Buy These 5 Stocks Every Month For LONG Term Investing? Rahul Jain Analysis #profit #sipstocks

Summary

This video offers insights on five diverse, non-cyclic stocks with promising prospects for the next 5-7 years. The script discusses growth in sectors like semiconductors, healthcare, auto, power, and banking, emphasizing the importance of analyzing historical performance, fundamentals, and future potential. It also touches on the complexities of calculating capital gains tax for SIP investments and recommends using ClearTax for an efficient tax filing experience.

Takeaways

• 😀 The video discusses five stocks from different sectors with potential for growth over the next 5 to 7 years, emphasizing these are not direct recommendations but should be part of one's analysis.
• 💡 Stock one, CG Power and Industrial Solutions, has shown significant SIP returns over the last five years, moving from a 6,000 rupee investment to 1,124,000 rupees, with a 147% XIRR.
• 🌐 CG Power's growth is attributed to its involvement in the semiconductor sector, with the Indian government investing heavily in this area, including a partnership with companies from Thailand and Japan.
• 📈 The company's fundamentals show strong sales and profit growth over the last three years, with 68% of revenues from Industrial Systems and Power Systems, both sectors expected to grow due to increased capex.
• 💼 CG Power's balance sheet is nearly debt-free, and it has a healthy unexecuted order book, indicating good revenue visibility for the upcoming year.
• 🏥 Stock two, Naran Rudal, a hospital stock, has also shown impressive SIP returns, with a 36% XIRR over the last five years, and is valued below industry averages.
• 🛠️ Naran Rudal plans significant capex for building new hospitals and infrastructure, which is expected to enhance revenue and profit visibility in the long term.
• 🚗 Stock three, Mahindra & Mahindra Limited, has a 52% XIRR over the last five years, with a focus on the SUV segment, which has been gaining market share rapidly.
• 💹 Mahindra & Mahindra's valuation is considered reasonable, with plans for substantial capex and new model launches, positioning it as a long-term investment.
• ⚡ Stock four, REC Limited, from the power sector, has a 64% XIRR over five years, and is poised to benefit from the government's ambitious power sector expansion plans.
• 🏦 The fifth stock, SBI, India's largest bank, has a 32% XIRR over five years, with a strong loan book growth and improving asset quality, trading at an attractive valuation.
• 📊 The presenter highlights the importance of analyzing non-cyclic, evergreen sector stocks with strong revenue and profitability visibility for SIP investments.

Q & A

What is the main topic of the video?

The main topic of the video is discussing five stocks from different sectors that are considered good for long-term investment using the SIP (Systematic Investment Plan) methodology.

What is the significance of the SIP methodology in stock investment?

The SIP methodology is significant for stock investment as it allows investors to invest a fixed amount regularly, which can average out the cost of acquisition over time and reduce the impact of market volatility.

What is the first stock mentioned in the video and which sector does it belong to?

The first stock mentioned in the video is CG Power and Industrial Solutions, which belongs to the semiconductor sector.

What is the potential of the semiconductor sector in India according to the video?

According to the video, the semiconductor sector in India has a bright future due to the Indian government's significant investment in this space, including the approval of three semiconductor units with an outlay of around 76,000 crores.

How has the stock of CG Power performed in the last 5 years in terms of SIP returns?

In the last 5 years, if someone invested 100 rupees every month in CG Power, a total investment of 6,000 rupees would have grown to 1,124,000 rupees, with an XIRR of 147%.

What is the importance of non-cyclic stocks for SIP investments?

Non-cyclic stocks are important for SIP investments because they tend to show consistent growth over time, providing better chances of earning profits in the long run.

What is the second stock discussed in the video and which sector does it belong to?

The second stock discussed in the video is Naran Rudal, which belongs to the hospital sector.

What is the potential risk that hospital stocks like Naran Rudal are facing as mentioned in the video?

The potential risk that hospital stocks like Naran Rudal are facing is the Supreme Court's directive to the Indian government to standardize hospital charges, which has put pressure on hospital stocks.

