If you want to avoid the risk of losing your investment you should be looking for companies that are more likely to maintain and grow their value regardless of market conditions. To do this successfully, there are certain fundamentals that you should look for, which include but are not limited to: financial health, liquidity and reliable earnings capacity. Below are a few options I am looking at: Vardhman Textiles, SJVN and Hero MotoCorp.
Vardhman Textiles Limited (BSE:502986)
Vardhman Textiles Limited, together with its subsidiaries, operates as an integrated textile manufacturing company in India. Founded in 1973, and currently lead by Shri Oswal, the company size now stands at 21,206 people and with the market cap of INR ₹75.39B, it falls under the large-cap category.
502986 is well-postioned financially , due to the high ratio of current assets to long-term liabilities, which is currently at 2.76x. Its operating cash flow position also reached a solid 70.45% of total borrowings, providing greater comfort for investors that the company is well-grounded if equities become out of favour. because it’s a mid-cap stock priced at ₹75.39B and a PE of 12.75x, there is room for enough active participants in the market for the stock and there could still be space for value in the price, helping curtail the rate of decline in share price during periods of mass selling. To add to this, 502986 has recorded a healthy 12.04% annual growth in earnings over the past 5 years and a 8.09% ROA in the past year (beating the industry by 1.81%), which shows 502986 has maintained attractive fundamentals for a defensive portfolio. Dig deeper into Vardhman Textiles here.
SJVN Limited (NSEI:SJVN)
SJVN Limited, together with its subsidiaries, engages in the generation and sale of power in India, Nepal, and Bhutan. Founded in 1988, and currently run by Nand Sharma, the company now has 1,492 employees and with the stock’s market cap sitting at INR ₹144.16B, it comes under the large-cap category.
SJVN has a robust financial position , due to the high ratio of current assets to long-term liabilities, which is currently at 1.74x. On top of this, cash flow from operations is 30% of total debt, a strong sign, giving equity investors greater confidence in the safety of their investment. With SJVN’s market value of ₹144.16B and a PE ratio of 9.34x, there are active participants in the market for the stock and there could still be room for value in the price, which reduces risk of firm price declines and allows you to sell without a large loss due to unattractive spreads. With that has also been annualised earnings growth of 9.41% for the last 5 years and an even greater 9.72% last year, which demonstrates SJVN contains many of the valuable traits in a defensive stock. Dig deeper into SJVN here.
Hero MotoCorp Limited (BSE:500182)
Hero MotoCorp Limited manufactures and sells motorized two-wheelers, spare parts, and components in India. Founded in 1984, and currently headed by CEO Pawan Munjal, the company size now stands at 5,842 people and with the market cap of INR ₹716.36B, it falls under the large-cap stocks category.
500182 has a robust financial position as current assets surpass total liabilities by 10.06x. On top of this, cash flow from operations is well-above total debt by 2x, a strong sign, which provides a safe buffer for servicing debt if difficult conditions prevail in the market. With Hero MotoCorp’s market value of ₹716.36B and a PE of 19.98x, greater liquidity is offered at a good price relative to the market, which reduces risk of firm price declines and allows you to sell without a large loss due to unattractive spreads. Seeing that earnings grew 14.08% in the prior year, exceeding the 5-year average annual growth rate of 8.72%, and leading to an ROE of 34.16%, 500182 is a fundamentally strong defensive company. Interested in Hero MotoCorp? Find out more here.