9 Best Stocks to Buy for Beginners in India [2022]

There are more than 5000 stocks listed on our Indian Stock Exchanges. For a beginner, it will not be possible to analyse all these companies and decide which companies they should try initially.

We need to analyse business of the company, about management, balance sheet strength, potential upside from current levels and many more things. Once you become a mature investor in stock market and keep adding something to your knowledge about how to analyse companies, it will become little easy to analyse companies.

But as of now, when you are a beginner, it will not be easy for you to analyse which companies would be suitable for you even if the number of listed companies would be 500-1000.

Therefore, in this article, I have mentioned about some stocks which are best for the beginners in stock market of India.

Filters that were used to select these Stocks for Beginners

Only those stocks which are actively traded on exchanges and institutional investors remain quite active in them, are selected for the beginners. This will provide beginners little safety and less price volatility.

Then, metrics like Bluechip company or not, strong balance sheet, Good Promoter-Backing or Management, Potential Risks in Business, Business Growth Potential and Expensive or not, were used.

If you don’t know much about stocks and want to start investing in stocks, then you can initially start with these stocks.

Here is the list of Top shares for Beginners. . . . .

Best Stocks to Buy for Beginners in India

HDFC Bank

HDFC Bank is one of leading banks of India. But in terms of market value, it is the largest Bank of India. It has a banking network of 5,326 branches and 14,996 ATMs spread across 2,825 cities and towns.

The Bank has three primary business segments, namely Retail banking, wholesale banking and Treasury business. As the name suggests, HDFC bank in Retail Segment serves Retail Customers, serves big clients (corporate, public sector units, government bodies, financial institutions etc.) through Whole Segment and under Treasure business, bank provides different products and services on foreign exchange and derivatives, local currency money market and debt securities, and equities.

Primary reasons why HDFC Bank is one of the best Stocks to buy for beginners

• Because of consistent Outperformance in past and Management that has always given importance to all major and minor stakeholders, HDFC Bank is a favourite stock of FIIs and DIIs. This gives good safety and return potential in stock.
• Without Banking, an economy is nothing. And without HDFC Bank, Private Banking Sector of India is nothing because of its size. Along with any uptick in GDP, Bank is expected to benefit every time.

Bharti Airtel

Bharti Airtel Limited is a leading global telecommunications company with operations in 18 countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks amongst the top 3 mobile service providers globally in terms of subscribers.

In India, the company’s product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed home broadband, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G, 4G wireless services and mobile commerce. Bharti Airtel had over 423 million customers across its operations at the end of March 2020.

Primary reasons why Bharti Airtel is a best share to buy for beginners

• Without an Internet service Provider, the Internet is nothing. And without Internet, it is quite similar to a dream to think about expanding Digital World. On our exchanges, Bharti Airtel is the only listed company that is a major telecom service provider and not a loss making company. This thing generally keep shares of a company in good demand and focus.
• Going forward, tariff rates are going to rise. And history of Airtel company suggests that it will be able to capture most of the benefits arising out of any tariff rise in future. This thing will always keep future of the company bright.

Maruti Suzuki

Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corporation, Japan, is India’s largest passenger car maker. The Company is engaged in the business of manufacturing and sale of passenger vehicles in India. Making a small beginning with the iconic Maruti 800 car, Maruti Suzuki today has a vast portfolio of 16 car models with over 150 variants. Other activities include facilitation of pre-owned car sales fleet management, car financing.

The Company, formerly known as Maruti Udyog Limited, was incorporated as a joint venture between the Government of India and Suzuki Motor Corporation, Japan in February, 1981. Presently, Suzuki Motor Corporation owns equity of 56.2%.

Primary reasons why Maruti Suzuki is one of the best stocks to buy for beginners

• Because of its leading position in Passenger car segment, hardly anyone wouldn’t know about the company. With any uptick in demand of passenger cars in India, company is expected to benefit most.
• Owner of the company is a Japanese Promoter. When the promoter is a Foreign entity, history suggests that dividend payment always remain maximum but optimum in the company and chances of any fraud/scam are always low. Such things generally make a company more preferable bet among investors, safe and maximise return potential.

Larsen & Turbo

Larsen & Toubro, commonly known as L&T, is an Indian technology, engineering, construction, manufacturing and financial services conglomerate, with global operations. Company operates in sectors like Hydrocarbon, Infrastructure, Power, Process Industries and Defence.

L&T has several international offices and a supply chain that extends around the globe. The Company’s manufacturing footprint extends across eight countries in addition to India. Company’s businesses are supported by a wide marketing and distribution network, and have established a reputation for strong customer support. Every aspect of L&T’s businesses is characterised by professionalism and high standards of corporate governance.

Primary reasons why L&T is a Best stock to buy for beginners

• Purchasing L&T shares enables you to bet on several Key Industries of our country and the world. When an investor wants to invest in a Bluechip company of Infrastructure, he/she will have to firstly look at the L&T. Thereafter, any other company would come to their list! That is the presence and significance of the company.
• The price where shares of L&T are quoting right now are quite safe. Beside of this, it also has a good potential of giving attractive returns to beginners from current price.

