Saturday, May 30, 2009

Best Indian Stocks – Defensive Investors

Last week, I posted a list of stocks for the investors who tend to follow Aggressive approach and have also mentioned about other risk profiles. In this article, I will list some of the good stocks for Defensive Investors.

Who are Defensive Investors?

Conventional definition defines defensive investor as the one who does not take undue risk to make money. But in stock market, no one is spared of risk and defensive investment therefore does not mean not taking risk at all. It just means taking affordable risks by following a conservative approach in stock selection to derive optimal returns. In many cases, defensive investors match the returns of aggressive investors and they do not lag behind significantly. They also invest in some growth stocks but their primary investment strategy revolves around “Conservative” stocks.


Branding stocks as growth stocks or conservative stocks heavily depends on perception. In fact some stocks might have given more than average returns but still would be branded as a defensive bet just because investors perceive it that way. Hence, considering all this I have come up with a list of stocks that can be considered by investors who follow conservative approach.

Banking / Finance

HDFC
State Bank of India
Bank of Baroda
Bank of India
Punjab National Bank
Federal Bank

Pharmaceuticals

Sun Pharmaceuticals
IPCA Labs
Dr Reddys Laboratories
Pfizer
Cipla
Cadila Healthcare
JB Chemicals and Pharmaceuticals / Piramal Healthcare

Software / Services

Tata Consultancy Services
Infosys Technologies
Educomp Solutions

Shipping / Offshore

Great Eastern Shipping
Shipping Corporation of India Limited
Great Offshore


FMCG

ITC Limited
Hindustan Unilever Limited
United Spirits
Asian Paints
Marico Limited
Colgate Palmolive
Britannia Industries Limited / Nestle India
Titan Industries

Power

NTPC
PTC
Power Grid Corporation
Tata Power Company
CESC Limited
Rural Electrification Corporation
Neyveli Lignite Corporation


Agriculture / Fertilizer / Chemicals

Monsanto India Limited
Bayer Crop science Limited
BASF India Limited
Gujarat State Fertilizer Corporation
Coromandal Fertilizers
Tata Chemicals

Diversified / Cement

Grasim Industries
Kesoram Industries Limited
Nava Bharath Ventures
Ambuja Cements
ACC Limited


Engineering / Electronics / Telecom

BHEL
ABB Limited
BEML
Bharath Electronics
Bharath Forge
Hawkins Cookers Limited
Blue Star
Crompton Greaves
Century Textiles and Industries
Siemens

Bharti Airtel

Tata Communications

Oil / Gas / Steel

Reliance Industries Limited
ONGC
Indian Oil Corporation
HPCL
BPCL
GAIL

Tata Steel
Indian Hume Pipe Company

Others

Dredging Corporation
Container Corporation
Bilcare
Blue Dart
Bannari Amman Sugars
Shree Renuka Sugars
MRF
Mahindra & Mahindra
Asian Hotels
Power Finance Corporation

I request the readers to share their list of stocks in the comments section.

Kumaran Seenivasan

www.stockanalysisonline.com

4 comments:

jamesvaikom May 31, 2009 at 3:36 AM  

Sir,
Like other defensive stocks educomp has not fallen in current bear market. But I doubt whether it is good for conservative investors. Huge intra day volatility will keep conservative investors away from this stock. Though they are the market leaders their margins will affect if big players enter into the market.

DARK KNIGHT ABHAY June 2, 2009 at 10:30 AM  

HI GR8 POST...


BUT WHY HAD U TAKEN UNITED SPIRITS AND TATA STEEL IN DEFENSIVE....DONT U THINK THAY ARE VOLITAILE....

Kumaran June 2, 2009 at 6:43 PM  

Hi Abhay,

Thanks for your comments. As you pointed I have included few stocks which are volatile. But they all have strong presence in the respective fields and are widely considered to be defensive bets. I personally believe that these stocks will reach new highs over the long term no matter how much drops over the short term. Hope I have answered to your satisfaction.

Anonymous,  June 5, 2009 at 5:46 AM  

hi kumaran

your list is really good in the category u mentioned,great job.
what r the chances of dredging in this category

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