10 Monopoly Stocks in India for Investing - Top 10 Indian Companies with Monopoly | Value Investing By BSAT Group

Today, we identify one of Warren Buffets’ favourite categories i.e. monopolies, but in the Indian markets. Monopoly refers to the category of companies who due to their major competitive advantage are market leaders in their industry.

These companies are very difficult to compete with and maintain the highest market share for their products and services. They are market leaders in their industry with zero or very little competition. 

Let’s get started..............

• Top 10 Indian Companies with Monopoly
• Following are the list of monopolies in the Indian markets i.e. the companies that enjoy the status of being a monopoly: (Company + Market Share)

1. IRCTC – 100%

• IRCTC is a state-owned entity and the only player in the Indian markets that operate in the Industry. The company was founded in the year 1845. Rail networks are generally considered as ‘ Natural Monopolies’. This is because only one train can use the rack at a given time.

• The company has a 100% monopoly in this industry, however, earlier this year government announced that it will be opening the sector for other players.

2. HAL – 100%

• The Hindustan Aeronautics India Limited represents the Indian aviation industry and plays a very important role in the Indian defence sector. The company was set up in 1940 by Walchand Hirachand and the Government of Mysore to manufacture aircraft in India.

• Today the company is state-owned and is associated with designing, fabricating, and assembling aircraft, jet engines, helicopters, and their spare parts.

3. Nestle – Cerelac – 96.5%

• Cerelac is the brand of instant cereal made by Nestle for infants 6 months and older as a supplement for breast milk. Nestle is one of the world's leading nutrition, health, and wellness companies set up in 1866 in Switzerland.

• It has spent more than a century in the Indian markets over the years has become an undisputed market leader in the baby food segment. It has an undisputed market share of 96.5% despite functioning in an open to all industry.

4. Coal India – 82%

• Coal India Limited is a coal mining and refining company. It is also the world’s largest coal-producing company in the world. It is owned by the Union government of India and is managed by the Ministry of Coal. The company contributes up to 82% of the total coal production in India.

• This year, the government announced that the coal sector would now be opening up for commercial mining, possibly ending its monopoly in the future.

5. Hindustan zinc – 78%

• Hindustan Zinc Ltd. is the world’s second-largest zinc-lead miner and holds a 78% market share in India’s primary zinc industry. The company was incorporated as Metal Corporation of India in 1966 as a Public sector undertaking.

• Today the company is a subsidiary of Vedanta Limited which owns a 64.9% stake in the Company while the Government of India holds a 29.5% minority stake.

6. ITC - 77%

• Although the company has diversified into a conglomerate in the last century. Despite this, its cigarette business still holds 77% a strong position in the Indian markets.

• Apart from a market experience, another advantage that the brand has is its supply chain and distribution network which spans across the country.

7. Marico – Oil Products – 73%

• Marico is one of the well-known FMCG companies in India but the majority of its success lies in its two brands ‘Saffola’ and ‘Parachute’. The company has come a long way in the segment despite being around for only 3 decades.

• Safola which competes in the premium refined edible oil segment has maintained its market leadership with a share of 73%. ‘Parachute’ on the other hand holds a market share of 59%. These also form up to 90% of their income.

8. Pidilite – 70%

• Pidilite’s product range includes adhesives and sealants (Fevicol and M-seal), construction and paint chemicals (Dr Fixit), automotive chemicals, industrial adhesives, and industrial & textile resins. It is the leader in the adhesive and industrial chemical market with a market share of 70%.

9. CONCOR – 68.52%

• Container Corporation of India Limited (CONCOR) is a Public Sector Undertaking managed by the Indian Ministry of Railways. The company was set up in 1966 with the aim of containerizing cargo transport in the country.

• Concor’s core businesses include that cargo carrier; terminal operator, warehouse operator & MMLP operation. They hold a market share in domestic business of 68.52% in 2019-20.

10. BHEL

• BHEL is India’s largest engineering and manufacturing enterprise in the energy and infrastructure sectors and is also a leading power equipment manufacturer globally.

• Its services and products range from power-thermal, hydro, gas. Nuclear and solar PV, transmission, etc. It also holds the single largest market share in the emission control equipment business in India

Closing Thoughts.......

• We discussed the list of Indian Companies with monopolies in their Industry. For a value investor, a monopoly or big Moat stock is similar to a gold mine.
• But investors must watch out as these stocks just like other Blue Chip companies are generally overvalued and can lead to lower returns or losses.

That’s all for today. Have a great day and Happy investing.