Dec 23 - Jan 5

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in DEC 23, 2019 - JAN 05, 2020 I DALAL STREET INVESTMENT JOURNAL 1
2 DALAL STREET INVESTMENT JOURNAL I DEC 23, 2019 - JAN 05, 2020 DSIJ.in
Vol. 35. No. 02 • DEC 23, 2019 - JAN 05, 2020
22
Recommendations
10 Choice Scrip
Where To Invest In 12 Low Priced Scrip
Cover Story
14 Hot Chips
18 Analysis Regulars
BIOCON LIMITED 06 Editor’s Keyboard
Add Biocon To 07 Company Index
Beat Markets! 08 Market View
16 Technicals
38 Special Report
37 Call Tracker
59 Query Board
Debt Free Companies In 62 Reviews
Current Market Scenario 63 Kerbside
Subscribers can access
the complete databank
44 Special Report
Technical Analysis:
consisting of more than
3500 companies on our
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For All Seasons!!
DSIJ.in DEC 23, 2019 - JAN 05, 2020 I DALAL STREET INVESTMENT JOURNAL 5
Year 2020 To Be High On Steroids
L et me start with the good news. Year 2020 is going to be a profitable year for investors.
The Sensex may not shoot too high, but the rise will be broad-based thus, bringing a
smile on investors already reeling under huge losses.
Why do we say this? We believe that there would be a lot of reforms and sweeteners doled out
to induce support to push the economy and markets into a higher orbit. On the US front, we
can expect Donald Trump to ensure the economy remains kicking with low unemployment
rates and the Trade Deals remain under control to ensure an easy election victory for him.
On Indian front, it has become evident that the government is taking on itself to ensure that
the two big reforms i.e. demonetisation and GST do not get interpreted as a failure and this
will propel them to keep energising the economy with liberal reforms. Hence, be prepared for
a lot of goodies coming your way starting from the Budget on January 31, 2020.
However, do also remain cautious on the fact that while the economy and markets are being
held high, the improvements on the ground must pace up. I am referring to the increase in
private consumption expenditure, investment, government expenditure and net exports
(exports minus imports). Corporate India must ensure that all systems are in overdrive mode
within this life support induced timeframe and are able to pick up the earnings. It is just like a
building wherein the building is being externally supported and more floors are being added.
The assumption is that during this time, the foundation of the building will also be
strengthened to hold the newer, bigger structure. If the foundation is not in place when the
external support is removed, then the reversed things are going to come down like a pack of
cards. A crash! A remote possibility but as a well-wisher to our readers, it is our duty to keep
them abreast of this possibility. Nonetheless, for next 12 months, things are likely to be good.
We are continuously tracking this development and will keep you all updated on the
situation. Do stay tuned.
Our ‘Where to Invest in 2020’ cover story talks in details on the market outlook and why we
believe 2020 will be a year to reckon with for long-term investors. Various aspects including
IPO markets, Gold outlook and global markets outlook is shared for your perusal. We hope
you use our observations profitably in 2020!
Technical analysis is something that is very useful for understanding trends, both long-term
and short-term. In our Special story, we have discussed the basics of technical analysis in
detail and shared some useful exit strategies as well. Icing on the cake is the views shared by
the best in class chartists globally. We are delighted to bring to you a holistic perspective on
technical analysis which we are sure will be more than useful for the traders and investors
alike.
Often, we hear experts comment on how it is a good idea to avoid highly leveraged stocks.
Excessive leverage is not good for any company. In our second special story, we have focussed
our comments on ‘Zero debt Companies’ and have made some objective statements. Scan
them (Zero debt stocks) whenever possible. We urge you to go through the special story for
some refreshing insights into zero debt stocks.
Enter markets on a positive note and visualise a better 2020 as the dynamics are in favour of
equity markets going ahead.
Wishing all our readers a Very Happy and Profitable New Year!
RAJESH V PADODE
Managing Director & Editor
facebook.com/DSIJin twitter.com/DSIJ
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Vol. 35. No. 02 • DEC 23, 2019 - JAN 05, 2020 enquiry@dsij.in linkedin.com/in/DalalStreetInvestmentJournal
Multibagger Stocks
Founder Graphics
Late V B Padode Vipin Bendale Hi, I read your story on Multibagger stocks and found it to be an
Subscription & Customer Service
interesting read. You mentioned that it was possible to find multibagger
Managing Director & Editor
Utkarsh Sawale stocks in sectors that have high CAGR profit growth. Do you think I
Rajesh V Padode
could find such stocks in the Chemical Sector?
Deputy Editors Compliances and Internal Audit
Arvind Manor - Anand Batavia
Yogesh Supekar
Shashikant Singh Marketing & Sales
Farid Khan - AVP Editor Responds: We are happy that you liked our cover story on
Copy Editors
Juhi Shahab Mayank Dubey - AVP Digital multibagger stocks. Yes, your observation is accurate since maximum
Mumbai:
multibagger stocks have indeed emerged from sectors that have reflected
Research
Anand Chinchole - Sr. Manager higher CAGR profit growth. However, it’s difficult to say which sectors will
Karan Bhojwani
Apurva Joshi Delhi: continue delivering higher CAGR profit growth going ahead and even more
Amir Shaikh Lokesh Sharma - Sr. Manager difficult to pin point a specific sector in that case. Still, as per our observation,
Nidhi Jani it could be financial, healthcare and chemical sector going ahead as these
Henil Shah Domain Experts sectors are reflecting good growth and are popular with investors.
Pratik Shastri
Vinayak Gangule
Hemant Rustagi Hope this helps! Keep writing to us and assist us with your feedback.
Jayesh Dadia
DSIJ Private Limited Recommendations

Company/Scheme Reco. Price (`) Column Page No
Avanti Feeds l Buy 540.25 Kerbside 63
For Customer Service Bajaj Finance l Buy 4135.20 Cover Story 32
020-49072626 OR  service@DSIJ.in
Balrampur Chini Mills l Buy 170.10 Kerbside 63
Bharti Airtel l Buy 439.95 Kerbside 63
Mumbai Office BIOCON LIMITED l Buy 295.55 Analysis 18
419-A, 4th Floor, Arun Chambers, Tardeo, Next to AC Market Can Fin Homes l Buy 415.00 Cover Story 32
Mumbai - 400034 022-43476012/16/17 Dixon Technologies l Buy 3551.70 Cover Story 33
Galaxy Surfactants l Buy 1407.20 Hot Chips 14
Pune Office GMM Pfaudler l Buy 1628.25 Cover Story 33
C-105, 1st Floor, Trade Center, North Main Road, Near Axis Bank,
Opposite Lane no. 6, Koregaon Park, Pune - 411001
Gujarat Gas l Buy 228.45 Cover Story 34
020-49072600 Gujarat Gas Limited l Hold 228.45 QueryBoard 59
HDFC Limited l Buy 2430.80 Technicals 16
Delhi 8076878278 Inox Wind Limited l Buy 34.95 QueryBoard 60
Jamna Auto Industries (JAI) l Buy 40.40 Low Priced Scrip 12
KNR Construction l Buy 237.85 Cover Story 34
KOTAK MAHINDRA BANK l Buy 1713.05 Cover Story 35
To advertise, mail us on ads@dsij.in L & T Infotech Ltd. l Hold 1646.25 Reviews 62
Printer and Publisher: Nitin Sawant, Editor: Rajesh V Padode for DSIJ Pvt L&T Finance Holdings l Buy 116.50 Hot Chips 14
Ltd. on behalf of Achievements Merchandise Pvt Ltd. Printed at RMOSS M&M Financial Services l Hold 321.65 Reviews 62
Prints Pvt. Ltd., C/449, MIDC Pawane, TTC Area, Near Mayur Cold
Storage, Turbhe, Navi Mumbai -400708 and published from 419-A, 4th MAHANAGAR GAS l Buy 1071.80 Technicals 16
Floor, Arun Chambers, Tardeo, Next to AC Market, Mumbai - 400034 Maruti Suzuki India Limited l Hold 7196.85 QueryBoard 60
 All rights reserved.  While all efforts are made to ensure that the
information published is correct and up-to-date, Dalal Street Investment MOIL Limited l Hold 137.45 QueryBoard 59
Journal holds no responsibility for any errors that might occur. All Power Grid Corporation l Buy 188.20 Cover Story 35
material contained herein is based on fundamental and technical analysis
and other in-house methods, which though reliable, are not infallible. The
PVR l Buy 1822.35 Choice Scrip 10
information given in the magazine is of an advisory nature. Readers are SAIL l Buy 40.85 Kerbside 63
advised to consult experts before taking any investment decision and Dalal Sonata Software l Buy 303.50 Cover Story 36
Street Journal holds no responsibility for any losses that may arise due to
investment decisions made on the basis of information given within the The Phoenix Mills l Buy 775.15 Cover Story 36
magazine. No reproduction is permitted in whole or part without written The South Indian Bank l Hold 10.47 QueryBoard 61
consent from Dalal Street Journal  All disputes are subject to the
exclusive jurisdiction of competent courts and forums in Mumbai only. YES Bank Limited l Avoid 47.60 QueryBoard 61
 Dalal Street Investment Journal is a member of INS/ABCs. BP - Book Profit • BPP - Book Partial Profits • BL - Book Loss
Market Watch Post Boris Johnson’s win;
European indices went up
with a more confident
view on Brexit although
there is a long road ahead.
T
FTSE was up by 3.20 per
he fortnight ended with
positive investor sentiments
was up by 3.20 per cent along with CAC
40 and DAX up by 3.54 per cent and 3.42
cent along with CAC 40
as the world received clarity per cent. and DAX up by 3.54 per
on the much-awaited
US-China trade war. As part As for the domestic markets, Sensex and cent and 3.42 per cent.
of the phase of the trade deal, US Nifty was up by 0.33 per cent and 0.05
President Donald Trump stated that the per cent, respectively. Majority of the cent. With a hope of a boost from the
planned tariffs on $160 billion of Chinese domestic sectoral indices registered a fall government, Realty index was up by 2.51
goods which were to be implemented in during the fortnight. The Smallcap and per cent following IT index, which was
December 2019, will be scrapped and Midcap indices were down by 1.50 per up by 2.94 per cent.
also reduce the tariff to half on another cent and 1.38 per cent, respectively. Since
$120 billion worth of Chinese goods to the FMCG sector is heavily affected by The trading data for the FIIs and DIIs
7.5 per cent. All of these in exchange for the slowdown in consumption demand, showed that for the fortnight, FIIs were
the increase in Chinese imports of US the FMCG index fell by 2.84 per cent. net sellers to the tune of Rs 1,304.72
agricultural goods. Metal and Power indices crore. DIIs were also net buyers to the
underperformed with a decrease of 1.63 tune of Rs 3,474.29 crore.
During the fortnight, global indices were per cent and 1.58 per cent, respectively.
in Euphoria based on the positive global Bankex index was increased by 0.89 per For the fortnight, gold prices increased to
activities. Hong Kong’s Hang Seng cent whereas; Auto index fell by 0.17 per Rs 39,210 for 10g of 24 carat gold, which
is an increase of 0.33 per cent. For the
same period, Brent crude prices went up
by 7.25 per cent to US $65.34. The next
fortnight may see an impact of the
conclusion on the GST Council meeting. DS
02nd Dec. 16th Dec. Gain/Loss

Indices
2019 2019 (%)
Dow Jones Ind 27783.04 28235.89 1.63
S&P 500 3113.87 3191.45 2.49
NASDAQ 8567.99 8814.23 2.87
FTSE 100 7285.94 7519.05 3.20
DAX 12964.68 13407.66 3.42
CAC 40 5786.74 5991.66 3.54
Hang Seng 26444.72 27508.09 4.02
Nikkei 23529.5 23952.35 1.80
Shanghai 2875.81 2984.39 3.78
Performance Of Indices Net Investment In Equity Markets (`/Cr)

registered an increase of 4.02 per cent as 02nd Dec. 16th Dec. Gain/Loss Date FIIs DIIs
market reports suggested of a rebound in Indices 16-Dec-19 117.49 -796.38
2019 2019 (%)
industrial production in China, owing to Sensex 40802.17 40938.72 0.33 13-Dec-19 -614.96 384.92
a relief from the US-China trade wars. Nifty 12048.25 12053.95 0.05 12-Dec-19 384.09 810.23
China’s Shanghai index also went up by Mid-Cap 14968.21 14762.39 -1.38 11-Dec-19 -181.93 239.87
3.78 per cent. US indices such as Small-Cap 13508.22 13305.79 -1.50 10-Dec-19 733.37 338.4
NASDAQ, S&P 500 and Dow Jones Auto 17928.85 17898.21 -0.17 9-Dec-19 -73.96 74.93
Industrial Average (DJIA) were in Bankex 36164.48 36486.14 0.89 6-Dec-19 437.41 210.72
positive, up by 2.87 per cent, 2.49 per cent FMCG 11697.91 11365.75 -2.84 5-Dec-19 195.45 -410.49
and 1.63 per cent, respectively. Post Boris IT 14749.28 15183.42 2.94 4-Dec-19 -102.82 904.13
Johnson’s win; European indices went up Metal 9809.35 9649.23 -1.63 3-Dec-19 -1447.71 963.97
with a more confident view on Brexit Power 1918.9 1888.62 -1.5 2 Dec-19 -751.15 753.99
although there is a long road ahead. FTSE Realty 2159.46 2213.75 2.51 Total -1304.72 3474.29
Recommendations Equity
other PVR operations.
According to an EY report, the cinema

PVR hall penetration in India (9,600 screens)
is low in comparison to USA (55,623)
PREMIUMISE YOUR PORTFOLIO and China (40,837). This gives the

multiplexes in India enough room for
expansion.
HERE IS WHY PVR is amongst the Top 10 global

Leading multiplex chain in India multiplex chain operators in terms of the
Good expansion plans number of admit (Source: CRISIL).
However, in terms of spending per head
Strong revenue growth and average ticket price, PVR’s numbers
are significantly lower than that of its
P
global peers, which indicates significant
headroom for Box Office and F&B
VR Ltd is the largest and the revenue growth by continuing
most premium film premiumisation of screens and improving
exhibition company in India. customer experience. The company has
It has nearly 800 screens and good expansion plans by adding newer
expanding aggressively with screens and upgrading the existing
42 screens added this year till date. The screens to premium quality. This will
company has an asset light model with result increase in revenue as the erstwhile
Best of LAST ONE Year
no ownership of cinema premises. This front seats were more difficult to sell.
Name of Reco Exit/CMP Absolute Annual
makes expansion easier without stressing Company Price Price (`) Gains Returns
the balance sheet. Ten per cent of PVR’s (`) (%) (%) On a year-on-year consolidated basis, net
screen portfolio is premium. Premium Balkrishna Ind. 1079.8 1317.85 22.05 417.79 sales increased by 37.35 per cent to Rs
screens have higher margins. Recently, Tata Metaliks 667.8 826.2 37.93 89.89 973.18 crore in Q2FY20. EBITDA
the company acquired SPI cinemas. This Colgate-Palmolive (I) 1051.65 1231 17.5 77.78 (excluding other income) rose 156.50 per
acquisition will help the company’s PFC 122.6 147.6 20.39 64.96 cent to Rs 318.08 crore and EBITDA
future expansion in the underpenetrated Symphony 1429.8 1672 16.94 64.19 margin was 32.68 per cent as against
South India market. 17.50 per cent inQ2FY19. Net profit in
Q2FY20 jumped from 34.58 per cent to
In H1FY20 admits have increased by 22 gourmet selection which is not Rs 47.83 crore.
per cent to Rs 5.63 crore as against 4.61 traditionally found in cinemas, such as
crore same period last year. However, the artisanal pizza, chicken hotdog and PVR trades at a TTM PE of 58x versus
income from movie tickets, foods and mocktail. Further, they are providing the industry PE of 25x. PVR commands
beverages has increased by 25 per cent innovative and convenient ways for the a premium over its listed peers due to the
and 33 per cent respectively. The excess consumers to order food. The Company’s greater number of screens, good share of
growth in these income segments focused attention to this segment has premium seating and better screen
vis-à-vis admit growth can be attributed resulted in achieving the highest F&B locations. With its aggressive expansion
to increase in revenue per seat due to the spend per patron in the Indian industry. plans, growth in urban middle class and
increasing ticket prices and growing Revenue from this segment is also the more spending on leisure activities, the
share of premium seating. PVR has highest as compared with its peers. F&B company and stock has good growth
undertaken numerous initiatives in this contributes about 25 per cent of the prospects. We recommend our readers D
segment which includes offering overall revenue in comparison to all the BUY. S
CMP
Monthly Stock Market Returns Shareholding Pattern Last Five Quarters (`/Cr) (Consolidated)
(`)
BSE Code: 532689 as of Oct 2019 Sept-19 Jun-19 Mar-19 Dec-18 Sep-18
CMP: `1822.35 FV: `10
BSE Volume: 20,621 Total Income 973.18 880.39 837.63 843.11 708.55
Promoters 18.41
Date: 18/12/2019 Other Income 6.22 6.77 8.52 14.26 6.1
Public 81.59 Operating Profit 324.30 285.35 169.32 178.57 130.11
Interest 111.13 131.43 39.51 37.87 29.82
Others --
Net Profit 47.83 17.77 48.42 55.53 35.54
Total 100 Equity 48.38 46.77 46.74 46.74 46.74
the product portfolio and introduced
Jamna Auto Industries (JAI) spring allied products and a range of lift
axle components in the aftermarkets.
CHALK OUT PLAN TO RULE AUTO INDUSTRY

The Company has the widest range of
products in the aftermarket, supplying
more than 5,000 part numbers of all type
of springs of commercial vehicles. The
Company has entered into Technology
Transfer and Technical Assistance
Agreement with Tinsley Bridge Limited,
UK for extralite spring technology and
HERE IS WHY special steel technology. These springs
Leader in leaf and parabolic springs are under development and expected to
be ready by next financial year.
Aims to be a complete suspension system provider
Attractive valuations
J
On a year-on-year consolidated basis,
net sales decreased by 55.80 per cent to
AI is an auto ancillary company. It Rs 242.35 crore in Q2FY20. EBITDA
is the market leader with 70 per PRICED SCRIP (excluding other income) decreased
cent share in OEM leaf and 72.23 percent to Rs 18.89 crore and
parabolic springs. It has client base Best of LAST ONE Year
EBITDA margin was 7.79 per cent as
including big players like Tata, Name of Reco Exit/CMP Absolute Annual
against 12.41 percent inQ2FY19. Net
Toyota, Mahindra, GM, SML Company Price Price (`) Gains Returns profit in Q2FY20 declined 82.07 per cent
ISUZU, Ashok Leyland and Volvo. (`) (%) (%) to Rs 6.37 crore. The reduced numbers
With its market leadership position in the National Fert. 61.30 78.00 27.24 350.22 should be seen keeping in mind the
leaf and parabolic springs, it plans to go Gufic BioSci. 78.70 95.10 20.84 288.55 factors that went against the company in
beyond these products and is trying to be Jamna Auto Ind. 77.15 96.75 25.41 254.10 the last one year.
a complete suspension system provider Virinchi 88.00 110.00 25.00 225.00
and also focusses on aftermarkets. The Amines & Plasti. 68.00 81.00 19.12 167.88 Jamna has a good client base.With its
company has added capacity through market leadership position in the leaf
modernisation of existing plants and in the cost of production. Therefore, the and parabolic springs, plans to go
expansion. It has planned new units at recent quarterly result and couple of more beyond these products, its efforts to be a
Pithampur (Madhya Pradesh) and quarterly results are not indicative of the complete suspension system provider as
Adityapur (Jharkhand) in continuation company's future potential. The impact of well as its focus on aftermarkets, we
of the company's strategy of staying close axle load regulations could be short term believe the company has enough scope
to customer base. as implementation thereof would settle in for expansion. The current slowdown in
the coming months. CV would end with economic and rural
The CV industry had an overall good run revival. The NBFC crisis and BSVI
in the last three years ending April 2019 After reaching the leadership position in transition are also one-time event that
witnessing a sustained growth. However, leaf and parabolic spring products, the will eventually stop hurting numbers.
currently, the industry is facing Company's focus is to expand in new Jamna auto trades at TTM PE of 18x
slowdown mainly due to, deceleration in products and markets. The Company versus industry average of 32x. This gives
the economy, liquidity crunch and considers aftermarket to have a huge it enough room to expand once the
revised axle norms. The cost of change to potential to grow. Therefore, they are NBFC crisis and BSVI transition is over.
BS-VI emission norms could adversely taking efforts to expand its network in Owing to these reasons we recommend
impact the demand of the CVs due to rise aftermarkets. The Company has increased our readers BUY. DS
CMP
Monthly Stock Market Returns Last Five Quarters (`/Cr) (Consolidated)
Shareholding Pattern
BSE Code: 520051 (`) as of Sept. 2019 Particulars Sept-19 Jun-19 Mar-19 Dec-18 Sep-18
CMP: `40.40 FV: `10
BSE Volume: 89292 Total Income 242.35 420.51 542.84 486.29 548.37
Date: 18/12/2019 Promoters 47.88
Other Income 6.29 1.36 1.59 3.90 3.16
Public 52.12 Operating Profit 25.19 47.30 70.61 67.46 71.19
Interest 6.52 4.30 4.94 8.99 6.25
Others --
Net Profit 6.37 20.41 33.37 28.55 35.52
Total 100 Equity 39.83 39.83 39.83 39.85 39.83
L&T FINANCE HOLDINGS CMP - `116.50
BSE CODE Volume Face Value Target Stoploss

