Before our list of “Top 10 Wide Moat Stocks India”. Let us understand what are Wide Moat Companies and how we selected these companies.

What are Wide Moat Companies:

These are companies having a monopoly in their market segment. Even if there is a competition that’s just very small compared to these companies giving them a massive advantage in their products.

Wide Moat is a parameter that determines how long and how well these companies will have an edge over their competition.

Criteria for selecting Top 10 Wide Moat Stocks India:

  • Gross Margin – The stocks with more than 35% of Gross Margin.
  • Cash Ratio – The stocks with a cash ratio of more than 1. (Cash ratio = cash & equivalents/Current Liabilities)
  • 5Y Revenue CAGR – The stocks with a Revenue CAGR of more than 10% for the past 5 years.
  • 5Y Avg. Net Profit Margin – The stocks with more than 7% of Average NPM for the past 5 years.
  • 5Y Avg. RoE – The stocks with more than 15% of Average Return on Equity for the past 5 years.

Here are our Top 10 Wide Moat Stocks India:

  • Shree cement Ltd – Shree Cement is engaged in the manufacturing and selling of cement and cement-related products and is one of the lowest-cost producers in the country. It is the 3rd largest cement manufacturer in India. Total Cement Production installed capacity is 43.4 MTPA. The Company has a set target to achieve 80 MTPA capacity by the year 2030.
  • Dr. Lalpath Labs Ltd – Dr. Lal PathLabs Ltd 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.
  • Poly Medicure Ltd – Poly Medicure Ltd is an India-based manufacturer and exporter of medical devices. The Company exports plastic medical disposables/surgical devices. The company has a pan-India distribution network with over 260 distributors.
  • Clean Science and Tech. Ltd – Company specializes in manufacturing critical Specialty Chemicals, Pharmaceutical Intermediates, and FMCG Chemicals. The better process of manufacturing between Clean science and peers assisted the company to offer products at a competitive price and thereby helped it gain meaningful market share across its product portfolio.
  • Vaibhav Global Ltd – VGL is an online retailer of fashion jewelry and lifestyle accessories on its proprietary TV home shopping channels and eCommerce platforms with live telecasts in the US and the UK. The company offers value propositions to its customers by pricing its products at attractive price points, averaging around $27-30 per piece.
  • Caplin Point Labs. Ltd – The company is engaged in the manufacturing and sourcing of Drug APIs. It also has a line of Products in finished formulations, R&D, clinical research. It has a wide presence in Latin America, the USA, and other nations. the company has a wide portfolio of pharma products with over 4,000+ registered products. It has a presence in 26 therapeutic segments.
  • Nestle India – Nestle is the largest food company in India. It has over Rs.13000 crore of sales. Its market presence is mainly in infant & baby food products, noodles, chocolates & beverages categories. Nestle has 8 manufacturing facilities. the new plant in Sanand, Gujarat is likely to get operational by the end of the year.
  • Divi’s Laboratories Ltd. – The Company has a market presence in 95 countries and ~17,000 employees and is one of the leading pharmaceutical companies in the world. The company has a strong financial record with 18% Revenue CAGR and 17% PAT CAGR over the past 10 years.
  • Symphony Ltd – Symphony remained the undisputed market leader as of FY21 with an estimated organized market share of 50% in the air cooler industry. The Symphony brand is available in more than 25,000 retail stores spread across 26-States.
  • Escorts Ltd – Escorts is one of India’s prominent players in the Tractor industry . It has a major market share of 11.2% in the domestic tractor industry. Escort is also present in construction and material handling equipment. They also manufacture cranes, compactors, and forklifts and control a 55% market share.

These companies have a quantitative edge over their competition which makes them a good selection for investment.

Please read our other articles on Best S&P 500 ETF India.