What is the third stock mentioned in the video and which sector does it belong to?

The third stock mentioned in the video is Mahindra & Mahindra Limited, which belongs to the auto sector.

Why is the SUV segment important for Mahindra & Mahindra Limited's growth?

The SUV segment is important for Mahindra & Mahindra Limited's growth because SUVs have been gaining significant market share from the passenger vehicle segment, with a rise from 34% in FY20 to 60% in FY24.

What is the fourth stock discussed in the video and which sector does it belong to?

The fourth stock discussed in the video is REC Limited, which belongs to the power sector.

What is the significance of the Indian government's plan to add 517 GW of power capacity by 2031-2032 for REC Limited?

The significance of the Indian government's plan to add 517 GW of power capacity by 2031-2032 for REC Limited is that it presents a huge opportunity for the company, as REC is a major financier of power sector companies, which will need capital for this expansion.

What is the fifth stock mentioned in the video and which sector does it belong to?

The fifth stock mentioned in the video is State Bank of India (SBI), which belongs to the banking sector.

Why is SBI considered a good long-term investment according to the video?

SBI is considered a good long-term investment because of its large scale, serving one out of three Indians, having a significant market share in both customer deposits and loan books, and showing consistent improvement in the quality of its loan book.

What is the importance of diversification across different sectors when choosing stocks for SIP investments?

Diversification across different sectors is important when choosing stocks for SIP investments as it helps spread risk and ensures exposure to various market opportunities, enhancing the potential for long-term growth.

What is the role of Clear Tax in the context of this video?

Clear Tax is mentioned as a partner in the video, providing a service to make capital gain tax calculations easier for investors, especially for those who have built a significant corpus through SIP investments.

Outlines

00:00

📈 Stock Investment: SIP Methodology in Diverse Sectors

This paragraph introduces a video focused on five stocks from different sectors with promising futures for the next 5 to 7 years. The speaker emphasizes that these stocks should not be taken as recommendations but rather as a part of the viewer's own analysis. The first stock discussed is from the semiconductor sector, CG Power and Industrial Solutions, with a significant return on investment over the past five years. The speaker highlights the company's growth, low debt, and strong fundamentals, especially considering the Indian government's investment in the semiconductor industry. The company's involvement in setting up a new semiconductor unit in Gujarat and its robust unexecuted order book are also mentioned. However, the high PE and PB ratios compared to the industry are noted, which the speaker attributes to the company's strong tailwinds in the power and industrial segments.

05:01

🏥 Healthcare Investment: Hospital Stock Analysis

The second paragraph delves into the hospital sector, specifically the stock of Narayana Rurala. The speaker discusses the stock's past performance and its non-cyclic nature, noting its low PE and PB ratios compared to industry standards. Fundamentals such as ROC and ROE percentages are highlighted, showing strong capital efficiency. The speaker also mentions the company's plan for significant capital expenditure to build new hospitals and infrastructure, which is expected to enhance revenue and profit visibility. However, a potential risk is identified in the form of regulatory pressure from the Supreme Court on hospital charges, which has impacted the stock's recent performance.

10:03

🚗 Auto Sector Investment: Mahindra & Mahindra's Growth Prospects

The third paragraph examines the auto sector, with a focus on Mahindra & Mahindra Limited. The speaker is bullish on the company due to its leadership in the SUV segment, which has seen a significant increase in market share over the past few years. The company's plans for substantial capital expenditure to expand capacity and launch new models are discussed. The speaker also notes the company's valuation, which is considered reasonable compared to industry standards, making it an attractive long-term investment opportunity.

15:04

⚡ Power Sector Investment: RC Limited's Role in Energy Financing

The fourth paragraph discusses the power sector, focusing on RC Limited. The speaker outlines the company's strong SIP returns over the past five years and its role in financing power sector companies. The Indian government's ambitious plans to add substantial power capacity by 2031-2032 are highlighted, with a significant focus on renewable energy. The speaker suggests that companies like RC Limited, which provide financing to power sector operators, are poised for growth. The company's valuation is noted to be below industry levels, offering an attractive entry point for investors.