533519 5,08,239 `10 `126 `108(CLS)
L&T Finance Holdings Limited is a Scrip’s Movement
non-banking financial institution-core
investment company. It offers a range of
financial products and services across
retail, corporate, housing and infrastruc-
ture finance sectors, as well as mutual
fund products and investment manage-
ment services. For Q2FY20, Assets under
Management (AUM) increased by 1.65
per cent to `65,797 crore from `64,729 2019
crore in Q2FY19. Interest Income for Last Seven Days’ Volume Table
Q2FY20 was reported to be `3,294.38 (No. of Shares)
crore, up by 16.73 per cent, from Days Volume
`2,822.34 reported in the same quarter of
Dec 10, 2019 11,25,336
the previous fiscal year. Net profit on the
Dec 11, 2019 9,40,982
other hand, saw a decrease of 68.79 per Dec 12, 2019 6,64,409
cent to `174.51 crore in Q2FY20, from Dec 13, 2019 8,26,304
`559.12 crore reported in Q2FY20. The Dec 16, 2019 6,25,981
decrease in net profit was on account of a Dec 17, 2019 6,53,546
onetime impact of reversal of DTA of 473 Dec 18, 2019 5,08,239
crore which has been fully accounted for
in the second quarter of the current fiscal which was contributing less than 1 per
The scrips in this year. The company exited from its wealth cent towards LTFH's total revenue and
column have been management business by divesting its profitability. Thus, we recommend a
recommended holding in L&T Capital Markets Limited BUY.
with a 15-day investment GALAXY SURFACTANTS CMP - `1407.20
horizon in mind and
carry high risk. Therefore, BSE CODE Volume Face Value Target Stoploss
540935 1313 `10 `1530 `1320(CLS)
investors are advised to Scrip’s Movement Galaxy Surfactants (GSL) is engaged in
take into account their risk manufacturing and marketing surfactants
appetite before investing, and specialty chemicals for personal and
as fundamentals may home care industry. It produces a variety of
vital cosmetic ingredients, which also
or may not back the includes active ingredients, Ultra Violet
recommendations. (UV) protection and functional products.
On the consolidated financial front, for
Q2FY20, the company reported net sales of
2019
`648.82 crore, a decrease by 5.32 per cent
YoY from `685.29 crore for Q2FY19. A
Last Seven Days’ Volume Table
correction in the product prices owing to a
(No. of Shares)
sharp fall in RMC (fatty alcohol) negatively
Days Volume impacted the company’s revenue. PBDT
Dec 10, 2019 4022 grew by 1.74 per cent to be `82.90 crore as
Dec 11, 2019 1389 compared to `81.48 crore in Q2FY19. Net
Dec 12, 2019 1223 profit significantly increased by 44.80 per
Dec 13, 2019 326 cent YoY in Q2FY20 to be `67.07 crore from
Dec 16, 2019 630 `45.71 crore in Q2FY19. Robustness of its
Dec 17, 2019 872 business has enabled GSL to maintain stable
Dec 18, 2019 1313 margins. A gradual shift in the consumption
pattern towards specialty care products will support volume growth and profit-
(Closing price as of Dec 18, 2019) ability. Hence, we recommend a BUY. DS
Technicals Equity
NIFTY Index Chart Analysis
Nifty to continue its forward march.
A
ll the benchmark indices are Roadmap for the next 15 trading sessions
trading at a lifetime highs Ideas Nifty Levels Action to be Initiated Probable Targets
but the Smallcap-100 index Trading above 12,220 on the on a weekly closing
Resistance for the medium-term 12,220 – 12,260 12,400-12,500
is 41.07 per cent and basis would give further momentum to the bulls.
Midcap-100 index is 22.44 Support for the medium-term 12,000 – 11,910
Close below 11,910 on the weekly chart would
11,800
per cent, away from their life time highs. change the trend and trigger a retreat.
This divergence between the benchmark
indices and the broader indices is not a historically proven that levels above 28 PE significant resistance for the medium-
character of earlier bull market conditions. are not suitable to invest aggressively for a term. Before reaching further highs, the
The Nifty was able to rally 14.36 per cent long-term. market will correct to 11,800 levels once
from its August 2019 lows. The again with a higher probability. This
Smallcap-100 index rose by 11.25 and the Technically, Nifty is in confirmed uptrend correction may trigger before the budget.
Midcap-100 index gains by 13.11 per cent in all parameters. Nifty closed above the Thus, January could be a tricky month or
from its August 2019 low. Even in the November 28 high with strong bull a top for the medium-term.
recovery path, these broader indices are candle. As we discussed in the earlier
lagging in comparison to the benchmark. columns, the 11,800 level worked as the There are several technical parameters
The Banking, Financial Services, and strong base support for the market. The pointing the negative divergence. The RSI
is still making lower lows
weekly. Though it came out
of the downward channel
on Tuesday, it is incapable
to make a new swing high.
Even MACD also have a
serious negative divergence
on a weekly chart. The
histogram is not moving up
even though the price is
higher. The trend strength
indicator ADX is flat for the
last two months and is
indicating that its strength
is neutral. An interesting
observation is that, till
Monday, there was a
bearish belt hold pattern on
the daily, weekly and
monthly chart. With
Services sectors also reached to the striking observation is that when the Tuesday’s close above the monthly open
lifetime highs on Tuesday. When market is at a peak, the number of price, the bearish belt holds are negated.
BankNifty is at lifetime highs, the PSU distribution days is higher than the typical But, currently it looks like a dragonfly
Bank index is still 44.66 per cent away bull market consolidation. In the last five Doji or a hanging man on a monthly
from its lifetime high. So, the sectoral weeks, there are at least five distribution chart. These evidences are a caution for
participation is also lagging in this bull days. Even a day before making a lifetime the aggressive long positions. As long as
market. This is only a selective large-cap high, the Nifty marginally escaped a Nifty protects prior day low on the closing
market rally with the support of liquidity. distribution day. Any additional basis, keep the trend of 12,400 targets in
Despite the lack of earnings growth, the distribution day in this week means this mind. But, in any case, if it closes below
Nifty is trading at 28.35 PE. Earlier in uptrend is vulnerable to a correction. the prior bar low, book profits in long
February 2000, January 2008 and August Nifty is developing a rising wedge pattern positions. A close below 12,000 will open
2018 tops, the Nifty traded in similar PE. on a weekly chart. The wedge resistance is short opportunities with the target of
On June 3, 2019, the PE reached to the placed at 12,400 levels. The 127.6 11,800 again. Only closing below 11,800
historical high of 29.90. With this data, we Fibonacci extensions are placed at 12,507 on weekly basis bears will dominate the
are at an overvaluation zone. It’s levels. This zone of 12,400-12,500 is a market.
STOCK RECOMMENDATIONS
HDFC LIMITED............ ................ BUY ......................... CMP `2430.80

BSE Code : 500010 Target 1 .... `2525 | Target 2 ..... `2550 | Stoploss....`2340 (CLS)
India’s leading housing finance company, having a vast
distribution network in the country, just made a lifetime
high on Tuesday. Technically, the stock has broken out
of 20 week cup and handle. The cup depth is 17.25 per
cent. The volumes are recorded above the average. The
stock is clearly in uptrend since February 2016 and
making higher highs and higher lows on a weekly chart.
It is trading above all moving averages as 50 and 200
DMAs are trending up. The RSI is in a super bullish
zone above 68 currently. The MACD histogram
indicating the bullish momentum is picking up. The
Directional index ADX is also showing the strength in
the stock. It meets the Minervini’s trend template and
Daryl Guppy’s MMA rules. It is also giving the buy
signal in Martin Pring’s long-term KST set up. The stock
is also meeting all the CANSLIM characteristics. Its
price relative strength is at EPS strength, which is at 87. The buyer’s demand is at a greater level as all the institutional investors
and fund houses hold this stock. The consistent double digit growth in sales and earnings and 13 per cent ROE with earnings
stability looks attractive fundamentally. It is also meeting most of the Warren Buffett rules of investing. Buy this at `2,430.80 with
a stop-loss of `2,340. The medium-term target is placed at `2,525 and `2,550.
MAHANAGAR GAS ............................. BUY ................. CMP `1071.80

BSE Code : 539957 Target 1 ..... `1155 | Target 2 ..... `1170 | Stoploss....`1000 (CLS)
One of the country’s leading natural gas distribution
companies, Mahanagar Gas Limited (MGL), caters to 1.21
million households, 3,850 commercial establishments and
75 industrial establishments as customers. It doubles its
earnings in the recent quarter with a history of
consistency in earnings. Technically, the stock has broken
out 32 weeks cup with 29.34 per cent depth. The stock also
came out of 82 week range. It formed a base at `754 level
and finally broke the range on Tuesday. The stock is also
trading above the all short and long-term moving
averages. All the moving averages, including 200-DMA,
are trending up. The leading indicator RSI is also coming
out of cup and handle formation, and it is in a bullish zone
on a weekly chart. There are no negative divergences
visible on any time frame in major indicators. The MACD
line is above the signal line for more than three months. The directional indicator ADX (32.81) is above the +DI and -DI showing
strength in the trend. The stock is also meeting most of the CANSLIM characteristics. Its price relative strength (RS) is as high as 90 and
EPS strength is at 94. The greater buyers demand shows the accumulation by big investors. The institutional investors increased their
stake in the company by 27.21 per cent and the number of funds invested in this company increased by 13 per cent. The double digit
sales growth for the past 8 quarters and the 100 per cent increase in EPS makes this stock attractive at current level. Buy this stock at
`1,071.80 with a stop-loss of `1,000. The medium-term targets are placed at `1,155- `1,170. DS
*LEGEND: n EMA - Exponential Moving Average. n MACD - Moving Average Convergence Divergence n RMI - Relative Momentum Index
n ROC - Rate of Change n RSI - Relative Strength Index (Closing price as of Dec 17, 2019)
Disclaimer : Above recommendations are based on various technical parameters and any fundamental input has not been considered for the recommendations. Follow strict stop loss for the recommendation.
Analysis Equity
INTRODUCTION
Biocon is a biopharmaceutical company
which manufactures generic Active
Pharmaceutical Ingredients (APIs) sold
across the globe. Along with it, the
company also manufactures novel
biologics as well as biosimilar insulins
and antibodies which are sold in India as
branded formulations. Biocon's
biosimilar products are also sold in both
bulk and formulation forms in several
emerging markets. The company
conducts its research services through
Syngene International Limited (Syngene)
which is a publicly listed subsidiary of
Biocon. Through its products and
research services, Biocon focusses to
reduce therapy costs of chronic diseases
like autoimmune, diabetes, and cancer
through offering affordable healthcare.
The company’s popular brands include
INSUGEN (rh-insulin), BASALOG
(Glargine), CANMAb (Trastuzumab),
BIOMAb-EGFR (Nimotuzumab) and
ALZUMAb (Itolizumab), an anti-CD6
monoclonal antibody.
INDUSTRY OVERVIEW
India is considered as one of the fastest
growing economies in the world. The
healthcare sector consists of healthcare
BIOCON LIMITED
ADD BIOCON TO BEAT MARKETS!

delivery, pharmaceuticals, medical
devices, clinical trials, and health
insurance segments. This industry is
expected to grow at 22 per cent annually
by 2022. There are innumerable factors
which results in the demand for The Indian pharmaceutical industry patients are becoming more engaged and
pharmaceutical sector like increasing experienced a growth of 10.5 per cent to willing to take control of their health and
healthcare expenditure due to rising `1,34,780 crore in FY19 compared to treatment choices.
incomes, growing elderly population, FY18. Domestic companies make up to
increased disease awareness, diagnosis 80 per cent of the domestic From 2017–2024, oncology is expected
rates, increase in Non-Communicable pharmaceutical market, registering a to remain the dominant therapy segment
Diseases (NCDs), diagnostic growth of 10.8 per cent in FY19 with a growth of US$ 129 billion in
requirements and hospitalisation due to whereas; MNCs grew at 9.4 per cent in worldwide sales to reach around US$ 233
NCDs, expansion of healthcare services FY19. For FY19, Indian companies billion by 2024. Accordingly,
to Tier II and Tier III cities as well as the registered a volume growth of 3.4 per immunosuppressants are expected to
rise in luxury offerings and services by cent compared to 3.7 per cent in FY18. have the highest CAGR gain during the
hospitals, etc. Stringent FDA regulatory approvals and same time period, at 15.7 per cent
slow economic environment resulted in followed by dermatologicals at 13 per
Compared to global standards, the the reduced volume growth. cent, oncology at 12.2 per cent and
healthcare expenditure in India is low. Surrounded by the newest technology, anti-anemic at 11 per cent.
portfolio. Small molecules is the a co-development collaboration for
company’s largest segment contributing developing 11 products. During FY19,
nearly 31 per cent to the total Biocon received regulatory approvals for
consolidated revenue of FY19. The key biosimilars in global markets from
segment gained revenue of `1,772.8 crore USFDA thus, realising the growth
in FY19 increasing by 17.58 per cent potential of this segment.
compared to `1,507.7 crore in FY18. The
improved performance during FY19 can Novel Molecules consists of early and
be attributed to better product mix and advanced stage programs related to
increased demand of its API sales therapeutics which aim at treating
globally supported by the growth in diabetes, oncology, auto-immune and
generic formulations business in the US. inflammatory diseases. Such therapeutics
In the previous year, the segment had span across multiple modalities including
witnessed headwinds due to pricing recombinant proteins, novel fusion
pressure and channel consolidation faced antibodies, monoclonal Antibodies
by clients in the US post which the (mAbs), and Small interfering RNA
segment reported an upward trend in (SiRNA). In this segment, Biocon has
FY19. Robust sales were reported in the been ahead of its peers when it comes to
markets of Latin America, Europe and undertaking studies or developing
Middle East as well as among India- products. Biocon’s CD6 antibody is
based clients. Biocon has been out-licensed for the United States and
successfully launching new products in Canada markets to Equillium which is a
the US which has resulted into its US based biotechnology company,
growing market share. To strengthen its planning to develop a molecule to treat
pipeline further, it has filed several Drug severe autoimmune and inflammatory
Master Files (DMFs) in developed disorders having high unmet medical
markets and key emerging markets. need. Such initiatives have resulted in
Biocon being able to easily expand its
Biologics market presence and product portfolio.
The Biologics segment consists of
Biosimilars and Novel Biologics. In FY19, the Biologics saw an improved
performance with the start of
The biosimilars pipeline consists of commercialisation of the first wave of
commercialised and under-development biosimilars in the developed and
molecules that include human insulin or emerging markets. Owing to that, for
insulin analogues, monoclonal FY19, it was the strongest performing
BUSINESS SEGMENTS antibodies and other biologics. It segment for Biocon, with an increase of
basically includes asset which are aimed 97 per cent in revenues compared to last
Small Molecules API and for addressing unmet medical needs year’s `1,516.9 crore. A strong revenue
Generic Formulations associated with non-communicable growth led to a significant improvement
diseases. The therapeutic focus has been in the segment profit margins as
Biocon’s Small Molecules business is in developing molecules in area of biosimilars in general are high value
backed by its strength in the diabetes, oncology, and immunology. To products. This has helped overcome fixed
fermentation technology and make the products available across all costs and higher R&D spends that had
entrenched presence across chronic markets, Biocon has partnered with impacted segment profit margins of the
therapy areas. It has a differentiated major global companies such as Mylan previous year.
portfolio comprising of complex and Sandoz. Biocon’s aim to provide
molecules for cardiovascular and access to high quality yet affordable Branded Formulations
anti-obesity agents to biosimilars to global patients has engaged
immunosuppressants and narrow the company in developing technology, (India and UAE)
spectrum antibiotics. Even though critical mass and also skill sets required Biocon’s Branded Formulations business
Active Pharmaceutical Ingredients for producing the complex molecules consists of products which are sold under
(APIs) have technical barriers related to with the presence of very few credible the company’s brand name in regional
entry such as complexity in global competitors. Thus the company’s markets, that is, currently in India and
manufacturing, potent compounds, etc., R&D costs for developing biosimilars are UAE. This business mainly has its focus
Biocon strives to invest and develop in significantly higher than those of other on specialty brands in critical therapies
the segment in order to diversify its segments. Along with Mylan, Biocon has offering affordable and differentiated
Analysis Equity
medicines of good quality to patients in Biocon Ltd. the new client. Since the beginning of
India and UAE. It includes biologics BSE Code: 532523 CMP (`)295.55 FY20, Biocon has increased its
(biosimilars, novel molecules, etc), Particulars Amonut (` Crore) investments in R&D for portfolio
in-licensed products and branded Net Sales 6107.70
expansion as well as for high quality
generics for acute and chronic % Change 30.72% talent acquisition. Revenue from this
conditions. In FY19, the Branded Operating Profit 1740.30 segment for Q2FY20 stood at `465 crore
Formulations segment registered a % Change 38.48% registering a growth of 11 per cent, led by
growth of 7 per cent to 656.4 crore from Net Profit 984.10 growth in the Discovery Services
`611.5 crore in FY18, owing to a growth % Change 27.57% business and consistent performances in
in the Indian business, in terms of both Equity 600.00 the Dedicated R&D Centres and
sales as well as profitability. Despite this, EPS (Rs.) 10.78 Development Services business.
the improved performance in India FV (Rs.) 5.00 Syngene also operationalised the first
was offset by a subdued performance of CMP (Rs.) 295.55 phase of new 50,000 sq. ft. research
the business in UAE caused by certain P/E (x) 45.45 facility located in Hyderabad which will
product recalls and delays in drug Dividend Yield (%) 0.71 have a team of nearly 150 discovery
registrations with the local health Book Value (Rs) 53.16 research scientists.
authorities and also due to repricing (Trailing Four Quarter Data) n CMP as on 16 Dec, 2019
of products by the Ministry of Consolidated Data CONCLUSION
Health. Currently for Biocon, the API business is
degrowth by 11 per cent from `164 crore a growth driver pulling stable revenues
FINANCIALS to `128 crore. On the annual front, net and business opportunities. Going
Looking at the quarterly trends on sales for FY19 were `5,514.4 crore, which forward, the Small Molecule business
consolidated basis, for the second quarter is an increase by 33.53 per cent when will gain increasing focus building on the
of FY20, the company reported net sales compared to `4,129.7 crore for FY18. generic formulations opportunity. The
of `523.9 crore, an increase of 14.71 per For FY19, the PBDT increased by 70.65 company growth strategy involves
cent as against net sales of `456.70 crore per cent to `1,661.8 crore from `973.8 building a robust pipeline of difficult-to-
for the same quarter of FY19. The PBDT crore of FY18. The net profit which make, technology-intensive molecules
also increased by 6.47 per cent for the increased significantly was reported at which can be commercialised in several
second quarter of the current fiscal year `1,001.7 for FY19 as against `431.80 global markets including the United
to `149.8 crore as compared to `140.7 crore gained in the previous financial States. Biocon has always been able to
crore for the second quarter of the year. gain the trust of its consumers and
previous fiscal year. The company gained increase its market share on the basis of
a net profit of `189 crore in the second RESEARCH SERVICES attractive and qualitative product
quarter of FY20, which is a slow growth Developing products, research and offerings. Successful completion of audits
of 3 per cent as compared to `184 crore innovation is essential to drive the at several of the company’s
gained in the second quarter of FY19. growth of a pharmaceutical company. manufacturing facilities including APIs
The net profit for the quarter was Syngene is a global Contract Research and Formulations reflects its strong
impacted due to an increased R&D Organisation (CRO) engaged in commitment to quality and GMP
expenses which enabled the purpose of providing integrated discovery, compliance thus in-building consumer
portfolio expansion. Additionally, higher development and manufacturing confidence.
employee costs were incurred in order to services for small and large molecules,
support independent management of antibody-drug conjugates and The company’s products receive a
Small Molecules, Biocon Biologics and oligonucleotides. During FY19, the demand boost due its strategy of catering
Novel Molecules businesses under the business of Dedicated R&D Centres to the needs of emerging nations first and
company’s revised organisational gained significant traction thus then the developed markets. In the
structure. benefitting from the expansion and future, Biocon aspires to front-end the
extension of the multi-year agreement commercialisation of some of its
During Q2FY20, Small Molecules with Baxter Healthcare Corporation and biosimilar assets in global markets. For
segment increased by 23 per cent to additional revenues from the extension FY20, the company plans to have some
`530 crore as compared to `432 crore in of collaborations with Bristol-Myers facility expansions along with new
the second quarter of the previous fiscal Squibb (BMS) and Amgen achieved in greenfield constructions which will
year. Biologics segment contributed with FY18. Led by contract renewals, the support the company’s future needs in
the highest growth in Q2FY20 by 40 per Discovery Sciences segment reported an biosimilars, small molecule APIs and
cent to `516 crore as against `368 crore impressive growth through expansion of formulations segments. Hence looking at
in Q2FY19. On the contrary, Branded existing Full-Time Engagement (FTE) the company’s growth potential, we
Formulations segment reported collaborations as well as an increase in recommend a BUY. DS
Cover Story
Where To Invest In
The equity markets in 2018 and 2019 witnessed a narrow market rally. Will 2020 be a
repeat of 2018 and 2019? Maybe not. Yogesh Supekar explains why 2020 could
be a better year for investors while the DSIJ Research Team share their top 10
stock ideas for the upcoming year.
fter a difficult phase in 2018 and 2019,
equity markets for India investors are
now gearing up for a much better 2020.
Hopes are on the expansionary
government policies, US markets’
performance in 2020, earnings upgrades,
lower interest rate environment globally
and in India, recovery in GDP growth
rate, stable liquidity, benign inflation
environment and how well the
beleaguered sectors recover in the
coming year! It does look like a tall order
from the markets.
However, the odds are in favour of

markets doing better in 2020 as
compared to 2019 and 2018. Next year is
an election year in US markets and the
US markets traditionally have been
setting the tone for the global equities.
The US markets have shown a strike rate
of 90 per cent of delivering positive
returns in election year and the average
returns for the S&P 500 has been 12 per
cent if we consider only the election
Cover Story
years. So, going by the historical data, we can expect the US
markets to remain positive in 2020. Most analysts expect S&P
500 to deliver returns in the range of 8 to 10 per cent in CY20.
The government, after realising the implication of economic
slowdown is finally getting its act together. One can expect Portfolio for 2020
several expansionary measures to be adopted in order to push
the economic growth higher. The nagging issue has been the
Quantity Investment Weights
consumption and the demand which somehow had been Company CMP (`) Value (`) (%)
missing throughout 2019. Investors are expecting the Kotak Mahindra Bank 1713.05 583 9,98,708.15 10
government intervention in order to boost consumption in the Bajaj Finance Ltd. 4135.20 243 10,04,853.60 10
economy. Can Fin Homes Ltd. 419.20 2385 9,99,792.00 10
Dixon Technologies (India) 3550.75 281 9,97,760.75 10
FIIs have been positive on
Indian markets in 2019 and
Table: FIIs participation GMM Pfaudler Ltd. 1628.30 614 9,99,776.20 10
YEAR FII (Rs Cr) DII (Rs Cr) Gujarat Gas Ltd. 228.45 4377 9,99,925.65 10
are expected to be net
2019* 92357.4 38986.87
positive, as despite the KNR Construction Ltd. 238.85 4186 9,99,826.10 10
2018 -32628.28 109366.93
slowdown, the economy is Power Grid Corporation Of India 188.20 5312 9,99,718.40 10
2017 51949.06 89936.84
expected to be one of the Phoenix Mills Ltd. 773.75 1292 9,99,685.00 10
2016 21398.26 37124.92
fastest growing economies Sonata Software Ltd. 301.35 3318 9,99,879.30 10
2015 17946.24 66814.95
in the world. In the past five Total Portfolio Value 10000000
years, FIIs have withdrawn Data as on: - December 11, 2019 100
funds only in 2018 from the Sensex (17 Dec 2019) 41352.17
Indian market. DIIs have been less bullish than FIIs in 2019 till Prices as on (17 Dec 2019)
December this year.
DSIJ Portfolio Performance

'Where to invest' portfolio has a track record of beating the benchmark index on a consistent basis. The
latest 'Where to invest in 2019' portfolio has outperformed the benchmark index by a couple of
percentage points when majority of investors have struggled to come close to Sensex returns. The latest
portfolio recommendation has generated close to 15 per cent returns while Sensex has generated 12.37
returns in a comparable period.
With earning likely to show an uptick, we foresee the Sensex to have crossed 47,000 by December 2020! The
year 2019 especially has been challenging as the broader markets have under-performed the key benchmark
index i.e the Sensex. Most investors have struggled to generate close to 10 per cent returns in 2019.
Stocks such as Jubilant Life Sciences and City Union Bank have been the star performers. On the contrary,
stocks such as NOCIL and WPIL were responsible for pulling down the portfolio in 2019. A positive
performance in 2019 makes us more motivated in identifying worthy opportunities for the year 2020.
Performance Reco Price Dividend Close Price Weights Annual Returns

