Warren Buffett Would Love These 3 Nifty50 Companies for Long-Term Wealth

India’s benchmark indices, Nifty50 and Sensex started the day in green after a muted week. Despite the rising Iran-Israel tensions, the indices have recovered with Sensex up over 800 points while Nifty50 is up over 200 points, reclaiming 25,000. The stock market was subdued for the last three sessions and this bounce was expected. India’s overall economic outlook is bright and positive. If Warren Buffett was building a portfolio of Nifty50 stocks, here are three companies he’d load up on for long-term wealth. 

State Bank of India

The State Bank of India is a public sector bank and is the largest bank in the country with over 20% of market share by assets. SBI stock has seen a gradual upside but has generated impressive returns over the years. Exchanging hands for Rs.797, the stock is down 5% in 12 months but has soared over 300% in five years. 

SBI has very strong financials and since it is a public sector bank, it becomes a fairly secure investment. While the company saw a 10% year-over-year dip in net profit for the fourth quarter, it saw an 8.83% YOY rise in the operating profit. The company announced a dividend of Rs.15.90 per share after the fourth-quarter results. 

Over the long term, the State Bank of India will continue to see steady growth, driven by an improved economy. It has a diversified business model and the ability to maintain steady profits, making it a stable investment for investors. Its dividend yield of 2% isn’t bad either. 

Jefferies has a buy rating for the stock and sees a 21% upside with an average price target of Rs.960. The analyst expects 12% credit growth and 10% deposit growth, driven by liquidity buffers. 

Larsen & Toubro

While Larsen & Toubro remains one of the top losses of Nifty50, this dip is a golden buying opportunity. Up over 300% in five years, the stock is exchanging hands for Rs. 3,649, and its all-time returns are higher than 19,000%.

The company is a multi-national giant with a presence across construction, industrial technology, engineering, defense, and financial services. Long-term investors often overlook the market volatility and hold on to the stock for years. This has generated impressive returns for them.

It reported a consolidated net profit of Rs. 5,497 crore, up 25% year over year and the revenue from operations jumped 11% to Rs. 74,392 crore. The company won orders worth Rs. 356,631 crore, up 18% year-over-year and the International orders came in at Rs.207,478 crore. Larsen & Toubro is a dividend stock that Warren Buffett would love. It announced a dividend of Rs. 34 per share at the end of the March quarter. 

Despite the recent challenges, Larsen & Toubro remains a strong business with a low debt-to-equity ratio and enough projects in the pipeline to bounce back. The stock is trading at a discount and the dip is a chance to buy. 

The stock has a long-term positive outlook with analysts projecting an average price target of Rs.3,950. 

Infosys Limited

A multinational technology company, Infosys Limited offers outsourcing and business consulting services. Infosys stock is down 14% year-to-date and 15% in 6 months. However, it has soared over 100% in five years. 

If you’re looking to load up on tech stocks, Infosys is the one to own. Morgan Stanley recently picked Infosys with an equal weight rating. The brokerage added that stock prices have rallied since the lows in April, giving investors a chance to rebalance their portfolios. 

Infosys stock should see a strong rebound once the company manages to close two of its announced acquisitions, which will help lift the full-year revenue growth guidance. The company has announced the acquisition of The Missing Link, a cybersecurity services provider, and has just completed the acquisition of MRE Consulting, a consulting company.

In the fourth quarter, the company saw an 11.8% slump in profit while the revenue was up 7.92%. The management issued a revenue growth projection between 0-3% and once these two acquisitions close, this number could see an improvement. It declared a final dividend of Rs. 22 per equity share. 

Infosys has a dividend yield of 2.66% and is a prominent IT company with massive growth potential. Any dip in the stock is a chance to buy. 

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