🏦 Banking Sector Investment: SBI's Dominance and Asset Quality

The final paragraph of the script addresses the banking sector, with a focus on State Bank of India (SBI). The speaker appreciates SBI's large scale, serving a significant portion of Indians and holding a substantial market share in deposits and loans. The improvement in the quality of SBI's loan book over the years is emphasized, with a notable reduction in gross non-performing assets (NPAs). The speaker also addresses criticisms regarding the bank's past practices and argues that the current asset quality and growth trajectory make SBI an attractive investment. The stock's valuation is considered attractive compared to other PSU banks, and the speaker concludes by summarizing the video's focus on non-cyclic, evergreen sector stocks with strong revenue and profitability visibility.

Keywords

💡SIP (Systematic Investment Plan)

SIP refers to a method of investing in which a fixed amount is invested in a financial asset at regular intervals, such as monthly or quarterly. This approach is popular for long-term investments due to its simplicity and the power of compounding. In the video, the speaker discusses the SIP methodology as a strategy for investing in stocks for the next 5 to 7 years, highlighting its effectiveness through the example of a 100 rupees monthly investment growing substantially over five years.

💡Stock

A stock represents a share in the ownership of a company. Owning a stock typically entitles the investor to a portion of the company's assets and earnings. The video's theme revolves around selecting stocks for long-term SIP investments, with the speaker discussing five different stocks from various sectors that are expected to perform well in the future.

💡Sector

In the context of the video, a sector refers to a category of the economy that comprises companies with similar business operations. The speaker mentions five different sectors, emphasizing diversification in investment by choosing stocks from semiconductor, hospital, auto, power, and banking sectors.

💡XIRR (eXtended Internal Rate of Return)

XIRR is a financial metric used to calculate the annualized rate of return for an investment when the cash flows are irregular or not periodic. In the script, the speaker uses XIRR to demonstrate the historical performance of the stocks discussed, showing how much a 100 rupees monthly investment would have grown over five years.

💡Non-Cyclic Stock

A non-cyclic stock is one that does not experience significant fluctuations based on the economic cycle. The speaker advises focusing on non-cyclic stocks for SIP investments to ensure steady growth over the long term, as opposed to cyclic stocks, which can be more volatile.

💡Fundamentals

Fundamentals in stock analysis refer to the financial and economic factors that affect a company's value and performance. The speaker emphasizes the importance of examining a stock's fundamentals, such as sales growth, profit growth, and ROCE (Return on Capital Employed), to assess its potential for future earnings.

💡Capex (Capital Expenditure)

Capex is the money a company spends to buy, maintain, or improve its fixed assets. In the video, the speaker highlights the significance of a company's planned capex, as it indicates future growth and investment in infrastructure, which can lead to increased revenue and profitability.

💡Debt-Free Company

A debt-free company is one that has no outstanding long-term or short-term debt. The speaker points out that a debt-free company is desirable because it indicates financial stability and the ability to invest and grow without the burden of debt repayments.

💡Unexecuted Order Book

An unexecuted order book refers to the total value of orders that a company has received but not yet fulfilled. The speaker mentions this as an indicator of future revenue visibility, suggesting that a high unexecuted order book can signal strong demand and growth potential for a company.

💡PE Ratio (Price-to-Earnings Ratio)

The PE ratio is a valuation ratio calculated by dividing a company's market value per share by its earnings per share. It is used to determine if a stock is overvalued or undervalued. The speaker discusses the PE ratio in the context of stock valuation, noting that a high PE ratio can indicate that a stock is trading at a premium due to expected future growth.

💡PB Ratio (Price-to-Book Ratio)

The PB ratio compares a firm's market value to its book value, providing a sense of how much investors are willing to pay for each unit of the company's net asset value. The speaker uses the PB ratio to discuss the valuation of stocks, pointing out that a high PB ratio can reflect investor confidence in a company's future prospects.

💡Clear Tax

Clear Tax is a platform that simplifies the process of calculating and filing capital gain taxes in India. The speaker mentions Clear Tax as a partner in the video, highlighting its utility for investors who use SIP investments, as it can assist in managing the complexities of tax calculations on investments.

