Monopoly stocks are the shares of companies with a dominant market position. These companies hold a monopoly or near-monopoly in their sector. In the Indian context, this would mean companies with a substantial market share in their respective sectors. These companies face low competition due to factors involving government regulations, high entry barriers, or simply because they operate in a niche market.
Let's explore some of the characteristics of monopoly stocks in India.
Features of Monopoly Stocks
Some characteristics of monopoly or near-monopoly companies are:
- Monopoly stocks have pricing power which allows them to maintain higher profit margins.
- These stocks often generate consistent revenue even in economic downturns due to low competition.
- They receive favorable treatment from the government if they are in strategic sectors or are large employers.
In India, some sectors where monopoly-like situations occur include utilities, railways, defense, and certain manufacturing sectors with only one or a few major players.
Let's go through some of the best monopoly stocks in India.
Monopoly Stocks in India
Here are the top monopoly stocks in India:
| Stock | Ticker | Last Price | Technical Score | Growth Score |
|---|---|---|---|---|
|
Asian Paints Limited
|
ASIANPAINT
|
2357.2
|
50
|
38
|
|
Bharat Heavy Electricals Limited
|
BHEL
|
194.54
|
62
|
45
|
|
Bharat Petroleum Corporation Limited
|
BPCL
|
261.3
|
65
|
63
|
|
Coal India Limited
|
COALINDIA
|
375.75
|
44
|
38
|
|
Container Corporation of India Limited
|
CONCOR
|
736.95
|
50
|
63
|
|
Eicher Motors Limited
|
EICHERMOT
|
5144.5
|
34
|
68
|
|
Hindustan Aeronautics Limited
|
HAL
|
3672.45
|
62
|
78
|
|
Hindustan Zinc Limited
|
HINDZINC
|
450.95
|
31
|
83
|
|
Indian Railway Catering & Tourism Corporation Limited
|
IRCTC
|
749.5
|
34
|
53
|
|
ITC Limited
|
ITC
|
439.5
|
46
|
43
|
|
Larsen & Toubro Limited
|
LT
|
3448.8
|
62
|
68
|
|
Maruti Suzuki India Limited
|
MARUTI
|
11995.5
|
51
|
53
|
Coal India Limited (CIL)
Coal India is the largest coal-producing company in the world and controls the majority of India's coal production and nearly all of the mining rights. It produces around 80% of India's coal which indicates a strong monopolistic position.
Indian Railway Catering and Tourism Corporation (IRCTC)
IRCTC is the only authorized entity to provide catering services, online railway tickets, and packaged drinking water at railway stations and trains in India. Consumers use IRCTC for nearly all digital transactions related to Indian Railways which makes it a top monopoly stock in India.
Container Corporation of India (CONCOR)
CONCOR has an extensive network of more than 60 Inland Container Depots (ICDs) across India. It provides container transport, especially to the Indian railways which makes it a key player in India's multi-modal logistics sector.
ITC Limited
ITC's cigarette business has a monopolistic market position. It holds about 75-80% of the market share in India's cigarette industry which highlights its monopolistic stance.
Hindustan Zinc
Hindustan Zinc is the only integrated zinc producer in India and the world’s second-largest zinc-lead miner. The company has a market share of over 75% in India’s primary zinc industry.
Bharat Petroleum Corporation Limited (BPCL)
BPCL is one of the state-owned oil refining and marketing companies. It has a significant share of the petroleum products market in India. BPCL along with a few other government-controlled companies has a strong hold on the fuel market. There aren’t any big players in this sector which makes it a monopoly-like company.
Hindustan Aeronautics Limited (HAL)
HAL is the only Indian company with the capability to design and manufacture aircraft. It is the primary source of aircraft for the Indian Air Force and Indian Navy and perhaps the reason it is a monopoly stock in India.
Larsen & Toubro (L&T)
L&T has a near-monopoly in heavy engineering and construction especially in projects that require specialized expertise like metro rail systems and nuclear power plants. It is the only private-sector player in India capable of manufacturing nuclear reactors.
Bharat Heavy Electricals Limited (BHEL)
BHEL is one of the largest engineering and manufacturing enterprises in India and has a commanding position in the power equipment manufacturing sector. The company has supplied over 70% of India’s total power generation equipment giving it a monopoly stock status.
Maruti Suzuki India Limited (MARUTI)
Maruti Suzuki has been the leader in the passenger vehicle segment for decades. It holds around 50% market share in the Indian passenger vehicle market which is significantly higher than any of its competitors.
Asian Paints (ASIANPAINT)
Asian Paints is the largest paint company in India and has consistently held more than 50% market share in the decorative paint segment. The company’s vast dealership network and brand equity have made it a go-to for consumers and contractors.
Eicher Motors (EICHERMOT)
Eicher Motors enjoys a cult-like status through its Royal Enfield unit India's mid-segment motorcycle (250-750cc) Mardia. Royal Enfield bikes command more than 90% market share in their segment.
Final Words
These are just a few monopoly stocks in India. They have a dominant market position and enjoy significant market shares, pricing power, and government support. Investors find stability and long-term growth potential in monopoly stocks. However, even these stocks carry financial and regulatory risks. Therefore investors must perform thorough research before investing to evaluate a company and its standing in the market.