on-year (YoY)to Rs 7,218 crore. The profit was once barely above the ET Now Poll estimate of Rs 432 crore, whilst revenue fell quick of expectations.

L&T (Larsen and Toubro Ltd)

Revenue from operations grew 8% to Rs 3,223 crore during the quarter under review, as against Rs 2,988 crore in the previous year quarter.  The company said it has already achieved its “Target 2026 goal” of more than 80% retail sales three years in advance. Retail PAT for Q1 stood at Rs 533 crore, up 176% year-on-year, due to stable net interest margin and reduction in expenses and savings costs.

The retail portfolio combine of the company now stands at 82% of the total loan book.  Retail distribution stood at Rs 11,193 crore, up 25% year-on-year, pushed through strong boom throughout all retail verticals coupled with top-notch digital and data analytics.

Ambuja Cements

Ambuja Cements reported a 31% year-on-year increase in total profit at Rs 1,135 crore for the first quarter of FY23-24.  The net profit in the corresponding quarter of the previous financial year was Rs 865 crore.  Total revenue grew 9% year-on-year to Rs 8,713 crore in Q1.

Titan

According to the nine brokerages, consolidated net profit for the quarter is expected to grow 17% year-on-year at Rs 915 crore with consolidated revenue estimated at Rs 10,386 crore.  Which registers a growth of 16% from the year-ago period.

Also read this for : Performance Tracker : large cap fund,large cap fund

Conclusion

In conclusion, investing in index funds can be a prudent and relatively safe approach for long-term growth in the stock market. Index funds provide diversification by holding a group of top-performing companies, such as the Nifty 50 or Nifty IT, reducing the risk associated with individual stocks. The returns from index funds have historically been favorable, often outperforming actively managed mutual funds.

While certain individual stocks may offer higher returns in the short term, they also come with higher risks, and their value can sometimes plummet, leading to potential losses. On the other hand, index funds, especially those based on large-cap and small-cap indexes, offer a balanced and stable investment option with reduced risk of losing the entire investment.

Frequently Asked Questions (FAQ’s)

Why is investing in index funds a better option for long-term growth?

Index funds provide diversification and reduced risk by holding a basket of top-performing companies. Over the long term, they have historically outperformed many actively managed mutual funds. Additionally, index funds offer the assurance that even if individual stocks in the fund decline in value, the overall investment will never reach zero.

What are the advantages of investing in small-cap index funds?

Small-cap index funds can offer significant growth potential during market upswings. Some small-cap companies have high growth potential, which can result in better-than-average returns. However, it’s essential to recognize that investing in small-cap stocks also carries higher risks.

How can international index funds like S&P 500 benefit investors?

International index funds like the S&P 500 can provide diversification across global markets and industries. They offer exposure to economies outside of one’s home country and can potentially benefit from currency exchange rate fluctuations.

What is the “buying on dips” strategy in the stock market?

The “buying on dips” strategy involves monitoring the price movements of a particular index or stock. When the price experiences short-term declines (dips), the investor buys more shares. This approach aims to take advantage of lower prices and potentially increase overall returns.

Can individual stocks outperform index funds in terms of returns?

Yes, certain individual stocks can outperform index funds over short periods. However, they also carry higher risks, and their prices can be volatile. Index funds, on the other hand, offer more stable and predictable returns over the long term.

which 5 large cap  companies whose performance in the first quarter of FY2023-24 has been very good?

1.      Adani Total Gas
2.      TVS Motor
3.      L&T
4.      Ambuja Cements
5.      Titan

Disclaimer

The following information provided is for educational and informational purposes only. It should not be considered as financial advice or an endorsement of any specific investment strategy or product. Investing in the stock market involves risks, and past performance is not indicative of future results. Before making any investment decisions, it is essential to conduct thorough research and seek advice from a qualified financial advisor. The author and publisher of this content are not responsible for any financial losses or damages incurred as a result of using this information.

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