Stocks
(%) (`) Per Share (`) (%) (%)**
City Union Bank * 21.18 178.45 0.00 216.25 14.28 42.36
HDFC Bank* 18.37 2093.75 0.00 2478.45 14.28 36.75
Tata Consultancy Services* 16.46 1987.7 27.00 2314.85 14.28 21.94
Jubilant Life Sciences* 16.22 727.5 0.00 845.50 14.28 64.88
Dabur 4.48 443.05 2.90 462.90 14.28 4.48
NOCIL -38.20 166.25 2.50 102.75 14.28 -38.20
WPIL -28.95 858.3 7.50 609.80 14.28 -28.95
Average 14.75
Sensex Return 12.03
Reco date : 20-Dec-18 I * Calls are close I ** Returns are annualised returns
The year (2019) Performance Of Indices (%) Sensex @ 2019
Indices YTD 1 Year Coming to Sensex, we found that out of 30 Sensex stocks, 12
gone by Sensex 10.99 12.47 stocks have managed to beat the key benchmark index returns,
The year 2019 belonged to Nifty 8.7 10.4 that is, 10 per cent on YTD basis. Almost 16 stocks out of 30
realty stocks, banking stocks Mid-Cap -4.82 1.64 stocks that constitute Sensex have generated positive returns.
and IT stocks as is reflected Small-Cap -10.07 -4.08
in the sectoral indexes’ Auto -14.96 -10.98 Sensex constituents performance in 2019
performance. Bankex 16.65 22.91 Company Name Market Cap (` Cr) YTD Returns (%)
FMCG -2.45 2.01 Bharti Airtel Ltd. 228757.2 51.95
BSE metal index was the IT 6.20 5.95 Bajaj Finance Ltd. 237393.41 48.54
worst performing sectoral Metal -19.19 -16.35 ICICI Bank Ltd. 340558.09 44.81
index slipping by close to 20 Power -6.62 0.48 Reliance Industries Ltd. 996871.45 40.24
per cent, followed by auto Realty 16.86 24.23 Kotak Mahindra Bank Ltd. 316912.52 32.56
index which was down by As on: - December 9, 2019 Asian Paints Ltd. 165600.7 25.85
nearly 15 per cent.
Bajaj Auto Ltd. 93338.23 18.39
Axis Bank Ltd. 206380.73 16.65
The broader markets underperformed in 2019 with BSE
HDFC Bank Ltd. 680560.79 15.76
Mid-cap slipping 4.82 per cent and BSE Small-cap sliding 10.07
Housing Development Fin. Corp. 399394.39 14.98
per cent on YTD basis with Sensex gaining 10 per cent and
HCL Technologies Ltd. 149699.34 14.69
Nifty inching up by 8.7 per cent on YTD basis.
Hindustan Unilever Ltd. 435094.75 11.47
The best performing real estate stocks : Godrej properties, SENSEX 10
Phoenix Mills and Prestige Estate Projects were the three Tata Consultancy Services Ltd. 773253.92 8.32
outperforming real estate stocks that pushed the BSE Realty Infosys Ltd. 305288.76 7.86
index higher. Godrej properties gained 36.22 per cent followed State Bank Of India 282687.07 5.81
by Phoenix Mills and Prestige Estate Projects that inched up by Tech Mahindra Ltd. 72439.48 4.29
32.15 and 31.83 per, respectively. Sun Pharmaceutical Industries Ltd. 102451.6 -1.41
Power Grid Corporation Of India Ltd. 98196.94 -6.1
The best performing Banking stocks : ICICI Bank, Kotak Maruti Suzuki India Ltd. 211372.97 -6.42
Mahindra Bank and City Union Bank proved to the best Tata Motors Ltd. 46356.38 -7.52
performing banks in 2019 clocking 46.7, 34.74 and 21.42 per NTPC Ltd. 111610.61 -8.73
cent returns in 2019. IndusInd Bank Ltd. 100488.28 -9.06
Larsen & Toubro Ltd. 179223.31 -11.43
The best performing IT stocks : Tanla solutions, D-Link ITC Ltd. 296602.35 -14.67
(India) and NIIT Technologies were amongst the best Oil & Natural Gas Corporation Ltd. 158951.83 -15.17
performing IT stocks gaining 116.78 , 34.74 and 29.20 per cent, Tata Steel Ltd. 48941.43 -21.16
respectively. Hero MotoCorp Ltd. 47601.38 -23.83
Vedanta Ltd. 53007.19 -29.46
The worst performing Metal stocks : Nalco, Vedanta and Mahindra & Mahindra Ltd. 63859 -33.6
SAIL were amongst the worst performing metal stocks slipping Yes Bank Ltd. 14333.65 -69.5
by 35 per cent, 31.44 per cent and 31.36 per cent, respectively. Data as on Dec 09, 2019
Best Performing Stocks : BSE 500 Worst performing BSE 500 stocks :-
Company Name Market Cap (` Cr) YTD return (%) Company Name Market Cap (` Cr) YTD return (%)
Adani Green Energy Ltd. 19456.34 200.85 Reliance Capital Ltd. 304.51 -94.77
Aavas Financiers Ltd. 14109.27 113.84 Dewan Housing Finance Corporation Ltd. 509.96 -93.41
Reliance Nippon Life Asset Management Ltd. 20751.2 113.04 Reliance Infrastructure Ltd. 586.47 -92.95
CreditAccess Grameen Ltd. 11489.91 106.83 Reliance Power Ltd. 906.06 -88.8
HDFC Asset Management Company Ltd. 63459.11 96.8 Jain Irrigation Systems Ltd. 451.69 -86.82
Astrazeneca Pharma India Ltd. 6903.88 91.53 Coffee Day Enterprises Ltd. 926.34 -84.29
Dr. Lal Pathlabs Ltd. 13585.52 76.12 Indiabulls Integrated Services Ltd. 702.55 -78.51
Info Edge (India) Ltd. 30386.39 72.47 The Lakshmi Vilas Bank Ltd. 654.91 -77.67
Gujarat Gas Ltd. 15857.07 71.51 HEG Ltd. 4019.14 -71.76
Dixon Technologies (India) Ltd. 4058.34 71.24 Vodafone Idea Ltd. 18649.27 -71.54
Cover Story
Rupen Rajguru
Executive Director, Head - Equity Investment & Strategy, Julius Baer India
❝Healthcare is one sector which seems to be bottoming out and

may surprise positively in the coming years. ❞
As per your opinion, how is the Indian market equity investments over the next two quarters. Considering the
placed in emerging market space? overall divergence in the valuation of 'High quality growth' and
India's main attraction is its large and youthful population, 'Value' stocks, we are recommending a 'barbell strategy' i.e,
which will convert over the long-term into a huge growth in have 'high quality growth' stocks on one side and beaten-down
the consumer, healthcare, financial sectors among others. 'relative value' or 'mean reversion' plays like Corporate Banks,
There are other countries that have the same positive Pharma and Utilities on the other side. We are also
demographic story, but their financial markets are too small, recommending clients to build exposure towards mid and
illiquid or difficult to access to attract substantial foreign small-cap stocks.
interest (Vietnam, Philippines, Pakistan, Bangladesh and so
on). The second attraction is a corollary of the first: because of We would focus on those mid and small-cap names which
its large and youthful population, the country has an economy exhibit the following characteristics:
that is relatively divorced from the vagaries of global growth A) The company is a leader in its segment or has a niche
(i.e. the health of other countries' economy, the trade war). positioning.
What goes against India is its valuation. At 22.5x forward P/E, B) It is trading at a valuation which is close to multiple-year
it is much more expensive than any other emerging market. lows/significantly below the long-term average.
China for example is 14.0.x. While India has always traded at a C) There is an expectation of earnings rebound.
premium among other emerging market peers, this is the top
of the range! Therefore, it should not be expected to India until now has been riding on one engine
outperform its peers in the short-term, but can be expected to of consumption and even the investment cycle
do so in the long-term. has not been picked up for many years now.
So, looking at the current situation in India, do
In your view, which sector may surprise you think that the economic pain is here to
positively and which ones may surprise stay? What's your broad outlook for 2020?
negatively in 2020? Over the last few years, the consumption growth in the country
Healthcare is one sector which seems to be bottoming out and has been quite healthy, which has been a key support for the
may surprise positively in the coming years. The sector has economy at a time when investments have been completely
been under a lot of pain since the last few years, primarily due lacking, especially the private-sector investments. However,
to U.S. generic price erosion and the heightened level of U.S. with income levels probably not rising commensurately, it has
Food and Drug Administration (USFDA) activity for the led to an increase in leverage at individual household level front
various manufacturing facilities. Though the price erosion (which now seems to be getting improved). The weakness in
scenario seems to have bottomed, the resolution of the USFDA private investments has been on account of a combination of
observations continues to be a work-in-progress. However, several factors: Weakened balance sheet of the corporates (who
successful resolutions, combined with the benefits from the have of late been focussing on de-leveraging), low-capacity
R&D efforts of the last few years (new launches, especially in utilisation levels, uncertain growth outlook, liquidity stress, etc.
niche/specialty products, biosimilars, etc) could result in better Unfortunately, the fiscal stress has also restrained the
growth visibility. Government from aggressive investments. However, the
capacity utilisation levels are gradually trending up and once
Some of the stocks from the quality basket which are trading at the demand level starts improving, providing some better
a very premium valuations (such as Consumer Staples, Paint growth visibility, it is expected to trigger the next round of
companies, some Financial companies, etc) can probably capex cycle (although it could take another 12-18 months and
disappoint as the margin of error is low and any shortfall in may not be of similar magnitude as the last cycle).
performance v/s expectations could lead to some derating.
Economy-wise, although the overall growth momentum has
What strategy are you recommending your slowed down, yet India is still expected to rank amongst one of
clients for 2020? the fastest growing economies globally. The growth
Overall, we remain constructive of the Indian equity markets momentum seems to be bottoming out and several macro-
and are recommending clients to gradually build up on their factors (such as CAD/BOP, Fx, Liquidity, Interest rates, etc.)
The surprise of the pack has been the performance of Bharti
are showing signs of improvement, which could lead to a Airtel on bourses. Who could have thought that a telecom
revival in demand. The performance of India Equity market player can be the best performing Sensex stock in 2019! In fact,
indicates some sort of deviation to the economic environment, Bharti Airtel has been the world’s 3rd Best Telecom stock in
wherein, despite the weak economic activity, the markets are 2019. Ubiquiti with 93.70 per cent and ZTE with 63.76 per cent
trading at its all-time high levels. However, there has been are the second and third best telecom stocks globally. The
some sort of polarisation in the markets, wherein some of the Bloomberg World Telecom Index was up by 6.72 per cent.
quality index-heavy weights have started trading at premium
valuations (because of growth visibility and flight to quality The market story of the year 2019 has been the resilience shown
due to the prevailing uncertainty), thereby influencing the by the Sensex and the narrow rally. The rally can be said to be
headline index number. Moreover, the valuations may narrow when more than half of the index constituents reflect
also seem high due to the significant push back of earnings that negative returns in a given year. Sensex showed remarkable
we have seen over the last couple of years due to varying factors resilience in the midst of economic slowdown and earnings
at different points of time (Sensex earnings have grown at a downgrade. The million dollar question is whether Sensex will
muted 5-6 per cent CAGR over the last 4-5 years. The domestic manage to repeat its performance in 2020 and come up with yet
liquidity scenario remains supportive for Equities (with a lack another positive year for the investors? Also, most investors
of alternate investment opportunities), while the FII activity must be speculating if 2020 will be a hattrick year in the sense
has also started picking up, especially after the corporate tax where only a handful of stocks will pull the market performance
cuts by the Government. There remains a hope that the broader higher. And even more important question that needs attention
economic environment will start picking up once the sentiment is whether the same set of stocks that did well in 2019 will drive
starts improving. The government's (and also RBI's) focus is on the Sensex performance in 2020?
providing support to kick-start the economy, which is expected
to bear fruits in the coming period. Overall, India remains an Same goes for Nifty! Almost 31 stocks are seen underperforming
attractive investment destination with its favourable Nifty 50 which means that the current year’s rally has been
demographics and healthy growth opportunities. narrower than 2018. In 2018, Nifty was up by 3.2 per cent and 22
out of 50 stocks closed in positive territory while Nifty is up by
In terms of reforms and government's effort nearly 9 per cent on YTD basis as on December 10, 2019 and 23
to support the credit cycle, do you think there stocks are in positive with only 19 stocks managing to beat the
seems to be an acknowledgement and an benchmark returns.
attempt to fix the economy?
Over the last couple of years, there has been a major economy
reset exercise aimed at
Performance of Indian markets vs global markets
1) Getting more transparency and formalisation (GST and The Indian markets were seen underperforming in 2019 in
Demonetisation) comparison to most of the major global indices. With Sensex
2) Cleaning up of banking system (IBC). returning close to 12 per cent and Nifty nearly 10 per cent, the key
Indian benchmark indices not only struggled to repeat its world
This has weighed heavily on the economic growth and to make beating performance but did not even manage to beat its emerging
things worse, the collapse of IL&FS has led to a major risk market peers. NASDAQ was the best performing index with close
aversion and liquidity tightness in the credit market. To to 30 per cent returns followed by Brasil’s Bovespa delivering 26.27
counter the economic slowdown, over the last couple of per cent returns. US markets, European indices and emerging
months, the Finance Minister (FM) initially announced a series markets all were seen inching up in 2019 from anywhere between
of 'feel good-sentiment booster' for various sectors like 16.96 per cent to close to 30 per cent returns.
Financials, Autos, Real Estate and Exports. It also reversed the
surcharge on FPI taxation. Finally, the FM veered off the tight
Indian Indices Vs Global Indices performance in 2019 (%)
rope walk on the fiscal front, and gave the economy a much- YTD 3 year 5 year
needed boost, by announcing a cut in the corporate tax rate. BSE Sensex 11.99 51.01 45.65
Nifty 50 9.61 44.11 43.12
The Government's voice and action has definitely turned S&P 500 25.10 38.79 52.24
positive/pro-growth. They (along with RBI) have been taking NASDAQ 29.94 58.36 80.89
various measures to provide a more conducive environment to DOW 30 19.64 41.27 56.78
support growth-Liquidity easing, efforts on monetary CAC 40 23.39 22.53 36.90
transmission, corporate tax cuts and farm support. There are SMI 23.79 28.83 15.28
expectations that there could be more measures from the DAX 24.12 16.98 33.82
Government to further support growth. Hence overall, it seems Bovespa 26.27 83.43 121.10
that the Government's focus is definitely to fix the economy, MOEX 24.30 33.35 99.63
which is good news! Shangai 16.98 -9.77 -9.85
Nikkei 225 16.96 23.24 31.42
Cover Story
Gold Outlook:-
Gold prices have been trending up since 2015, however in
choppy fashion. The bullion may inch up by 8 to 10 per cent,
however, may not outperform equities in 2020, even though a
temporary outperformance by gold is not ruled out.
With US economy expected to grow in 2020 and recessionary fear
at minimum, we can expect the gold prices to be in check in 2020.
If the GDP growth happens as expected in US and UK while
economic expansion happens in Asia, gold will be under pressure.
IPOs in 2019: -
George Heber Joseph CEO & CIO, ITI Mutual Fund
The year 2019 has been extremely profitable for IPO investors.
Even though the number of mainboard IPOs issues was less in
2019 when compared to 2018, the performance of the newly-
listed stocks has definitely raised hopes for IPO investors.
Do you think equity will outperform other
asset classes in 2020? IPO performance in 2019
We are very constructive on equity markets in a medium-
term point of view. Our view is that Indian economy is close Company Issue Size Listing Post Listing
to bottom of the economic cycle with a low GDP and credit (Rs Cr) Gain (%) Gains (%)
growth rates and multi-year low in corporate profitability to CSB Bank Limited IPO 409.68 41.00 -5.00
GDP. Many sectors are showing cyclically low earnings. We IRCTC Limited IPO 645.12 143.00 11.00
believe all these low indicators will rebound. The sentiment Vishwaraj Sugar Industries Ltd IPO 60.00 1.00 33.00
towards equity remains quite pessimistic. Many sectors and Sterling and Wilson Solar Ltd IPO 3145.16 -20.00 -56.00
stocks are trading at attractive valuations and with this; we SpandanaSphoorty Financial Ltd IPO 1202.34 -5.00 43.00
feel it’s the right time to buy equities for handsome gains over Affle (India) Limited IPO 459.00 13.00 59.00
the next three to five years.
IndiaMARTInterMESH Limited IPO 475.59 36.00 51.00
Neogen Chemicals Limited IPO 132.35 22.00 33.00
What is your take on the NBFC sector in Polycab India Limited IPO 1346.00 20.00 50.00
India? Metropolis Healthcare Limited IPO 1204.29 10.00 32.00
The NBFC sector has always played a key role in providing Rail Vikas Nigam Limited IPO 481.57 4.00 17.00
credit to those where the banking sector could not lend a Embassy Office Parks REIT 4750.00 9.00 29.00
helping hand. They have been playing the role of financial MSTC Limited IPO 212.04 -5.00 18.00
inclusion much before this term became popular. Chalet Hotels Limited IPO 1641.18 4.00 12.00
Xelpmoc Design and Tech Limited IPO 23.00 10.00 -9.00
Thus, they will continue to play an important role in the
economy in a profitable manner. Many NBFCs in sectors
such as auto financing, MFI lending, SME lending, retail For the 15 IPOs on main board that have been listed in 2019, we
housing loans will continue to perform well. Some NBFCs find that the average listing gains is 19 per cent while the average
who followed more aggressive practices with respect to post listing gains for the 15 IPOs is 21 per cent. Nearly Rs
lending standards or asset liability matching are under stress 16,937.32 crore has already been raised through primary
currently and this is part of the normal business cycle. markets in 2019 up till December 10.
The returns are definitely beating the markets and this kind of
The BSE IPO index has been one of the best performance of IPOs in 2019 for sure augurs well for the IPO
investors looking for opportunities in 2020. The IRCTC was the
performing indices on Indian bourses. The best performing IPO in 2019 while the Sterling and Wilson
one-year return for the BSE IPO index is 42 Solar Ltd. was the worst performing IPO.
per cent and on YTD basis, the index that
Mutual Funds in 2019
measures how well the IPOs performed,
The importance of choosing the right mutual fund scheme was
delivered 33.32 per cent returns. highlighted in 2019 as indicated by the gap between the top
The risk remains in the market if the Global market outlook:-
GDP further slows down. However, The average annual GDP growth is likely to rise to 3.4 per cent
the market has not discounted a in 2020 from 3.1 per cent in 2019 for the world economy.
further slowdown, instead expecting a Despite several headwinds, the global equity markets as
represented by MSCI world index delivered 20 per cent +
recovery. The 13-months consecutive returns in the first 10 months of 2019, which is easily above the
drop in auto sales may finally stop and average returns displayed by the index. While 2020 may
struggle in comparison to 2019, the most important equity
take a U-turn in 2020. Expect some markets are expected to deliver positive returns closer to 10 per
recovery in the auto stocks! Today, the cent. Emerging markets however, are expected to show
recovery.
economic growth is two-standard
deviation below the normal growth. It The interest rates are at their all-time low levels and may not go
may take 3 to 4 quarters to inch back to further down from the current levels globally even though
emerging markets are expected to witness some rate cuts in
normal levels. The GDP deficit reaching 2020. The inflation levels are expected to pick up in US markets
3.8 per cent may have a crowding out while the inflation levels in Europe and Japan is expected to be
around 2 per cent.
effect. The bond yield may harden, and
the earnings may get downgraded for few The global earnings are expected to grow by 7 per cent unless
sector stocks. the situations on global trade do not worsen.
Global Growth Projection
Morgan Stanley CLSA Goldman Sachs Credit Suisse
Global 3.2 1 3.4 2.5
DM 1.3 NA 1.7 1.4
performing funds in Category Return Difference (%)
EM 4.3 NA 4.8 4.3
any category versus the EQ-CONSUMPTION 22.49
US 1.8 1 2.3 1.8
bottom performing EQ-DIVIDEND YIELDING 6.18
Euro Area 0.9 0.3 1.1 1
fund in the category. EQ-ELSS 17.05 Japan 0 NA 0.4 0.4
For example, if we EQ-FINANCE 13.73 UK 1.4 NA 1.1 1.3
consider the mutual EQ-INFRA 28.06 China 6 6 5.8 5.9
fund schemes that EQ-INTERNATIONAL 18.91 India 6.3 5 6.4 6
primarily invest in EQ-LARGE &MID 14.57 Brazil 2.2 NA 2.2 2.7
finance sector stocks, EQ-LARGE CAP 16.07 Russia 1.7 NA 2.2 NA
we would see that the EQ-MID CAP 17.58 All figures in %; NA = Not Available; Source: Morgan Stanley, CLSA, Credti Suisse, Goldman Sachs reports
returns gap between EQ-Multicap 23.77
the best performing EQ-MNC 9.45 Indian Equity Market Outlook
fund in the category EQ-Pharma 7.19 Many investors sat on sidelines in 2019 owing to constant
and the worst EQ-POWER 9.44 negative news and developments in the global markets.
performing fund in the EQ-SMALL AND MID CAP 30.46 However, equity markets surpised investors with its
category is 13.73 per EQ-TECHNOLOGY 7.8 performance in 2019. The year 2020 again seems full of
cent in 2019. The EQ-VALUE 21.32 challenges and hence, it may not be a smooth ride for investors
following table next year as well. Market timing may continue to be a futile
highlights the gap or difference between the best and the worst exercise and the best way any investor can help himself is to
performing mutual fund scheme in each category. remain invested in equities throughout the year. A lower double-
digit return is expected from the key benchmark indices i.e
Category wise, it was the mutual fund schemes invested in Sensex, while there is a higher probability of broader markets
financial stocks that did the best in 2019 by delivering on an beating the key benchmark indices such as Sensex in 2020.
average of 21.4 per cent returns. The International funds as a
category followed by large-cap funds and multi-cap funds were As of now the fiscal stimulus and easy monetary policy is not
the top performers with average returns for the category being able to reverse the economic slowdown. Steady global capital
14.17 per cent, 12.63 per cent and 11.25 per cent, respectively. flows and improvement in demand is what the bulls are betting
on for 2020. Basically, we are at the bottom of everything
including GDP growth, unemployment and consumption
Cover Story
which suggests there is limited downside on the economic Amar Ambani
fundamentals. However it also means that it may take time for Senior President and Research Head,
earnings to be robust. Stretched valuation in the index stocks Institutional Equities, YES SECURITIES
and especially those stocks which have pulled the markets to
all-time highs indicate that there might be a correction in select
counters, thus limiting the upside for the key benchmark
indices. One must be prepared to face correction in stocks that
have taken the markets to all-time highs.
Having said that global brokerages such as Morgan Stanley and In the present context,
Credit Suisse have changed their stance from 'underweight' to
'overweight' on India. According to credit Suisse the global
our Nifty target for the year
emerging market (GEM) equities will outperform the developed
markets and one of the key drivers for the GEM equities will be
2020 is 12900, but with rising risk
the currency. USD surge may halt in 2020. India remains one of of a sudden deep correction. Having
the high conviction markets for Credit suisse. CLSA however has
a neutral stance on India while it is bullish on the EM pack. said that, 2020 will be a year to firm
Not only does Indian market feature in the high conviction list up positions in equities, as we
of foreign brokerages but also the earnings growth estimate for
the domestic market is one of the highest in the emerging
believe that 2021 will bring a start
market (EM) pack. This expectation is despite the rough patch
Indian economy is going through. The consensus earnings per
of a secular rally. I would therefore
share (EPS) growth estimate in 2020 for the EM pack is 14.1 per advocate at least a 65% asset
cent while that for the Indian market is 20.3 per cent. With EM
pack expected to dominate the markets in 2020 and Indian allocation to equities if
markets on top of list along with South Korea in terms of
earnings growth expectation, investors in Indian equities have a you have 3-4 year
lot to cheer for in coming year. time horizon.
Sectoral outlook
Banks : - The growth outlook for banks and non-bank
lenders is moderate. The loan growth may remain muted
throughout 2020. Those banks with a strong franchise, higher
profitability and higher capital adequacy may gain market share
in 2020 and hence, can be expected to outperform in 2020 as
they did in 2019. Telecom outlook:
Cement :- A good earnings momentum may continue in
2020 for cement stocks. The cement prices are expected to ❝The recent prepaid tariff hikes will not be adequate for
sustainability of the telecom sector. Key players will require
remain sturdy in 2010 as was the case in 2019. The earnings an additional equity or asset monetisation of Rs 50,000
momentum will remain strong for cement stocks. crore for the rollout of 5G. The revision in prepaid tariffs
may improve the EBITDA levels on an average by 20 per
FMCG :- The revival in consumer demand is on card. H2 can cent-25 per cent for the existing players. Debt to EBITDA
be better than H1 for FMCG sector. The trend of deeper levels for the sector, nonetheless, will still continue to be
penetration of products and increasing organised market size elevated between 3x-6x levels. The sector will continuously
will help FMCG sector grow in 2020. require capital investments for not only rolling out 5G
services over the medium-term but also for the regular
Defence :- The year 2020 could be exciting for defence players upgradation of networks. The 5G roll out is likely to get
as the prospects remain strong for huge orders. The growth delayed beyond 2022 given the inadequate capacity of the
visibility exists due to strong order book. Also, several companies incumbent players to bid in fresh spectrum auctions.
in the sector have strong balance sheets and are cash-rich. Therefore, rationalisation of tariffs has to be also supported
by additional equity infusion, strategic divestments and
Infrastructure :- A strong order book brings in growth asset monetisation.
❞
visibility for the sector stocks just like in defence hence, the
sector will see more action in 2020 than compared to 2019.