Highlights

The video discusses five stocks from different sectors with potential for the next 5 to 7 years, emphasizing the use of SIP methodology for long-term investment.

CG Power and Industrial Solutions is highlighted for its impressive SIP returns over the last 5 years, growing from a 6,000 rupee investment to 1,124,000 rupees.

The importance of analyzing past stock performance for future investment decisions is stressed, with a focus on non-cyclic growth stocks.

The Indian government's investment in the semiconductor space, with CG Power setting up a unit in Gujarat, is identified as a significant growth driver.

The company's sales and profit growth over the last 3 years, driven by Industrial Systems and Power Systems segments, is noted.

CG Power's low debt and high unexecuted order book as of March 2024 indicate strong revenue visibility.

The high PE and PB ratios of CG Power are justified by the company's growth prospects in the semiconductor and power sectors.

Clear Tax is introduced as a partner for simplifying capital gain tax calculations for SIP investments.

Naran Rudal, a hospital stock, is presented for its low valuation and strong fundamentals, including high ROC and ROE percentages.

The potential impact of Supreme Court rulings on hospital charges and the subsequent effect on hospital stocks like Naran Rudal is discussed.

Mahindra & Mahindra Limited is highlighted for its leadership in the SUV segment and plans for significant capex to expand capacity.

RC Limited from the power sector is identified for its role in financing power generation companies and its low valuation compared to the industry.

State Bank of India (SBI) is presented as a long-term bet due to its scale, improving asset quality, and attractive valuation.

The video emphasizes the importance of diversification across sectors when selecting stocks for SIP investments.

Visibility of revenues and profitability in the next 5 to 7 years is identified as a key factor in selecting long-term SIP stocks.

The video concludes by inviting viewers to share their long-term SIP investment considerations and to utilize Clear Tax for tax calculations.

