As Dalal Street benchmarks fail to escape a correction phase, one way to protect the portfolio is by ensuring enough allocation to defensive bets.

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Typically, defensive businesses see all-seasons demand, do not depend on market cycles and offer high dividend payouts — something that makes them attractive regardless of overall market mood.

Some traditional examples of defensive stocks in the Indian market are NTPC, Coal India, Chennai Petroleum, Indian Oil, and Bharat Petroleum.

All in all, defensive stocks help investors protect the overall value of their portfolio in bad market conditions.

Currently, when the Nifty50 index stands 12.9 percent below its all-time high — scaled in October 2021, here's a list of stocks that can save a portfolio from turning sour in the current market scenario:

Healthcare

Healthcare is in focus once again amid rising coronavirus infections in the country.

Hemang Jani, Retail Equity Strategist at Motilal Oswal Financial Services, views the recent correction in diagnostic companies as a good opportunity for long-term investors.

"You had COVID, and even otherwise, due to lifestyle changes, there is going to be a fair bit of growth that one can really look at for the next few years," he told CNBC-TV18 last week.

Elixir Equities Director Dipan Mehta has Apollo Hospitals as his top pick from the healthcare basket.

"It is a market leader ahead of the curve in terms of launching new products and services. It has been pretty strategic in terms of capital allocation. The next few years would be a very good growth period for Apollo Hospitals. Because of the steep correction, valuations also are now in kind of a reasonable territory," he told CNBC-TV18.

ALSO READ: The rally in diagnostic stocks may be over but you can still ride the wave

Explorers

Upstream oil and gas companies — ones into search and exploration — benefit from elevated benchmark rates. Though experts say the current levels of petroleum benchmarks may be temporary, they believe the worst of the COVID-related slump in demand may be over.

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, remains positive on upstream companies given the current crude oil prices and the expectation of an upwards revision in domestic gas rates.

"We have raised our 2022-23 target for average Brent crude to $105 a barrel from $90. We have also raised our forecast for 2023-24 to $90 a barrel from $70. We expect domestic natural gas prices to average $8.9 per mmBtu in 2022-23 as against $2.6 per mmBtu in 2021-22, given the sharp jump in global prices triggered by massive supply shortages," Chouhan told CNBCTV18.com.

While Oil India has already reached close to his target price, he is bullish on ONGC with a fair value estimate of Rs 190.

Consumption

Sharekhan by BNP Paribas expects a reduction in consumer inflation to help volume growth momentum for consumer goods companies in the coming quarters. Operating margin will improve on account of easing rates of commodities, including fuel, according to Sharekhan.

The brokerage sees upside to the tune of 12-41 percent in Marico, Tata Consumer Products, Hindustan Unilever, Nestle, Asian Paints and Zydus Wellness, its top picks in the space.

First Published:Jun 13, 2022 7:36 AM IST