-- Acuité Ratings and Research
NBFC :
Housing Finance Sector Outlook :
❝Mortgage lenders have been the toast of local investors for ❝The trifecta of constrained funding access with rising
more than four years, due to the simplicity and safety of their borrowing costs, re-calibration and de-risking of loan book
business models. Since last September, however, they have and a slowing economy is set to beat down growth in assets
virtually been toasted to a crisp. Even though many of these under management (AUM) of non-banks, comprising
lenders are trading at multi-year lows, the fault lines in their non-banking finance companies and housing finance
financial engineering and opacity of the real estate market companies to a decadal low of 6-8 per cent this fiscal, as
have made them rather unattractive for serious investors. compared to ~15 per cent last fiscal. ❞

The housing finance sector growth has slowed down in the --- CRISIL
last one year due to liquidity crunch. Housing finance
companies (HFC) lowered their disbursements and raised
portfolio sale through securitisation for repayment of debt
obligations. The market has started to differentiate between Conclusion
strong and not-so-strong HFCs. There is no constraint The equity markets have climbed the wall of worries in the past
whatsoever as far as liquidity is concerned for strong HFCs. and it seems most likely that they will do so in 2020 with flair.
There is plenty of liquidity. There is a complete eagerness from The current valuation is on the higher side of its historical
banks, mutual funds, insurance companies to lend stronger average and it does look like there is a little room for error for
HFCs. The not-so-strong HFCs are facing liquidity issues. On corporate India this season. Higher valuations and a lack of
the liability side, as long as risk aversion continues, the small, support from the GDP data indicate markets may face some
mid-sized HFCs will have to look at co-originating loans and headwinds in 2020. However, we firmly believe that the
selling loans, keeping spread in the middle. expansionary measures taken by the government will usher in
higher growth trajectory in the coming quarters and that may
The Centre and the Reserve Bank of India (RBI) have taken augur well for several sectors thus, creating demand for stocks
several steps to ease liquidity. The RBI has relaxed the from various sectors.
minimum holding period for which the asset needs to stay
on the book before it is eligible for securitisation. Due to this The impact of the economic slowdown has been much broader
change, additional assets worth Rs 40,000 crore have become than expected while the sectors and stocks that have done well
eligible for selling down.❞ have become narrower. We may be at the bottom of economic
cycle and believe most of the negatives are factored in by the
-- Venkatesh Kannappan markets.
Managing Director & CEO, Aham Housing Finance.
While the Sensex may remain resilient in 2020, there is a very
good probability that markets may witness mid-caps and
small-caps rallying better than the large-caps. The focus for
investors should be on mid-caps and small-caps, as one may
find maximum compounders from this space in 2020. A lot of
leveraged positions in the mid-cap and small-cap space have
been unwound. While the choppiness in mid-caps and
small-caps cannot be ruled out, there is a good probability that
Real estate Outlook : the smart money will flow into mid-caps and small-caps in
❝India's faltering GDP growth rate q-o-q prompted the 2020.
government to dole out innumerable measures after taking
charge in its second term. From creation of AIF of Rs 25,000 PSU stocks will remain in limelight throughout 2020 due to
crore for last-mile funding of stalled realty projects to deep divestment process. The impressive performance of IPOs in
cuts in corporate taxes to further relaxation in FDI norms 2019 may continue in 2020, so investors should not miss the
for single-brand retail, the government has been on a roll. opportunity to participate in quality issues. With earning
Despite this, 2019 failed to see a perceptible positive impact expected to show an uptick, we think the Sensex should reach
of these announced measures. At the most, it boosted the 46,000 by December 31, 2020!
confidence of India Inc. and the affected sectors. However,
2020 looks promising; especially the second-half! ❞ Based on our positive biew on the markets we have identified
a portfolio of stocks that we believe should outperform
-- Anuj Puri markets. Please refer next page to view our preferred stocks
Chairman, Anarock Consultancy for 2020.
Cover Story
Bajaj Finance Can Fin Homes
CMP : `4135.20 CMP : `415
BSE Code : 500034 BSE Code : 511196
Face Value (`) : 2.00 Face Value (`) : 2.00
Market Cap FF (` Cr.) : 1,02,012.29 Market Cap FF (` Cr.) : 3,868.13
B C
ajaj Finance Limited which is a Non-Banking Finance an Fin Homes Ltd. offers a housing loan to individuals,
Company (NBFC) is a subsidiary of Bajaj Finserv. It is builders or developers and also offers loans against
primarily engaged in lending and allied activities property. As part of the housing loan, it offers loan
focussing on consumer lending. under various schemes related to construction or purchasing of
properties.
Overall for the NBFC sector, Q2FY20 seemed to be rather
slower. With the company’s strategy to create a balance mix of During the quarter, the loan book of Can Fin Homes surpassed
wholesale and retail borrowings, its consolidated borrowings the mark of `19,600 crore with a clientele base of 1.55 lakh,
were around `1,19,539 crore in a mix of 38:47:15 between while the Loan book depicted a growth by 16 per cent YoY
banks, money markets and deposits as of September 30, 2019. which is driven by 13.8 per cent rise in loans to salaried and
For Q2FY20, Assets under Management (AUM) grew by 38 per professional client as well as an increase of 20.8 per cent in the
cent YoY to `1,35,533 crore from `98,013 for Q2FY19. self-employed and non-professional segment. The net interest
Subsequently, the Net Interest Income (NII) increased by 48 per earned by the bank in Q2FY20 came in at `493.98 crore as
cent and was reported at `3,999 in Q2FY20 as compared to against `414.19 crore in Q2FY19, clocking a growth of 19.26
`2,708 in Q2FY19. On consolidated basis, in Q2FY20, Bajaj per cent. Even when there is a slowdown in housing credit
Finance gained a net profit of `1,506 crore, clocking a growth of landscape with a sluggish growth in the company’s key market
63 per cent as compared to the net profit of `923 crore gained in of Karnataka, the company gained a net profit of `97.62 crore in
Q2FY19. On the annual basis, in FY19, AUM grew by 41 per Q2FY20, thereby increasing 19.71 per cent YoY. On the annual
cent to `1,15,888 crore from `82,422 crore. The company front, the net interest earned by the bank in FY19 came in at
reported a 46 per cent increase in NII to be `11,878 crore in `1,699.54 crore as against `1,490.58 crore in FY18, clocking a
FY19 as compared to `8,143 crore in FY18. Bajaj Finance growth of 14.01 per cent. Disbursement during FY19 amounted
gained a net profit of `3,995 crore in FY19 improving to `5,479 crore accompanied with growth in the loan book.
significantly by 60 per cent from `2,496 gained in FY18. Negative impacts from previous period tax expenses and
increased CSR expenditure affected the PAT with a
The company continues to focus on its growth, profitability and comparatively lower growth by 3.68 per cent to `296.73 crore in
sustainability. In future, the company strives to strengthen its FY19 from `286.19 crore in FY18.
business model to boost its demand. The AUM growth is
expected to be led by rural revival, backed up by the monsoons By March 2022, Can Fin Homes aims to reach the loan book
and latest governmental reforms toward consumption and size of `40,000 crore (CAGR of 26 per cent) on the basis of high
liquidity. Also, the gains arising from the recently announced asset quality, transparency and best-ethical practices as well as
and implemented corporate tax rate cuts to end-borrowers, in prudent risk management practices. With a stable environment
order to be more competitive in certain segments, will support in the NBFC sector, the growth outlook for Can Fin Homes
growth. looks positive.
LAST FIVE QUARTERS (Consolidated) (`Crore) LAST FIVE QUARTERS Standalone (`Crore)
Sep-19 Jun-19 Mar-18 Dec-18 Sep-18 Sep-19 Jun-19 Mar-18 Dec-18 Sep-18
Total Income 6321.45 5801.25 5307.66 4974.7 4261.36 Total Income 500.49 484.01 463.05 448.54 419.94
Other Income 1.10 7.04 0.81 20.56 11.94 Other Income 0.18 0.13 0.75 0.84 1.89
Operating Profit 4416.58 4027.75 3765.66 3462.87 3033.32 Operating Profit 471.43 454.47 431.09 428.69 404.70
Interest 2323.42 2113.36 1913.21 1786.11 1565.43 Interest 338.47 329.37 313.73 301.50 283.70
Net Profit 1506.29 1195.25 1176.06 1059.56 923.47 Net Profit 97.62 80.98 67.01 80.35 81.55
Equity 115.55 115.49 115.37 115.31 115.29 Equity 26.63 26.63 26.63 26.63 26.63
Dixon Technologies GMM Pfaudler
CMP : `3551.70 CMP : ` 1628.25
Market Cap FF (` Cr.) : 1,520.47 Market Cap FF (` Cr.) : 595.02
D G
ixon Technologies (India) Limited is a design-focussed MM Pfaudler Ltd (GMMPL), an Indian subsidiary of
products and solutions company engaged in Pfaudler Inc. of USA is a company that manufactures
manufacturing products in the consumer durables, glass-lined equipment, storage vessels, alloy steel
lighting and mobile phones markets in India. equipment and other special-purpose machinery used by the
pharmaceutical companies , fine chemicals, dyes and
On a consolidated basis for Q2FY20, Dixon Technologies agricultural chemical industries.
posted an increase of 89.75 per cent in the net sales to
`1,401.98 crore from `738.85 crore in Q2FY19. In Q2FY20, its Looking at the quarterly trends on a consolidated basis, GMM
PBT grew by 96.07 per cent to `48.35 crore from `24.66 crore in reported the net sales of `153.05 crore in Q2FY20, an increase
Q2FY19. Net profit jumped by 161.96 per cent in the latest of 27.75 per cent from `119.8 crore reported in Q2FY19. The
quarter to `43.04 crore compared to `16.43 crore reported in PBT in the latest fiscal quarter saw a growth of 25.05, growing
Q2FY19. to `24.76 crore from `19.8 crore in Q2FY19. Net profit jumped
by 51.20 per cent in Q2FY20 to `20.79 crore as against `13.75
On an annual consolidated basis, the company saw a steady crore reported in Q2FY19.
growth of 4.59 per cent in net sales to `2,984.45 crore in FY19
from `2,853.39 crore reported in FY18. The PBT reported by On an annual basis, net sales increased by 22.31 per cent in
the company for the FY19 was `93.81 crore, an increase of 6.34 FY19 to `502.64 crore from `410.96 crore reported in the
per cent from `88.22 crore reported in the last fiscal year. Net previous fiscal year. PBT for the FY19 was `73.27 crore, up by
profit grew by 4.04 per cent in FY19 to `63.35 crore as 20.81 per cent from `60.65 crore reported in the previous fiscal
compared to `60.89 crore reported in the previous fiscal year. year. Similarly, net profit grew by 18.54 per cent and was
reported at `50.58 crore in FY19 as compared to `42.67 crore
Currently, there has been substantially lower penetration of reported in FY18.
consumer electronics and appliances in India, compared to
other countries. This has led many to believe that the domestic GMM Pfaudler has a competitive edge in the Glass Lining
industry will grow at a much faster pace, thus contributing equipment (GL) industry owing to robust order backlog, high
towards the company's growth. Improvement in infrastructure entry barriers, market leadership position, strong brand name,
especially electrification in rural regions and massive wave of and sticky clientele. It has been able to pass on the price
urbanisation among other factors can also be considered as a increase taken in the GL sector onto the customers owing to the
growth driver.The company puts strong focus on backward high demand, showcasing its bargaining power in the market.
integration manufacturing, capacity expansion across key
segments based on a strong order book. Along with this, new In the short term, increase in the domestic company's
customer additions are expected to drive revenue and profit producing API and key materials in-house will help GMM in
growth going forward. maintaining strong revenue and profit growth for the future.
LAST FIVE QUARTERS Consolidated (`Crore) LAST FIVE QUARTERS Standalone (`Crore)
Equity 11.33 11.33 11.33 11.33 11.33 Equity 2.92 2.92 2.92 2.92 2.92
Cover Story
Gujarat Gas KNR Construction
CMP : `228.45 CMP : `237.85
Market Cap FF (` Cr.) : 5,661.46 Market Cap FF (` Cr.) : 1,505.06
G K
ujarat Gas Limited which was formerly known as GSPC NR Constructions Limited is an India-based holding
Distribution Networks Limited is engaged in the company. The company is a multi-domain
natural gas business in the state of Gujarat. It mainly infrastructure project development company that
carries business operations related to city gas distribution undertakes Engineering, Procurement and Construction (EPC)
which also includes sale, purchase, supply, distribution, contracts, as well as Build-Operate-Transfer (BOT) projects
transport and trading in natural gas, Compressed Natural Gas across various sectors, such as construction and maintenance of
(CNG), Liquefied Natural Gas (LNG), etc. roads, highways, flyovers and bridges.
Looking at the quarterly trends on a consolidated basis, the On a consolidated basis, the quarterly trends show the net sales
company reported an increase of 27.58 per cent in net sales to for Q2FY20 reaching `587.07 crore, a rise of 30.34 per cent
`2,569.25 crore for Q2FY20, as compared to the net sales of from the net sales of `450.42 crore in Q2FY19. The PBT was
`2,013.83 crore in Q2FY19. For Q2FY20, the PBDT doubled reported to be `94.69 for Q2FY20, a jump of 163.47 per cent
to reach `341.55 crore from `130.12 crore of Q2FY19. from PBT of `35.94 crore reported in Q2FY19. Similarly, the
net profit reported for the most recent quarter was `74.64 crore,
Also, in Q2FY20, the company posted a significant rise in the an increase of 109.55 per cent from `35.62 crore reported in
net profit gained of `517.25 crore from `41.07 crore gained in Q2FY18.
Q2FY19.
On an annual consolidated basis, net sales saw an increase of
Looking at the annual trends, the net sales increased by 25.60 10.72 per cent in FY19 to `2,291.5 crore, from `2,069.59 crore
per cent to `7.962.48 crore for FY19 from `6.339.35 crore in reported in the previous fiscal year. PBT reported for the FY19
FY18. The PBDT of the company increased by 20.05 per cent to was `289.27 crore, increasing 26.78 per cent from `228.16 crore
`882.14 crore for FY19, as compared to `734.84 crore of FY18. reported in FY18. Net profit for FY19 grew by 14.38 per cent to
In FY19, the company’s net profit registered a growth by 43.19 `261.8 crore as compared to `228.88 crore reported in the
per cent to `416.96 crore from `291.19 crore gained in FY18. previous fiscal year.
The company intends to increase its focus on the growth of The Company is currently focussing more in the states of
CNG and domestic PNG segment. An increase in both the Maharashtra, Tamil Nadu and Karnataka for new projects. It is
CNG as well as industrial PNG demand will drive the expecting an additional order in the second half of FY20,
company’s volume growth. Gujarat Gas supplies natural gas to mainly led by at least 1 Hybrid Annuity Model (HAM) project.
ceramic makers in Morbi thus tile demand revival is expected A strong order book, along with the proven record of healthy
to positively impact the company’s revenue margins. Also, execution of existing projects indicates a strong future growth
development of the CNG ecosystem is a growth driver for in the company's top line.
Gujarat Gas.
LAST FIVE QUARTERS (Standalone) (`Crore) LAST FIVE QUARTERS (Standalone) (`Crore)
Equity 137.68 137.68 137.68 137.68 137.68 Equity 28.12 28.12 28.12 28.12 28.12
KOTAK MAHINDRA BANK Power Grid Corporation
CMP : `1713.05 CMP : `188.20
Market Cap FF (` Cr.) : 2,30,602.09 Market Cap FF (` Cr.) : 42,134.70
K P
otak Mahindra Bank Limited (KMB) mainly provide ower Grid Corporation of India Limited is an electric
services in treasury and corporate centre, which includes power transmission company. The company's business
dealing in debt, equity, money market, forex market, segments include transmission, telecom and consultancy.
derivatives, investments and primary dealership of government The transmission segment includes Extra High Voltage and High
securities and Balance Sheet Management Unit (BMU). Voltage (EHV/HV) networks and grid management. It also owns
EHV Alternating Current (AC) and HV Direct Current
On the financial front, the net interest earned by the bank in the (HVDC) sub-stations. The consultancy segment includes the
Q2FY20 increased by 15.49 per cent to `8,418.75 crore as against planning, designing, engineering, load dispatching, procurement
`7,289.46 crore in Q2FY19. Total income in Q2FY20 was management, operation and maintenance, financing and project
`12,542.99 crore, an increase by 15.83 per cent from `10,829.08 management.
crore in Q2FY19. The net profit rose by 37.76 per cent to
`2,407.25 crore in Q2FY20 as against `1,747.37 crore in Q2FY19. Looking at the quarterly trends on a consolidated basis,
For Q2FY20, the GNPA ratio was 2.17 per cent as compared to Power Grid reported net sales of `9,051.29 crore in Q2FY20,
1.91 per cent in Q2FY19. The CRAR ratio in Q2FY20 was 18.15 an increase of 6.01 per cent from `8,538.07 crore reported in
per cent and in Q2FY19, it was 17.04 per cent. Q2FY19. The PBT in the latest quarter saw a growth of 16.61
per cent to `3,004.61 crore from `25,76.68 crore reported in
On the annual front, the net interest earned for FY19 came in at Q2FY19. Net profit for Q2FY20 was reported to be `2,571.1
`29,934.76 crore, an increase of 19.11 per cent from `25,131.08 crore, up by 9.49 per cent from `2,348.25 crore reported in the
crore in FY18. The total income earned in FY19 was `45,903.36 same quarter of the previous fiscal year. On an annual basis, net
crore, an increase of 18.54 per cent from `38,723.67 crore sales increased by 17.04 per cent in FY19 to `35,059.12 crore
earned in FY18. The net profit in FY19 rose by 16.18 per cent to from `29,953.62 crore reported in the previous fiscal year.
reach `7,204.13 crore as against `6,200.97 in FY18. KMB
reported a GNPA ratio of 1.94 per cent for FY19 and 1.95 per PBT for the FY19 was 11,674.04 crore, an increase of 14.60 per
cent for FY18. In FY19, the CRAR ratio was 17.45 per cent, cent from FY18 when it was reported at `10,186.56 crore.
whereas in FY18, it was 18.22 per cent. Similarly, net profit increased by 22.60 per cent to `10,033.52
crore in FY19 from `8,204 crore in the previous fiscal year.
With KMB’s focus on CASA and retail deposits, its cost of
funds is in line with its peers enabling the bank to gain The outlook of the company looks promising with continued
profitable market share while de-risking its balance sheet. The investment in renewable energy and an increase in power
bank has stringent underwriting standards and targets demand driving the need for transmission works. Moreover,
risk-adjusted returns on lending which drives growth. KMB has PWGR's already robust project pipeline and recent project
also demonstrated its ability to initiate timely damage control orders will highlight its competitive position in the market to
measures thus, proving its stability. take on future projects.
LAST FIVE QUARTERS Consolidated (`Crore) LAST FIVE QUARTERS Standalone (`Crore)
Equity 955.01 954.67 954.38 953.77 953.50 Equity 5231.59 5231.59 5231.59 5231.59 5231.59
Cover Story
The Phoenix Mills Sonata Software
CMP : `775.15 CMP : `303.50
Market Cap FF (` Cr.) : 4,399.37 Market Cap FF (` Cr.) : 2,202.19
T S
he Phoenix Mills Limited is a company engaged in the onata Software Limited is an Information Technology (IT)
construction of buildings carried out on own-account servicing and solutions company. It provides solutions for
basis or on a fee or contract basis. It operates through travel, retail and distribution, and software product
two segments: Property & Related Services, and Hospitality companies by integrating technologies, such as Omni-channel
Services. The company engages in the development and commerce, mobility, analytics, cloud and enterprise resource
operation of malls and other real estate properties, specialising planning. Its operations include software development,
the ownership, managing and development of retail-led mixed technical services and product marketing.
use properties.
On a consolidated basis, Sonata Software's net sales for
On a consolidated basis for Q2FY20, Pheonix mills posted an Q2FY20 stood at `703.07 crore, a hike of 18.55 per cent from
increase of 2.55 per cent in net sales to `415.06 crore from the net sales of `593.07 crore reported in Q2FY19. The
`404.73 crore in Q2FY19. Operating profit grew by 34.04 per company's PBT grew by 13.55 per cent in Q2FY20 to
cent in Q2FY20 to `99.27 crore from `74.06 crore reported in `98.62 crore from `86.85 crore reported in Q2FY19. Net profit
Q2FY19. For the second quarter of the current fiscal year, the grew by 16.81 per cent to `72.24 crore in Q2FY20 as compared
company posted a net profit of `64.26 crore, up by 14.34 to `62.18 crore in the same quarter for the previous fiscal year.
percent from `56.2 crore posted in net profit for Q2FY19.
On an annual consolidated front, Phoenix Mill's net sales stood Looking at the annual consolidated trends, the net sales were
at `1,981.56 crore in FY19, up by 22.33 per cent for a net sale reported at `2,960.9 crore for FY19, an increase of 20.66 per
figure of `1,619.85 crore reported in the previous fiscal year. cent from `2453.94 crore reported for FY18. The PBT expanded
Expanding significantly, it reported an operating profit of by 34.23 per cent to `349.49 crore in FY19 from `260.37 crore
`571.56 crore in FY19, up by 98.88 per cent from `287.39 crore in FY18. The company reported net profit of `248.88 crore in
reported in FY18. The company's net profit rose by a massive FY19, increasing 29.54 per cent from `192.13 crore reported in
118.18 per cent to `461.68 crore in FY19, as against `211.6 crore the previous fiscal year.
it had reported in the previous fiscal year.
Sonata Software has differentiated its business model,
Plans of scaling up its operations are already underway with 5 focussing investment in Intellectual Property (IP) led
retail assets with a combined total of 4.90 mn sq.ft and 2 solutions and enhancing its Microsoft 365 capabilities
commercial assets aggregating to 0.96mn sq. ft. under through selective acquisitions. Intellectual Property (IP) led
construction, which are expected to become operational business along with digital are expected to gain momentum in
between FY20 and FY23. Furthermore, continued strong the coming years led by platform and alliance led strategy
growth in rental revenue of operational malls and growth in and are expected to drive future revenue growth in the
office space rentals indicate that the company's revenue and company.
profits should continue their upward trend.
LAST FIVE QUARTERS Consolidated (`Crore) LAST FIVE QUARTERS Consolidated (`Crore)
Other Income 19.46 15.38 32.90 16.98 18.26 Other Income 20.84 16.78 7.49 -4.74 16.69
Equity 30.67 30.67 30.66 30.65 30.64 Equity 10.39 10.39 10.39 10.39 10.38
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Company Name
Date Price Date Price (%)
May 24, 2018 Tata Chemicals Ltd. 717.20 Feb 06, 2019 595.00 -17.04
Jun 07, 2018 Tata Steel Long Products Ltd. 1088.65 Jun 11, 2019 706.85 -35.07
Jun 21, 2018 Bajaj Auto Ltd. 2833.80 Dec 03, 2018 2733.15 -3.55
Jul 05, 2018 KEI Industries Ltd. 406.35 May 24, 2019 484.70 19.28
Jul 18, 2018 Ashoka Buildcon Ltd. 147.85 Open -36.79
Aug 02, 2018 Take Solutions Ltd. 204.05 Open -53.49
Aug 16, 2018 Trent Ltd. 363.00 Jun 25, 2019 435.00 19.83
Aug 30, 2018 Finolex Industries Ltd. 602.65 Aug 30, 2019 504.00 -16.37
Sep 12, 2018 Chambal Fertilisers & Chemicals Ltd. 158.65 Jun 07, 2019 189.55 19.48
Sep 27, 2018 ITD Cementation India Ltd. 125.00 Sep 27, 2019 49.85 -60.12
Oct 11, 2018 V Mart Retail Ltd. 2032.20 Oct 31, 2018 2400.60 18.13
Oct 25, 2018 Escorts Ltd. 572.65 Nov 02, 2018 685.90 19.78
Nov 05, 2018 Crisil Ltd. 1495.00 Jan 03, 2019 1645.00 10.03
Nov 22, 2018 Indian Hotels Company Ltd. 134.30 Dec 12, 2018 148.00 10.20
Dec 06, 2018 Tech Mahindra Ltd. 725.25 Feb 08, 2019 817.00 12.65
Dec 20, 2018 Bandhan Bank Ltd. 556.00 Open -6.50
Jan 03, 2019 Godrej Consumer Products Ltd. 807.65 Open -16.24
Jan 17, 2019 ITC Ltd. 296.00 Open -19.21
Jan 31, 2019 Biocon Ltd. 326.80 Oct 24, 2019 245.50 -24.88
Feb 14, 2019 Shoppers Stop Ltd. 500.20 Open -30.43
Feb 28, 2019 Titan Company Ltd. 1037.70 May 20, 2019 1223.95 17.95
Mar 14, 2019 CCL Products India Ltd. 299.45 Open -37.89
Mar 28, 2019 Indian Hotels Company Ltd. 150.95 Open -3.35
Apr 11, 2019 Indian Bank 271.65 Open -56.56
Apr 25, 2019 ICICI Bank Ltd. 401.05 Nov 08, 2019 490.60 22.33
May 09, 2019 Larsen & Toubro Infotech Ltd. 1695.15 Open -2.85
May 23, 2019 SRF Ltd. 2927.70 Open 13.32
Jun 06, 2019 KNR Constructions Ltd. 287.25 Open -14.05
Jun 20, 2019 Manappuram Finance Ltd. 141.70 Oct 24, 2019 165.05 16.48
Jul 04, 2019 Bharat Electronics Ltd. 113.05 Open -10.17
Jul 18, 2019 Marico Ltd. 368.15 Open -8.98
Aug 01, 2019 Jubilant Foodworks Ltd. 1201.25 Sep 23, 2019 1441.50 20.00
Aug 14, 2019 Atul Ltd. 3623.05 Nov 01, 2019 4337.45 19.72
Aug 29, 2019 Radico Khaitan Ltd. 305.05 Open -1.43
Sep 12, 2019 HCL Technologies Ltd. 531.91 Open 3.07
Sep 26, 2019 PI Industries Ltd. 1304.80 Open 14.43
Oct 10, 2019 Aegis Logistics Ltd. 166.60 Dec 02, 2019 202.50 21.55
Oct 24, 2019 PNC Infratech Ltd. 172.40 Open 13.52
Nov 07, 2019 Petronet LNG Ltd. 288.25 Open -4.56
Nov 21, 2019 Hero MotoCorp Ltd. 2469.80 Open -6.00
Dec 05, 2019 Thyrocare Technologies Ltd. 567.35 Open -4.82
Special Report
One of the most important
parameters while analysing
quality stocks is the debt levels
of the company. Often, excessive
levels of debt are considered
negative for stocks performance
but should all debt-free
companies be considered good
for investments?
Geyatee Deshpande
explains the merits of focussing
on debt-free companies while
identifying quality stocks.
Debt Free Companies In

