3 Monopoly Stocks to Consider in Your Portfolio

  • Stock Market Analysis

Retail investor’s participation has increased in recent times. India’s adverse real interest rate scenario has forced more and more retail investors to park their hard-earned money in equities and mutual funds. The pandemic and work from home catapulted the growth rate of retail participation in the stock market. However, before trading or investing in any equity share, investors should understand the business model and thoroughly analyze the company’s financials. We have selected three companies that have a near-monopoly in their business.

1. Indian Energy Exchange Ltd (NS: IIAN )

Indian Energy Exchange is the largest power exchange in India. It is an online platform where buyers and sellers of electricity come together for trade. It increases the accessibility and transparency of the power market and enhances the speed and efficiency of trade execution. The spot power trading on the exchange is significantly rising. The country’s power demand continues to scale as the pandemic recedes. The demand in June was 191.5 GW which increased to 200 GW in July—the highest in history. IEX is a direct beneficiary of this increase in demand. It has a dominant market share of over 98% of traded volume in electricity and a customer base of more than 6,300.

India Energy Exchange reported solid financials Q1FY2022. The net revenue at Rs 91.03 crore was up 34.1% compared to Rs 67.88 crore in the last fiscal for the same period. Net profit increased from Rs 42.1 crore to Rs 62.8 crore, translating to a year-on-year rise of 49.23%. Every year, the revenue increased to Rs 318 crore from Rs 257 crore in fiscal FY2021. Currently, the stock is trading at a 4.8% discount to a 52-week high of Rs 454.6.

2. Multi Commodity Exchange of India Ltd (NS: MCEI )

Multi Commodity Exchange of India is the country’s first commodity derivative exchange. It facilitates the online trading of commodity derivative transactions. Through an MCX trading account, one can trade in a wide range of commodities. MCX has a near-monopoly in the commodity exchange segment in India, with a market share of over 92%. With a stable monsoon forecast, trading in agriculture commodities will increase substantially, which is a good sign for the company’s future revenue growth.

In Q1FY2022, the average daily turnover of commodity futures contracts increased 21% to Rs 28,031 crore from Rs 23,129 crore for the same period in the last fiscal. The company posted a consolidated net profit of Rs 39.80 crore in Q1FY2022. What is noteworthy is the net profit CAGR which is 27.6% for the last three years.

3. Computer Age Management Services Lt (NS: COMU )

Computer Age Management Services is Chennai-based financial services and financial infrastructure provider company. It is India’s largest registrar and mutual fund transfer agent with over 70% market share. The business model of the company is highly asset-light. The mutual fund industry has witnessed decent growth in the last five years. Indian mutual fund industry’s assets under management (or AUM) have grown at 15.5% CAGR during the same period. CAMS mutual fund clients include four of the five most significant mutual funds. The entry barrier to this business is very high, and replacing the company is very difficult, giving CAMS a unique advantage.

CAMS’s profit after tax zoomed 40% to Rs 60 crore in Q4FY2021 from Rs 43.07 crore in the corresponding period in its previous fiscal. The operating revenue rose 14.3% to Rs 199.77 crore from Rs 174.8 crore. The company clocked a net profit CAGR of 12% in the last three years ended FY2021. The scrip is trading at a 12.4% discount to its 52-week high of Rs 3740.65. The stock delivered 133.8% in a year, 82.3% in six months, 17.31% in a month, and 0.34% in five days ending July 29.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100
  • Pankaj Kumar @Pankaj Kumar
    CDSL, MTAR,
    Like 5
    • Jash Jacob @Jash Jacob
      How is MTAR monopoly ? Joke
      Like 0
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • Saket Shrivastava @Saket Shrivastava
    Vry good info
    Like 3
  • Varun Koli @Varun Koli
    IRCTC is missing in this list
    Like 13
    • Deepam Jain @Deepam Jain
      Could you please mention the names, I am new to the market.
      Like 2
    • Dinesh Gawde @Dinesh Gawde
      1. IRCTC 2. HAL 3. MCX 4. Coal India 5. IEX 6. Hindustan Zinc 7. ITC 8. Zydus Wellness 9. Marico 10. Pidilite 11. Honda siel 12. Asahi India glass 13. Concord 14. NRB bearings 15. Exide 16. Time technoplast 17. Delta Corp 18. Naukri 19. Praj Industries 20. Maruti Suzuki 21. Asian Paints
      Like 6
    • Dinesh Gawde @Dinesh Gawde
      1. IRCTC 2. HAL 3. MCX 4. Coal India 5. IEX 6. Hindustan Zinc 7. ITC 8. Zydus Wellness 9. Marico 10. Pidilite 11. Honda siel 12. Asahi India glass 13. Concord 14. NRB bearings 15. Exide 16. Time technoplast 17. Delta Corp 18. Naukri 19. Praj Industries 20. Maruti Suzuki 21. Asian Paints
      Like 2
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • Brajesh Prajapati @Brajesh Prajapati
    Very good selection
    Like 2
  • Haresh Bhut @Haresh Bhut
    right
    Like 3
  • Nil 's @Nil 's
    Computer Age Management Services Lt (NS:COMU). How does it became the monopoly as there are others also in the market
    Like 10
    • Prabhu Manjunath @Prabhu Manjunath
      @Nil 's When you have 70% of the market share, like CAMS, it is called a Monopoly.You need not have 100% to be called a Monopoly.
      Like 20
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • Hareesh Padigar @Hareesh Padigar
    CAMS not monopoly, but largest market share, registry and transfer agent
    Like 3
    • Prabhu Manjunath @Prabhu Manjunath
      @Hareesh Padigar When you have 70% of the market share, like CAMS, it is called a Monopoly.You need not have 100% to be called a Monopoly.
      Like 4
    • Prabhu Manjunath @Prabhu Manjunath
      Sorry, reply to wrong thread
      Like 1
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or

      100
  • hussain rajvani @hussain rajvani
    this week taxtile share rise and fall down may be next week pic up with also metal indsutires
    Like 2
  • arvind sharma @arvind sharma
    Cdsl & irctc also monopoly good budiness should be in portfolio.
    Like 4
  • ashish raje @ashish raje
    irctc monopoly stock
    Like 6

Related Articles