Best Shares For Long Term Investment
If you are a long term investor, you tend to always make returns in equities. In fact, equity shares have known to outperform other asset classes in the long term. We have selected a few stocks that offer great opportunities for long term investors. These include stocks that have a very low debt to equity ratio and which have shown good growth over the years. These stocks have the tremendous potential to generate money in the long term.
Some of them are from very fast growing sector like construction, agrochemicals and ofcourse, the fast improving PSU banking space.
Lupin Ltd
Lupin is the second largest pharma company in India and the sixth largest generics pharma company globally. In the last few quarters we have seen investors heavily dumping pharma stocks on account of US FDA worries and also on account of squeeze of margins in the US. In line with this, Lupin Ltd has also seen its stock nosedive from levels of Rs 1,800 to the current price of Rs 1032. Going ahead complex and branded generics is likely to help growth in the US markets and this is what Lupin is likely to focus on. Between 2017 and 2020, Lupin wants to be a leading generics player with a larger complex generics mix. It also plans to increase its geographic spread. In 2017, the company achieved quite a few milestones, with its Goa EIR receiving US FDA, the company also saw its somerset, NJ, New block commissioned, saw Albuterol MDI ANDA filing and a new plant in Sikkim and Japan being innaugurated.
Aurobindo Pharma
Aurobindo Pharma was the only large pharma stock that jumped after the company declared its quarterly numbers to March 31, 2017. Glenmark, Sun Pharma and Lupin all had very steep falls after they declared their quarterly numbers. Aurobindo net profits did not fall as steep as some of its peers. In fact, pricing pressures in the US are beginning to play out, which is pushing Indian pharma stocks lower. Aurobindo Pharma has a big advantage here since they do not rely on a few products to boost revenues and profitability. The company has one of the finest mix of products that makes the company's shares a very attractive long term bet.
Rallis India
Rallis India has to be a great pick from the pesticides and agrochemicals space. To begin with the government plans to double the farmer income in the next 5 years. The huge outlay towards the agriculture sector, is a big positive for a player like Rallis India. The one good thing about the stock is that the fundamentals are very much in place. The debt to equity ratio is less than 0.10 and the company reported good numbers for FY 2017. In fact, the company's EPS for the year was close to Rs 14, which translates into a p/e of just 17 times one year forward earnings at the current market price of Rs 245. Check stock quote of Rallis here Rallis India is a Tata Group company and the stock last closed at Rs 221.
Taxation of shares
It is important to note that shares do not attract a long term capital gains tax. However, if you sell shares before one year, they attract a sort term capital gains tax of 15 per cent. So, before investing it is very important to consider the tax liability on the same. On the other hand it is also important to note that the tax liability is almost similar to those of equity mutual funds. One important thing to note is that there is no long term capitals gains if you hold shares and sell them at a profit of more than one year.
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