Most large-cap stocks, even outside the Nifty, have underperformed smallcaps and midcaps.
The Nifty’s 1-year return is -8.13%, while the Nifty Midcap 100 and the Nifty Smallcap 100 have both delivered positive returns over the last year.
One big factor in the underperformance has been FII selling. Against this backdrop, we look at some of the best large-cap stocks for the long term.
To determine the best, we compared valuations versus peers, along with a proven track record and strong brand equity.
#1 LIC of India
First on the list is LIC. Life Insurance Corporation of India is India’s largest life insurer and remains the market leader, with strong brand equity.
LIC of India remains one of the lowest-priced life insurance stocks when compared to peers.
| Company | CMP (Rs) | M Cap (Rs m) | PE | PB |
| LIFE INSURANCE CORPORATION | 399.7 | 50,56,203 | 9.4 | 2.6 |
| SBI LIFE INSURANCE | 1,764.0 | 17,69,858 | 68.0 | 8.8 |
| HDFC LIFE INSURANCE | 558.4 | 12,13,065 | 61.4 | 6.2 |
| ICICI PRUDENTIAL LIFE INSURANCE | 494.5 | 7,17,628 | 42.4 | 5.2 |
Source: Equitymaster
The table shows the stock remains undervalued compared to its listed peers in terms of both PB and PE. LIC of India also offers a dividend yield of 2.6%, which is way better than others. The insurance corporation also reported a good set of numbers for the quarter ending 30 June 2026.
For the quarter ended 30 June 26, total premium income — total individual premium income, including renewals — was Rs 754.16 bn, compared to Rs 714.74 bn for the quarter ended 30 June 25, a year-on-year growth of 5.52%.
The net profits and VNB cheered investors. Profit after tax for the quarter ended 30 June 26 was Rs 134.92 bn, up from Rs 109.86 bn for the quarter ended 30 June 25, a year-on-year growth of 22.81%.
The net VNB margin improved by 750 basis points on a year-on-year basis, from 15.4% to 22.9%.
The company has also been constantly evolving with products. Since April 2026, two new products have been launched, namely LIC’s New Jeevan Sathi single premium and LIC’s New Jeevan Sathi limited premium, and one product has been withdrawn, namely LIC’s Nav Jeevan Shree single premium, which was a close-ended plan.
#2 HDFC Bank
Next on our list is the stock of HDFC Bank.
HDFC Bank is one of India’s largest private-sector banks, with businesses spanning retail banking, home loans, corporate banking, commercial and rural banking, payments and treasury.
It was established in 1994 and commenced operations in 1995. The merger with HDFC Ltd was completed in 2023, significantly expanding its mortgage business and creating a broader financial-services group.
One reason for the stock’s recent underperformance is that the merger’s benefits are taking longer to materialise.
HDFC Bank inherited HDFC Ltd’s long-duration mortgage assets along with its funding structure. Immediately after the merger, the bank’s credit-to-deposit ratio was high, meaning it needed to grow deposits rapidly rather than aggressively expand loans.
Management subsequently slowed the loan growth to bring this ratio down.
However, over the last few quarters, the management of the bank has sounded more optimistic, with the first quarter seeing good deposit growth.
| Company | CMP (Rs) | M Cap (Rs m) | PE | PB |
| HDFC BANK | 719.9 | 1,10,97,712 | 13.4 | 1.8 |
| ICICI BANK | 1,344.6 | 96,51,794 | 16.2 | 2.6 |
| KOTAK MAHINDRA BANK | 416.6 | 41,43,696 | 20.5 | 2.2 |
| AXIS BANK | 1,244.2 | 38,73,810 | 13.9 | 1.7 |
Source: Equitymaster
HDFC Bank trades at the lowest PE compared with other private-sector banking peers. The PB has fallen below 2, which is significantly lower than what the bank has received historically.
On accomplishments in Q1, management said deposit growth is better than historical Q1 trends. The bank is gaining market share both incrementally and on a stock basis.
Productivity at the branch continues to rise, and management says that the bank is likely to realize the benefits of the investments it has made over the last five to six years. On the advances front, the bank is on the verge of pressing the pedal.
#3 Canara Bank
Next on the list is Canara Bank.
Canara Bank is one of India’s large public-sector banks, established in 1906. It became significantly larger after the merger of Syndicate Bank with Canara Bank in April 2020, which expanded its balance sheet, branch network, and geographic reach.
The stock is trading at relatively cheaper valuations when compared to peers like Bank of Baroda, Punjab National Bank and Indian Bank.
PE ratio of Canara Bank vs Peers
| Canara Bank | 5.9 |
| PNB | 6.5 |
| Bank of Baroda | 6.8 |
| Indian Bank | 9.0 |
| Union Bank | 6.8 |
Canara Bank stock also offers a dividend yield of 3.4%.
Financially, the bank performed well in Q1FY27. Net interest income grew by 13.39% YoY. Net profit also rose 2.19% YoY to Rs 48.56 bn.
During the quarter, it increased its provision coverage ratio to around 95%. Asset quality improved, with gross NPA falling 112 basis points YoY to 1.57%.
According to management, performance was better than the guidance the bank had given. They cite business growth, where guidance was 10-11%, now at 14.37%. The advances growth guidance was 10-12%, while the bank grew by 17.97%. The deposit growth guidance was 9-10%, but it’s at 11.63%.
Conclusion
Large-cap stocks can provide exposure to established businesses with strong market positions, liquidity and relatively greater financial resilience.
However, large-cap status does not eliminate market, valuation, regulatory or business-specific risks.
Investors should consider earnings growth, valuations, balance-sheet strength and future prospects before taking a long-term position.
Past performance is not a guarantee of future returns, and the suitability of any stock will depend on an investor’s objectives, risk appetite and investment horizon.
Happy investing.
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