4 Long Term Stocks to Add to Your 2026 Watchlist

'The stock market is a device for transferring money from the impatient to the patient.' - Warren Buffett

In the stock market, those who don't understand the fundamentals of the companies they're buying will probably end up losing their money.

So it should be no surprise to hear the old stock market saying that more than 90% of traders lose money in the long term.

But there is a simple way to beat the odds and beat the market too. To do that you need to become a long term investor.

So if you are ready to take the plunge as a long-term investor, the first question on our mind should be, what kind of stocks make good long-term investments.

Stocks represent ownership in a business. Thus, the best stocks for long term investing will be of those companies that do the best over the long term.

In this editorial, we will look at 4 fundamentally strong stocks for your 2026 watchlist. These are stocks, if purchased at reasonable valuations, can be held for the long term.

Read on...

#1 Tata Consultancy Services (TCS)

First on our list is Tata Consultancy Services. The company is the crown jewel of the Tata group.

Tata Consultancy Services (TCS) is one of the world's largest IT services companies, known for scale, execution and client trust. It's a preferred partner for enterprises modernising with cloud and AI.

In FY25, TCS revenue grew 6% to Rs 2.55 tn, with EBIT margin at 24.3%. Q1 FY26 saw revenue up 1.3% YoY but down 3.3% sequentially in constant currency, hit by the BSNL contract ramp-down.

The company's margins at 24.5% were softer than expected due to excess capacity and higher variable pay, though cost controls and FX offered some support.

The management believes AI will expand IT budgets, creating a net revenue-positive effect. The BFSI and tech segments are resilient, while retail, auto, and healthcare are soft.

Moreover, the management stated that margins can only move back to the 26-28% band once growth climbs to high single digits.

TCS Financials (FY21-25)

Source: Equitymaster

Indian IT companies have invested considerable time and money to get the entire workforce AI ready so as to be prepared for this disruption. TCS has led the charge on this front.

The company's future revenue growth will depend a lot on how it fulfils the demand for AI-related services in the face of intense competition.

To know more about the company, check out its financial factsheet and latest quarterly results.

#2 HDFC Bank

HDFC Bank, with about 10% market share in the Indian banking sector, it's one of the most respected banks in the country. The company has merged with HDFC Ltd creating an entity with global potential.

It's India's largest private sector bank by assets, the second largest bank in India and a market leader in almost every asset category.

The bank relies on a model of wide franchise and low-cost deposit base. This ensures good pricing power and sustainability of above average NIMs (net interest margins).

As a result, it has always reported consistently good earnings. This has in turn led to high return ratios compared to its peers.

The management is conservative with its margins and provisioning policies. Therefore, it comes as no surprise that HDFC Bank's net NPAs have never crossed 0.5% of its loans.

The bank is also a leader in digital initiatives, taking continuous measure to enhance customer relations and add value to the customers.

For FY25, the bank's net NPA's stood at 0.4% of total advances. Its gross non-performing assets (NPA) ratio also improved stood at 1.33% as against 1.4% in December 2024.

Its net interest income and net profit have grown at a healthy CAGR of 12.1% and 16.2% respectively in the last five years, and the net interest margin averaged at 3.8%.

HDFC Bank Financials (FY21-25)

Source: Equitymaster

For FY26, the management expects to grow at market rate with a focus on gaining market share in deposits and advances.

While the short term looks stable for the bank, the long term looks very positive. HDFC Bank has been investing in various startups to fill gaps and gain expertise in many niche services. This will help the bank stay ahead of the curve in the fintech race.

To know more about the bank, check out its factsheet and latest quarterly results.

#3 Hindustan Unilever Ltd (HUL)

Hindustan Unilever Ltd (HUL) is a subsidiary of Unilever, one of the world's leading suppliers of food, home care, personal care, and refreshment products.

The company has 50-plus brands under its roof spanning 15 categories - foods, beverages, cleaning agents, personal care products, water purifiers, and other fast-moving consumer goods.

The company's products are present in 9 out of 10 Indian households. Forbes has rated HUL as the most innovative companies in India and #8 globally. It's a zero debt company with rock solid long-term fundamentals.

In FY25, revenue was Rs 607 billion (bn), up 2%. It was almost entirely volume-led. Pricing barely moved. The company chose affordability over short-term margins.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) was down slightly for the year at 23.5%. The pressure came from commodity inflation in palm oil, tea, and coffee that wasn't fully priced through and from deliberate price cuts to defend market share.

Net profit was up 5%, helped by interest income, a prior-period tax adjustment, and the one-off gain from the Pureit sale.

HUL Financials (FY21-25)

Source: Equitymaster

In the long term, the company is well placed to dominate the FMCG market in India despite the rising competition. A combination of strong brands, good cost control, a high quality management, will sure long term success.

HUL is focusing on brand superiority, category creation, social-first marketing, channels of the future and the "Winning in Many Indias" framework.

To know more about HUL, check out its fact sheet and quarterly results.

#4 Larsen & Toubro (L&T)

Larsen & Toubro (L&T) is an Indian company founded by two Danish refugees - Henning Holck-Larsen and Soren Kristian Toubro. If you talk engineering and infra stocks in India, L&T is the first name which comes to mind.

The company has a diverse presence in engineering, construction, manufacturing, technology, and services. It's one of the top 5 construction companies in India. The company is also engaged in defence manufacturing, IT, green energy, and financial services.

The company has a strong global footprint with manufacturing facilities in 8 countries and offices across more than 30 countries.

L&T's financial statements make for pleasant reading. Sales and profits have seen a steady increase. The company recovered quickly from the pandemic and is now setting growth records.

The company's fundamentals are strong. It has a moderate debt-equity ratio and a steadily growing return on equity. Its cash flows are strong.

In FY25, the company clocked a record order inflow of Rs 3.6 tn, up 18% YoY. Its total order book grew 22% to Rs 5.8 tn, with nearly half of the orders coming from international markets.

L&T Financials (FY21-25)

Source: Equitymaster

Big orders and many sectoral tailwinds have ensured L&T's long term prospects are very good. With a Rs 19 tn pipeline in sight for FY26, L&T is well-positioned for continued growth.

The company is a powerhouse in India's industrial and infrastructure landscape. It's now transforming into a technology-driven, service-oriented conglomerate with a strong commitment to sustainability and global expansion.

To know more, check out L&T fact sheet and latest quarterly results.

Conclusion

We have often heard stories on how investing in the stock market has delivered high returns. Investors are fascinated by the multibagger returns that fundamentally strong stocks keep on delivering.

But the most important aspect of investing is often ignored, i.e. the time horizon. History is proof that some of the largest gains have come from investing in long-term stocks.

The key to finding the best long-term stocks is to look at all the aspects of the company. You need to look at the growth opportunities for both revenues and profits, quality of the management, financial performance, track record of dividends, and much more.

Consider all these points holistically. The best stocks for the long term are the ones that have a tick mark against all of them.

This list of 4 stocks for your 2026 watchlist have the potential to deliver the kind of returns expected by long term investors.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Happy investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...