Tag Archives: stocks

Investing in the Indian stock market in 2011

8 Feb

The stock market has again crashed, not because people don’t see a future in India, not because of an fundamental indicators weakening but because if liquidity and partial recovery in global markets. From a peak of 22,000 the market has crashed to below 18,000 which represents a close to 20% market correction.

The Indian economy continues to be strong, with close to 9% growth in 2010 and at least 7 to 8% forecasted in 2011.

India continues to be under invested in infrastructure, power generation, housing, automotive industry and per capita consumption. With a growing middle class and the second largest population in the world, India continues to enjoy high growth rates and strong demand in most market segments.

Based on these facts, I would invest in a diverse portfolio which consists of:

Auto / auto components:

Bharat Forge; Mahindra and Mahindra

Banking:

HDFC; HDFC Bank, ICICI Bank

Engineering/Capital Goods:

Cummins; Larsen and Toubro, Elgi Equipments

FMCG/Hotels:

ITC; Hindustan Unilever, Procter and Gamble; Indian Hotels.

IT:

Infosys, TCS, KPIT Cummins, Persistant Systems

Pharmaceuticals:

Cipla Pfizer, Wockhardt, Dr. Reddy’s

I strongly believe investing in this type of portfolio in the current market condition could produce returns of over 20% in a 12 to 18 month horizon.

 

Disclaimer: All opinions, advice are my own and are not endorsed by any investing body, my employers, etc. I may at any time hold positions in these stocks, which I would divest or reinvest in at the right opportunity. If you are not experienced at investing please consult a professional investment advisor. Past success in investing is no guarantee of future results, so please follow after considering these risks.