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3 Indian Stocks for portfolio stability in 2017 and beyond

Published : August 25, 2017

3 Indian Stocks for portfolio stability in 2017 and beyond

Indian stocks corrected by the end of 2016 due to demonetarization. But for the whole of 2016, most of the stocks gave returns higher on month on month basis. Demonetization of the 86% of currency in circulation was claimed to be the largest drive in Indian history. This is to curb black money and gave good buying opportunity in value stocks. The first quarter of 2017 has ended and the following stocks from large cap category are picked for long term investors to have a closer look for their long term portfolio.

Stock ideas abound patient long term investors

Indian stocks market corrected decently post demonetization during the end of 2016 and quality stocks were available cheap. 3 large-cap Indian stocks are hand picked that are expected to give stability to the portfolio in 2017. HDFC Ltd, Hindustan Unilever Ltd, and Maruti Suzuki are the 3 Indian stocks

What are large-cap Indian stocks?

Large-caps are companies with market valuations of rupees one lac crore or more. They have earned their large valuations due to their time-tested business models that withstand fluctuations in the economy and stock market.

Due to this reason, large-cap stocks are the first choice for the income investors. The volatility and current uncertainty in the market are likely to persist at least during the first half of 2017, the large-cap stocks may be among stabilizing force in your overall portfolio.

So the following are the top three large-cap Indian stocks idea for 2017 that is expected to provide stability to your portfolio.

The Large-Cap finance company – HDFC Ltd

(M-Cap -19.62 Lac Cr)

3-LargeCap-Indian-Stocks-for-Portfolio-Stability-in-2017 - HDFC Bank

  1. Almost 2% down from 2015 closing, HDFC Ltd, the Housing Development Finance Corporation Limited is a holding company and is engaged in financing activities. As per the latest data, about 88.54% of the company is held by institutions. Remaining 8.72% by the general public and 2.74% by other investors.
  2. Demonetization will help most of the unorganized player to turn into organized sectorial players with the help of such financing intermediaries like HDFC Ltd, in turn helping their business to grow. And this is positive of HDFC Ltd share prices.
  3. According to Reuters, currently 10 analysts are recommending the buy in HDFC Ltd., 15 is saying it will outperform, 5 had recommended holding the stocks to their clients while one had said that the stock price will underperform and one had recommended selling the stock.
  4. Reuters’ analyst consensus estimate suggests for 13% and 11% of sales growth in FY-17 and FY-18 respectively. Likewise same estimates projects for 14% and 11% growth in earning per share (EPS) respectively during the same period.
  5. The product of the company includes –
    1. Loans –It provides loans to Indians for purchase or construction of residential houses, commercial real estate and certain other purposes.
    2. Insurance –HDFC Ltd. Covers life insurance, general insurance motor, health, travel, home and personal accident in the retail division, and to corporates customized products, such as property, marine, aviation and liability insurance
    3. Asset Management and Others –It provides portfolio management, mutual fund, property investment management, project management, investment consultancy and property related services.
  6. As on date, it has a total strength of 2196 employees with the distribution network of 4,520 branches and 12,000 automated teller machines in 2,590 locations.
  7. HDFC Developers Ltd., HDFC Investments Ltd., HDFC Trustee Co. Ltd., and HDFC Asset Management Co. Ltd. are its subsidiaries.

Price movement expectation of HDFC Ltd

  • On charts, the HDFC Ltd share price is trading around 1760 levels after testing all time high of 1799 levels recently. For 2017, it will get strong support in between 1250 levels and 1070 levels. Below it HDFC Ltd support is at 800 levels.
  • With the continuation of trading above 1250 support, the possibility to make new all-time high in 2017 will become stronger and its likelihood is high.

