Three top-quality Indian stocks to buy for long-term profit growth

The Aberdeen New India Investment Trust seeks to deliver long-term outperformance by investing in exceptional Indian stocks. Our bottom-up approach targets quality businesses benefiting from India’s structural growth. We focus on five key traits: resilient business models, strong finances, supportive industries, capable management teams, and robust practices in the field of environmental and social governance (ESG).

Stock selection drives returns, so we remain agnostic with respect to sectors and benchmarks. If a company fails our quality threshold, we don’t own it – even if it’s a market leader. We also avoid stocks priced beyond their earnings potential. The result is a focused, high-conviction, all-cap portfolio of India’s best ideas. And because quality typically holds up better in periods of volatility, the fund can offer a defensive edge in downturns.

Three Indian stocks to consider for your portfolio

Bharti Airtel (Mumbai: BHARTIARTL) is one of India’s leading integrated telecom providers, offering mobile, fixed-line, broadband and enterprise services. Known for its strong balance sheet, disciplined execution and cost control, Airtel is riding the wave of smartphone adoption and the rollout of 5G-mobile networks.

With more than 280 million smartphone data users, Airtel’s subscriber base continues to expand, driving higher average revenue per user and increasing market share. India leads the world in data generation, and Airtel is well positioned to capture this rising demand.

The country has the world’s second-largest online population and the most active market for large-language model (LLM) users, while offering some of the lowest data costs globally: an estimated £1.50 per month for between 20 and 30 gigabytes GB. In a sector that has consolidated from 12 players to three, Airtel stands out as the most commercially savvy and financially disciplined operator.

Mahindra & Mahindra (Mumbai: M&M) is a powerhouse in agriculture. From SUVs to tractors, it dominates India’s vehicle sector: it is the country’s top tractor maker with a 43% market share. Agriculture may not drive GDP growth, but as the sector is one of India’s largest employers, demand for farm machinery remains strong. Given low levels of mechanisation, we believe tractor sales could grow by an annual 10% over the next few years, providing cash flow for Mahindra’s push into premium vehicles and electric vehicles (EVs) – locally made and competitively priced.

This dual strength allows Mahindra to profit from India’s structural growth. The stock has delivered solid gains this year despite market headwinds, reflecting its excellence in innovation and execution. Mahindra is primed for sustainable growth and margin expansion, making it a compelling long-term opportunity.

Aegis Logistics (Mumbai: AEGISLOG) is India’s leading integrated oil, gas, and chemical logistics player. It has launched a two-phase $5billion capital-expenditure plan to drive long-term growth.

Aegis boasts a first-mover advantage at key ports and is expanding capacity. Fundamentals are solid too: a net cash position since 2018, a strong balance sheet, and management that consistently delivers. Meanwhile, India’s rising demand for liquefied petroleum gas (LPG), the shift away from fossil fuels, and domestic supply lagging consumption have all pushed natural-gas prices higher, benefiting Aegis.

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