Current Market Scenario
A
stock can go up for multiple reasons at company has, more promising the growth prospects can be for
any given point of time. The reason why any listed company, simply because the margins will be higher
stock prices jump could be better than for the low debt or zero debt companies. Going by the same
expected profits, higher sales growth, logic, the prospects should be much better for those companies
better profit margins, a big order wins, a which have no debt on its books at all- isn’t it?
macro event which uplifts the overall
sentiment thus, pushing higher majority While the answer may not be objective enough to excite
of stocks or even an institutional investor investors and lure them to make investment decisions based
taking exposure in the stocks in a big way. purely on the zero debt levels of the company, the latter should
However, in the long-run what works consistently in the favour be a part of scanning list of any fundamental investor.
of any outperforming stock, is the quality and the durability of
the growth in terms of sales and profits while maintaining Arvind Mehta who has been investing in markets for over two
healthy profit margins. To put bluntly, we can say that the stock decades says, “My investment process includes filtering stocks
returns are mostly positively correlated to profits and sales for their fundamentals. While I am doing so, I give a lot of
growth along with other fundamentals as reflected in higher preference to zero debt companies as I think it is an important
RoEs, positive economic value added (EVA) etc., over longer advantage the company has when compared to its
periods. These are the kind of quality stocks that are most competitors”.
desirable by long-term investors.
Being zero debt is good for sure as there is no interest cost
One of the most important desirable quality aspects that every servicing to be done. The riskiness of conducting the business is
analyst focuses on while identifying a stock for long-term less and especially in the periods of economic slowdown and
investments is the ‘Leverage’! Indeed, studying the debt levels turbulence, the survival rate of such zero debt companies will
of the company has always been one of the most important be much higher.
aspects of identifying a quality stock. More so in today’s world,
studying the debt levels of a listed company has become
important, where dozens of so-called ‘stable businesses’ are
Performance of Zero debt companies
going bankrupt and ‘established brands’ are literally entangled We checked the performance of zero debt companies in 2019
in a debt spiral. Logically, lower the debt levels a listed and noticed that the performance is mixed. We considered only
YTD performance of Zero Debt companies
Company Sector MCAP (` cr) YTD (%)
Garden Reach Shipbuilders &Engineers Ship Building 2405.02 129.83
Reliance Nippon Life Asset Management Finance 20751.2 113.04
HDFC Asset Management Company Finance 63459.11 96.8
Astrazeneca Pharma India Healthcare 6903.88 91.53
those stocks that have market capitalisation greater than Rs 500 Dr. Lal Pathlabs Healthcare 13585.52 76.12
crore. There are close to 160 zero debt stocks across various Info Edge (India) IT 30386.39 72.47
sectors listed on bourses with more than Rs 500 crore market Abbott India Healthcare 27100.83 68.34
caps. Out of these 160 stocks, we found that 71 zero debt stocks Whirlpool Of India Consumer Durables 29698.79 66.45
have yielded positive returns in 2019. The average return for all Amrutanjan Health Care Healthcare 1379.98 65.53
the zero debt stocks has been approximately 3 per cent. SBI Life Insurance Company Insurance 94520 57.81
Indraprastha Gas Inds. Gases &Fuels 28672.03 50.78
However, we concluded that the zero debt companies from ICICI Prudential Life Insurance Company Insurance 70306.51 50.27
Finance, Capital goods, Healthcare, Consumer durables and Multi Commodity Exchange Of India Finance 5620.28 49.95
Insurance sector have performed comparatively better. Bata India Retailing 21705.73 49.8
Pfizer Healthcare 19587.58 49.44
HDFC Life Insurance Co Insurance 115531.17 48.44
Zero debt companies : Finance sector Tata Global Beverages Agri 19912.14 44
17 Companies with an Nesco Capital Goods 4437.22 42.41
Finance Sector GMM Pfaudler Capital Goods 2416.13 38.9
average Return : 14.60%
Siemens Capital Goods 52536.64 38.53
Best Performing Companies Return (%) ROE (%)
Esab India Capital Goods 1946.29 37.96
Reliance Nippon Life Asset Management 113.00 19.56
Maharashtra Scooters Automobile &Ancillaries 5097.2 37.4
HDFC Asset Management Company 96.30 35.00 Bajaj Finserv Finance 142256.88 37.07
Multi Commodity Exchange Of India 49.00 9.04 BF Investment Finance 1321.19 35.61
Bajaj Finance 37.00 10.11 Procter &Gamble Health Healthcare 7076.57 34.98
BF INVESTMENT 35.61 2.93 Navin Fluorine International Chemicals 4459.61 30.6
Ujjivan Financial Services 26.42 1.23 Avanti Feeds FMCG 6862.69 29.49
Rites Capital Goods 6996.25 28.65
We observed that out of 17 stocks from the finance sector Ujjivan Financial Services Finance 4217.78 26.42
which are zero debt, 9 have given positive returns. The Jubilant FoodWorks FMCG 20805.58 25.88
best-performing zero debt stocks in this sector are Reliance Asian Paints Chemicals 165600.7 25.85
Nippon Life Asset Management, HDFC Asset Management VST Industries FMCG 6351.57 25.4
Company, Multi Commodity Exchange, Bajaj Finserv, BF Pidilite Industries Chemicals 67451.95 20.59
Investments and Ujjivan Financial Services. The average YTD FDC Healthcare 3539.14 19.83
Vinati Organics Chemicals 10008.4 19.37
return for all the 17 zero debt companies from finance sector is
Atul Chemicals 12210.55 19.37
14.60 per cent.
Honeywell Automation India Consumer Durables 23117.13 19.15
Bharat Electronics Capital Goods 24962.89 16.69
Zero debt stocks : Healthcare sector Max Financial Services Finance 13960.24 16.67
Procter &Gamble Hygiene &Health Care FMCG 37209.25 15.89
16 Companies with an
Healthcare Sector Glaxosmithkline Consumer Healthcare FMCG 36577.17 15.03
average Return : 22.41% HCL Technologies IT 149699.34 14.69
Best Performing Companies Return (%) ROE Bajaj Holdings &Investment Finance 37605.52 14.3
AstraZeneca Pharma India Ltd 91.53 20.03 Mahanagar Gas Gas Transmission 10262.52 13.47
Dr. Lal PathLabs Ltd 76.12 23.53 Just Dial Miscellaneous 3675.63 13.4
Abbott India Limited 68.34 24.66 Hindustan Unilever FMCG 435094.75 11.47
Amrutanjan Health Care Ltd 65.53 17.87 Honda Siel Power Products Capital Goods 1262.46 11.23
Pfizer Ltd 49.44 15.07 Sanofi India Healthcare 16164.39 10.93
Procter &Gamble Hygiene &Health Care 34.98 73.79 ABB India Capital Goods 30788.17 10.03
We found that out of 16 stocks from the Healthcare sector that Zero debt stocks : Insurance sector
are zero debt, 11 stocks have given positive returns and the
best-performing stocks in the sector are AstraZeneca Pharma 5 Companies with average returns
Insurance Sector
India Ltd, Dr. Lal PathLabs Ltd, Abbott India Ltd, Amrutanjan of 24.68%
Healthcare Ltd, Pfizer Ltd and Procter & Gamble Hygiene and Best Performing Companies Return (%) ROE (%)
Health care. The average YTD return of all zero debt healthcare SBI Life Insurance Company 57.81 19.18
companies is 22.41 per cent. ICICI Prudential Life Insurance Company 50.21 22.73
HDFC Life Insurance 48.44 24.61
All Data as on Dec., 16, 2019
Special Report
In the insurance sector, we find that 3 zero debt stocks out of 5 the company may lose market share to its competitor. A
have given positive return. The average YTD return of all zero proactive strategy may be required in a growing economy to
debt insurance companies is 24.68 per cent. The best tap growth optimally. Optimal leverage in such condition helps
performing companies are SBI Life Insurance, ICICI tap growth opportunities and zero debt companies may
Prudential Life Insurance and HDFC Life Insurance. underperform in such a market environment. Also, the zero
debt companies may lose out on tax shield.
Zero debt stocks: Capital Goods sector Another well-documented disadvantage of being a zero-debt
16 Companies with average company is the ‘management discipline’. It is observed that
Capital Goods Sector returns of 11.68% leveraged companies are more disciplined in their expenditure,
Best Performing Companies Return (%) ROE (%) as compared to those companies that enjoy higher cash flows
Nesco Ltd. 42.41 16.56 and higher income. Complacency kicks in for zero debt
GMM Pfaudler Ltd. 38.9 20.14 companies when compared to a leveraged company which may
Siemens Ltd 38.5 11.17 lead to unwarranted expenses and inefficiencies.
Esab India Ltd 37.96 17.86
Rites Ltd.
Bharat Electronics Ltd.
28.65
16.69
19.4
22.97
Conclusion
Blue Dart Express, Wabco India, eClerx Services,
We also found that out of 16 stocks from the Capital Goods GlaxoSmithkline Consumer Healthcare, HCL Technologies,
sector that are zero debt, 11 stocks have given positive returns Bayer Cropscience and VST Industries are some of the
and the best performing stocks in the sector are Nesco Ltd, multibagger stocks that have had low debts on their balance
GMM Pfaudler Ltd, Siemens Ltd, Esab India Ltd, Rites Ltd and sheets.
Bharat Electronics Ltd. The average return of all the zero debt
stocks is 11.68 per cent. The biggest positive of having a zero debt stock in the portfolio
is that these stocks have little exposure to interest rate risks and
are insulated from any rise in borrowing cost. Zero debt
Zero debt stocks : companies will face no strain in cash flows as experienced by
Consumer Durables Sector leveraged companies.
4 Companies with average Also the low interest outgo for zero debt companies allows the
Consumer Durables returns of 17.29% company to retain more cash. The excess cash can be
Best Performing Companies Return (%) ROE (%) strategically used for tapping growth prospects or for
Whirlpool Of India Ltd. 66.45 21.12 distributing dividends. It is quite possible that the zero debt
Honeywell Automation India Ltd. 19.15 22.73 companies enjoy a scarcity premium over their leveraged peers.
Symphony Ltd. -7.05 15.88 It is possible to see several multinational companies (MNC) to
TTK Prestige Ltd. -9.41 17.66 feature in the list of zero debt companies.In the current
environment with no meaningful cut in interest rates expected
When considering the Consumer Durable Sector, we observed for few quarters and given a low growth environment,
that there are 4 zero debt companies namely, Whirlpool Of companies with low debt or companies that are debt free can be
India Ltd, Honeywell Automation India Ltd, Symphony Ltd, preferred for investments.
TTK Prestige Ltd and the average return of these companies in
the Consumer Durable Sector is 17.29 per cent. While investors can and should consider the quality of zero
debt-free companies to be included in the portfolio, there is no
guarantee that a company will outperform simply because it is
Why zero debt companies are not debt-free. Just because a debt-free company has better chances
always good? of survival in the downturn, does not mean that it will
It does sound as a wonderful strategy to invest in zero debt outperform when the market condition reverses. Investors
companies but it not logical to simply include the zero debt should consider all other parameters such as consistent growth
companies in the portfolio just because they are ‘zero debt in profits and sales over the past few years before making any
companies’. Debt actually is a lower cost source of funds for investment decisions.
any company.
Preference can be given to those debt-free stocks that operate
What investors are looking for is optimal growth. In a strong in a growing industry. For example, if the outlook for the
economic growth outlook and a lower interest rate regime, a capital goods sector is positive, identifying the debt-free
company can actually use leverage to add capacity and grow companies in the capital goods sector can be profitable.
optimally. In spite of a strong vision of the growth, if the Debt-free companies do have an advantage but only a limited
company adopts a low leverage option, there are chances that one. DS
Tax Column
in the reasons. The Tax Officer may or Assessing Officer may keep the penalty
may not accept your submission and may proceedings in abeyance but may insist
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Against this assessment order, you can You may also write to the Commissioner
file an appeal before the Commissioner of Income Tax (Appeals) for posting the
of Income Tax (Appeals) and in appeal appeal out of turn and at the earliest in
Jayesh Dadia you can make your representation and
convince the CIT (A). Even if the CIT
view of tax demand.
Chartered Accountant (A) does not decide the appeal in your In the appellate proceedings, you have to
favour, then you can go to the Income file confirmations from all the investors
I have received a notice under section 148 of Tax Appellate Tribunal, then High Court who had invested in the share capital
and then the Supreme Court. along with their credit worthiness and
the Income Tax Act for the assessment year
PAN. These all will be considered as
2013-14 requiring me to file Return of Thus, you will observe that filing of the additional evidence. Moreover, you have
Income. I have not filed Returns of Income Return is must. If you ignore the notice to file an affidavit before the
since assessment year 2012-13 as I did not issued under section 148 of the Income Commissioner of Income Tax (Appeals)
have any taxable income in all these years. I Tax Act and do not file the Return, then and request him to admit the additional
am dependent on my son who earns and files the Tax Officer may pass an ex-parte evidence. Further, since you have issued
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should I take or tell me the procedure I need income as concealed income and required to file a valuation report under
determine the tax liability. Even the CIT section 11UA/11UB of the Income Tax
to follow and if I do not follow the same, what
(A) may not be able to help you and Rules to justify the amount of the share
would be the consequences? ultimately the demand may become final, premium.
Under section 147 of the Income Tax unless the higher appellate authorities
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certain income has escaped assessment the procedure as I mentioned above. (Appeals) may admit your additional
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Income Tax Act for reopening the company. The company has raised additional Assessing Officer gives a positive report,
assessment. In your case, it seems the then the Commissioner of Income Tax
share capital during the financial year
Tax Officer had reasons to believe that (Appeals) is bound to delete the addition.
certain income has escaped or not 2016-17 at a premium of Rs 100 per share. But if the report is not that positive, then
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The first step to follow is to file the Company. Now what legal remedies are gather all the information and present
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have Nil Income, you should file the available with the company and how to Income Tax (Appeals).
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your objections. If the Tax Officer does appeal within 30 days from receipt of the suggest me what should I do or where to make
not accept your objections, then he will assessment order before the my grievance which may result in immediate
issue a show cause notice as to why the Commissioner of Income Tax (Appeals). action?
escaped income should not be taxed. These days, the appeal needs to be filed
Now you have to give a detailed online with digital signature of the You can make your grievances on
submission along with documentary director. After filing the appeal, inform CPGRAMS PORTAL. Kindly check this
evidences to justify that you have not the Assessing Officer to keep the demand website and file your grievance on
earned any such income or earned and the penalty proceedings in abeyance https://pgportal.gov.in. I am sure you will
income of lesser amount than recorded till the disposal of the First appeal. The get refund very soon. DS
Trackpad
Sunteck Realty launches project in Mumbai
M umbai-based premium housing construction player, Sunteck Realty received
good response to the first tower of 4th Avenue SunteckCity, where it launched
225 apartments. The luxury flat builders have seen strong response to ready-to-move
in flats off late. DLF, the Delhi based premium housing player, had received same
kind of response in October when it sold `700 crore worth flats in same day.
Out of total launched 225 apartments, it has already sold 125 apartments, generating
sales worth more than `200 crore in 18 days from the launch day.The company is
planning to sell around 85-90 per cent of the apartments, opened for sale and having
revenue opportunity worth `300-325 crore, in a short span of time.
The premium real estate segment had seen negative sentiments due to issues faced by
Jaypee infra home buyers. This has shifted the preference towards ready-to-move in
flats. The sentiment further improved after the GST cut to just 1 per cent from earlier
8 per cent for such apartments as against 5 per cent under construction schemes.
Quick Heal announces strategic partnership with Big C Mobiles
Q uick Heal Technologies announced a strategic partnership with Big C Mobiles

to increase the uptake of mobile security solutions in Andhra Pradesh and
Telangana region.
Big C Mobiles is the largest retail chain for smartphones in the region and this
association will enable Quick Heal to tap into their vast retail presence of over 225+
mobile stores in both the states, thus, increasing the adoption of next-generation
mobile security solutions.
peaking on the association, the managing director and chief executive officer of
Quick Heal Technologies, Kailash Katkar, stated, "the company's partnership with
Big C Mobiles fell in line with its mission of enabling robust digital security for all the
netizens and that this association would ensure that smartphone devices of the
digital-first population in Andhra Pradesh and Telangana were protected against the
rapidly evolving threat vectors."
Quick Heal Technologies Limited is a provider of security software products and

solutions in India. The company is engaged in the sale of Internet security products and software support services. Its anti-virus
products are available across all the four segments, namely, retail, small and medium business (SMB), enterprise, and mobile.
Ujjivan Small Finance Bank makes a sparkling debut

O n December 12, 2019, Ujjivan Small Finance Bank made a sparkling debut on both the exchanges BSE and NSE, respectively,
as it got listed at 59 per cent premium to issue price delivering bumper gains to investors who got its allocations.
The stock made a listing gain of 58.78 per cent as it opened at `58.75 on its debut compared to its issue price of `37. For the
primary market, the IPO had recorded the highest number of subscriptions. It witnessed the subscription of more than 165 times
last week in its `750 crores IPO. It received bids for 2,053.5 crores shares on the final day of IPO. The IPO was open for
subscription during December 2-4, 2019, at a price band of `36-37. Investors believed the IPO to be strong due to attractive
valuation and asset quality. The IPO was managed by Kotak Mahindra Capital Company, JM Financial, and IIFL Securities. The
proceeds from the issue were planned to be utilised for augmenting the company's capital base to meet any future requirements.
Ujjivan Financial Services, which is a microfinance lender is the holding company of Ujjivan Small Finance Bank and,
subsequently, its shareholders received a discount of `2 on the IPO price band. This debut IPO has beaten the record of Indian
Railway Catering and Tourism Corporation (IRCTC), which was considered as the most subscribed IPO in 2019. The IPO of
IRCTC was subscribed 111.91 times in October.
EaseMyTrip files ELGI Equipments gets nod to acquire a stake in
for IPO Michigan Air Solutions
E asy Trip Planners Ltd, which
operates one of the largest India
travel portals by gross booking
E LGI Equipments informed the bourses that it has received the approval for the
acquisition of 100 per cent shareholding and control of Michigan Air Solutions
LLC, a limited liability company, headquartered in Michigan, USA.
revenue, EaseMyTrip, has filed a draft
prospectus with the Securities and This acquisition will be accomplished through ELGI Compressors USA, Inc., a
Exchange Board of India (SEBI) for an wholly-owned subsidiary of ELGI Equipment. The Board of Directors of the company
initial public offering (IPO). The size has approved it at its meeting held on December 16, 2019.
of the IPO is pegged at Rs 510 crore.
ELGI is a distributor and specialist in air compressor sales, maintenance and services.
The company offers a range of The total consideration for the acquisition is around US$6 million (Rs 42.44 crore).
travel-related products and services, This acquisition will significantly expand ELGI's footprint in Michigan, USA.
including airline, rail and bus tickets,
hotels and holiday packages, travel
insurance, visa processing, and tickets
for activities and attractions. It claims
that it has been profitable since Mastek sells its partial stake in Majesco to
incorporation. drive growth strategy
EaseMyTrip accounted for 3.8 per cent
market share of gross bookings in
India’s online travel industry. The
M astek announced that it had confirmed the partial sale of its legacy holding in
Majesco USA. An initial lot of 20,00,000 shares were sold for USD 15.94 million
and the remaining 30,44,875 shares are intended to be sold in future.
company provided its client's tickets
for more than 400 international and Reacting to the news, Mastek Group CEO, John Owen said that as part of the
domestic airlines, 1.09 million Indian company's 'Vision 2020 strategy', the company will divest non-core assets and use the
and overseas hotels, almost all the proceeds to accelerate the core business plan to deliver improved performance and
railway stations in India, and bus execute its strategic goals.
tickets to and taxi rentals for major
cities in the country. It is affiliated with Mastek Limited (Mastek) is an Information Technology (IT) solutions provider. The
over 52,752 travel agents across major company and its subsidiaries are providers of vertically focussed enterprise
Indian cities as of September 2019. technology solutions. Its portfolio includes business and technology services, which
consists of IT consulting, application development, systems integration, application
This IPO will make Easy Trip Planners management outsourcing, testing, data warehousing, business intelligence, application
the first Indian travel company to list security, customer relationship management (CRM) services and legacy
on Indian bourses and will join a modernization.
handful of internet companies that
have recently gone public.
MakeMyTrip, India’s largest online
travel company, was listed on the
NASDAQ in 2013.
L&T Construction bags Heavy Civil
Infrastructure contract
The company will not directly receive
any proceeds from the IPO. The
proceeds from the sale of shares will
L &T Construction has been awarded a contract for its Heavy Civil Infrastructure
business from Rail Vikas Nigam Limited (RVNL) to construct the Rishikesh
- Karanprayag Tunnel 2 package works, which comprise of tunnels, bridges, and
go to the promoter selling formation works in the state of Uttarakhand.
shareholders. Axis Capital and JM
Financial are the merchant bankers, The main works in the project consist of the main tunnel along with other parallel
arranging and managing the IPO. escape tunnel and also a ballast-less track that will run inside the main tunnel. This is
AZB & Partners is the legal counsel to a type of fast track project, which is intended to be completed within stringent
the company. Khaitan & Co. and timelines. The size of this project is from Rs. 1,000 crores to Rs. 2,500 crores.
Squire Patton Boggs (MEA) LLP are
India and international legal counsel Larsen & Toubro is a multinational engaged in technology, engineering, construction,
to the merchant bankers. manufacturing, and financial services, having around US$21 billion in revenue. It
operates in nearly 30 countries worldwide with a strong, customer-focused approach.
Special Report Technical Analysis
As the market participation improves and

