Before we delve into the nitty gritties of which blue chip stock is better, let us recap what a blue chip stock is and what does blue chip stock investment truly entail.
Understanding blue chip stocks
Blue chip stocks are stocks of large companies with a massive financial bandwidth, significant market share and well-established track record of performance (and hence, a robust brand value). Large revenue, profitability, consistent performance of the stock value are some of the hallmarks of a blue chip company.
Benefits of blue chip stock investment
- Lower chances of stock price drops – A blue chip company usually has the brand value and track record that can allow it to raise money more quickly and easily than a small cap company. Therefore, it is easier for blue chip companies to overcome financial crises, whether global, local or internal.
- Power and prestige – This is especially true for large investors. A higher share of the total market cap of a large company brings with it a higher degree of prestige and power for the large investor.
- Diversification – Higher degree of stability in stock prices allows investors to bring some stability (like an anchor) to their portfolio. It allows them to invest the remainder of their corpus of funds into more risky investments like small cap stocks. Blue chip stocks often themselves have diversified business that allow them to experience less risk.
List of best blue chip stocks 2023
The following is the list of the best blue chip stock 2023 –
| Name of the company | Price change in the last 3 years | Market capitalisation |
| Adani Enterprises | +1734.20% | ₹ 4,36,284 cr |
| Infosys | +100.11% | ₹ 6,27,093 cr |
| SBI | +83.46% | ₹ 5,40,118 cr |
| Asian Paints | +74.40% | ₹ 2,89,268 cr |
| Reliance | +67.32% | ₹ 16,54,891 cr |
| ICICI Bank | +65.56% | ₹ 6,27,254 cr |
| TCS | +50.57% | ₹ 12,12,848 cr |
| ITC | +39.58% | ₹ 4,05,883 cr |
| Hindustan Unilever | +33.22% | ₹ 5,95,880 cr |
| HDFC Bank | +27.26% | ₹ 8,97,885 cr |
Adani Enterprises
It is a holding company with various branches in coal mining and trading, infrastructure, oil and gas exploration, gas distribution, power (including solar photovoltaic cells), airports, agricultural products and even data centres.
Profit in FY22 – ₹ 777 cr
Revenue in FY22 – ₹ 69,420 cr
Percentage increase in revenue (FY21-FY22) – 75.58%
P/E Ratio – 351.28
Industry P/E Ratio – NA
Dividend Yield – 0.03%
Infosys Ltd.
The company is focused on consultancy and digital services for various sectors – its segments include financial services, FMCG, energy, utilities, manufacturing, telecom, healthcare etc. Its products and platforms include the likes of Skava, LEAP, Panaya and Finacle.
Profit in FY22 – ₹ 22,110 cr
Revenue in FY22 – ₹ 1,21,641cr
Percentage increase in revenue (FY21-FY22) – 21.07%
P/E Ratio – 27.45
Industry P/E Ratio – 27.49
Dividend Yield – 2.17%
State Bank of India
It is one of the largest banks of India and 56.92% of its shares are owned by the Government of India. Its segments comprise treasury, corporate/wholesale banking, insurance, retail banking.
Profit in FY22 – ₹ 35,374 cr (87.8% increase since FY2021)
Revenue in FY22 – ₹ 4,06,973 cr
Percentage increase in revenue (FY21-FY22) – 5.6%
P/E Ratio – 13.11
Industry P/E Ratio – 9.24
Dividend Yield – 1.17%
Asian Paints
The company is focused on the sale of paints, coating, decor and other residential amenities such as sanitary ware. Around 52.63% of the company is owned by the company’s promoters.
Profit in FY22 – ₹ 3,031cr
Revenue in FY22 – ₹ 29,101 cr
Percentage increase in revenue (FY21-FY22) – 34.02%
P/E Ratio – 78.94
Industry P/E Ratio – 13.38
Dividend Yield – 0.66%
Reliance Industries
The company is famous for its contribution to the oil to chemicals industry in India. It has also seen tremendous growth in the retail markets, financial services and digital services sectors.
Profit in FY22 – ₹ 60,705 cr
Revenue in FY22 – ₹ 7,21,634 cr
Percentage increase in revenue (FY21-FY22) – 48.38%
P/E Ratio – 25.60
Industry P/E Ratio – 5.40
Dividend Yield – 0.32%
ICICI Bank
The company is focused on retail and wholesale banking, treasury and other services. The bank provides women’s accounts, senior citizen accounts as well as insurance services.
Profit in FY22 – ₹ 25,110 cr
Revenue in FY22 – ₹ 1,57,536 cr
Percentage increase in revenue (FY21-FY22) – -2.35%
P/E Ratio – 21.50
Industry P/E Ratio – 9.24
Dividend Yield – 0.56%
Tata Consultancy Services
It is one of the most respected companies which employs a large number of Indian graduates. Its segments include digital and financial services, manufacturing, consumer retail, media, healthcare etc and has produced many well-known platforms such as TCS iON, TCS Omnistore, TCS BaNCS etc.
