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At a time when markets are volatile, it’s probably difficult for investors to think short term. While long term prospects are good for the Indian economy, there are many stocks which can still provide comfortable returns in these tough market conditions. Here are some stock picks which can be part of your portfolio.


NTPC


CMP: Rs 180
Nuclear deal gained more attention in the recent times, mainly due to politics around it. Congress managed to continue in power and argued that would solve the energy issue. But BJP opposed it on the grounds that nuclear deal addresses only six percent of the nation's energy needs. However, brokers and large investors are accumulating NTPC for various reasons. NTPC is one of the biggest power generators in India. It is almost close to buying a coal mine and certain to take another on long-term lease in Indonesia. It has floated a special purpose vehicle (SPV), International Coal Ventures Limited, to buy out mines or to take measures to ensure long-term coal supplies. NTPC has set aside three billion dollars for the overseas acquisitions. Being a stable stock, it provides decent long-term returns to the risk-averse investors. It is unlikely to come down from the current market price of Rs 179 though the stock lost some of its ground due to weak results. Investors with medium risk appetite can accumulate the stock with a horizon of 1-2 years.


Gujarat NRE Coke


CMP: Rs 107
Gujarat NRE Coke announced 2.2 times increase in the first quarter net, bonus and dividend on July 18. After the announcement, its stock price went up by over 10%. On July 3, the stock dipped by over 13% to Rs 108, which was 40% of its 52 week high level. This can be interpreted as activity by some informed circles in this strong stock. There is an ever increasing demand for coke and the company is expanding its capacity in wind energy. Domestic and overseas steel companies are driving the demand for metallurgical coke. This demand will continue at least for a couple of years from now. Furthermore, several brokerages recommended this stock with a target price of Rs 200. Being the market leader, this company will benefit from the demand from the users than other companies in the same category. Current market price is around Rs 105 but not much downside is expected from the current level.


Rolta


CMP: Rs 325
Rolta India announced 1:1 bonus on October 22, 2007 and its price was ruling around Rs 589 at that time. From that level, the current price is fairly stable at around Rs 300. Rolta is riding on the growth of IT as well as Internet revolution. It has strong presence in engineering design and eSolutions. As Internet and e-business solutions and services gained vital importance in the planning of any business, Rolta has huge potential for further growth. Its presence in the US, Canada, UK, Germany, Netherlands and middle east in addition to 15 offices across India, gives it a good chance to take full advantage of the Internet and Telecom revolution. Through overseas acquisitions, Rolta is making use of its earnings to form valuable assets. Investors can expect above market returns from this stock in the next 12 months.


Sesa Goa


CMP: Rs 172
Over the past one year, Sesa Goa is in the fold of UK based Vedanta Resources, which controls 51 percent of the company's stock. Sesa Goa is India's largest exporter of iron ore. It accounts for 1.5 percent of global iron ore trade. The biggest advantage for this company is its cost of operations. It stands at the bottom in terms of cost of mining among its peers in India. Needless to say, its position is even stronger when compared to its global peers. Though it has mining operations in Goa, Karnataka and Orissa states, tremendous growth potential in exports to China made it focus on exports, mostly from east coast of India. Sesa Goa feels the rapid growth would continue at least for the next few years. Though public sector companies like MMTC and NMDC give tough competition in iron ore exports, being a private sector company, it has advantage of pruning wasteful expenditures and controlling production costs, very effectively. With demand for iron ore spiralling, investors can bet on the stock at current levels.



Srikala Bhashyam is a journalist and investment consultant with 13 years of experience across financial publications. The author can be contacted at srikala.bhashyam@gmail.com


Disclaimer: The views expressed in this column are purely those of the columnist. MSN does not necessarily subscribe to them.The financial advice reflects the opinion of the author. You are advised to make enquiries before taking decisions on financial issues. MSN will not be liable for any such decisions taken.

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