more number of stocks is expected to
contribute to the market rally in 2020,
understanding which stocks may outperform
and which ones are in uptrend can prove to
be a crucial advantage.
Karan Bhojwani highlights the
importance of identifying trend accurately
and identifying proper exit zones. He further
explains in detail how to avoid common
mistakes that most chartist and traders
make. To complement the message we have
the 'Baadshahs' of the Technical Analysis
world sharing their perspective on the
subject as well as letting us know their
perspective on global markets - Technically!!
Technical Analysis:
Technical Analysis
For All Seasons!!
O
ver the recent years, the discipline of Technical market. Trend analysis is an integral part of the Technical
Analysis has assumed a high relevance. It Analysis. It is crucial to identify trends, so that we can avoid
involves the study of the price action using trading against them.
historical price and volume data in order to
identify the present as well as the future trend in The most common method to identify an uptrend or a
the prices. The financial markets, of late, has grown much downtrend in Technical Analysis is by using Trend Lines. The
more interconnected and volatile. While the fundamental complex analysis of the trend analysis may involve the usage of
analysis does its work, at times, it changes in a few quarters. other tools and indicators like Moving Averages, MACDs, RSI,
Fundamental analysis, even if it is carried out at length, etc.
ultimately involves an estimate. Having said this, at the most, it
will tell us ‘WHAT’ to buy. However, when it deals with time, One of the most common and rudimentary methods of
that is, ‘WHEN’ to buy, then, Technical Analysis becomes identifying a trend is using a trend line. A trend line is nothing
useful. Another point that adds to its relevance is that it can be but a method of joining one price point with another. A line,
applied to any time frame. It can be applied to a time frame of which connects two or more peaks or bottoms, can be called a
as short as one minute to the long-term monthly charts. valid trend line. The more the number of peaks and bottoms
that a trend line connects, the more potent the trend line will
How to identify Trends using technical be.
analysis Ideally speaking, an uptrend line is created by connecting the
One of the most important applications of technical analysis is final low with the first bottom in the rally. Opposite to this, a
to identify trends. Through the analysis of price data and downtrend line is created by connecting the final peak or a
applying the indicators and oscillators to it, we can identify top with the subsequent top, which is lower than the previous
whether we are having an uptrend, downtrend, or a trend-less one.
consolidation, it usually faces contraction in volatility. This
means that the volatility or the movement in these stocks
narrow down a lot. Volatility contraction causes the Bollinger
Bands to contract.
It is assumed that the periods of low volatility are followed by a

period of high volatility. Note that the periods of low volatility
provide investors those stocks that are in a consolidation range
and in a neutral setup. They can use these periods of low
volatility to their advantage. They can create a watch list of
fundamentally good stocks with low volatility and Bollinger
Band squeeze. Once a breakout appears, investors can buy such
stocks as they usually initiate a new and robust trending move.
In the above illustration, one can identify an uptrend by drawing The technical tool that is used to measure periods of low or
the trend line. There was a time when this line was violated, at high volatility is Bollinger Bands. The bands are nothing but the
that time; the uptrend came to a halt. In the same way, we can value of 2 Standard Deviation placed above and below the
also use the downtrend lines to identify a downtrend. 20-Period Moving Average.
In the above illustration, a downtrend is clearly defined by the How to identify proper exit zones
use of a trend line that joins the lower tops. Once the price went Not making a timely exit is the most common thing that has
above this falling trend line, the downtrend came to an end. damaged many portfolios. If you ask any old time investor that
if given a chance to alter one thing in their investment journey,
they would definitely talk about exiting stocks during the bull
Stock Selection: party which got busted with the 2008 financial crisis. As we all
Top-down and bottom-up know when the stock price rises, it’s like blowing up a balloon
The stock selection process is the most crucial beginning point and when it falls, it’s like letting all of the air out. In most cases,
for investors. For anyone with a medium to long-term when the stock goes up in price, the investor would wait for
approach, can opt for a top-down approach while selecting the further incremental returns. However, in this rosy picture,
stocks. He should begin with the sectors that are presently many investors are blindfolded with the temptation of greed
leading or likely to lead over the coming months. After and hope and they overlook to a fact that every good thing
identifying the right sectors, he can further analyse to select comes to an end and at the time of the reversal of the trend, the
good stocks within the sectors. He can use technical tools like investor fails to identify the reversal point. If the stock price
‘Relative Rotation Graphs’ to identify various sectors followed falls, the investor would hold on to his investments with a hope
by stocks in those sectors. More importantly, along with of recovery without realising that the uptrend has ended and
advising the investor to invest in a particular sector, the Relative the trend has reversed. By the time he exits from the holding, he
Rotation Graphs would also tell investors which sector and would have lost much of its appreciation.
stock he must avoid!
To avoid the above mentioned scenario which affects a vast
Steps to profitable stock picking majority of investors, can be sorted out if they can put technical
As one of the methods for stock selection, investors can use analysis into use. They can use trend lines as they help investors
fundamentally good stocks, which are, then, undergoing to provide potential exit signals. If a market participant is
consolidation phase. Whenever a good stock is undergoing holding a winning position but due to some reason, the stock
violates the trend line support, it suggests the trend has run its technical analysis and takes well-qualified professional advice.
course. Further, the market participants can use trend reversal
techniques, such as reversal pattern to identify the formation of Another severe mistake of perceiving the value of the stock is
a likely top, and attempt to exit at the optimised price levels. the fall from its recent highs. As it is popularly said, never
Many a times, the market participants also identify a trend perceive the bottom of the chart as the support for the price.
reversal by using the momentum indicators. One of the most The downtrend may continue. Just because the stock is off
widely followed techniques is to spot divergence and Martin J. 30-40 per cent from its peak does not mean that it is attractively
Pring has explained the phenomena of divergence in a valued. It is just not possible to know what is driving the fierce
simplified manner where he has said the conflict between downtrend and there are all possibilities that the stock may inch
momentum and price is known as divergence. Whereas, a lower after falling significantly from the high point.
negative divergence, which can be put to use to exit any stock,
occurs when rising prices are supported by weaker and weaker
underlying momentum. At the same time, he emphasises that
the most important point to remember is that, it is of
paramount importance for a divergence to be confirmed by a
trend break in the price itself, no matter how significant the
divergence may appear on its own merit. Hence, the divergence
on momentum indicator used in conjunction with a trend
reversal pattern, helps protect the value of the portfolio by
giving signs of a potential trend reversal.
For identifying exit zones, one can also use a simple trend
reversal pattern. Let us take an example of Head and Shoulder
formation. This is a classic trend reversal pattern. For such a
pattern to be a potent one, it should have occurred following a
right amount of uptrend in the price before that.
The above is a classic example of the wrong perception of value.
When the stock declined 69 per cent from its peak, many
investors were lured by value the stock had to offer and some
might have made the mistake of entering into the stock to take
up on this thrilling experience. They would have perceived
some value in the stock just because it traded 69 per cent
cheaper from the peak. This opportunity would have turned
out to be a blunder. If anyone had bought the stock even after
the 69 per cent decline from the peak, they would have further
lost 35 per cent of their investment in the second round of
decline. Still worse, even after such a magnitude of the decline,
there was no value in the stock. The stock took a further beating
of 84 per cent in the third phase of the decline. In the entire
process, the stock lost over 97 per cent of its value.
Above example is perfect use of the Head and Shoulder Pattern More on Technical Anlysis : We just saw some of
to spot exit zones. the most important decision making points that any chartist
and trader should focus on. But surely technical analysis is
Wrong methods in identifying value in much more than identifying trends and proper exit zones. It is
the stock very important for any trader to evolve as a professional in due
course. To become a professional, one needs to understand how
Just as mentioned earlier, the following correct methods in the professionals think and study financial markets using technical
stock selection process is of utmost importance. Most often, we analysis. It is also important to know what technical indicators
see investors rely on hard mentality, unconfirmed news flow, are used by the most successful technical analysts globally. In
incompetent analysis to make their investment decisions. More the following pages, we have discussed some of the best
often than not, such methods prove to be harmful in the long exponents of 'Technical Analysis' commenting on their method
run. of analysing markets using specific indicators. Also, to promote
The investors must adopt a knowledge-based approach when it technical analysis, Chartered Market Technician (CMT)
comes to selecting assets with their hard-earned money. It association is taking some eye-catching steps both globally and
would prove rewarding in the long run if the investor acquires in India. Turn pages to understand the efforts taken by CMT
basic investment knowledge, learns to use basic tools of association to promote Technical Analysis in India.
That's the answer of three or four books, not a couple of
sentences. Let me just say that in my view, long-term trends are
far more reliable than short-term. Long-term trends are a
function of people's changing attitude to the emerging
fundamentals. Those changing attitudes take time to
materialise. Short-term trends are much more random. I like to
use relationships between different sectors and asset classes as a
way of determining where we are in the cycle and to act as a
cross check to the technical position of the security I am trying
to analyse. Credit spreads for instance, where you compare a
risky with a safe bond category, say junk to treasuries, reflect
swings in confidence and are a useful starting point for equities
bond yields and the economy.
Tell us about your stock selection process. Is it

usually bottom-up or top-down approach? Do you
Martin J. Pring have an 'ideal' market environment for your
trading methodology?
President of pring.com
The business cycle has an inflationary and deflationary phase.
Tell us about your experience at CMT Association Consequently, I try to figure out where I am in the cycle. If it's
the deflationary stage, then bonds and defensive sectors such as
India Summit 2019, Mumbai utilities or consumer staples are the place to be. On the other
I received a very special and touching appreciation from the hand, commodity and commodity driven sectors do well when
audience and was delighted to see that technical analysis is capacity is tight at the end of the cycle. Even if we are in the
prospering in India. inflationary part for instance, you just do not go and buy
mining or energy stocks, you want to make sure that they are
performing in a consistent way in the expected manner. I call it
What do you like about Technical Analysis (TA)? As Trust and Verify.
a first timer, what was the real turning point in
your journey? Throw some light on the Special K indicator and
Everything is revealed in the charts, as they tell you what people how does one utilises this indicator to identify shift
are actually doing as opposed to what they SAY they are doing.
Since price trends are a reflection of people in action and
in trends at an early stage?
human nature is more or less constant, that means a technician It combines the short, intermediate and long-term KSTs into
can pick up a chart of any freely traded entity and have some one individual long-term momentum indicator. Whereas, a
understanding of what's going on. That's not true for those long-term smoothed oscillator such as the long-term KST is
oriented to fundamental analysis. often slow to turn. The jagged nature of the Special K or SPK
means that if we have a normal cyclic time span, the indicator
peaks and troughs more or less simultaneously with the price it
How do you see the evolvement of TA in the is monitoring. The trick then becomes one of the identifying
modern markets? SPK primary trend peaks and troughs with the use of
Since I have been in the business, I have noticed the trend in trendlines, peak and trough analysis and its signal line
business and real life is for attention spans and time horizons to calculated from a 100-day MA smoothed by a 100-day MA.
get shorter. I see no reason why this trend will not extend. The indicator is described in my book- A Complete Guide to
Technical Analysis: An Indian Perspective, by Shroff
Publishers.
There is a common myth that TA can be used only
for short-term trading and now, it is time to bust it. What is your view on emerging markets, in
Along with macro and long term analysis, how can general, and on India, in particular?
The Nifty appears to be in a trading range and is currently
TA be used for examining inter-markets and cross lagging the MSCI World Stock Index, which has broken to the
upside. This suggests a world-wide bull market lifting all boats.
asset relationships? I suspect that the Nifty will eventually follow suit.
Amidst fear of expected global slowdown, do you not see that bullish sentiment, I see caution and that's an
excellent sign. The global slowdown is a reality that began to be
actually feel that it has a potential to translate discounted by the markets in early 2018. That's in the rear-view
itself into recession? If yes, how would Equities, in mirror. Now, the markets are looking ahead to the next
recovery. The first chart I featured in my presentation showed
general, are likely to fare? How do you see that a really long leading global economic indicator with a
emerging markets, especially India, adjust to this? good track record for equities has recently turned up. That's
certainly not a guarantee but it is an odd on probability.
If we were supposed to head for a global recession, global
equity prices would already have started to discount it by
selling off. Since they are breaking out from a 2-year Lastly, if you could give some key advice for
consolidation to new highs, it sends a message of optimism for
the global economy to me. The first time I came to India, in
aspiring traders out there, what would it be?
January 2008, people kept asking me about resistance levels, as Be patient, be disciplined and be humble. Just when you think
there was a pervasive bullish sentiment in the air. I was you have everything taped; the markets will indicate that you
brushed off when I suggested people should be looking at have more to learn. I have been in the business for nearly
potential support levels because I was bearish. This year I did 50-years and I am still learning.
Martin J. Pring is the President of Pring.com and the Chairman of Pring Turner Capital Group. Awarded with the Market’s Technician
Association (MTA) Annual award and the A.J Frost Memorial Award, he is also an Author of several outstanding books.
Around that time, the Dutch Air Force was buying F-16 jets in
the US. All good, but there is a Dutch regulation that says that
governmental bodies while entering into an obligation that
includes payment in a foreign currency, must immediately buy
that currency!
As you can imagine, F-16 jets cannot be delivered overnight so,

we were in a situation where the Dutch Air Force had hundreds
of US million dollars waiting in the bank for the delivery of the
planes so that they can use it to pay them.
Euro did not exist at that time and moreover, Netherlands was
still using the Dutch Guilder. While this was happening, in
mid-eighties, the exchange rate for USD/NLG dropped from 4
guilders per USD in 1985 to 2 guilders in 1987 amidst all those
dollars sitting in a bank-account unused.
So I decided to write my thesis about how the Dutch Air Force

could use currency options to hedge its exposure to the USD/
Julius de Kempenaer NLG exchange rate.
This made me seek interest in financial markets and options

Creator of Relative Rotation Graphs®, trading. After I graduated and started working as an officer, I
Director and Founder of RRG Research enhanced my interest in markets and trading and started
teaching retail investors on options. What they are, what you
can do with them, how they are traded and so on.
After having served in the Royal Dutch Air Force, The firm which conducted the courses that I taught was also
what made you look at the financial industry? active in technical analysis which sparked my interest and I
started gaining interest in technical analysis. That was the start
I studied economics at the Royal Military Academy in the of my career in TA.
eighties. In my final year, I had to write a thesis to graduate.
The European Options Exchange (EOE) had just started its
operations which caught my interest.
There are several tools that are staple for any
what is often referred to as, ‘Comparative’ Relative Strength.
This is a technical study that looks at the comparison (ratio)
The weekly RRG of between the two securities. There can be two stocks, two
indexes, one sector-index versus a market-index.
international stock Comparative Relative Strength is very powerful in our tool kit
markets against the but there are two problems associated with it:
1) It only looks at two securities at a time; only 1-1
Dow Jones Global comparisons are possible
2) The numerical values of the RS Lines are incomparable
index shows the Nifty When you are working on a big project, like I was at that time,
(500) index, inside the the amount of relationships that you need to monitor quickly
spirals out of control. Quite often, some sort of ranking is
improving quadrant required to determine what is good or what is bad.
The ‘solution’ was always to create these so-called performance

charts which would show the performance for multiple
securities over a fixed, anchored period. First of all, I always
Technical Analyst and Relative Strength is one of find these charts hard to read, because firstly, there are so many
lines on them, and secondly, it is impossible or at least very
them. You have given a new dimension to the difficult, to detect trends for the various securities.
study of Relative Strength through creation of
The first step in the process was to come up with a way to be
RRG. Please tell us about RRGs in detail. How are able to ‘rank’ a large group of stocks (or securities) based on
they different from the traditional Relative their trends in relative strength, which is completely different
from plotting a number of performance lines on a 2-D,
Strength analysis? time-price based chart.
Relative Rotation Graphs®, that is, RRG®s came to life when I
was working as a sell-side analyst for an investment bank in In the beginning, I used that ranking mechanism that I
Amsterdam. My job was to provide research to institutional developed, the JdK RS-Ratio to inform my clients of where they
investors on European stocks. The universe that I was covering should invest or look for opportunities.
was the STOXX 600 index divided over 18 sectors.
During the dot-com bubble in 2000, this approach led to
My clients, the professional PMs, did not have the luxury of extremely over-extended values for technology related stocks,
moving their entire portfolio or large parts of it into cash, industries, etc. and of course, as it’s still a trend-following
especially when they had a fair idea that market may decline. approach, the detection of weakness in the tech-sectors were
They are in the relative performance game. This means that late. This resulted in an email from an Italian investor who
even when the market goes down by 10 per cent and their wrote to me saying, ‘This time your system did not work too
portfolio goes down by only 5 per cent, it is believed that they well....’ and he was right.
have done very well as they out-performed the market by 5 per
cent, despite the fact that their portfolio lost 5 per cent in value. I decided to research and play around to find a way to detect
This restriction makes it necessary for them to look for pockets things a bit earlier, sort of an early warning system. This work
of strength in markets where they can move their money to resulted in the creation of the JdK RS-Momentum indicator
prevent it from dropping too fast. Or rather, pockets of which is a measure of the Rate-of-Change in these relative
weakness that they should avoid. trends that are measured by the JdK RS-Ratio line. This helped
me to detect changes in the behaviour of relative strength a bit
The tool that we have in our technical tool kit to do such earlier.
analysis is called Relative Strength. Now be careful! This is not
the widely used RSI indicator that was developed by Welles For a while, I worked with these two metrics but despite the
Wilder. RSI is the Relative Strength Index and it looks only at a fact that I was now able to rank a universe on two metrics, the
single security and compares current prices to its own problem of only being able to watch one-on-one relationships
historical prices to determine if that security is ‘overbought’ or remained.
‘oversold’.
Over time and after experimenting with many different chart
In order to decide between multiple securities we need to use, formats, I came up with an idea to plot both values on a
Cartesian plane which enabled me to see the whole universe in (stock) markets. We now know that the relative movements of
one image. At the beginning, these were only single dots but it these international markets also follow a rotational pattern
actually gave a pretty good idea of the positioning of the around a common benchmark, for example the MSCI world
various elements of the universe vis-a-vis the benchmark but, index. So, they are well-suited to identify which markets are
very importantly, also against each other. worth a look and which ones can be better avoided from a
relative perspective.
As a technician, since I always wish to see the historical
movement of values, I started to plot multiple historical
observations on the same plot which eventually led to the
Let’s take the previous question a little further.
development of what is now known as the tail or trail on the Comparing India against a global benchmark like
RRG. This truly helps visualise (sector) rotation around a
benchmark and also in a clock-wise fashion.
Dow Jones Global Index, what do you think, where
does this country stand?
After a period of tuning and tweaking this, it became the RRG®
as we now know it. At this point of time, the weekly RRG of international stock
markets against the Dow Jones Global index shows the Nifty
So getting back to your question, RRGs are based on the (500) index, inside the improving quadrant and heading
general approach of comparative relative strength and what is towards the leading, so India is currently well-positioned
unique about them is the way they enable the comparison of all against the rest of the world.
elements in the universe AND most importantly, the
visualisation of all these relationships on one graphical image. Looking at the long-term chart, the area around 10,000 seems
‘The BIG picture in ONE picture’ to be a very serious overhead resistance level. Once that is
cleared, I would not be surprised to see the Indian stock market
accelerating higher!
Is it true that apart from identifying short term
momentum of a group of stocks against a set How can a retail investor or a trader make use of
benchmark, RRGs also help in taking a larger view RRG and in what way can he/she benefit from it?
by identifying sector rotation? Retail investors and traders can use RRG, first of all, to keep an
eye on the bigger picture and also use it to filter the securities
Yes! As I explained in the previous question, RRGs enable users they want to trade to only focus on the out-performers.
to visualise pretty much all relationships on financial markets
as long as you feed them with comparable data, that is, when Another way that I see a lot of traders use RRG is to spot and
you want to compare stocks and bonds for example, you find pair-trading opportunity which allows them to mitigate
should use (total return) indexes for bonds and not yields. general market or sector risks by hedging a long position with a
The RRG will show you the rotations but they will not be very short position, essentially, playing only the difference or the
helpful as bonds move inverse to stocks as we all know. spread between two securities.
Garbage in, garbage out!
The third way I see people using it is as a portfolio monitoring
RRGs are perfectly suited to visualise sector-rotation as it has tool. They plot all their holdings on an RRG to visualise how
never been done before and show you that sectors will actually their positions are doing against a benchmark.
‘rotate’ and they do so in a clock-wise sequence. The time frame
for the analysis and the rotations on an RRG can be used from
(very) short term to very long-term rotation sequences
Lastly, if you could give some key advice for
depending on the frequency. They are fractal just like any other aspiring traders out there, what would it be?
chart format. Think along the lines of the interaction between Find your way in the field; there are many different roles and
bar-charts on various time frames from monthly to weekly, daily much different type of traders. Try to figure out what your
and even intraday like hourly, 30-minutes, 5-minutes and so on. preferred role or approach is and learn as much as possible
about it. Then gradually, advance into more senior roles and
keep an eye on developments around you. Financial markets
By applying the same principle, we believe we can are a big eco-system with many parts moving at the same time.
use RRG to identify outperforming markets in a bid Do not lose track and stay focused!
to get even a larger picture. What is your opinion When you are, like many nowadays, interested in quantitative
on this? finance/trading/analysis.... my advice is:
Definitely, RRGs can also be used to compare international ‘Start simple, it will become complicated very fast!’
Overview Of Indian Sectors And
Indian Markets Against The World Markets
INDIA AGAINST WORLD MARKETS
In the RRG, we will examine how India is placed against
its global peers when benchmarked against the MSCI
World Index.
Indian broader market index-NIFTY500 is presently

placed in the improving quadrant. Over the past couple of
weeks, the Indian Markets have gained a strong
momentum. There is some loss of momentum seen in the
Indian Markets, as it is seen heading down while still
sloping in the direction of the leading quadrant. Though
the Indian markets have slightly turned down, it compares
well with global peers and is likely to head further towards
the Improving quadrant. Indian Markets are expected to
remain much resilient and relatively outperform the other
global markets like FTSE, the Shanghai Composite Index,
Australia All Ordinaries Index, as well as the emerging
markets like Brazil, which are seen losing their relative
momentum against the MSCI World Index.
Along with the Indian Markets, the Hang Seng and the Straits Times, are also likely to outperform. Indian Markets are expected to
strongly outperform the FTSE, Australian Index, and other emerging markets like Brazil and China, which are seen rotating lower
on a relative basis.
Indian Sectors against NIFTY 500
In the RRG, we compare placements of different Indian Sectors remain in the Improving and Leading Quadrant and are seen
and benchmark them against the broader NIFTY 500 Index. building on their relative momentum steadily and strongly. The
Auto and Energy packs will also perform better; however, only
The present structure of various sectors on the RRG, points out stock-specific shows can be expected.
which ones are likely to remain resilient in the event of any
corrective moves and will outperform in the event of any upside One place where investors would not like to invest would be the IT
in the markets. In short, they are expected to outperform the sector. It stays in the lagging quadrant and does not show any
broader markets relatively in a strong way. In the coming weeks, immediate signs of bottoming out. Apart from this, we will also
the sectors that investors and traders should focus see some less but good performers from Infrastructure, PSE,
simultaneously are PSU Banks, BankNIFTY, Financial Services, FMCG and Consumption space. These are the sectors that
and Metals, which are likely to outperform the markets. They investors should wait for bottoming out before they invest in them.
Milan Vaishnav, CMT, MSTA - Consulting Technical Analyst, Gemstone Equity Research and Advisory Services
Tell us a little bit about your trading

