Blue chip companies are in which who can stood stand still in their economic positions even in a recession. Blue chips are nationally recognized, well-established and financially sound companies. A blue-chip stock is stock in a company that well-known and highly respected with a national reputation for quality, reliability and the ability to operate profitably in any volatile economic state. Blue chips generally sell high-quality, widely accepted products and services. As far as internationally concern Blue Chip companies Coca-Cola, General Electricals, 3M, McDonald's Corp, Wal-Mart Stores Inc., Walt Disney Co, Microsoft Corp., General Motors Corp., Hewlett-Packard Co., Boeing Co., Kraft Foods Inc., Volkswagen, Siemens, Nokia are providing solid growth to portfolios. When it comes to Indian top blue chip companies are Reliance Industries Ltd., Infosys Technologies Ltd. and ICICI Bank Ltd. As for Sri Lanka, as at now, John Keells Holdings, DFCC, Hatton National Bank, Dialog Axiata, Commercial Bank of Ceylon and Sampath Bank are excellent counters for Blue chip stocks.
Characteristics of a Blue Chip Company
- Financial strength, A record of profit growth and reputation for Skilled Management;
- Established, well-known company considered to be stable and mature with a reputation for providing high quality goods and services
- Leader in its market niche.
- In addition, companies are analyzed for their record of earnings over a relatively long period of time and future potential. Dividend payments, while not required, are considered.
Blue Chip companies of Sri Lanka
The best way to explain this point is to take couple of examples from list of Blue Chip companies in Sri Lanka. As far as I see John Keels Holdings and Aitken Spence PLC can be considered as 2 of Blue chip companies functioning in Sri Lanka. Aitken Spence PLC is an associate of Distilleries Company of Sri Lanka PLC (DCSL). DCSL is a company which stretches the scope in to vast business areas like
- Beverages - Periceyl (Pvt) Ltd., Local spirits and exclusive agent for world renowned foreign liquor brands of the prestigious Group Pernod Ricard, France such as Royal Salute, Chivas Regal, The Glenlivet, Ballantines whiskies, Martell Cognac, Absolut Vodka, Beefeater Gin, Havana Club Rum, Jacob’s Creek, Long Mountain, Montana wines and G.H. Mumm and Perrier Jouet champagnes.
- Tele communication - Lanka Bell
- Plantations - Balangoda Plantations PLC and Madulsima Plantations PLC
- Diversified – Melsta Logistics (Pvt) Ltd, Taxpro Industries, Browns Beach Hotel…etc.
Here the some companies DCSL own are Associates and Subsidiaries. As for an example Browns Beach Hotel which is also associated to Aitken Spence Hotels Chain became part of the DCSL Group in 2011. Above its mentioned Aitken Spence PLC is an associate of DCSL.
Now let’s turn to John Keels Holdings (JKH), is the largest listed conglomerate on the Colombo Stock Exchange. It’s obvious that JKH have spread the wings to its full scale in each and every corner in numerous sectors.
- Airline & Aviation – Partners of Jet Airways, American Airlines, Gulf Air for Passenger services and Cargo Services
- City Hotels & Restaurants – Cinnamon Grand, The London Grill, Tea Lounge…etc.
- Financial Services - Union Assurance, John Keells Stock Brokers, John Keells Capital
- Foods & Beverages - Keells Food Products PLC , Keels, Krest, Elephant House
- Holidays & Tours
- IT Services & BPO
- Integrated Logistics
- Plantations & Commodities
- Ports & Shipping - South Asia Gateway Terminals (Pvt) Ltd. , Lanka Marine Services (Pvt) Ltd
- Property & Real Estate - The Monarch, The Emperor, On Three 20 and Retail Mall- Crescat Boulevard
- Resorts & Spa - Cinnamon Lodge Habarana, Chaaya Village Habarana, Chaaya Citadel Kandy, Chaaya Wild Yala, Chaaya Island Dhonveli, Chaaya Reef Ellaidhoo
- Retail & Loyalty - Keells Super, Nexus
P.S.
It's just I heard the term “Blue Chip Companies” few days ago in my CIMA class so sought about finding few facts about it. Then thought to share it with others as I didn't want to lavish the facts I learnt from my memory and writing always been one way of catharsis my leisure time. Please do correct me in any case I’m wrong. All your opinions, suggestions, accuses and alleges are highly appreciated. Cheers!!!
As in the report of epic research these are the top blue chips to invest- Tata Consultancy Services, Reliance Industries, ONGC, ITC HDFC, Coal India, Sun Pharma, Infosys, SBI, ICICI Bank. These blue chips can give real profits.
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