Transcripts

hi friends if you're looking to invest

in stocks using sip methodology for long

term then this video is perfect for you

because in this video I'll speak about

five stocks from five different sectors

that have bright future for the next 5

to 7 years please do not take these

stocks as recommendations use this

information in your own analysis with

that let's get this video started and go

to stock number one this stock is from

semiconductor sector the name of the

stock is CG power and Industrial

Solutions have a look at my screen and

you will see that in the last 5 years if

we speak about the Sip returns of this

stock the stock has moved from a total

investment of 6,000 Rupees to 1ak

124,000 rupees meaning in the last 5

years if you invested 100 rupees every

month then that would have meant total

6,000 rupees of investment and that

6,000 rupes of investment would have

become 1 124,000 rupes and if you were

to calculate xir returns then you would

see that it will come out to be 147% now

of course pass returns does not give any

guarantee for future F returns but we

still need to have a look at the past

history of the stock because it tells us

a lot about that stock it tells us about

the confidence of the market in this

particular stock that's why I shared

this data with you now I would really

like us to focus in terms of the last

three years of fundamentals of this

stock and if you see the stock chart one

thing that you will quickly note is that

this is a non-cyclic stock and if you're

looking to invest in sip stocks one

factor to consider is that try and find

stocks that are not cyclic in nature

they are growth stocks so that that you

have better chances of earning some

profits in the coming years now one of

the reason I like this particular stock

is because of the semiconductor space

overall and how that is going to behave

in the next 5 to 7 years because Indian

government is putting lot of money into

the semiconductor space for example in

February 2024 if you see the union

cabinet approved three semiconductor

units in India with the outlay of around

76,000 crores and CG power is going to

be one of the companies setting up a

semiconductor unit in Gujarat in

partnership with two companies one from

Thailand and one from Japan now this

doesn't mean that this company is going

to give you revenues and profits from

semiconductor space in the next 6 to 12

months what their management says is

that it is going to take them at least

four years of time to start realizing

these revenues now a couple of very very

important points about this St that you

must know Point number one is that if

you see my screen you will notice that

in the last 3 years the sales of the

company has grown by around 40% and if

you look at the profit growth you will

see that in the last 3 years the profits

have grown by 111% C Jr basis what is

driving this growth in the company is

what we need to understand and very

quickly if you see 68% of their revenues

are coming from Industrial Systems out

of which 18% is contributed by Railways

and 32% are coming from Power Systems

both these segments power system as well

as Industrial in the last 2 to three

years have been trending like anything

and in my view in the next 5 years these

both segments are going to give really

really good Revenue visibility because

there is a lot of capex going into these

sectors and I've spoken about these in

my various videos on on this channel

including BHL and many other power

sector theme stocks and that is why

precisely last 3 years fundamentals if

you consider of this stock you will see

EPS growth has been around 104% rocce

has been very very good 50% and when

their semiconductor plant is ready that

is going to further boost these revenues

in my view secondly if you look at the

balance sheet of this company you will

see that debt is very very low almost a

debt free company is what we can see

here last very important point about

fundamentals of this stock is that the

company as of March 2024 is sitting at

unexecuted order book of around 6,000

which is 45% higher than the previous

year so there's a good Revenue

visibility as well for the next one year

at least coming to the valuation of this

stock you will very quickly notice that

the PE is very high compared to the

industry PE and PB is also very high

comparing to the industry PB but there

is a reason the stock is enjoying this

premium because of the Tailwinds I've

explained in the semiconductor space in

the power space in the industrial

segment space and that is why you see

capital goods manufacturing stocks such

as Simons ABB they all are trading at a

very high PE right now now and that's

why investing in such stocks in the Sip

mode makes more sense than investing in

lumpsum not a stock recommendation here

but I've given you this analysis and

I've created a full video about this

stock on my Channel please go ahead and

watch it if you need more details about

this stock before I move to stock number

two one thing about sip investing is the

complication of calculating the taxes

for example if You' have been doing sips

and if you built a corpus of let's say

10 lakh Rupees and now if you want to

redeem 2 lakh out of it how to go about

calculating capital gain taxes is it

going to be short-term from long-term

capital gain and this brings me to the

partners of this video clear tax clear

tax have made Capital Tax gain

calculations very very easy because

using clear tax you can import thousands

of capital gain transactions within

seconds and then automatically it will

calculate your capital gain taxes and

finally it will select the right it form

for you clear tax allows you to import

capital gain transactions from more than

25 stock Brokers and 20 plus crypto

Brokers it will show you summary of

short-term capital gain long-term

capital gain across various assets such

as mutual funds stocks Etc you can also

see individual transactions as well