background and who are your mentors?
I am a John Murphy disciple through and through. There is
no question about it! I approach the markets from an
intermarket perspective, keeping in mind, the trading
strategies and risk management techniques described
throughout the Market Wizard books. Well, this is how I
was introduced to trading and the markets.
JC Parets, CMT
Founder and Chief Strategist, Allstarcharts.com
Dow is now up nearly 20 per cent
in current year. What is your
outlook for CY2020?
A 32,000 target for the Dow Jones Industrial
Average would be consistent with normal
returns in year 2 of a cycle. We are in the
camp that 2019 was year 1 of the new bull
market.
What is your view on emerging

markets and what are key
opportunities and challenges for
emerging economies in the
coming year?
The problem with emerging markets is the
exposure to natural resources and a lack of
heavy weighting in technology, like you will
find in the US Stock Market. India is the
exception to that rule because of its heavy
exposure to banks and technology. NIFTY
Banks are some of the most expensive (high
multiples) banks in the world, and for good
reasons. I do believe we continue to get
rotation into Emerging Markets throughout
2020, but it is not clear whether they will
start to outperform any time soon.
How do you see Base Metals and Crude oil What is your long-term view on Nifty index? Which
price panning out in CY2020? Do you see are the sectors that you think will outperform
yellow metal (Gold) hitting surging to new going forward? Also, which are the sectors that you
highs in the year 2020? would advise investors to stay away from?
Selling Gold - and Buying Stocks/Selling Rocks - neutral NIFTY50 12800 and Bank NIFTY 35000 targets
Crude Oil and base metals. Commodities and metals indexes still look terrible.
Brett Villaume Within the past 18 months, the CMT Association has opened
an office in Mumbai, hired a full-time staff member in India
(Joel Pannikot), and elected an Indian to our global Board of
Vice President of CMT Association Directors (Akshay Chinchalkar). Additionally, we held our
inaugural India Summit conference in Mumbai on November
You hold an important office at the CMT 23 at the Taj Lands End Hotel, and we intend to continue
hosting such large-scale conferences in the future.
Association. Tell us about CMT Association and its
activities. Going forward, the Association is committed to addressing a
strong demand for Technical Analysis education and the CMT
I am the Vice President of the Chartered Market Technician designation in India. Developing chapters throughout India,
(CMT) Association and have served on the Board of Directors building our Academic Partner Program with universities, and
for four years. The CMT Association is a non-profit providing networking opportunities and job development
organisation headquartered in the United States that assistance to CMT Program candidates and members are our
administers the Chartered Market Technician designation, the highest priorities over the coming years.
pre-eminent professional designation in the field of technical
analysis of securities worldwide.
How do you plan to spread awareness on the
The CMT Program consists of three levels, each advancing in
scope from an introductory/definitional stage, to an integration
necessary quality education in TA? How do you
stage, and finally to an application stage. The CMT Association wish to engage with corporates?
has over 3,000 members and there are currently over 1,000
program candidates enrolled in the December 2019 exam cycle. We engage with corporations across India that employs
For the first time in the history of the program dating back to the professional in alpha-capture roles. There are over 450 such
early 1980s, the candidates in the Asia-Pacific region, primarily institutions in the Indian financial sector alone. We are
in India, make up the largest segment of test takers creating opportunities for both our members and corporations
internationally. to interact with practitioners at the cutting edge of Technical
Analysis research and application. The Inaugural CMT India
The CMT Association provides member benefits such as Summit, held in Mumbai on November 23, was one such step
annual conferences, local chapter meetings in 43 cities around in this direction. We also conduct regular chapter meetings in
the world, and educational content through its website and all cities where we have a significant member presence, such as
social media outlets. Additionally, the Association upholds a Mumbai, New Delhi, Kolkata, Bengaluru, Hyderabad,
robust ethical code among members and continually strives to Chennai, Pune and many more. Our academic partner
maintain the highest standards of ethical conduct within the program gives us the opportunity to enhance the quality of
investment community. Technical Analysis being taught in business schools across the
country.
What do you think about the growth of the

profession of Technical Analysis here in India A lot needs to be done on the engagement with
and how is it in comparison to the West? regulators. While engaging in a regulatory
advocacy initiative, what would be the key areas
The use of Technical Analysis methods by Indian professionals is
quite similar to that of the West. Growing numbers of traditionally
that you wish to focus on?
‘fundamental’ trained investment advisors, portfolio managers, The CMT Association has achieved success in the United States
analysts, and proprietary traders are learning how to apply and other countries working with regulatory agencies to gain
Technical Analysis to more successfully manage risk and improve recognition and accepted use of the CMT designation among
investment returns for clients. Within developing markets, financial professionals. An excellent example of this was the
volatility and uncertainty (that is, ‘VUCA’) drives demand for adoption of the Financial Industry Regulatory Authority
additional tools to navigate the gap between the intrinsic values (FINRA) Series 86 exam exemption for CMT Level 2 graduates.
identified through fundamental analysis and market prices. The SEC and FINRA granted this exemption in 2004 following
the enactment of Sarbanes-Oxley regulations and fruitful
conversations with regulators to explain the value and unique
With CMT Association now having its presence in skills set of the CMT charterholder. We are keen to support the
India, what would be the Association’s priorities, regulators, SEBI, RBI, MoF, as well as the exchanges with the
input required to maintain a robust oversight of the markets
going ahead? and the analysis performed by CMT charterholders. DS
Expert Speak
Sectoral Investment
Opportunity For 2020
O
ne question that is constantly asked by many investors is where is a good investment opportunity in the current
market? With BSE SENSEX trading at its all-time high, the answer to this question is not so simple and straight
forward. To identify an investment opportunity, one needs to see where the price-value gap is.
In this article, we would attempt to identify if there is any real investment opportunity in the already heated stock
market by carrying out a sectoral study. We focus on sectors that contribute more to the overall profits but their market
capitalisation is not correctly reflecting their contribution. We will also analyse Return on Equity (ROE) of all these sectors and
focus on sectors which are still generating high ROE despite of all the troubles which the economy is currently facing. Our data
sample is Top 250 companies as per their market capitalisation in 2019.
Overvaluation in a sector is generally caused by high expectations on the future profitability and cash-flows. Stocks of companies
where the share prices have increased in anticipation of higher profitability, generally trade at higher PE multiples. However, if
these expectations are not met, there would be a substantial correction in stock prices. Markets would appear to be patient for
some time in the hope of improvement in profitability, but after waiting for some time, resources do get re-allocated to companies
which are generating profits. Thus, it is important for companies to consistently generate higher ROE for shareholders. Investors
should always be on a lookout for sectors which are likely to do well and are reasonably priced.
In this study, we focussed on Top 250 companies in 2019 and gathered data for them since 2010. We obtained market capitalisation
for all these companies segregating them industry-wise. Further, we calculated the sector-wise market capitalisation and its
percentage share in the overall market capitalisation of all 250 companies. This methodology ensures that each sector market
capitalisation is indicated as a percentage share of 100 (overall sample).
Chart-1 Relative Share of Market Capitalization of each Sector

Studying chart-1, we can observe that in
2010, energy sector (21 per cent) had the
largest share by market capitalisation;
closely followed by financial sector (20 per
cent), followed by basic material,
industrial and technology each at ~10 per
cent. In 2019, these ratios have
significantly changed as the financial
sector contributes 28 per cent followed by
energy sector at 13 per cent. There is a
huge gap between the leading two sectors
in 2019, which was very insignificant in
2010. This strongly suggests that there is a
very significant overvaluation in the
financial sector as compared to other
sectors.
Now let’s analyse the contribution to

profits by each of these sectors. We obtained profitability of all the companies and calculated percentage profitability of each sector
as a proportion to the overall profitability.
Chart-2 Relative Share of Profitability of each Sector
In 2010, the highest contribution to profits was from energy sector (27 per cent) followed by the financial sector (22 per cent).
These exactly were the two sectors which had the highest contribution to market capitalisation in 2010 indicating that the market
capitalisation was in sync with the profit numbers. Now let’s focus on the year 2019. Energy sector contributes 30 per cent to the
profits but the contribution to market capitalisation is merely 13 per cent. Further, the financial sector which contributes merely 11
per cent to profitability of the Top 250 companies is contributing almost 28 per cent to market capitalisation. This is really
contrasting and suggests a huge overvaluation in the financial sector as compared to its profitability; the data points also suggest
undervaluation of energy sector.
Technology sector contributed 8 per cent to overall profits and had market capitalisation of 10 per cent in 2010. Whereas in 2019,
technology sector contributes 17 per cent to
profits and has a 12 per cent share of market
capitalisation. This is also an indicator of
relative undervaluation of technology sector.
Similar observation can be made for sectors
like basic material and utilities. Profitability
of sectors like consumer discretionary, real
estate and telecommunication have eroded
over the past few years and are unlikely to
recover soon.
Now let’s analyse these industries by using

the Return on Equity as this ratio matter a lot
to shareholders. We obtained the ROE of all
the companies and calculated the average
ROE for each sector from 2010 onwards.
Chart-3 Return on Equity from 2010 to 2019
Average ROE for most of the sectors has shown a decreasing trend over the period, except for technology, utilities and consumer
staples. Average ROE for telecommunication sector has been negative and shows great amount of variation.
After studying the three parameters, Market capitalization, Profitability and ROE, we can expect that stocks prices in the following
three sectors (technology, energy and utilities) should appreciate more as compared to other sectors as these sectors are relatively
undervalued. Increase in return on equity and profitability over the period is a healthy indicator. Retail investors seeking an
opportunity to invest in 2020 can look at shares within these three sectors for higher returns in the long term. Please remember the
wise words of Peter Lynch, “My routine is always the same. I search for companies that are undervalued, and I usually find them in
sectors or industries that are out of favour.”
Dr Ruzbeh Bodhanwala and DrShernaz Bodhanwala are faculty at FLAME University, Pune.
Expert Speak
Tarun Kumar Kalra
Global Head of Sales, CredoLab
Financial Technology And Its Impact On

Faster And Improved Credit Approvals
P
rogress in technology and increased digitisation is to weeks and months to process a loan, while Fintech lenders
transforming all the industries and, lending institutions take a mere few hours or less to approve a credit transaction.
are not to be left behind! While financial lending was With digital application processes and lightning-quick digital
earlier synonymous with banks and credit unions, Fintech approval, Fintech firms such as CredoLab are better equipped
companies are revolutionising lending, embracing digitisation, technologically to shorten the loan processing time, thereby,
and modernising established practices. offering instant loan disbursement. With the AI capability to
generate scores within three seconds, CredoLab’s bank grade
The Global Fintech Adoption Index 2019 published by EY, algorithm is the most predictive and efficient alternative credit
ranks second in India in Fintech adoption rate, worldwide. scoring solution available in the market. Both, global Fintech
From the increased use of ATMs to digital credit notes to players such as Google Pay, Amazon, and those closer to home
mobile banking apps, digital services are reshaping consumer like Ola, ZestMoney, PayU and so on, have already gained a
expectations, and Fintech models show great promise in stronghold in the market when it comes to fast loan services.
addressing changing customer behaviour and needs.
In the last five years, the Indian Fintech industry has

Use of alternative data sources
experienced steep growth and will continue to do so. Evidence Around four billion adults in the world lack the traditional
of this growth, lies in both the increasing number of Fintech banking services and they constitute an entire underserved
companies in India and the investments they have been able to market mostly in developing countries. And while banks are
attract. According to Tracxn, over 2,000 Fintech companies still figuring ways to penetrate these underserved sections,
have emerged in India from 2013 to 2018, making it a hotspot telecom companies have already been able to reach this tier of
for entrepreneurial opportunities in this area. customers. Majority of this population is using prepaid mobile
connections, which presents a huge opportunity for Fintech
firms in the form of a ready customer base.
Introduction of alternate lending Many industry players such as the African Development Bank
models (ADB) have launched a fund for making digital financial
Traditional lending models are based on credit deposits used services available to at least 320 million Africans. In a similar
by lenders to offer loans to other customers. Fintech companies attempt to cater to an underserved market, the CIMB Bank
have revolutionised this established process by doing away with Philippines has collaborated with CredoLab. The digital-only
the need for credit deposits. They have introduced peer-to-peer bank is using data points such as number of apps, percentage of
lending where lenders earn interest on the amount they lend. unread emails, payment wallets, etc. from customer’s mobile
Banks and peer-to-peer lenders collaborate by offering low risk phones to assess their creditworthiness. With an easy access to
products at attractive rates to customers. RBI’s latest hike in the a flexible loan mechanism, Fintechs are working their way to
lending limits for P2P players to Rs 50 lakh, has given this increase financial inclusion.
industry the right push it deserved. Companies such as Lenden
Club offer a platform that matches lender to quality borrowers,
thereby, enabling credit transactions for a small fee from the
Flexible tenures and loan amounts
borrower’s repayment. Majority of banks and financial institutions offer a minimum
loan amount of Rs 50,000 with the tenure of 12 to 60 months.
Also, most of these financial firms quote Rs 25 lakh as the
Quick and hassle-free approvals highest limit for credit. Fintech companies, on the other hand,
Even though traditional banks and financial institutions are offer personal loans for amounts as low as Rs 5,000 and the
catching up with the digital wave, there is a lot left to be done to tenures are very flexible too, starting from just three months
ensure speedy loan approval processes customised to modern and extending up to 60 months.
credit market requirements. In certain cases, banks can take up
With the increased availability of flexible finance options with Travel Card in no time, through an application-free and
easy repayment tenures, more and more individuals as well as hassle-free process. Another innovative Fintech solution is the
MSMEs are beginning to rely on advanced Fintech firms. emergency airtime that allows pre-paid mobile connection
Borrowers no longer have to worry about maintaining a high users to receive airtime value in credit to extend their talk time,
credit score in order to apply for high quality loans. With a low send SMS, surf the internet, etc., once they run out of balance.
credit score of 600 to 650, they can now seek personal loans
from Fintech firms at higher interest rates of 18 per cent to 20
per cent.
The future is full of possibilities
In order to cater to a wide range of demographical and
economical strata of customers, Fintech lenders are looking to
Better customer experience across scale up their operations. A number of alternative lenders are
industries focussing to merge with NBFCs to offer a whole gamut of
From travel trends to purchase impulses to payment needs, all financial services to new-age customers. Apart from easing
customer-related patterns are evolving and technology is at the loan facilities, Fintech firms are also exploring new
core of this evolution. Globalisation and digitisation have led technologies to expand their range of offerings.
the industry to the age of customers, where they are more Many firms are now evaluating investing in blockchain and
aware and connected than ever, and modern businesses are crypto assets as they are disruptive technologies with high
gearing up to meet their changing needs. growth potential. Currently, one-fourth of the Global X
Several industries in developing economies are turning to the Fintech ETF (FINX) companies are exploring the possibilities
latest financial technologies to serve their tech-savvy of blockchain or crypto-assets. This is just one example of the
customers. We Travel, a Fintech booking platform for travel potential that the intersection of finance and technology has to
companies, is coming up with their first pre-paid credit card offer, while there are many more, yet to be explored.
for travel operators in the US. We Travel users can create a We
Expert Speak
Vivek Jalan
Founder, Tax Connect Advisory Services
Steps The Government Must Initiate

To Widen The Tax Base In FY 2021
A
s India struggles to revive a sluggish economy, the hand. Such a scheme, if drafted and implemented with
government faces multiple contradictory challenges of sincerity, would certainly be highly impactful at this hour of
infusing liquidity in the system, boosting consumer widening Fiscal Deficit. It would also increase the tax base as
demand while still keeping the fiscal deficit under reasonable most of the citizens would grab the opportunity to discard old
check. India’s fiscal deficit stood at Rs 5.54 lakh crore at the end baggage and make a fresh start in a New India!
of August, 2019 even as credit rating agency Fitch predicted
that it would be as much as 3.7 per cent of the GDP for fiscal
year 2019-20. The revenue deficit stood at Rs 4.36 lakh crore at
the end of August 2019.
Scan bank lockers for undeclared
income
With a widening fiscal deficit a major concern, particularly at a ‘Bank Lockers’ are another untapped area. Again as a first step,
time of declining growth, the government on the one hand linking of locker holders to PAN/Aadhaar should be done. Post
needs to pump in more savings into the hands of consumers to this, mandatory disclosure of the possessions therein may also
boost consumption, while on the other hand, it needs to be required. This would again have the effect of getting a lot of
increase revenue at hand. No doubt, Finance Minister Nirmala dormant wealth circulating back into the mainstream
Sitharaman has an enviable task at hand. In fact, media reports economy.
have already suggested that the finance ministry is looking for
ways to widen the tax base in the FY21 by plugging loopholes
in the law, especially in areas of tax exemptions and
Trace black money in the banks
concessional tax schemes. India’s taxpaying population has Despite implementing initiatives such as the demonetisation
traditionally remained low. In fact, the gross tax to GDP ratio and linking of bank accounts with Aadhaar, even today, much
declined to 10.9 per cent in 2018-19. The total income declared of the black money is still in the banking channel in the form of
by individuals during AY 2019 stood at Rs 34.1 trillion. Of Bank Accounts which have been opened without a PAN. It
this Rs 20 trillion was declared by the salaried class while the should be made mandatory for Banks to take Aadhaar or PAN
business income stood at merely Rs 9.3 trillion. number of these Bank Account Holders and then trace it with
Generating more revenue will not only give the government their IT Return. The data of such accounts can be made
more funds to infuse into public welfare schemes but will also available easily.
allow them more leeway in initiating policies that generate
more income and jobs in the economy. The government has to
find intelligent ways to increase the Tax Base. The following are
Reform tax slabs to put more money
some of the suggested ways which may be out of the box but into people’s hands
might prove effective: Apart from the above two exercises, the Government should
also increase the Tax Threshold Limit to Rs 5 Lakh, the 10 per
cent Tax Bracket to Rs 10 Lakh and 20 per cent Tax Bracket to
Initiate Dispute Resolution or voluntary Rs 20 Lakh. This would help in putting the much-needed
income disclosure scheme money into the hands of the masses, a step badly needed to
After Demonetisation and GST Implementation and the revive the slumping consumer demand. While the government
consequential high pitched assessments in Income Tax, the has already initiated a series of sector-based measures to
time is ripe for a ‘Dispute Resolution Scheme in Income Tax’ address the supply side bottlenecks, reforming tax slabs will
wherein pending disputes can be settled after paying certain help address the Demand Side problem in the economy and
portion of the disputed taxes on the one hand and helping increase consumption. It would also be an incentive to file
citizens to come into the mainstream economy on the other returns and disclose income.
QueryBoard
Investment Horizon
Query-Specific
MOIL LIMITED GUJARAT GAS LIMITED

I bought 10 shares of Gujarat Gas at `166 in July.
Should I book profit or hold for further upside?
Should I exit from MOIL Ltd.? I hold 5 shares bought - Vivek D.
at `186.38.
- Jaramachandran R
HOLD HOLD
BSE/NSE Code 533286 /MOIL BSE Code 539336 / GUJGAS
Face Value `10 Face Value `2
CMP `137.45 CMP `228.45
52-Week High `181.70/ Low `118.20 52-Week High `236.80 / Low `116
Your Current (26.25 per cent) Your Current 37.62 per cent
Profit/(Loss) Profit/(Loss)
M G
OIL Limited is engaged in the exploration, exploitation ujarat Gas Limited was formerly known as GSPC
and marketing of manganese ore and products. The Distribution Networks Limited which is engaged in the
company operates through three segments namely natural gas business in Gujarat. It mainly has business
mining, manufacturing and power generation. The company also operations related to city gas distribution also includes sale,
has around two wind farms of over 4.8 MW and of around 15.2 purchase, supply, distribution, transport and trading in natural
MW located at Nagda Hills and Ratedi Hills respectively in gas, Compressed Natural Gas (CNG), Liquefied Natural Gas
Madhya Pradesh. On the consolidated financial front, in Q2FY20, (LNG), Liquefied Petroleum Gas (LPG), etc.
the company reported an decrease in net sales by 27.25 per cent to
be `253.11 crore compared to net sales of `357.77 crore in On the consolidated financial front, the company has reported
Q2FY19. For Q2FY20, the PBT decreased by 40.57 per cent to an increase of 27.58 per cent in net sales to `2,569.25 crore for
`104.44 crore from `175.79 crore in Q2FY19. On the other hand, Q2FY20 as compared to net sales of `2,013.83 crore for Q2FY19.
net profit decreased by 15.72 per cent to `88.59 crore in Q2FY20 as For Q2FY20, the Profit Before Depreciation and Tax (PBDT)
compared to `105.11 crore reported in Q2FY19. On an annual doubled to reach `341.55 crore from `130.12 crore for Q2FY19.
basis, net sales grew by 8.86 per cent to `1,440.66 crore in FY19 Also, in Q2FY20, the company posted a significant rise in the net
from `1,323.46 crore in FY18. The company’s PBT increased by profit gained of `517.25 crore from `41.07 crore gained in
11.09 per cent to `719.75 crore in FY19 from `647.92 crore Q2FY19. On the annual front, the net sales increased by 25.60
reported in the previous fiscal year. In FY19, the net profit was per cent to `7962.48 crore for FY19 from `6339.35 crore for
recorded at `473.88 crore, a 12.30 per cent increase from `421.99 FY18. The PBDT of the company had increased by 20.05 per cent
crore reported in FY18. The company’s strong business model and to `882.14 crore in FY19, as compared to `734.84 crore of FY18.
dominant position in the domestic market supports a positive In FY19, the company’s net profit registered a growth by 43.19
bearing for the stock. Also, the Indian manganese ore demand is per cent to `416.96 crore, from `291.19 crore gained in FY18.
set to be supported by better fundamentals for the domestic steel Based on the company’s positive financial performance, we
industry. Thus, recommend a HOLD. recommend a HOLD.
Readers are requested to send only one query at a time so that more readers get a chance. For complaints regarding non-receipt of
dividend, bonus, rights and other matters, investors may write to www.investor.sebi.gov.in
Company Name: DEMOCRATIZING WEALTH CREATION
Vol. No. 35
31 No.
No.20
02
Query:
Send in your queries:
DSIJ Pvt.
C-305,
C-101, 3rd
1st Floor, Trade Center,
Name: North Main Road, Near Axis Bank,
Opp. Lane No. 6, Koregaon Park,
Address:
Pune - 411001
E-mail: Email:editorial@DSIJ.in
QueryBoard
Investment Horizon
Query-Specific
INOX WIND LIMITED MARUTI SUZUKI INDIA LIMITED

