'Safe House' Bets - Part 2

In PART 2 of Theindiastreet.Com list of companies that are considered ‘safe houses’, we continue to look at more Indian companies that are equity darlings. However this time too we continue to look at companies with good past performance, potential for growth, robust quarterly revenues, good corporate governance and return for investment.

Hero Honda: The country’s biggest two wheeled vehicle maker. With an increasing line of models that are aimed at attracting a younger audience as well as the budget conscious middle class Indian, Hero Honda is on the right track. Its overseas presence is also growing steadily. Recently it reported its latest earnings and in a shrinking consumer auto market has managed to post a profit in the third quarter. More importantly it’s probably been the only company that has outperformed the Sensex throughout 2008.

State Bank of India (SBI): The country’s biggest public sector bank but in simple terms it is the country’s biggest bank public sector or private. Overseen by the government like a little baby, its growth through the years is nothing short of a dream story. With its deposits running into many hundreds of crores and growing every single day, it’s simply too big to fail and since it’s a public sector bank it’s guaranteed a bailout but the entire scenario is a very distant possibility.

HDFC Bank: Headed by the same man who has been appointed to sort out the Satyam mess: Deepak Parekh, it’s a bank that is growing steadily. It is however a little more liberal than SBI as it’s not bound by the rules a Public Sector Bank is. Similar to SBI its deposits run into many hundred crores and along with its parent HDFC has a lot of potential to grow. It’s definitely ahead of competitors ICICI Bank, Axis, Yes And Canara Bank.

MRF Tyres: Most recognizable as the three letters on the very wide recognizable bat of one Sachin Tendulkar, is very much like the icon it endorses. Many people don’t go near the MRF stock simply because it costs too much! Those interested should however know that for a tyre company it commands as much respect as Reliance or Infosys and is the undisputed tyre leader on Indian roads. It simply never tyres! Though it has recently faced a sector wide downturn.

Tata Power: Is one of the few private sector power companies that have got the business of providing electricity right. Not many have lasted long enough to turn electricity into revenues but Tata power have and are now the largest private power company in india.They’ve also been in the business long enough to do it well, something which isn’t the case with newer private players in the same field including Reliance.

Indian Oil Corporation (IOC): There is one evident problem with IOC as seen with every public sector company and that’s the fact that its workers union can sometimes go overboard as most recently seen with the petrol strike.IOC shut down its petrol pumps for two days and half the country went without petrol. On the flipside it just goes to show how much of a mammoth the oil company actually is.