beauty of filing your returns using

clear text is that as soon as you enter

your pan number and upload your form 16

it extracts your personal income details

and prefill up to 90% of your

information available with the IT

department while filing the returns

using clear tax it will also give you

tax saving suggestions based on your

information it will recommend you the

best regime for you to save maximum

taxes with AI assistance 24x7 support

and free notice Management Services

clear tax in my view offers best tax

filing experience and unparalleled peace

of mind I would recommend you to check

out clear tax for your income tax needs

and you can use my code to get

additional 10% discount straight away

the link is in the description second

stock is a hospital stock called Naran

rudal if I invested 100 rupees per month

in The Last 5 Years that 6,000 rupes

would have become 14,000 rupes as of now

that translates to an xir of 36% again

past is not a prediction of the future

but we still need to know how the stock

has performed in the past if you see The

Last 5 Years of stock price history you

will notice that again this is not a

cyclic stock it has been a growing stock

in The Last 5 Years more importantly if

you see the valuation of this stock

right now for example PE ratio is well

below the industry level and if you

compare this with many other leading

Hospital stocks you will find it at a

very low p as well as low PB right now

but more importantly if you look at the

fundamentals of this stock for example

if you look at the ROC percentage Roe

percentage because hospitals are capital

intensive stocks you will notice that

these numbers are really looking very

very good compared to many other

Hospital stocks even if we consider 5

years of Roe 5 years of Roc percentage

you will notice that compared to many

other Hospital stocks these numbers are

looking very very good in my view if you

look at the p&l account of this stock

you will notice that right now the stock

is sitting at alltime high revenues

alltime High profits if you look at the

last three years of sales growth 25% of

CGR which is very very healthy bounded

profit growth in the last 3 years is

around

365. but what really matters is the

future and if I speak about future

company wants to spend around 1,600 cres

of capex have a look at this FY 25

projected cash these numbers are in

rupees Millions so I have converted them

into cores and if you total these up it

will come out to be around 1,600 cres of

capex which is going to be more than

double of what they did in fi 24 and

this capex is going to go into building

new hospitals new infrastructure all of

that in in the long run is going to give

lot of revenue and profit visibility in

my view that's why this stock is a

long-term bet and sip investment in such

stocks makes a lot of sense in my view

not a stock recommendation again but

I've given you lot of analysis about

this particular stock but lastly I want

to also speak about one of the biggest

risk that hospital stocks are facing

right now that the Supreme Court has

been asking Indian government to ask

private hospitals to standardize their

Hospital charges due to which many

Hospital stocks including Naran rudala

has been under huge pressure in the last

2 to 3 months that's why in the last one

month the stock has given minus 5%

Returns the next big action that is

going to happen on Hospital stocks is

10th of September that is when the

Supreme Court will hear The Plea and

there may be some more updates coming

from that particular hearing so far if

you're liking this video request you to

hit the like button it takes us 8 to 10

hours of time to create one video so

appreciate your support and therefore

request you to let me know in the

comments a simple thank you it will

motivate me to come up with such content

for you at zero cost also if you're

looking to get in-depth analysis of

stocks mutual funds ETFs and various

other assets you can consider

subscribing to my YouTube member

Community because almost on daily basis

I post in-depth analysis of various

assets and you will find that hugely

beneficial for your investing journey

Third stock is from Auto sector Mahindra

and Mahindra limited have a look at my

screen and you will see that if I

invested 100 rupees per month in The

Last 5 Years my total 6,000 rupes of

investment would have become 20,000

rupes and this translates to xir of

around 52% now Mahindra Mahindra as all

of us know is is operating in multiple

segments like Auto and farm finance and

Technology even growth gem such as

Mahindra life spaces but the reason I

like this stock is because of their

leadership in the SUV segment some of

their SUVs for example SUV 700 have got

massive bookings within few hours have a

look at these numbers here yourself and

if I speak about the leadership in the

SUV segment you will see that they're

number one from a market share

perspective from a revenue perspective

but from a volume perspective they are

number two right now and more

importantly the reason I am very bullish

about the SUV segment is because SUVs

have been consuming lot of market share

from the passenger vehicle segment have

a look at this data I don't know whether

you can read this but in fy20 34% of

passenger vehicles were SUVs versus now

60% in FY 24 so it has gone up from 34%

to 60% in the last 4 years and that is

why companies like Mahindra and Mahindra

have been building capacity have a look

at my screen in fy20 they had 19k of

overall SUV capacity which now stands at

around 49k and the company projects it

to go to 70 2K by the FY 2026 by FY 23

company is going to launch 23 new models

into the auto and farm sector 27,000

crores of capex is likely to happen

between 25 and 2027 and this is why

precisely I say stocks like Mahindra and

Mahindra are future long-term bets

because of the capex injection that the

company plans to do last point on MRA

and MRA is the valuation if you look at

