11 must have stocks

Axis Capital puts together a list of must have stocks in the midst of an economic slowdown

In the backdrop of present market conditions there is a dire need to reshuffle your portfolio and new strategies have gained prominence.

Axis Capital has prepared a list of 11 must have stocks, which should help deal with some of these issues. "As we have seen over both fearful and greedy market cycles, there have always been some sectors and large investible stocks which have outperformed. Thus, in a tough year, we pick 11 must-have Nifty stocks," says the report.

More than names, the importance of their positioning in portfolio is worth knowing.

HDFC Banks is the first stock, which could act like a goal-keeper given its consistency of outperforming across the market cycles. Apart from a goalkeeper, one also need defenders. In this list come companies like TCS, HCL Tech, Lupin, Sun Pharma that are mainly exporters who have been growing aggressively even in this global slowdown.

Next are the mid-field players, who not only defend from opponents in the centre of the game but also help in striking goals. In this, RIL, Tata Motors, Maruti, Bajaj Auto are the key candidates, because they are beneficiaries of expansion plans, interest cut and consumption.

Finally, we have the strikers. They are few but they can make a real difference in the overall game. Jaipraksh Associates and Tata Steel are the key contenders of this position given that they have a high-risk high-return profile. There, the upside is huge, but they come with a downside risk.

The process is not over. The team selector says that these (stocks/companies) are chosen for their expected earnings growth being above the Sensex average EPS growth of 18% per annum, not being expensive relative to their growth rate, and leadership position which enables them to wring the most from a difficult environment.