A Better Way to Handle Volatility: 4 Large-Cap Stocks Backed by Strong Parents with Upside Potential Up to 39%
Volatile markets often lead to knee-jerk reactions, causing even quality stocks to trade at attractive valuations. However, this market turbulence presents an opportunity to own companies with sound fundamentals, robust business models, and strong promoters known for long-term value creation.
This list highlights four large-cap stocks from different sectors that not only have solid fundamentals but also enjoy the advantage of being part of well-established industrial groups. With projected upside potentials of up to 39%, these stocks stand out as stable investments for navigating market volatility.
Why Focus on Companies with Strong Parents?
When uncertainty looms over the markets, companies backed by proven promoters tend to weather storms better. Their advantages include:
- Operational Excellence: Years of experience and diversified business portfolios help mitigate risks.
- Financial Discipline: Strong parentage often ensures access to capital and prudent financial management.
- Track Record: Promoters with a history of delivering shareholder returns boost investor confidence.
4 Large-Cap Stocks to Watch
1. Bajaj Housing Finance Limited
- Sector: Housing Finance
- Why It’s a Buy: A part of the Bajaj Group, Bajaj Housing Finance is a leading non-deposit-taking housing finance company with a diversified loan portfolio, including home loans, loans against property, and developer financing.
- Growth Catalysts: Rising urbanization and government support for affordable housing drive demand for housing finance. Additionally, Bajaj’s strong distribution network and digital lending platforms enhance its reach.
- Upside Potential: 34%
2. JSW Infrastructure Limited
- Sector: Infrastructure and Logistics
- Why It’s a Buy: As part of the JSW Group, JSW Infrastructure benefits from the group’s expertise in steel, power, and cement. The company operates ports and provides marine services, storage, and cargo handling solutions.
- Growth Catalysts: India’s focus on enhancing port infrastructure and multimodal logistics networks positions JSW Infrastructure for steady growth. Its diverse services across dry bulk, liquid bulk, and gases add revenue resilience.
- Upside Potential: 32%
3. Tata Technologies Limited
- Sector: Engineering Services and Digital Solutions
- Why It’s a Buy: Backed by the Tata Group, this engineering services company excels in product lifecycle management (PLM) and digital manufacturing solutions for global OEMs.
- Growth Catalysts: Tata Technologies is capitalizing on the surge in electric vehicle (EV) design and manufacturing projects, along with digital transformation initiatives across industries.
- Upside Potential: 39%
4. Bharti Hexacom Limited
- Sector: Telecommunications
- Why It’s a Buy: A subsidiary of Bharti Airtel, Bharti Hexacom focuses on mobile and fixed-line broadband services in Northeast India and Rajasthan. Its robust infrastructure supports digital penetration in underserved areas.
- Growth Catalysts: The rollout of 5G services and increasing demand for broadband in semi-urban and rural areas are driving growth. Bharti Hexacom’s digital services, such as Airtel Payments Bank and Xstream, provide additional revenue streams.
- Upside Potential: 36%
Key Metrics for Selection
- Strong Financials: Companies with at least a 12% return on equity (ROE) and a 12% net profit margin were shortlisted.
- Institutional Backing: Each company has institutional ownership of at least 1%, indicating confidence from large investors.
- Analyst Ratings: Stocks were selected based on “Buy,” “Strong Buy,” or “Hold” ratings from the Institutional Brokers Estimate System (I/B/E/S).
Why Invest Now?
- Opportunity in Volatility: Corrections often create opportunities to buy quality stocks at discounted prices.
- Sectoral Diversity: This list spans housing finance, infrastructure, engineering, and telecom—industries with long-term growth potential.
- Long-Term Focus: These stocks are ideal for investors willing to stay invested for 3–5 years, as they are backed by strong promoters and operate in growing industries.
Final Thoughts
Volatility can be unnerving, but it also offers an opportunity to own businesses with proven track records and robust growth potential. The four stocks listed here, supported by strong parentage, are well-positioned to deliver sustainable returns in the long run. For investors seeking stability amid uncertainty, these stocks merit consideration.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a certified financial advisor before making investment decisions.