the valuation from a p ratio perspective

from a PB ratio perspective it is not

hugely overvalued almost trending at the

industry PE right now almost half of the

industry PB right now moving on to

Fourth stock which is from the power

sector a company called RC limited I've

spoken about RC limited a lot on my

channel and there are videos that you

will find but if I speak about the Sip

returns of the stock you will notice

that in the last 5 years if I did 100

rupees per month my 6,000 rupes would

have become 26,000 rupes and this

translates to xirr of around 64% now I'm

not going to Deep dive into RC because

I've done a lot of analysis already but

the main Tailwind that you need to know

about this stock is the investment that

is going to happen in the power sector

have a look at my screen and you will

see that Indian government wants to add

around

517 gigatt by 2031 and 2032 this is a

huge capacity that is going to get added

into the power sector and if I give you

the breakup of this you will notice that

Renewable Power sector is going to see

majority of that which is going to be

375 gaw followed by thermal which is

going to be around 87 gaw followed by

hydro which is going to be around 42 gaw

and lastly the nuclear capacity that is

going to be around 12 gaw now one option

is to find stocks which are operating

into renewable energy sector or thermal

or Hydro for example likes of sjvn nhpc

are very good Hydro players now each of

these companies will have their own risk

profiles their own return profiles and

so on and the second option is to find

companies that are going to fund these

companies that are going to operate in

the power sector and this is where RC

comes if you look at the outstanding

loan book of R you will notice that it

is standing at around 5 lakh crores and

they are financing a lot of companies

into the power sector so their loan book

is constructed by multiple companies

that are operating in power generation

sector power distribution renewable

hydro and a lot so no matter where a

company is operating whether it's

operating in hydro thermal or solar they

are going to need money they're going to

need capex investment and this is where

companies like RC are going to give them

financing and if you want to know more

about R I've created two videos on my

Channel please go ahead and watch them

I'm not going to discuss those details

here but but lastly I will quickly touch

upon the valuation of the company have a

look at the PE Ratio have a look at the

PB ratio well below industry level right

now because of the higher earnings that

the company has been enjoying in the

last 12 months moving on to stock number

five which is from the banking sector

the stock called SBI if I invested 100

rupes per month in The Last 5 Years my

6,000 rupes would have become around

13,000 as of now and this translates to

an xirr of around 32% now the reason I

really like SBI as a bank and is one of

my long-term bets is because of what you

see on my screen the sheer scale of SBI

is just mindboggling one out of three

Indians is served by SBI when it comes

to customer deposits they have 22%

market share when it comes to the loan

book they have around 19% of the Indian

market share but more importantly the

chart that you see will beautifully

summarize the history of SBI you will

notice that the quality of the loan book

across various segments such as the

corporate retail loan book or for that

matter loan book agre loan book if you

see the quality of this loan book it has

been improving year on year and you see

these blue lines here which shows you

the gross npas that the company has been

operating for example in the sites the

fy20 the GNP used to be 9.43% it has

come down to around 3.75% now and this

has been happening while the loan book

is continuously growing you see the

massive growth the SBI has seen in the

loan book in the last 2 to three years

so growing the loan book and at the same

time bringing the gross npas down is

what you expect from a bank and this is

what precisely SBI has been doing now

there's a lot of criticism about SBI

that 10 years ago they used to give

money to politicians and high-profile

people and used to then write off that

debt but my point is that I did not

invest in SBI at that time I'm

considering SBI right now when the

quality of the assets is at very very

good levels and the loan book is

continuously growing and the second

important point I want to make about SBI

is the valuation have a look at the PSU

Banks and the valuation and you will see

that SBI right now is trading at around

11p and the industry p is at 9 just

compare the scale of SBI versus like

Bank of Baroda Punjab National Bank do

you think the PB value of SBI should be

at around 1.80 in my view this valuation

is still very very attractive again not

a stock recommendation but I've given

you my view in terms of where I see SBI

among many other PSU Banks so in summary

in this video I've explained five stocks

but you will see the broad pattern I

have followed here is that all these

five stocks are non-cyclic in nature

number one number two is that these five

stocks are operating in sectors that

have tail WIS or their are evergreen

sector such as banking Point number

three is I have picked up these stocks

from five different sectors giving us a

very very good diversification number

four is I see visibility of revenues and

profitability in the next 5 to 7 years

these are the factors I typically tend

to look at while looking at stocks for

longterm in a sip mode but I would love

to know which are the stocks you are

considering for sip investment for a

long term please let me know in the

comments and lastly as I explained in my

video calculating the capital gain taxes

for sip investing might be complicated

so definitely do check out clear text

you will find the link in the

description I hope you enjoyed this

video I'll see you in my next video

Until then keep rocking for