Markets have been experiencing selling pressure since the start of this week as the NIFTY50 declined 460 points or more than 2.8% and was trading at 15,671 points as of 11:20 IST. Considering 1 year’s performance, the index levels remain the same. While taking the year-to-date performance, the benchmark 50 stock basket has declined 11%.
There are also rumours of an impending bear market with market experts having a wary outlook due to rising Covid cases, interest rate hikes, price inflation and a weakening Rupee.
Amidst all this, it may be a wise choice for the investor to consider the inclusion of defensive stocks in the portfolio. Defensive stocks are companies that provide consistent dividends and stable earnings regardless of the overall market state. They are usually large-cap stocks with diversified product portfolios in mature industries.
Here are 4 trending defensive stocks:
ITC
Tobacco major with a diversified presence across industries such as FMCG, hotels, software, packaging, paperboards, speciality papers and agribusiness has been a knight in shining armour for Indian investors this year. It has surged more than 20% this year and presently offers a dividend yield of 4.35%.
Motilal Oswal, a domestic brokerage and research firm has updated ITC shares’ rating to buy. It has given a target price of ₹ 335 per share with an upside of 28% as per the trading price of ₹ 263 per share as of 11:20 IST.
Nestle India
The stock of the Indian subsidiary of the Swiss multinational FMCG company Nestle has generated a CAGR of 20% over the last five years. Its dividend yield stands at 1.19%.
Nestle India Chairman and Managing Director Suresh Narayanan said recently that rural markets have been experiencing a shift as consumers are also looking for aspiration brands there. Presently, the rural markets account for some 20-25% of the company’s revenue. The management sees this share snowballing in the months ahead.
Reliance Industries
Mukesh Ambani led well-diversified Reliance Industries and has given a return of 289% over the last 5 years. It was also one of the few companies that shed their losses fastest during the bloodbath of the Covid-19-led crash in 2020.
For the financial year ended March 2022, the oil to telecom conglomerate became the first Indian company to cross the $ 100 billion mark in revenues with good growth in net profit and revenues across all segments.
JP Morgan India recently upgraded RIL’s stock from ‘neutral’ to ‘overweight’ signalling a 22% upside for a target price of ₹ 3,170 per share over the next year.
Avenue Supermarts
Billionaire investor and retailer Radhakishan Damani-led Avenue Supermarts or popularly known by its brand name DMart has delivered a staggering return of 357% over the last five years.
Its e-commerce foray is expected to fuel the next phase of growth for the investors of the company.
ICICI Direct in its research report valued ASL at 5.5x of its estimated FY24 enterprise value/sales resulting in a price target of ₹ 4,530 and a rating upgrade from ‘hold’ to ‘buy’. This is a 23% upside from its price of ₹ 3,688 as of 11:20 IST.
Written By – Vikalp Mishra
Disclaimer
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
