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There are two types of investors. Those who seek thrill and chase huge returns. He likes momentum stocks, hot sectors and new investing trends. When the market is on a rise, they give it their all. Others are those who create wealth consistently. They focus on companies with strong fundamentals. If a strong foundation is built, the first type can also win. Treat your portfolio like a house…If your foundation is weak, a storm can bring everything down. But if you strengthen your investments with good stocks, you can make exciting bets on high-growth themes without risking your financial future. Now the question is, how to build a portfolio for the next 3 to 5 years in the current circumstances…this is where the core strategy comes in handy. Meaning, predictability with growth, discipline with ambition and financial strength with structural changes.
For the core portfolio, attention can be given to certain sectors and stocks.
Defence: structural development
Hindustan Aeronautics Limited A strong order backlog means clarity of revenues for many years to come. Superior return ratios and minimal debt make it a company that combines financial strength with strategic importance. Bharat Electronics Limited BEL has a monopoly in modern warfare electronics. It operates on an asset-light model, which helps in maintaining strong ROE and stable margins. It has a net cash balance sheet, which gives confidence to investors. Data Patterns (India) Limited specializes in manufacturing embedded systems, avionics and niche electronics. Margins are high because the technology is specific. Being a mid-cap, it can grow rapidly. Paras Defence: Works in sectors like optics and space engineering. As India’s space and defense programs grow, these areas may see significant growth. Zen Technologies Limited: It deals in simulation systems and anti-drone technologies, which are fast-growing niche areas. Growth can be rapid here.
Power: Forecast
NTPC Limited: Its regulated revenue model generates predictable income. Strong cash flow helps support the dividend.Triveni Turbine: With strong ROE, low debt and meaningful export exposure, it benefits from industrial capex and energy efficiency trends.
Industrial: Cyclical Profit
Bharat Forge Limited: Despite being associated with automotive cycles, it has now diversified into aerospace and defence. Its global presence is special.
Bluechip: Diversification
RIL: It reduces the risk and adds strength to the portfolio.
FMCG: Sustainability
ITC: When the market panics, it provides protection and protects your capital.
Checklist necessary before choosing shares
Investors should use filters like profit growth, debt burden and valuation while choosing names for the core portfolio. Building a long-term portfolio does not mean turning a blind eye. Quarterly review of portfolio is necessary. If fundamentals change or confidence in management wanes, don’t delay your exit. – Rachit Khandelwal, Head of Research, BNK Capital A strong core portfolio has three big benefits: Stability: Your ‘core’ portion stands as a shield in a downturn. Predictable returns: You know that over the long term, this portion will give you above inflation returns. Less stress: When 70% of the money is in safe and sound hands, you can afford to worry about the remaining 30%. Can take a little risk as well.