The Large Cap FMCG player – Hindustan Unilever Ltd (HUL)

(M-Cap – 17.34 Lac Cr)

3-LargeCap-Indian-Stocks-for-Portfolio-Stability-in-2017 - Hindustan Unilever ltd

  1. HUL, the Hindustan Unilever Ltd is the second in the list of large cap Indian stocks, share price also did not perform in 2016 after a decade of good yearly performance and is currently trading over 5% down from the 2015 year ending closing. HUL promoters 67.21% of issued shares. Another 18.97% by institutions, 12.05% by the general public and 1.77% by another type of investors.
  2. The way of spending is going to change drastically for Indian consumers due to demonetization and will have limited impact on consumption behavior of individuals and hence on HUL share prices.
  3. According to Reuters, currently 4 analysts are recommending the buy in HUL shares, 15 is saying it will outperform. Another 13 had recommended holding the stocks to their clients. While 5 had said that the stock price will underperform and 2 had recommended selling the stock.
  4. Reuters’ analyst consensus estimate suggests for 6.1% and 5.8% of sales growth in FY-17 and FY-18 respectively. Likewise same estimates projects for 9.0% and 10.1% growth in earning per share (EPS) respectively during the same period.
  5. HUL is a prominent player in fast-moving consumer goods business and has the total strength of 11,000. It operates in the home and personal care, foods, and refreshments segments.
    1. Soaps and Detergents –Includes soaps, detergent bars, detergent powders, detergent liquids and scourers.
    2. Personal Products –Includes products of oral care, skin care (excluding soaps), hair care, deodorants, talcum powder, color cosmetics and salon services.
    3. Beverages –Includes tea and coffee,
    4. Packaged Foods –Includes branded staples (atta, salt, and bread), culinary products (tomato-based products, fruit-based products, and soups) and frozen desserts.
    5. Others –Includes exports, chemicals, water business and infant care products, the export sale of marine and leather products.

Price movement expectation of HUL

  • On charts, it has a strong support at 730 levels and the possibility of any correction below it is quite low in 2017. However, below it the HUL support is around 550 levels.
  • In late 2016, it made an all-time high of 958 levels which break in 2017. Currently, it is trading around 1180 levels. And the possibility for new higher-high is quite high with sustaining above 770 levels.

The Large Cap Indian auto player – Maruti Suzuki India Ltd

(M-Cap – 15.41 Lac Cr)

3-LargeCap-Indian-Stocks-for-Portfolio-Stability-in-2017 - Maruti Suzuki

  1. The Maruti Suzuki Ltd is the third share in this list of large cap Indian stocks. It is also continuously growing year after year, the shareholder’s wealth. So far in 2016, it has grown to 12% from 2015 yearly closing. Which considering the holdings in the company, the promoters hold 56.21% of issued shares. Remaining 37.29% is held by institutions, 2.44% by the general public and 4.06% by another type of investors. As on date, total employees strength is of 13.259.
  2. According to Reuters, currently 15 analysts are recommending the buy in Maruti shares, 21 is saying it will outperform, 12 had recommended holding the stocks to their clients while one had said that the stock price will underperform and one had recommended selling the stock.
  3. Reuters’ analyst consensus estimate suggests for 16.7% and 17.5% of sales growth in FY-17 and FY-18 respectively. Likewise same estimates projects for 43.9% and 15.5% growth in earning per share (EPS) respectively during the same period.
  4. Maruti Suzuki India Limited is a holding company. It is in the business of manufacture, purchase, and sale of motor vehicles, components and spare parts (automobiles). Maruti also facilitates pre-owned car sales, fleet management, and car financing. It derives its revenue from India and overseas.
    1. Product Portfolio –Includes Alto 800, Alto K10, Wagon R, Celerio, Ritz, Swift, DZire, Ertiga, Omni, Eeco, Gypsy, and Ciaz.
    2. Service Offerings – Include Maruti Finance, True Value, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Suzuki Auto Card and Maruti Driving School
    3. Plants –It has five plants, located in Palam Gurgaon Road, Gurgaon, Haryana, and at Manesar

Price movement expectation of Maruti

  • Maruti Suzuki chart hints for strong support at 4990 levels. And any break of this levels will lead prices to correct for 4770 levels or below.
  • Recently Maruti share price has made all time high of 7917 levels. Further, it is likely that sustaining above 5990 levels will result in higher-high formation in rest of 2017.

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