Indian Oil

IndianOil, also known as IOC, accounts for nearly half of India’s petroleum products market share. Indian Oil is an integrated Energy major with business interests straddling the entire hydrocarbon value chain from refining, pipeline transportation & marketing, to exploration & production of crude oil & gas, petrochemicals, gas marketing, alternative energy sources.

Primary reasons why Indian Oil is one of the best stocks to buy for Beginners

• IOC has an attractive dividend paying percentage, almost 6-8 percent. Biggest player in Oil Marketing Business in India. And everyone can easily recognise this company and its main business without even doing any research. All these generally makes a stock good popular in stock market, easy to understand for investors and reduces potential of huge volatility in stock.
• Transportation volume is improving and is expected to reach pre-covid levels soon. Near term future of company doesn’t seems bad and looks quite certain. Volatility in Crude Oil prices may definitely keep influencing stock price little. But as per Income potential of the company and balance sheet strength, stock is available for any purchasing at a good price for beginners.

Also Read: Best Dividend Paying Stocks of India! 

Housing Development Finance Corporation (HDFC)

The principal business of company is to provide finance to individuals, corporate and developers for the purchase, construction, development and repair of houses, apartments and commercial property in India. Its diversified portfolio of loan offerings includes loans for purchase / construction of a home or office, renovation, extension, rural housing loans, loan against property etc.

Primary reasons why HDFC is one the best stocks to buy for Stock Market Beginners

• HDFC is a reputed name in our Indian Share Market. This has been build by over several decades of hard work and giving importance to every stakeholder. Because of this, Foreign Investors and Domestic Investors always keep HDFC and its subsidiaries in their priority list. And therefore, shares of HDFC and its subsidiaries are always considered safe and house of good growth potential which makes them attractive choice for beginners. Also, shares of HDFC are available at a good price.

Tata Consultancy Services (TCS)

Tata Consultancy Services is a leading IT Services, consulting and Business Solutions provider. IT services, business process outsourcing services, global consulting, and asset leveraged solutions, are some of the common offerings of TCS. Their customers are generally linked to banking, financial and insurance, manufacturing, retail and distribution, and telecom businesses.

Primary reasons why TCS is a best stock to buy for Share Market beginners

• In IT Sector, TCS is the biggest company of India. Company has always rewarded its shareholders through Bonus, Dividends and Buy Back, which makes it a favourite stock of top investors. Such kind of stocks which have a bright future and are favourite of top investors, always considered best stocks for beginners.
• Price of the stock is not too much high at current levels. Beside of this, TCS is a part of India’s one of the most trusted brands, Tata Group. Meaning thereby, a less risky and safe stock at current levels.

HCL Technologies

HCL Technologies is a leading Global IT services company that helps enterprises transform their businesses for the digital age. The company is primarily engaged in providing a range of software services, business process outsourcing and infrastructure services. Client Portfolio of Company consist of many verticles including Financial Services, Manufacturing, Telecommunications, Media, Entertainment, Life sciences & healthcare, Oil & Gas, Logistics etc.

Primary reasons why HCL is a best stock to buy for share market beginners

• HCL Tech is a 3rd biggest IT company of India. HCL has a good track record of rewarding its shareholders by doing Buybacks, issuing bonus shares and giving dividend at regular interval of time. This makes it an ideal choice among investors.
• Valuations of company seems comfortable for a beginner. Risk is low and growth potential in share price of the company is higher from current levels.

Tata Consumer Products

Tata Consumer Products or TCPL is a consumer focused company uniting the food and beverage businesses of the Tata Group under one umbrella. It is home to key brands such as Tata Tea, Tetley, Tata Salt and Tata Sampann. The Company has a 50:50 joint venture with Starbucks called Tata Starbucks Limited, to own and operate Starbucks cafés in India.

Primary reasons why Tata Consumer Products is one of the best stocks to buy for beginners

• TCLP was formed with the aim of bringing all FMCG type businesses of Tata Brand under one entity. After this formation, it is a expectation that Tata group will be able to work better in expanding its FMCG business and making it more bigger.
• Valuations of company looks comfortable. Tata name is also attached with the company which makes it more appealing to investors. Good safety is also there in stock and growth potential of company seems quite high.

What kind of Returns can Beginners expect from these Stocks?

These stocks have been selected considering the Risk in them. For the beginners, these stocks looks quite less risky and suitable to start their journey in stock market. However, along with less risk, the Return capacity of these stocks is not very high. But you can expect a normal or good returns. These stocks have potential to give you 20%+ returns annually.

Is it Right for Beginners to allocate all their Capital into these Stocks?

Stocks that have been mentioned above are good to buy if you don’t know much about the stock market yet. Thus, there will be no problem if you allocate most of your capital into these stocks during your initial period. Once you would know about some basics of stock market, you can shift to more better stocks which have potential to deliver you better returns, or add stocks of Small companies in your Portfolio which are capable to deliver better returns.