Most shares in India often trade on the Indian stock exchanges at a share price below Rs. 1,000 per share. However, few stocks trade at a price range of thousands of rupees. This makes it difficult for small retail investors to buy such stocks that trade at a very high price range.
So, are expensive stocks indicative of a company’s valuation? Not necessarily. The share price of a company may not entirely be linked to the company’s valuation and could be an outcome of the demand and supply situation of the stock. Liquid stocks could have lower prices whereas illiquid stocks may command a higher valuation. A company with a share price of Rs. 2,000, for example, could be undervalued as compared to other peer companies.
Here, we will discuss the most expensive stocks in India, mainly focusing on the companies with the highest stock price in India. We have shortlisted the top 10 expensive stocks based on the current share price quoted on the stock exchanges as of January 2023.
MRF (Rs. 88,447)
Market Capitalisation = Rs. 37,344 Cr
Madras Rubber Factory (MRF) is a well-known tyre manufacturer involved in the business of manufacturing a wide range of tyres. The company specializes in car & bike tyres, trucks/bus tyres, etc.
MRF currently has the highest share price in India among all the companies listed on BSE/NSE. The all-time high share price of MRF is Rs. 98,599. The stock is currently trading at a PE of 65.74.
The stock’s price has risen significantly from being traded at a price of only Rs. 10,000 in late 2012. The reason why MRF stock’s price is so high is that the company has never split its share and it has the backing of strong fundamentals.
Page Industries (Rs. 41,936)
Market Capitalisation = Rs. 46,758 Cr
Page Industries is an Indian manufacturer and distributor of innerwear, loungewear, and socks. The company’s popular brand is Jockey, and it also has an exclusive license for the distribution of Speedo International Ltd.’s products. The company’s stock is a multi-bagger, especially considering its listing price of only Rs. 600 back in 2007 v/s today at nearly Rs. 42k.
The company’s share price is a reflection of its strong fundamentals and the backing of two very strong brands. The stock’s PE currently stands at 63.68.
Honeywell Automation (Rs. 41,237)
Market Capitalisation = Rs. 36,090 Cr
Honeywell Automation India Ltd, a part of Honeywell group, USA is a leader in integrated automation and software solutions. It helps in making aircraft more fuel-efficient and less time-consuming. Apart from aircraft, Honeywell assists in the establishment of plants, buildings, and supply chains for businesses to become smarter and achieve sustainable growth through innovative process solutions.
The company’s stock has provided substantial returns at +10,000% in 22 years. It is currently trading at a PE of 94.40. The reason for a high stock price is that the company has not split its stocks and is considered a high-quality stock due to strong fundamentals.
Shree Cements (Rs. 23,529)
Market Capitalisation = Rs. 84,626 Cr
Shree Cement is an Indian cement manufacturer with headquarters in Kolkata and plants across the country. This Indian cement manufacturer was founded in Ajmer district, Rajasthan, in 1979. It is the biggest cement manufacturer in the northern part of India. Some of its well-known brands include Shree Jung Rodhak, Bangur Cement, Rockstrong Cement.
The company has stronger future prospects with the government’s push towards infrastructure development. Shree cements is currently trading at a PE of 52.82.
3M India (Rs. 23,257)
Market Capitalisation = Rs. 24,226 Cr
3M India Ltd is the subsidiary of 3M Company USA in India with the parent having a 75% equity stake in the company. It has a diversified portfolio including products such as dental cement, health care, cleaning, etc. Apart from these, it also manufactures adhesives, paint protection films, window films, and signs. Some of the popular brands from 3M include, Scotch Brite, Scotch Tapes, Post Its, Scotchgard glue, etc.
Foreign institutional investors, as well as mutual funds, have a stake in this company, which is a reflection of its strength. This stock currently has a PE of 65.81.
Abbott India (Rs. 21,501)
Market Capitalisation = Rs. 45,552 Cr
Headquartered in Mumbai, Abbott India Limited, is an American pharma corporation. This publicly listed company has a subsidiary named Abbott Laboratories. The company offers high-quality trusted medicines across various therapeutic categories such as women’s health, gastroenterology, cardiology, metabolic disorders, and primary care.
It is currently trading at a PE of 51.66. The stock has given investors returns in the range of more than 179% in the past 5 years.
