Categories of Equity Shares –

1. Blue chip Stocks (Stalwarts) -

2. Growth Stocks
3. Income Stocks
4. Cyclical stocks
5. Discount stocks
Blue chip stocks –
The term ‘blue chip’ comes from the game of poker where the blue gambling chips holds the
highest value on the table. Similarly, the Blue Chip companies represent those companies
from each industry that are well-established, have stable earnings and have the highest
market valuation.
Companies with large market capitalization deliver consistent returns on investment,
because of their high endurance during turbulent market swings. When it’s a bullish market,
returns from equity investments in large cap companies are better than companies with low
market capitalization.
Who Should Invest in Blue Chip Stocks?
Blue Chip Stocks offer great opportunity for making high returns on investment. If an
individual has a sound knowledge of financial markets and enough time to track the market,
s/he should invest in blue chip shares to earn consistent returns. The suitable investment
horizon for blue chip investment is 5-6 years.
The growth potential of Blue Chip companies is relatively less, as they’re already at the peak
of their performance in their respective sectors. This is why investment in equities of these
companies carries low-risk, together with low returns when compared to companies that
have a high growth potential. If you have a high risk appetite, then you should consider
investing in mid-cap or small-cap companies.
Best Blue Chip Stocks in India
According to the market capitalization, there are multiple blue chip companies whose stocks
will generate good returns in the long run. Here is a list of top 10 blue chip stocks that are
faring well in the stock market:
1. Indian Tobacco Company (ITC) Limited
2. Hindustan Unilever Limited (HUL)
3. Reliance Industries
4. Tata Consultancy Services (TCS)
5. Oil and Natural Gas Corporation (ONGC)
6. Housing Development Finance Corporation (HDFC)
7. Infosys
8. Eicher Motors
9. Sun Pharmaceuticals Industries Limited
10. State Bank of India (SBI)
How to invest in Blue Chip Stocks and Funds?
To invest in Blue Chip Stocks, one needs to have a demat account. Investors can either
directly invest in a preferred stock, or invest via a broker. However, you need to pay a
brokerage fee when you choose to invest through a broker.
If you want to invest in blue chip funds, you can do so in the two following ways:
Online
You can invest in Blue Chip Funds online seamlessly through online platforms (such as
Paisabazaar.com) or directly through the websites of the Asset Management Companies
(AMCs), offering the fund.
Offline
This conventional mode of investment requires an investor to fill a form and submit it at the
nearby branch of the fund house, or invest through a broker.
2. Growth Stocks –
We all want to buy a prospective ‘growth stock’, but we often end-up buying a wrong one.
How to eliminate this miss?
3. Income stocks –

Company Name Last Price (Rs) Market Cap (Rs Cr) Dividend (5 Yr Avg) Div Payout
(5 Yr Avg) Div Yield (5 Yr Avg)

Hindustan Petroleum 190.1 29,386.92 24.38 37.9 4.58

Indial Oil Corp 75.85 71,594.68 13.97 49.16 4.12
Power Grid 166.65 87,184.44 4.37 31.16 2.4
Rural Electrification 102.85 19,828.18 11.22 27.6 5.08
Oil India 85.45 9,266.24 10.35 33.54 3.22
Power Finance88.6 23,655.13 8.72 32.62 4.8
National Aluminum Co. 28.65 5,344.99 3.5 63 5.62
Hindustan Zinc 187.25 77,851.50 17.92 91.68 8.4
NTPC 93 92,019.38 4.282 35.54 2.8
BPCL 316.6 68,678.54 25.2 39.38 4.24

Company Name Last Price (Rs) Market Cap (Rs Cr) Dividend (5 Yr Avg) Div Payout
(5 Yr Avg) Div Yield (5 Yr Avg)

ONGC 77.61 98,377.78 8.136 39.64 3.88

Coal India 130.7 80,546.86 19.52 108.28 6.16
Hero MotoCorp 2177.69 43,768.89 79.8 49.18 2.54
GAIL Ltd 86.65 40,549.69 6.162 32.52 1.84
Tata Steel Ltd 271.45 31,181.23 9.8 47.58 2.22
Infosys 693.9 2,95,531.49 34.9 51.4 3.04
Bajaj Auto 2683.7 77,648.75 56 40.48 2.12
JSW Steel 179.15 43,304.50 5.81 6.3 1.24
Castrol India 120.22 12,062.35 7.9 80.32 2.26
NMDC 75.1 22,994.49 6.904 70.02 5.9

4. Discount stocks –
Book value is an accountant's measure of the worth of a company's equity. The key basis of
this screener is that markets are less reliable than accountants because markets can be
volatile and irrational while accounting estimates are conservative. Buying a stock below
book can provide what Ben Graham called a 'margin of safety.' On the other hand, stocks
available at a steep discount to book value can also have high risk, a poor growth outlook
and low returns on equity. So we applied appropriate checks to provide for these risks.
These checks look at return on equity, leverage and growth
6. Under valued stocks –
What is Undervalued
Undervalued is a financial term referring to a security or other type of investment that is
selling for a price presumed to be below the investment's true intrinsic value. An
undervalued stock can be evaluated by looking at the underlying company's financial
statements and analyzing its fundamentals, such as cash flow, return on assets, profit
generation and capital management, to determine the stock's intrinsic value. Buying stocks
when they are undervalued is a key component of famed investor Warren Buffett's investing
strategy.
BREAKING DOWN Undervalued
Value investing is not foolproof, however. There is no guarantee as to when or whether a
stock that appears undervalued will appreciate. There is also no exact way to determine a
stock's intrinsic value — which is essentially an educated guessing game.
An undervalued stock is believed to be priced too low based on current indicators, such as
those used in a valuation model. Should a particular company’s stock be valued well below
the industry average, it may be considered undervalued. In these circumstances, value
investors may focus on acquiring these investments as a method of pulling in reasonable
returns for a lower initial cost.
Whether a stock is considered undervalued is open to interpretation. In contrast, a stock
deemed overvalued is said to be priced higher than its perceived value. If a valuation model
is inaccurate or applied in the wrong way, it could mean the stock is already properly value
7. Turnaround stocks –
Patience is one of the greatest virtues of an investor, especially a long-term one. This is
because, they bet on stocks that have the highest potential to appreciate in the future. To
do so, they buy at lows and sell at highs, but the amount of time it takes for a stock’s price
to appreciate may be more. Also, there may be times when the stock may go through bear
runs. This becomes even more challenging considering the changing dynamics of industry
over a longer period of time. New players in a particular sector are constantly rising to shine.
The trick is to identify which company has the highest potential.
One such strategy is to identify turnaround stocks. These are stocks of companies which
have gone through a phase of weak financial performance and share prices have been
beaten down. The idea is to find companies that are likely to identify issues that lead to a
weak performance and change their business strategy to become profitable again.
https://www.businesstoday.in/moneytoday/stocks/stocks-rising-for-10-years-will-they-give-
good-returns-still/story/205535.html

https://getmoneyrich.com/fastest-growing-companies/

https://tradebrains.in/10-best-dividend-stocks-in-india-2/

https://www.moneycontrol.com/stocks/marketinfo/disc2bv/bse/index.php
https://www.moneycontrol.com/news/business/markets/value-traps-or-undervalued-18-
companies-in-bse500-index-trade-at-low-price-to-book-value-5610591.html

https://www.kotaksecurities.com/ksweb/Meaningful-Minutes/What-are-turnaround-
stocks#:~:text=These%20are%20stocks%20of%20companies,prices%20have%20been
%20beaten%20down.