Best Long-Term Stocks in India (2025)

What are Long-Term Stocks in India?

Long term stocks are equity investments held for more than 1 year and qualify for long term capital gains (LTCG) tax. Many investors, however, consider a horizon of 5 years or more to benefit from compounding, steady growth and companies with strong fundamentals, consistent earnings and sustainable business models.

How to Invest in Long-Term Stocks?

1. Open a demat/trading/stockbroker account. You can open a demat account with a smallcase!
2. Conduct thorough research into the top long-term investment stocks in India that are of interest to you. Investors can use tools like the Tickertape Stocks Screener to do this. The screener offers 200+ built-in filters to choose from, and investors can choose the parameters to research and generate long-term stock lists. 
3. Place a ‘Buy’ Order on the top long-term stocks of your choosing.

Overview of 5 Best Long-Term Investment Stocks in India 2025

1. ITC Ltd: ITC Ltd is a leading Indian conglomerate with a diverse portfolio in the FMCG sector, particularly in tobacco, personal care, and packaged foods. The company’s range of popular brands, such as Aashirvaad and Sunfeast, has established it as a key player in India’s FMCG sector.
2. Divi’s Laboratories Ltd: Divi’s Laboratories Ltd is a leading Indian pharmaceutical company. It specialises in the production of active pharmaceutical ingredients (APIs) and intermediates.
3. Hindustan Aeronautics Ltd: Hindustan Aeronautics Ltd (HAL) operates in India’s aerospace and defence sectors. It is actively involved in designing, manufacturing and maintaining aircraft, helicopters and systems. 
4. Kotak Mahindra Bank Ltd: Kotak Mahindra Bank Ltd is one of India’s top private sector banks. It works in the space of financial products like retail banking, corporate banking, wealth management and insurance. The bank is a major player in India’s private banking space, and it has made its way to the list of Indian blue-chip stocks.
5. Bharat Electronics Ltd: Bharat Electronics Ltd (BEL) is a leading public sector electronics company, specialising in defence electronics. BEL develops advanced radar systems, communication equipment and missile systems.

Benefits of Investing in Long-term Stocks in India

• Compounding of Returns: Holding quality businesses over time may allow profits and dividends to be reinvested, gradually building wealth through compounding effects.
• Reduced Impact of Volatility: Daily market swings often lose significance over years, as stock performance aligns more closely with the underlying company’s fundamentals.
• Dividend Support: Established companies often reward shareholders with dividends, providing a steady income stream along with price appreciation.
• Link to Economic Growth: Strong businesses tend to mirror India’s expanding economy, benefiting from rising consumption, urbanisation, and sectoral growth.
• Lower Costs: Fewer transactions may reduce brokerage and fees, allowing more capital to stay invested for compounding.

Risks of Investing in Long-Term Stocks in India

• Company-Specific Issues: Mismanagement, rising debt, or flawed strategies may erode shareholder value over the years.
• Economic Cycles: Inflation, recessions, or interest rate changes may weigh down returns, even for fundamentally sound firms.
• Regulatory Shifts: Sudden changes in government policies, taxation, or compliance norms may create hurdles for companies.
• Sectoral Slowdowns: A thriving industry today may lose relevance tomorrow due to technological disruption or changing consumer behaviour.
• Liquidity Challenges: While large-cap stocks trade actively, certain mid and small caps may become difficult to exit in the long run.
• Behavioural Bias: Holding onto weak businesses in the hope of recovery may often lead to long-term underperformance.

Factors to Consider Before Investing in Long-Term Stocks

• Financial Strength: Revenue growth, profit margins, and manageable debt levels often reveal whether a business can sustain itself over decades, making it a potential pick among long-term stocks.
• Leadership Quality: Ethical, transparent, and visionary management teams often steer companies successfully through changing times, increasing their chances of being recognised as high-return stocks.
• Industry Prospects: Sectors aligned with India’s economic growth, such as banking, IT, and consumer goods, tend to demonstrate strong long-term potential and frequently include some of the best stocks for sustained holdings.
• Valuations: Buying even a strong company at an inflated price may affect returns; investors frequently rely on metrics like P/E and P/B ratios when selecting 5-year CAGR stocks.
• Dividend Record: Companies with a history of paying dividends may reflect financial stability and a shareholder-first approach, making them attractive as stocks for long-term investment.
• Personal Goals: Matching stock selection with one’s time horizon and risk appetite may help keep expectations realistic, forming the basis of strong long-term stock investment strategies.