Before we Start our “Best Stocks To Buy In India For Long Term” , lets understand what is a money minting stock and what is the criteria that we followed.
What is Money Minting Stock:
Money Minting stocks refer to the companies which are having a good cash conversion cycle (CCC) with the best cash management. CCC is a great tool that measures the total number of days cash is engrossed in working capital. It helps significantly in analyzing the competence of an organization in creating sales through cash management. This metric takes into account the time needed to sell its inventory, the time required to collect receivables, and the time the company is allowed to pay its bills without incurring any penalties. Investors who compare close competitors look not only for the lower number of CCC but other metrics such as return on equity, quick ratio, and other fundamental metrics.
Cash Conversion Cycle (CCC) – The stocks with a CCC of less than 20 days. The negative value indicates the best money minting machines.
Debt/Equity Ratio – The Stocks with a Debt/equity ratio of less than 1.
5Y Operating Cash flow CAGR – The stocks with an OCF CAGR of more than 15% for the past 5 years.
5Y Avg. RoE – The stocks with more than 15% of Average Return on Equity for the past 5 years.
Quick Ratio – The stocks with a quick ratio of more than 0.60
- Hindustan Unilever Ltd – The large-cap Giant is a market leader in ~90% of its businesses. The company’s brands are available across 80 lakh+ stores across India and around 90% of all households in India use 1 or more of the company’s branded products.
- Dr. Lalpath Labs Ltd – Dr. Lal PathLabs Limited (DLPL) provides diagnostic and related healthcare tests and services with 231 clinical laboratories, 3,705 patient service centers (PSC), and 9,247 pick-up points (PUP) as of March 2021. The company has a strong financial record with 21% Revenue CAGR and 26% PAT CAGR over the past 10 years.
- Syngene International Ltd – Syngene is one of India’s leading CRAMS organizations. The company offers research services in medicinal chemistry and biology in the early stages of drug discovery, through process development and contract manufacturing of bio-therapeutics for human trials.
- Indraprastha Gas Ltd – Indraprastha Gas (IGL) is one of India’s largest city gas distribution companies and primarily operates in the NCT of Delhi with CNG sales contribute more than 70% of its total sales volume. IGL is currently operating in 10 geographical areas.
- Godrej Consumer Products Ltd – Godrej Consumer Products Ltd (GCPL) is one of India’s leading home-grown household & personal care companies. It also has a presence in other countries like Indonesia, Africa, the US, Middle East, among others. The company’s manufacturing facilities are located in India, Africa, Indonesia, Latin America, and the USA.
- Nestle India – Nestlé is the largest food company in India with over Rs.13000 crore of sales. It is broadly present in infant & baby food products, noodles, chocolates & beverages categories. The company has eight manufacturing facilities. One new plant in Sanand, Gujarat is likely to get commissioned by the end of the year.
- Supreme Petrochem Ltd – Supreme Petrochem has over 50% market share in the polystyrene segment and a capacity of 2,72,000 tonnes in polystyrene and 72,000 tonnes in EPS. The market position will be strengthened by the ongoing capacity expansion of 80,000 tonnes for polystyrene and 30,000 tonnes for EPS and the healthy demand from end-user industries.
- Gujarat Gas Ltd – Gujarat Gas Limited (GGL) is India’s largest player in City Gas Distribution with 27 CGD licenses across 43 districts in 6 states. GGL has more than 15.5 lakh households, over 13,000 commercial customers, 559 CNG stations, over 4000 industrial units, and close to 30,000 kilometers of the natural gas pipeline network.
- Dixon technologies Ltd. – Dixon Technologies is India’s leading electronic manufacturing provider and one of the largest beneficiaries of the government’s PLI scheme. It operates in both original equipment manufacturing (OEM) and original design manufacturing (ODM).
- Escorts Ltd – Escorts Ltd (ESC) is one of India’s prominent players in the Tractor industry, with an overall market share of 11.2% in the domestic tractor industry. ESC is also present in construction and material handling equipment, such as cranes, compactors, and forklifts with a 55% market share in the material handling segment.
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