The mortgage players are prone to slowdown to a certain extent as housing is a fundamental need and house-ownership levels are low in India. LIC Housing Finance has grown its mortgage portfolio by 23% per annum in last three financial years.

Engineers India

Engineers India provides engineering and technical services to petroleum refineries and other industries like highways and bridges, IT, airports, and ports and terminals. The company is likely to gain significantly from huge investments planned by the government in the oil and gas sector.

As on March 31, 2008, the company had Rs 1,270 crore of cash in its balance sheet. This translates to cash per share of Rs 226 and accounts for more than a quarter of its stock price.

CRISIL

CRISIL, a market leader in research, rating and advisory businesses in India, also offers services like bond rating, rating for bank loans and industry reports. On the government side, it has an advisory segment, which helps agencies in infrastructure, policy and energy. Its business is less prone to the health of corporate India because most of its research products are subscription based.

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Blue Star

Blue Star is one of India's leading manufacturer and supplier of air-condition and climate control equipment.

It also manufactures and markets a range of commercial refrigeration products and services catering to the industrial, commercial and hospitality sectors. The future of this company depends upon the performance of industries like financial services, construction, IT, ITES, hotel , healthcare, infrastructure such as airport.

Balrampur Chini

Balrampur Chini is one of the largest and most efficient sugar manufacturers of the country. Its financials for the past two years may not be encouraging, but ETIG reckons that sugar as an agricommodity is one of the most cyclical industries.

The reason why we are recommending this stock is because the outlook for sugar prices is buoyant as of now. Therefore, sugar companies are expected to do well in the course of next two years atleast. It also has diversified into alcohol and power generation, which together accounted for around 30% of Balrampur Chini’s revenue in March’ 09 quarter. These segments will help the company in tiding over the slowdown.

Most of these industries are expected to grow at high rates if Indian economy continues its growth trajectory. The company is far ahead of its competitors in terms of cash flows, as it has reported 60% CAGR in net cash from operations in the last four years much better than earning growth. Moreover, it has a track record of sustained high dividend payouts unmatched in the industry.

Mid-caps tend to be more volatile than large-caps. However, the volatility is more in stock price than in fundamentals. We have taken care to select the stocks, with robust fundamentals. So, even if they get beaten in a stock market downtrend for some months, over long period, they are expected to bring gains to investors.

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