Stocks To Buy For The Long-Term & Build Portfolio When Markets Fall

Every fall in the Indian markets is being bought into, thanks to cash rich mutual fund investments. In December 2021, equity mutual fund schemes garnered Rs 25,000 crores and for Jan 2021, the number pouring into equity mutual funds was more than Rs 14,000 crores.

Reason to buy the dips in the stock markets

We believe that each time the markets fall, mutual funds would buy into the dips, thus sustaining them. In Dec, 2021, Jan 2021 and till date, FPIs have sold approximately shares worth Rs 85,000 crores and mutual funds have bought about Rs 60,000 crores.

Even if there is sustained selling by Foreign Portfolio Investors, these will be bought into by mutual funds, as the solid sustained inflows into the mutual funds will prevent a big downside fall.

There is immense liquidity on the sidelines to support this falling market.

Stocks that you can bet on for buying when markets fall for the long-term

Housing Development Finance Corporation

One of the top reasons we believe that the Housing Development Finance Corporation stock is a good buy is that the shares are heavily owned by FPIs and we have seen them selling into Indian stocks. This has resulted in the stock falling from 52-week highs of Rs 3030 to Rs 2433. Now, that is a significant fall of 20% for a heavyweight stock.

In fact, we are seeing the entire HDFC basket of stocks fall, including the likes of HDFC Bank and HDFC Life. The company reported a 11% growth in net profits for the quarter ending Dec 31, 2021, which has been the pattern for the last few quarters.

The company owns more than 21% in HDFC Bank and also owns stake of higher percentage in subsidiaries like HDFC Life, HDFC Ergo, HDFC Asset Management etc. We believe that it's shareholding in all of these companies itself makes it a good stock to buy as the value of holdings can run into billions of rupees.

The stock of HDFC was last trading at Rs 2431 on the NSE.

LIC Housing Finance

This stock again has fallen from levels of Rs 545 to the current levels of Rs 405. One of the reasons the stock was subdued was the quarterly numbers of the past. However, LIC Housing Finance surprised investors by reporting a very good set of quarterly numbers for the period ending Dec 31, 2021.

The company reported a 6 percent increase in profit after tax at Rs 767.33 crore for the quarter ended December 2021, thanks to higher collections and drop in provisions. It had reported a profit after tax of Rs 727.04 crore in the same period of the previous fiscal.

We believe that this company is likely to be one of the top beneficiaries of the housing and real estate growth that is happening post the covid outbreak. The stock is worth buying on dips each time the markets fall. Buy the stock for long-term investing.

The shares of LIC Housing were last trading at Rs 405 on the NSE.

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article. The author and his family do not own the above mentioned stocks as on the date of writing this article.