Nestle India (Rs. 19,515)
Market Capitalisation = Rs. 1,88,604 Cr
Nestle India is a market leader in the food processing sector in India. It offers a wide variety of products, some of the popular ones being, Maggi, Kit-Kat, Nescafe, Every day, etc. It is the Indian subsidiary of Nestlé, a Swiss multinational company. The company started its Indian market penetration back in the 1900s, but set up a factory in India only in 1961.
The stock has strong fundamentals as was reflected by its strength during the Covid-19 pandemic.
This stock is currently trading at a PE of 87.11.
Bosch (Rs. 17,179)
Market Capitalisation = Rs. 50,640 Cr
Bosch is a part of the German multinational company Robert Bosch (or simply Bosch), headquartered in Germany. Bosch is a market leader in the automobile ancillaries industry. Some of its businesses include manufacturing of diesel and gasoline fuel injection systems, car multimedia systems, auto electricals, motors, accessories, etc.
It is currently trading at a PE of 39.14.
P&G (Rs. 14,285)
Market Capitalisation = Rs. 46,332 Cr
P&G is a very renowned and well established personal care product company in India. Most of the company’s products are an integral part of most Indian households. Some of them include Whisper, Gillette, Ariel, Oral-B, Olay, etc. The company manufactures and distributes these products and is one of India’s fastest growing consumer goods companies. The company has also forayed into the ayurvedic product segment recently.
It is currently trading at a PE of 90.52.
The Yamuna Syndicate Ltd. (Rs. 12,884)
Market Capitalisation = Rs. 396 Cr
The Yamuna Syndicate Limited is involved in trading & marketing of tractors, industrial lubes, automotive, batteries, electrical, pesticides & fertilizers, sugar, etc. The company also runs petrol pumps in the country. It was incorporated back in 1954 and is currently based in Yamuna Nagar, Haryana, India.
This stock is currently trading at a PE of 6.11.
Why you should invest in expensive stocks?
Expensive stocks, also referred to as high-priced or premium stocks, are a popular investment option for many investors. These stocks are often associated with companies that have strong financials, including high revenue and earnings growth, and dominate their respective industries. This market dominance, combined with the potential for growth, can make expensive stocks an attractive investment. Some of these companies also offer attractive dividend payouts, providing a steady stream of income for investors. However, it is important to exercise caution when investing in expensive stocks as they may be overvalued and vulnerable to market corrections. Thorough research into the company and its financials is crucial to determine if the high price is justified before making an investment decision.
Points to remember before investing in most expensive stocks
Before investing in expensive stocks, it is important to conduct thorough research on the company and its industry. This includes evaluating the company’s financials, market position, management, and competition. Additionally, consider important valuation metrics such as price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-book (P/B) ratio to determine if the stock is overvalued. Analyze the company’s earnings growth and assess the risks involved, such as market corrections and changes in the company’s financials or industry. Due diligence and careful consideration are crucial to make informed investment decisions.
Many investors may find these highly-priced stocks unaffordable to buy, while many seasoned investors stretch their finances to invest in them. Investing in mutual funds may prove to be an easier way of indirectly owning these kinds of expensive stocks even with lower investments like Rs. 500.
The above stocks have been selected based on the share price trends and is not exhaustive nor is it a recommendation list. The decision to invest in a stock entirely depends on the investor and also the company information. Therefore, investors must consider investing only after a detailed evaluation of the stock.
There is no difference between buying more of relatively cheaper stocks and less of a relatively expensive stock. After investing in a stock, there could be a percentage increase (or decrease) in the share price. This results in gains (or losses) and is a fundamental process of investing.
High-priced stocks could be less volatile when compared to low priced ones since investors mostly prefer to remain invested in these for the long term.
To choose a stock for investment, an investor should know the fundamental aspects like nature of the business, operations, balance sheet, etc. Before buying a share, investors should look at the company’s financial position by reading various research reports of the companies.
There is no minimum amount required to begin investing in the stock market. The amount to be invested depends on the stock price and number of shares to be bought.
To begin investing in stocks, investors need to reach out to an individual broker or an online broking platform. After setting up a trading and demat account along with completing the KYC formalities, one can begin investing in stocks.