12 Stocks You Can Count On and INVEST

INVESTING IN A DOWNT URN Rising rates, a slowing economy and global economic gloom — surely not the best of times to bet on stocks. But it's the stocks that you pick in these difficult times that can become your long-term winners. The ET Intelligence Group lists out a few companies that pack a punch... and promise Axis Bank  Axis Bank's loan book grew a robust 45% compared with an industry average of 21% between 2006 and 2011 due to its strong branch network. A strong loan book along with healthy fee income have boosted profit at a CAGR of almost 50% in 2007-11. Non-performing assets have been more or less stable for Axis. At the current P/E multiple of 12, the stock is reasonably valued. Bharti Airtel  Recent tariff hikes have put the telecom sector back on the investor's radar. And, of all players, Bharti Airtel looks to be the safest bet, considering its global presence. Apart from India, it is present in Sri Lanka, Bangladesh and 16 African nations. This insulates it from onemarket dependence. It is among the few players with more than 90% active user base, which should help new service launches. BHEL  The company's stock trades at a P/E of less than 14 – the lowest since March 2005. The current price makes the stock an attractive buy, given its strong balance sheet and sound financials. It has been logging a double-digit revenue growth, consistently since the past five years. However, order inflows and growing competition from Chinese manufacturers are some near-term concerns. HDFC Bank  It is the country's most premium bank in terms of valuations. Its strong financial and robust business model justifies the valuation. It is the most consistent performer in the sector in terms of profit growth and credit offtake. Its margin has stayed above 4%, which is one of the highest in the industry along with the lowest ratio of bad loans. So, despite a P/E multiple of 25, it is a safe bet for long-term investors. ITC  An established cigarette major, 60% of ITC's revenues are contributed by other businesses such as FMCG, hotels, paper, stationery and agriculture. Nevertheless, ITC relies heavily on the cigarette business as it generates 80% of net profit. Consistent growth, strong cash flows and high dividend payout of more than 45% make the company a safe haven for investors in these uncertain times. ONGC  The state-owned oil and gas major remains a safe bet in the current turbulent times, thanks to its robust balance sheet, inexpensive valuations and attractive dividend yield despite the compulsory subsidy sharing that's eroding profits. In the past one month, it has hardly fallen although the Sensex has lost 13.7%. If global oil prices fall due to another recession, ONGC stands to benefit as realisations will go up. Oil India  Oil India is the smaller peer of ONGC, which endows it with twin benefits — it enjoys the same traits as its larger peer when it comes to being defensive, but its smaller size means it can grow faster. It has steadily improved output in the past few quarters and is looking for overseas acquisitions. Being restricted to Northeast India was a major drawback, but it is expanding in other parts of India and overseas. Powergrid  The company is insulated from fuel availability and power off-take risks unlike other power companies. It also earns a fixed return on its investments. Its performance in the past one year has been impressive and earnings grew 23%. It will benefit from the huge demand for transmission capacity. Despite a 30% correction in the Power Index, the stock remains stable and makes for a less risky investment. Sun Pharma  Though the stock hit its record high a month ago, Sun Pharma remains the safest bet in the pharma sector. A strong balance sheet, robust cash flows and consistent performance make the company highly investment-worthy. It commands leadership in six therapeutic areas and boasts of one of the highest operating margins in the industry. Its prospects in the US market have improved after the Taro takeover. Sterlite Industries  UK-based Vedanta's Indian arm has outperformed its peers in terms of sales and earnings growth and is still available at a lower P/E multiple. Profits rose 63% on higher aluminium prices and better copper treatment and refining margins. While softening of base metal prices due to sluggish demand is a concern, earnings growth from its silver business remains strong. Thermax  It has shown a marked improvement in FY11 performance compared with the past two years. Revenue growth has outpaced peers in Q1 FY12. The current order book gives it a revenue visibility for more than a year but fresh order inflows are needed for revenue to grow at the same pace. It has corrected by 18% in the past one month and trades at P/E of 14, less than half its average P/E of past 5 years. United Phosphorous  At a price-to-earnings multiple (P/E) of 10.2, UPL's valuation has fallen to its lowest in at least five years. Nevertheless, it continues to grow through acquisitions and is already the fifth largest agrochemical company in the world. Although the world is facing threats of economic recession, UPL's customer industry — agriculture — is fairly immune to it, which makes the stock a safe long-term bet.