Best Long Term Shares to buy

Before we take a look at the long-term shares, an investor should understand what investing in Public Markets (listed) & Private Markets (unlisted) respectively. Investing in a listed market involves buying and selling publicly traded securities, such as stocks and bonds, through regulated exchanges. It offers liquidity, transparency, and a wide range of investment options but is subject to market volatility and may require ongoing research and monitoring.

Investing in private markets involves buying shares or securities of privately held companies that are not traded on public exchanges. It offers the potential for higher returns and access to early-stage companies, but it can be illiquid, less transparent, and carries higher risks due to the limited information available and longer investment horizons.

Take for instance these numbers: 

The data presented in the above picture is from Goldman Sachs & according to the above data, we can infer that Private Investments & money raised through secondary markets have consistently outperformed money raised by companies through public issuance. Infact the value of deals has been double or more on most occasions in the last 10 years.

So, while there are many long-term shares that an investor can look to invest in there are a few key things that investors should keep in mind before investing: 

Now let's discuss 5 stocks that you can invest in the long term:

Chennai Super Kings: 

a) Company: Just like NBA is known for basketball, EPL is known for Football. Similarly, the Indian Premier League is the biggest and richest cricket league in the world. CSK is one of the top IPL teams with the highest winning % i.e. 60%. It won the IPL in the year 2010, 2011, 2018, 2020 & most recently this year itself i.e. in 2023. It is the most consistent team and holds the largest fan base in comparison to all other IPL teams.

b) Traction: 10x return in 2 years - In 2017 the IPL broadcasting rights went for ~ Rs. 16,000 cr for 5 years out of which CSK got ₹900 cr - ₹1600 cr each year. This time broadcasting rights have gone up to ₹48,390 cr and out of which CSK has earned ₹2,250 cr ( 450 cr/year) which is ~3x of the earlier revenue of CSK. The sponsorship revenue of CSK was ₹59 cr in 2021 which increased in 2022 to ₹100cr showing a 191% increase in CAGR.

c) Client Base: Sports lovers & specifically cricket lovers are expected to form a major client base of Chennai Super Kings. People who idolize former Indian Skipper MS Dhoni & current Star all-rounder Ravindra Jadeja are also expected to undertake major investments in CSK.

d) Recent Developments: Chennai Super Kings has been crowned the Champions of the world’s richest Cricket league, the Indian Premier League (IPL) for the 5th time. They achieved this after competing against 9 teams. Previously they won the title in 2010, 2011, 2018 & 2021. For further information, you can check this video link.

e) Investment Thesis: It won’t be wrong to call CSK the torchbearer of IPL. A team that has won 5 IPL titles, qualified for the Finals a record 9 times. It just doesn’t get more consistent than this. CSK has a market cap of ₹5,361 Cr. In terms of popularity, CSK is now the most popular team in the world on Instagram with a record 377 Million followers leaving behind football giant teams like Real Madrid, FC Barcelona etc. It has shown a tremendous increase in Compounded Sales growth clocking over 231% & Return on equity of over 160%

1. Studds Accessories Limited: 
   

a) Company: Studds is the world's largest two-wheeler helmet manufacturer and is the market leader in the Helmet industry and holds more than 26% market share in India. The industry size of two-wheeler helmet manufacturers was estimated to be close to $ 2.5 bn (~ ₹20,500 cr.) in 2021 & is projected to reach $3.5 Bn (~ ₹28,685 cr.) by 2030, growing at a CAGR of close to 6.5%, showing steady growth. 

b) Traction: Studds come under the PLI scheme of the government. It is a zero-debt firm and has been giving compounding returns (double return every 2 yrs) to its investors. The company uses one of the best technologies for production and got certified by the European Safety Agency and Safety. Studds generates 92.5% revenue from India and 7.5% revenue from exports. Their total revenue increased by 15.7% which was ₹414.5cr in FY20 and reached ₹479.6cr in FY21 with a 35% return on capital employed. As per the past 5 years' data, they have shown a 38.5% growth y-o-y in profits.

c) Client Base: It has a presence in over 40 countries globally with a strong presence in diverse regions including the Middle East, Europe, Asia & Latin America. For further reference, you can check the research report of Studds.

d) Investment Thesis: 

Planify Capital: 

a) Company: Planify capital limited started 4yrs back and is now the largest private equity marketplace in India. Planify started with the Secondary sale of shares with the first Product as PreIPO where we provided Investors an opportunity to invest in Stocks before the IPO. People are having the problem of not getting allotment in IPO. IPOs generally are highly oversubscribed - 10x or even 100x at times. On the other hand, if some angel investors or VCs want to liquidate their holdings, they have to wait till the IPO or next round of funding for the company. They were able to hold through our marketplace. For reference, you can check the following video link.

b) Traction: If we talk about numbers and growth, Planify did ₹4.5cr in the first year it started, and achieved 300% (₹14cr) in 2nd year. Last financial year the aim was ₹50 cr but with the love of investors and channel partners, it has achieved ₹150 cr which is 1000% growth in terms of turnover.

