Defensive stocks protect financial health and returns in halcyon stock market conditions. Defensive stocks tend to hold up well in bear markets because these companies are part of basic economic sectors including healthcare, utilities, and consumer goods. In this article, we look at native defensive stocks in India one should look at investing for 2025 based on its financials, market, and growth.
- Hindustan Unilever Limited (HUL)
- Sector – FMCG
- Market Cap – ₹5.9 trillion (January 2025)
- Dividend Yield – 1.3%
- Definitive Financials – 12% revenue CAGR over the past 5 years
HUL stands for household products as it is a market leader in the fast-moving consumer goods (FMCG) category. HUL has a wide portfolio including personal care, food and beverages, among others, and has well-stocked distribution network and great brand loyalty. Its products are constants through the ups and downs of economic cycles, providing consistent revenue and dividend payments. HUL is a good fit for investors seeking steady growth and moderate risk.
- ITC Limited
- Sector – FMCG
- Market Cap – ₹4.6 trillion
- Dividend Yield – 3.2%
- Key Financials – 15% YoY PAT growth in FY24
ITC is a diversified conglomerate with growth as well as defensive Sectors. It is also a key FMCG business with well-known brands like Aashirvaad and Sunfeast commanding growth. Also, ITC’s history through showing consistent progress in dividends makes it a more attractive proposition for income oriented investors.
- Nestle India Limited
- Sector – FMCG
- Market Cap – ₹1.9 trillion
- Dividend Yield – 1.9%
- Key Financials – EPS growth of 14% CAGR over the past five years
When it comes to Nestlé India, it has gained its iconic status with the name Maggi, Nescafé and KitKat. Prominent in the FMCG sector, the company has constantly remained in the forefront of product innovation and it has concentrated on health and nutrition. Nestlé India with a robust financial position and strong pricing power is a quintessential defensive stock for 2025.
- Dr. Reddy’s Laboratories
- Sector – Pharmaceuticals
- Market Capitalization – ₹820 billion
- Dividend Yield – 0.9%
- Key Financials – Growth of 18% YoY in the revenue in FY 24
Dr. Reddy’s Laboratories is defensive industry intrinsically, and it has a large global presence as well as variety in product portfolio. The company focuses on generic drugs and biosimilars and is very well positioned to capture share from increased healthcare spending and export opportunity. Moreover, its robust R&D pipeline further fortifies its long-term growth prospects.
- Sector – Utilities
- Market Capitalization – ₹1.8 trillion
- Dividend Yield – 5.1%
- Key Financials – EBITDA margin of 85% in FY24
Power Grid takes place in the critical infrastructure domain, providing access to the country’s power grid. The company has a relatively well regulated business model giving it stable cash flows and high profitability. It has a very attractive pool of dividend yield and also government backing and is, therefore, a perfect defensive pick for investors.
- Coal India Limited
- Sector – Mining and Utilities
- Market Capitalization – ₹1.5 trillion
- Dividend Yield – 7.3%
- Key Financials – FY24 will record production of 700 million tones
Coal India is the world’s largest coal producer, and it’s crucial to India’s balance of energy security. Even with the overall shift toward renewable energy, coal is an essential resource to India’s power sector. With its strong cash generation and a high dividend yield, risk averse investors will find the company attractive.
- Asian Paints Limited
- Sector – Paints and Coatings (Consumer Goods)
- Market Capitalization – ₹2.9 trillion
- Dividend Yield – 0.9%
- Key Financials – ROCE of 30% in FY24
Asian Paints is the market leader in the Indian paints industry expressing a market share of around 50%. Its strong brand equity, extensive dealer network, and consistent innovation guarantee that it’s stuck. Asian Paints with steady demand from housing and industrial sectors are a defensive stock for 2025.
- Bajaj Auto Limited
- Sector – Automotive (Two-wheelers)
- Market Capitalization – ₹830 billion
- Dividend Yield – 3.5%
- Key Financials – 45% of the revenue as the export contribution
Bajaj Auto majorly focuses on two or three wheelers catering to a domestic and international market. It has a strong presence in emerging markets, and a good reputation for reliable products. Bajaj Auto is a well-known defensive stock with such dividends and a broad revenue base.
- HDFC Bank
- Sector – Banking
- Market Capitalization – ₹12.2 trillion
- Dividend Yield – 0.8%
- Key Financials – Net NPA ratio of 0.3% in FY24
HDFC Bank is India’s largest private sector bank and is widely recognized both for its operational efficiency and excellent asset quality. The bank has always grown in loans and deposits, even in the face of economic cycles. In the financial sector it is an automatic defensive pick due to its robust balance sheet and prudent risk management.
- Infosys Limited
- Sector – IT Services
- Market Capitalization – ₹7.3 trillion
- Dividend Yield – 2.1%
- Key Financials – Annual revenue growth of 13% YoY in FY24
Infosys, while a general rule of thumb is that IT is cyclical, stands out due to its robust business model and propensity to focus on digital transformation services. Its diversified client base and robust revenue streams make it a defensive play in tech, according to Brokaw. The staying power of the company owes to the emphasis laid by the company on innovation.
Conclusion
Defensive stocks are absolutely necessary in a well-rounded portfolio especially for investors who are looking to past market uncertainty. Indian defensive stocks such as HUL, ITC, Power Grid, steady financial performance and attractive dividends stand out in 2025. Investors can reduce risks and gain stability in their long term returns by focusing on companies that have good fundamentals, consistent cash flows and a track record of doing well. However, before making any investment, always get your investments in line with your risk tolerance and financial goal with an ai financial advisor.