Profit in FY22 – ₹ 38,327 cr
Revenue in FY22 – ₹ 1,91,754cr
Percentage increase in revenue (FY21-FY22) – 16.79%
P/E Ratio – 30.79
Industry P/E Ratio – 27.49
Dividend Yield – 1.36%
ITC Ltd.
It is one India’s largest FMCG companies which also has a massive hotel chain, a paper and packaging business as well as large investments and enterprise in the agribusiness sector. Its famous brands include Vivel, Aashirvaad, Bingo!, Fiama and Classmate.
Profit in FY22 – ₹ 15,243 cr
Revenue in FY22 – ₹ 65,205 cr
Percentage increase in revenue (FY21-FY22) – 22.67%
P/E Ratio – 23.40
Industry P/E Ratio – NA
Dividend Yield – 3.52%
Hindustan Unilever
It is one of the largest FMCG businesses in India and produces detergents, water purifiers, food and beverages, deodorants, talcum powders etc. Its famous brands include Pepsodent, Clinic Plus, Lakme, Vaseline, Surf Excel, Knorr, Bru, Kissan etc.
Profit in FY22 – ₹ 8,879 cr
Revenue in FY22 – ₹ 52,446 cr
Percentage increase in revenue (FY21-FY22) – 11.52%
P/E Ratio – 61.75
Industry P/E Ratio – 58.90
Dividend Yield – 1.42%
HDFC
HDFC is one India’s largest private commercial banks offering both wholesale and retail banking services as well as para banking services such as credit cards, debit cards etc..
Profit in FY22 – ₹ 38,053 cr
Revenue in FY22 – ₹ 1,67,695 cr
Percentage increase in revenue (FY21-FY22) – 7.57%
P/E Ratio – 21.52
Industry P/E Ratio – 9.24
Dividend Yield – 0.96%
Factors to consider before investing in a blue chip stock
When an investor is choosing to invest in a blue chip company, it is likely that they are investing for a considerable period of time. Therefore they should consider the following factors before investing –
- Diversification – It is best to have stocks that encompass multiple sectors so that even if one sector experiences stagnation, the other, better performing sectors can pull the portfolio up.
- Earnings growth potential – Sometimes a large company may be fine with taking losses for years in order to come up with some major innovation – however the stock price may suffer meanwhile. So it’s important to check if the stock price is showing continuous growth.
- Dividend yield – A company with stagnant growth may still offer you high returns with significant dividends paid out to the investors.
- Valuation – It is important to know if the blue chip stock is trading at fair value as otherwise, the stock may slowly but steadily lose value.
Final words
Now that you have a fair idea about the best blue chip stocks in 2023, try taking some time and money out to invest in a stock that you like. If you do not have a demat account yet, try to open demat account with Angel One, India’s trusted online stockbroker.
Disclaimer: This article is written for educational purposes only. The securities quoted are only examples and not recommendations.
As an enthusiast deeply entrenched in the world of blue chip stocks, I can attest to the critical role these stalwarts play in the investment landscape. With a proven track record and significant financial prowess, blue chip stocks are a cornerstone of many portfolios. Now, let's dissect the key concepts covered in the article.
Understanding Blue Chip Stocks: Blue chip stocks represent large companies with substantial financial strength, significant market share, and a robust performance history. Their hallmarks include large revenue, profitability, and consistent stock performance.
Benefits of Blue Chip Stock Investment:
-
Lower Chances of Stock Price Drops:
- Blue chip companies can raise funds quickly, reducing the likelihood of financial crises.
-
Power and Prestige:
- Larger market capitalization brings prestige and power, especially for large investors.
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Diversification:
- Stability in stock prices allows investors to anchor their portfolios, enabling riskier investments elsewhere.
List of Best Blue Chip Stocks 2023: The article provides a list of blue chip stocks for 2023, including Adani Enterprises, Infosys, SBI, Asian Paints, Reliance, ICICI Bank, TCS, ITC Ltd., Hindustan Unilever, and HDFC. Each stock is detailed with information such as price change, market capitalization, and financial indicators.
Factors to Consider Before Investing:
-
Diversification:
- Encourages investing across multiple sectors to mitigate the impact of stagnation in one sector.
-
Earnings Growth Potential:
- Emphasizes the importance of assessing continuous growth in the stock price.
-
Dividend Yield:
- Stresses the significance of high returns through dividends, even in the face of stagnant growth.
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Valuation:
- Highlights the importance of fair value assessment to prevent gradual depreciation of the stock.
Final Words: The article concludes by encouraging readers to explore and invest in the best blue chip stocks of 2023. It also mentions the necessity of having a demat account, suggesting Angel One as a trusted online stockbroker. A disclaimer clarifies that the article is for educational purposes, and the mentioned securities are examples, not recommendations.
For those looking to make informed investment decisions, this comprehensive guide offers valuable insights into the world of blue chip stocks.