c) Client Base: The company has facilitated fundraising worth ₹100 Cr. across 6 startups with a cumulative valuation of over ₹1600 Cr. The secondary investments have reached a tremendous ₹250 Cr. in Pre-IPOs & are increasing at a rapid rate.

d) Recent Developments: Planify launched its app in 2022 with a motive to provide all products under one roof to varied categories of users be they accredited investors or budding entrepreneurs. Planify has recently launched its very new product Launchpad allowing startups to get listed on Planify’s platform for a period of 1 year.

e) Investment Thesis: Planify has been the leading choice for Angel Investors looking to invest in top upcoming Startups, Pre-IPOs, and Unicorns. With a base of over 10,000 accredited investors and 250+ exclusive investment opportunities, Planify is certainly leading the chart as far as investment opportunities are concerned. As India’s startup ecosystem continues to rapidly scale up, there will be more opportunities for Angel Investors to generate exponential returns. Planify has shown excellent growth in all spheres where on the one hand it has shown 2500%+ compounded profit growth & over 64% on return of equity.

1. Urban Tots:  

a) Company: Urban Tots is involved in the business of manufacturing & selling toys, ranging from plastic to electronic toys and roll plays. The Toy industry in India was valued at ₹221 Billion in 2022 & is projected to reach ₹309 Bn in 2025. The government of India has recently introduced a PLI scheme to incentivize the production of Toys in India with the objective to make India a Net exporter in the toys sector, which is expected to greatly benefit Toy manufacturers like Urban Tots in scaling up their production. For more information, you can check the following video link. 

b) Traction: The company’s products are available at retail outlets like Hamleys, FirstCry, & even IOCL Petrol Pump retail outlets, etc. as well on famous e-commerce sites like Amazon. The company has recently signed a contract with Hamley’s worth ₹750 Cr. The company is in the advanced phase of talks with Hasbro Inc, a US-based conglomerate & one of the largest toy distributors in the world. Successful completion of the deal would result in an annual contract of ₹200 to ₹250 cr. (approx.)

c) Client Base: The company has recently signed an exclusive agreement with Disney, to use the characters over its toys e.g. Mickey Mouse, Donald Duck, Iron Man, The Hulk, Frozen, etc.

d) Recent developments: Urban Tots has recently opened its 5th retail outlet in Aerocity, Mohali, inaugurated by the Union Minister of Oil & Natural Gas.

e) Investment Thesis: Urban Tots has its own manufacturing plant spanning 36,000 sq. yd in Bhiwadi, Rajasthan. The company has a wide distribution network consisting of retail channels. The company has its own heavy machinery including 55 imported from abroad, which makes it self-reliant and independent.  Market Player Negligible competition in the domestic market. Speaking about its distribution business, be it retail stores like Reliance Retail, Hamleys, Dmart, or Vmart or e-commerce like Amazon, Firstcry, or Urban Tots has a widespread presence. The company has shown excellent compounded sales growth estimated at over 204% while giving back returns on equity measured at 60.28%.

VCI Chemical Industries: 

a)Company: VCI Chemicals is involved in the production of specialty chemicals products i.e. Coal Tar Pitch (commonly known as CTP) and high-grade Distillates. The company has a 1.1 Lakh MTPA Coal tar Distillery on 31.1-acre land in Kalinganagar, Orissa. CTP is a key ingredient used in the Aluminium smelter industry. For more information, you can check the following video link.

b) Traction: It is expected that the company will achieve a turnover of ₹350 Cr. by FY28  with a 12% EBIT margin, and VCI profits should be close to ₹45 Cr. At a conservative estimate of a P/E of 20x, the company is expected to achieve ₹900 Cr. valuation in 5 years which is a multiple of 12x.

c) Client Base: CTP demand of the Middle-east Market ( 2nd Globally) is at 5,70,000 TPA (Tonne per Annum) (estimated to be ~ 8,00,000 TPA by FY27). The company aims to substitute 20%-25% of the CTP requirement in the Middle Eastern market which currently relies 100% on Chinese imports. VCI is substituting up to 20% dependency of the middle-east Aluminum industry on Chinese monopoly by becoming long term (8+ years) strategic supplier of CTP (worth ₹ 300+ Cr.) to leaders of GCC (Gulf Cooperation Council).

d) Recent Developments: VCI has signed long-term contracts (8+ years) with industry veterans like EGA (UAE), ALBA (Bahrain), Sohar (Oman), Maaden (Saudi Arabia), and Qatalum (Qatar) aims to be a strategic supplier of  Coal Tar Pitch.

e) Investment Thesis: The company’s operations are envisaged to enjoy tremendous locational advantage since 67% of the plant feedstock (Crude Coal Tar) will be sourced from steel plants within 120 km & hence has the lowest inbound cost of any domestic competitors. The company has MoU with TATA Steel for the same. Feedstock Security is 3x+ in FY22. The plant is situated in a highly industrialized area of 1000 acres belonging to the Industrial Development Authority of Orissa & henceforth operations are expected to be hassle-free from local hassles. Ample availability of coal and private, as well as government electricity feeders, will ensure 100% uptime of power.