Please advise further management on my purchase of
Should I buy INOX (Industrial Oxygen) Wind shares? 100 shares of Maruti Udyog at `7768/-
- Harminder - C. S. Swaminathan
BUY HOLD
NSE Code 539083 / INOXWIND BSE/NSE Code 532500 / MARUTI
CMP `34.95 CMP `7196.85
52-Week High `80.75 / Low `30.80 52-Week High `7,929.00 / Low `5,447.00
Your Current -- Your Current (7.35 per cent)
I M
nox Wind Limited is an integrated wind energy solutions aruti Suzuki India Limited is a holding company
provider which is engaged in the manufacturing of Wind engaged in the manufacturing, purchasing and sale of
Turbine Generators (WTGs). The company provides motor vehicles, components and spare parts (automo-
Engineering, Procurement and Commissioning (EPC), Opera- biles). The other activities of the company comprise facilitation
tions and Maintenance (O&M), and Common Infrastructure of pre-owned car sales, fleet management and car financing. Its
Facilities services. Additionally, it provides wind energy solutions geographical segments include the domestic segment, compris-
and servicing to Independent Power Producer (IPPs) utilities, ing sales to customers located in India, and the overseas
Public Sector Undertaking (PSUs), corporates and retail investors. segment, comprising sales to customers located outside India. It
It primarily manufactures blades, tubular towers, hubs and has around five plants, located in Palam Gurgaon Road and
nacelles. Manesar Industrial Town located in Gurgaon, Haryana, with an
installed capacity of over 1.5 million vehicles per year.
On a consolidated financial front, the company posted net sales
of `138.61 crore in the second quarter of the current fiscal year, On a consolidated financial front, in Q2FY20, the company
which is a decrease of 68.26 per cent from `436.66 crore net reported sales of `16,123.2 crore, a decrease of around 25.20 per
sales reported in the second quarter of the previous fiscal year. cent as compared to the net sales of `21,553.7 crore reported in
The company reported an operating loss of `70.15 crore Q2FY19. There was a 50.63 percent decrease in PBT from
reported in the September ended quarter of FY20 as against an `3,251 crore reported in Q2FY19 to `1,604.9 crore reported in
operating profit of `2.44 crore reported in the September ended Q2FY20. Similarly, net profit decreased by 38.99 per cent to
quarter of FY19. Similarly, the company reported a net loss of `1,391.1 crore in Q2FY20 as compared to `2,280.2 crore
`45.6 crore for the second quarter of FY20 as against a net reported in the same quarter of the previous fiscal year.
profit of `1.52 crore reported in the second quarter of the last
fiscal year. On the annual front, the net sales saw a significant On the annual front, net sales FY19 have increased 3.35 per cent
increase to `1,437.44 crore in FY19 from net sales of `479.84 to ` 83,038.5 crore from `80,348.8 crore in FY18. However, PBT
crore reported in FY18. The company incurred an operating has fallen by around 4.86 per cent to `10,623.8 crore this year as
loss of `61.87 crore in FY19 as compared to an operating loss of compared to `11,166.9 crore from the previous fiscal year. The
`280.46 crore in FY18. The net loss gained in FY19 was `39.74 company’s net profit too decreased in FY19 by 2.92 per cent to
crore as against a net loss of `187.59 crore reported `7,650.6 crore from `7,880.7 crore in FY18.
in FY19.
The dip in the company’s performance can be attributed to the
Currently, the company’s order book looks strong with a string of demand slump in the automobile industry, high cost of vehicle
new orders that it has received during the fiscal year to supply, ownership and uncertain macroeconomic factors. But, Maruti
erect and commission wind power projects. The Indian has increased its vehicle manufacturing target anticipating a
government has been focussing on incentivising renewable higher demand in the fourth quarter of the current fiscal year
energy sector to encourage the developers for implementing owing to a roll-out of more cars that are compliant with BS-VI
advanced technologies in renewable energy projects which will and a strong demand for its new offerings. Hence, expecting a
further increase the demand. Hence considering government revival in the company’s performance owing to new launches
initiatives we recommend our investor-readers to BUY. and better economic conditions, we recommend a HOLD.
THE SOUTH INDIAN BANK LIMITED YES BANK LIMITED
I have 7,900 shares of South India Bank at an
average price of Rs 16.15 per share. For the last few
months, it is trading in the range of `10.60 to 11.20. Should, I buy Yes Bank Limited share?
Please advice. - G. P. Chopra
- Mr. Singh
HOLD AVOID
BSE/NSE Code 532218 / SOUTHBANK BSE/NSE Code 532648 / YESBANK
CMP `10.47 CMP `47.60
52-Week High `18.55 / Low `8.50 52-Week High `285.90 / Low `29.05
Your Current (35.17 per cent) Your Current --
T Y
he South Indian Bank Limited is engaged in providing ES Bank Limited is a private sector bank engaged in
services related to retail and corporate banking, para providing banking services. The bank’s segments include
banking activities like debit card, third-party product treasury, corporate banking, retail banking and other
distribution, along with treasury and foreign exchange business. banking operations. Its treasury segment includes investments
The treasury services segment includes interest earnings on and financial markets activities undertaken on behalf of the
investment portfolios, gains or losses on investment operations bank’s customers, trading, maintenance of reserve requirements
and earnings from foreign exchange business. Corporate or and resource mobilisation. The corporate or wholesale banking
wholesale banking segment mainly includes providing loans to includes lending, deposit taking and other services offered to
corporate segment whereas, retail banking segment includes corporate customers, while the retail banking includes lending,
providing loans to non-corporate customers. The Bank operates deposit taking and other services offered to retail customers.
through nearly 830 branches with around 40 extension counters
and near to 1,290 automated teller machines in the country. On the financial front, the net interest earned by the bank in the
second quarter of the FY20 came in at `7,382.72 crore as against
On the financial front, the net interest earned by the bank in the `7,231.14 crore in the corresponding quarter of the previous
second quarter of FY20 came in at `1,953.97 crore as against fiscal, clocking a growth of 2.1 per cent. The total income in
`1,696.51 crore in the corresponding quarter of the previous Q2FY20 was ` 8,347.5 crore, a decrease by 4.2 per cent from
fiscal, clocking a growth of 15.18 per cent. The total income in `8,713.673 crore in Q2FY19. The bank incurred a net loss of
Q2FY20 was `2,203.18 crore, an increase by 18.81 per cent from `629.09 crore in Q2FY20, as against a net profit of `951.47
`1,854.40 crore in Q2FY19. The profit after tax rose by 20.46 per gained in Q2FY19. For Q2FY20, the GNPA percentage was 7.39
cent to reach `84.48 crore in Q2FY20 as against `70.13 crore in per cent as compared to 1.62 per cent in Q2FY19. The CRAR
Q2FY19. For Q2FY20, the GNPA percentage was 4.92 per cent ratio in Q2FY20 and Q2FY19 was 16.3 per cent.
as compared to 4.16 per cent in Q2FY19. The CRAR ratio in
Q2FY20 was 12.08 per cent and in Q2FY19, it was 12.11 per On the annual front, the net interest earned by the bank in FY19
cent. came in at `29,623.80 crore, an increase of 46.16 per cent from
`20,268.59 crore in FY18. The total income earned by the bank
On the annual front, the net interest earned by the bank in FY19 in FY19 was `34,299.28 crore, an increase of 34.18 per cent from
came in at `6,876.52 crore, an increase of 11.04 per cent from `25,561.75 crore earned in the previous fiscal year. The profit
`6,192.81 crore in FY18. The total income earned by the bank in after tax on annual basis fell by 59.62 per cent to reach
FY19 was `7,602.73 crore, an increase of 8.15 per cent from `1,709.27 crore as against `4,233.22 gained in FY18. The
`7,030.06 crore earned in the previous fiscal. The profit after tax company reported GNPA ratio for FY19 to be 3.22 per cent and
in FY19 decreased by 26.09 per cent to reach `247.53 crore as 1.28 per cent for FY18. In FY19, the CRAR ratio was 16.5 per
against `334.89 in FY18. The company reported GNPA ratio of cent whereas in FY18, it was 18.4 per cent. The bank has
4.92 per cent for FY19 and 3.59 per cent for FY18. In FY19, the witnessed unstable situations due to a lack in clarity of the
CRAR ratio was 12.61 per cent whereas in FY18, it was 12.70 per investors and promoter issues which have negatively impacted its
cent. With stabilising asset quality, better asset pricing and retail stocks. Hence, we would recommend our investor and readers to
growth driven by mortgages, auto and gold loans, we AVOID.
recommend a HOLD. (Closing price as of Dec 16, 2019)
Reviews
In this edition, we have reviewed M&M Financial Services and Larsen & Toubro Infotech. We suggest our
reader-investors to HOLD in M&M Financial Services and Larsen & Toubro Infotech
Change
M&M FINANCIAL SERVICES HOLD 36.19 Per Cent
CMP - `321.65
BSE CODE Reco. Price Face Value

532720 `504 `2
W
e had previously On the consolidated financial front, the
recommended Mahindra and company posted net sales of `2,913.97
Mahindra Financial Services crore for Q2FY20, up by 16.19 per cent
in Volume 33, Issue No. 12, dated May 14 from `2,507.89 crore in Q2FY19. The
- 27, 2018 under the ‘Special Report’ PBT was `495.45 crore in Q2FY20,
segment. The stock was then trading at depicting a fall of 21.74 per cent from
`504 and was recommended based on Q2FY19 when it was reported at
the strong valuations, improved asset `633.10 crore. The net profit also
quality and growth in core business. reduced by 40.24 per cent from `421.91 `1,874.11 crore posted in FY18.
M&M Financial Services is a Non- crore in Q2FY19 to `252.12 crore in Similarly, the net profit gained in FY19
Banking Finance Company (NBFC) and Q2FY20. was `1,820.35 crore, an increase of
provides financial services in rural and 53.54 per cent from `1,185.60 crore
semi-urban areas across India. On the annual front, the net sales came gained in FY18.
in at `10,371.70 crore for FY19, an
The company offers a range of retail increase of 31.56 per cent from the Improvement in asset quality and
products and services, including previous fiscal year when it was reported collections post good monsoon pose as
financing vehicles for commercial and at `7,883.85 crore. a growth driver for the company.
personal use, tractors, small and medium Revival of the auto sector will positively
enterprise loans and several other The PBT in FY19 increased by 49.08 per impact the company’s growth. Hence,
financial products. cent to `2,793.83 crore as against we recommend a HOLD.
Change
L & T INFOTECH LTD. HOLD 2.87 Per Cent
CMP - `1646.25
BSE CODE Reco. Price Face Value

540005 `1695 `1
W
e had previously company posted net sales of `2,570.7
recommended Larsen & crore in Q2FY20, up by 10.27 per cent
Toubro Infotech in Volume from `2,331.2 crore in Q2FY19. The PBT
34, Issue No. 12, dated May 13 – 26, 2019 was `473.4 crore, depicting a fall of 11.78
under the ‘Choice Scrip’ segment. The per cent in Q2FY20 from `536.6 crore
stock was then trading at `1695 and was posted in Q2FY19. The PAT was `360.4
recommended based on the company’s crore in Q2FY20, down by 9.97 per cent
growth in orders and premium pricing from ` 400.3 crore in the same period of
over competitors. the previous fiscal year.
With the continuous increase in deals,
The company offers end-to-end software On the annual front, the net sales came the company looks at a positive growth
solutions and services such as package in at `9,445.8 crore in FY19 as against momentum. This coupled with its recent
implementation and support, application `7,306.5 crore in FY18, a growth of 29.28 strategic acquisitions will help LTI in
development and maintenance, per cent. The PBT in FY19 increased by strengthening its digital and analytics
enterprise application integration, data 40.67 per cent to `2,027.8 crore as against offerings and drive revenue.
warehousing and business intelligence, `1,441.5 crore posted in FY18. The PAT
etc. in FY19 was `1,515.5 crore, up by 36.24 We thus recommend a HOLD. DS
per cent from `1,112.4 crore posted in

On the consolidated financial front, the FY18. (* Closing price as of Dec 17, 2019)
Kerbside
The recommendations provided in this column are taken from various market
sources such as brokers, analysts, dealers and investment strategists, etc. These
recommendations may not be backed by strong fundamentals. Therefore we advise
readers to use their own discretion before investing in these recommendation
MAJOR BENEFICIARY
The Telecom Regulator
Bharti Airtel Authority of India (TRAI)
BSE Code: 532454 announced that it will now
CMP: `439.95 scrap IUC from January 1,
2021 instead of next
month. One of the major beneficiaries of this
move would be Bharti Airtel and the stock could
see a decent upmove in the coming weeks. Bharti
Airtel has been one of the big beneficiaries of the
IUC and this extension will compensate part of
the AGR charge payable. It may be prudent to
accumulate this stock for short-medium term
perspective.
RATINGS UPGRADE STOCK ACCUMULATION

Balrampur Chini Selected
The prices of Mills sugar stocks
SAIL steel stocks BSE Code: 500038
are back in
BSE Code: 500113 have seen a CMP: `170.10
the reckoning,
CMP: `40.85 decent surge and the stock
in the last of Balrampur
week or so. Recently, brokers have Chini Mills is one of the favourite of
upgraded ratings on steel stocks, a technical analyst working with a
citing likely increase in global steel reputed broking firm and one of the
prices. Some HNIs and active birdies has informed us that he has
traders are reportedly becoming been advising his clients to buy this
energetic on this counter in stock for an aggressive target on the
anticipation of some big higher side. Accumulation in the
announcement due to which, it is stock can be seen as there has been
likely to witness a spurt in its price a surge in the volume over the last
in the coming days. Risk-takers can couple of weeks and the price action
go for this scrip and hope to make has also been good. Traders with a risk appetite may buy this stock.
some quick buck.
ROBUST VOLUMES
One of the most popular stocks with
Avanti Feeds investors sometime ago has once again
BSE Code: 512573 come to limelight and this time, the
stock has surged sharply in the last
CMP: `540.25 week or so along with robust volumes.
There is a buzz in the market that bull
operators and some of the well-known investors of D-Street
are accumulating the stock. Investors and traders with a high
risk appetite can jump on to the bandwagon and hope to
make some quick buck as our sources suggest that the stock
may continue its northward movement.
DS
(Closing price as of Dec 17, 2019)
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Vol. 35. No. 02 • DEC 23, 2019 - JAN 5, 2020 www.dsij.in/apps.aspx

enquiry@dsij.in linkedin.com/in/DalalStreetInvestmentJournal
New Year Hold Investing Wisely

New Promises I was always in a dilemma as to where should I park my
T
he year 2019 started with a lot of promises however, money. At times, I thought of investing it in equity mutual
when we are nearing the end of the year, most of the funds but that seemed to be a risky proposition. However, at
promises of better returns seems to have fizzled out. the same time, I'm aware of the fact that risk-free instruments
More than 50 per cent of the equity MF schemes have don't give handsome returns! But I must say that your cover
failed to beat their benchmark. Nevertheless, on a positive note, story 'MF, PPF, NSC, NPS... Choosing wisely' has helped me to
the performance has been far better than 2018. In the year 2018,
almost three quarter of the funds had failed to beat their understand and choose the right investment avenue which
benchmarks. Going ahead, we will see the situation further suited me well. Eagerly waiting for your next issue!
improving in the year 2020 and more funds will beat its - Rajeev Saxena
benchmark. We get this confidence from the encouraging latest
high-frequency data, which shows that worst is behind us and Editor Responds : Thank you for writing to us! All the
economy has troughed out, after the sequential decline in the
GDP for the six consecutive quarters (4.5 per cent in Q2FY20). instruments discussed in our cover story serve specific purpose
The latest data on IIP, fuel consumption, air traffic, power and come with unique risk return profile. Depending upon your
demand, and monthly auto sales data clearly signals a green shoot situation, you can pick these instruments well-suited to your
appearing in the horizon. It seems that the policy actions taken by specific needs.
the government this year is yielding its result and is likely to play
out full in year 2020. In addition to this, the improving global
market conditions will further aid the recovery in domestic
Content
market.
Does this warrant us to increase our investment exposure to the

broader market funds which will benefit most with the
turnaround in the economy? Our suggestion is that you should
tread carefully. It is better to start increasing your allocation
towards broader market now and keep on increasing as and when
new data points suggest sustainability of the latest pick up in the
economy. Till that time, from an investment perspective, it is good
to invest in multi-cap funds and keep on shifting to mid-cap and
small-cap funds gradually. As this category (multi-cap) of fund, Cover Story MF Page
2
which has the liberty to invest in any market cap stocks, are best
positioned to take maximum benefit of improvement in economic Top 5 ELSS
condition. It may lift the performance of mid-cap and small-cap
stocks. Even if the latest macro-economic data proves to be a false
Mutual Fund Schemes
signal, the large-cap exposure of these funds will help to contain
the risk if any.
When it comes to debt investment, one of the major lessons that

we learned in last one year is that debt investment is not safe. They Financial Planning MF Page
8
come out with their own set of risks. With fall in the growth and
pause in the key policy rate cuts, short to medium duration fund
looks attractive. Investors with a higher risk appetite can also
consider high-rated corporate debt funds and accrual strategies.
Happy Investing 2020! Special Report MF Page

10
Low Beta Funds
SHASHIKANT
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Cover Story MF page - 02
Tax
Investment Saving
TOP
Equity Linked Saving Scheme
Mutual Fund
Schemes
T
here is an interesting fact about people who buy save tax. Life insurance is one of the most prominently used
life insurance policies. They suddenly get a instruments to save tax. It has been observed that in India,
realisation, in the month of March that they are when it comes to tax savings, people are more affectionate
going to die soon! And therefore, they purchase towards traditional investment avenues such as life insurance.
life insurance policies. Historical data shows that
most of the life insurance policies are sold in There is nothing wrong in buying insurance policies; however,
March and is often more than twice of the other 11 months. they should not be mixed with investment. Many of the
traditional insurance products give very suboptimal returns and
On a serious note, these policies are bought in that month to at the same time, might not give you the adequate life cover.
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Such an investment might lead to an opportunity loss to create (Comparative analysis of Tax Saving Instruments under Section
wealth. This happens especially in a case where the investor has 80C) below shows how ELSS scores over others in terms of
little or no knowledge about investment or tax planning. There returns. In the last three years, it has generated highest return
is a lot of difference between tax saving and tax planning. When among all the other instruments.
you take insurance policy on the 11th hour with an intention to
qualify for the deduction under section 80C of Income Tax Act, Now let us look at the performance of ELSS category as against
then that is tax saving. Whereas, if you plan to save tax right at S&P BSE 200 (benchmark of maximum funds in the category).
the beginning of the financial year, then you can easily save tax This will give us an idea about how they perform in the long
as well as invest in an investment avenue that would suit your run as individual asset without considering tax.
financial situation and risk profile. Tax planning
would help you to achieve most out of your
investment.
One of the most popular tax saving option which

will help you in achieving both, is investment in
Equity Linked Savings Scheme (ELSS). These types
of tax saving mutual funds were taken under the
umbrella of section 80C of Income Tax Act to
increase the retail participation in equity markets.
So, now let us understand what these ELSS funds
are and why you should invest in them.
What is ELSS?
ELSS is one of the main categories of equity mutual
funds having investment objective of providing
capital appreciation along with benefit of claiming deduction As we can look at the above graph, ELSS as a category was able to
up to Rs 1.5 lakh under section 80C of Income Tax Act. For beat its benchmark most of the time since year 2012. It is clearly
example, if you are in a 30 per cent tax bracket, you can save visible that in long run ELSS proves to be a better investment
taxes up to Rs 46,800. Although, it is important to know what option even without considering its tax saving benefits.
are the traits of ELSS to make sure it is the best-suited
investment for you. ELSS comes with a lock-in period of three There is no denial to the fact that similar to life insurance
years, which is the lowest among other tax saving options. ELSS policies, even ELSS see a jump in the investments in last three
works similar to a multi-cap fund. This means that they should months of any fiscal year, especially March. These investment
have minimum 65 per cent of investment in equity or equity- habits may not give you optimal returns so, it is important to go
related securities and they are free to invest across market cap. for tax planning instead of tax saving.
Now the question is why should they be considered for tax In the following paragraphs, we are listing 5 Best ELSS, out of
planning? One of the main reasons is their higher returns as which you can choose maximum of two depending upon your
compared to other tax saving instruments. The table risk appetite.
Comparative analysis of Tax Saving Instruments under Section 80C
Investment Instruments under Sec Minimum Investment Maximum Investment Returns^ Risk Lock-In Period Taxability
80C Amount Amount*
Long Term Capital Gains Tax of 10%
Equity Linked Savings Scheme (ELSS) 500 150,000 11.17% Moderately High 3 Years
for gains above Rs. 1 Lakh
Unit Linked Insurance Plan (ULIP) Depends on Sum Assured 150,000 9.27% Moderate to High 5 Years Tax Free
Public Provident Fund (PPF) 500 150,000 7.90% Low 15 Years Tax Free
Employee Provident Fund (EPF)~ 12% of Basic Salary 150,000 8.65% Low Up to Retirement Tax Free
Interest earned is Taxable as Income.
National Savings Certificate 100 150,000 7.90% Low 5 Years
TDS is applicable
5 Year Tax Saving Fixed Deposits 100 150,000 6.25% to 8.25% Low 5 Years
TDS is applicable
Senior Citizen Savings Scheme (SCSS) 1,000 150,000 8.60% Low 5 Years
TDS is applicable
Sukanya Samriddhi Yojana 250 150,000 8.50% Low 15 Years Tax Free
* Actual maximum investment amount varies from product to product. All the above investment products other than PPF and Sukanya Samriddhi Yojana, have maximum investment amount of Rs. 1.5 lakhs and more.
~EPF is compulsory for people with basic salary less than Rs. 15,000.
^ Returns mentioned for ULIP and ELSS are of last 3 years and are market linked so depends on the market and rest all apart from FD's depends on the government's decision.
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Aditya Birla Sun Life Tax Relief '96 - Direct Plan

This fund was launched in the year 1996 and has seen almost
three market cycles. It has given Compounded Annual Growth `9,998.00 `33.67 1.06%
Rate (CAGR) of 23.65 per cent since its launch. Currently, the AUM (in Crores) NAV (Rs.) Expense Ratio (%)
total Assets Under Management (AUM) of the fund stands at As on Nov 30, 2019 As on Dec 10, 2019 As on Oct 31, 2019
Rs 9,814 crore. The scheme being multi-cap in nature follows
an aggressive approach while investing. It can be gauged from Benchmark : S&P BSE 200 TRI I Fund Manager : Ajay Garg
the fact that it has a higher allocation towards mid-cap and
small-cap stocks compared to the category as well as Returns 1-Year 3-Year 5-Year
benchmark. The fund adopts the growth style of investing; Fund 6.69 14.48 11.10
however, the investment philosophy of this fund is to invest in Category 9.35 12.57 8.74
good quality businesses. They look for businesses with good
management led by strong promoters, especially those who Top 5 Holdings* Top 3 Sectors*
adhere to best corporate governance practices and spend good Company % Assets Sectors % Assets
amount in research and development. The companies having Reliance Industries 8.97 Banks 14.01
business uncertainty are not considered for investments. Honeywell Automation India 8.34 Pharmaceuticals
13.78
HDFC 7.65 and Healthcare
At the end of October 2019, this scheme has invested around 45 Gillette India 7.25 Finance 10.98
per cent in large-cap stocks, 44 per cent in the mid-cap stocks Pfizer 6.71
and 11 per cent in the small-cap stocks. Nevertheless, this fund
is on the margin of a concentrated portfolio with almost 60 per
cent of the assets invested in the top 10 stocks, but this has
favoured it in the long run. The fund is consistent in its return
in longer period. For the period from December 2010 to
November 2019, the fund has given 3-year average rolling
returns of 28.81 per cent which is more than category average
of 24.60 per cent and more than twice of its benchmarks (S&P
BSE 200) average of 12.35 per cent. Looking at the current
constituents of the fund, it is more suited for an investor with
higher risk appetite.
Axis Long Term Equity Fund - Direct Plan

This fund has created its place to call it as the benchmark of
managing an equity fund. This fund has always been on top of `21,160 `51.39 0.92%
the list whenever a fund is evaluated based on its risk and AUM (in Crores) NAV (Rs.) Expense Ratio (%)
returns. The Axis AMC had launched this fund in the year 2009 As on Nov 30, 2019 As on Dec 10, 2019 As on Oct 31, 2019
and has generated annualised returns of 17.07 per cent since
launch. In terms of performance, this fund has been the beast. Benchmark : S&P BSE 200 TRI I Fund Manager : Jinesh Gopani
The only underperformance of the fund against the category
and the benchmark since its launch was in the year 2016, when Returns 1-Year 3-Year 5-Year
it gave negative returns whereas, the category and benchmark Fund 14.76 17.46 12.16
gave positive returns in that period. Presently, it has invested Category 9.35 12.57 8.74
95.31 per cent in equity and equity-related instruments and
5.01 per cent in debt. They have invested around 75 per cent of Top 5 Holdings* Top 3 Sectors*
the assets in large-cap stocks, 23 per cent in mid-cap stocks and Company % Assets Sectors % Assets
mere 2 per cent in small-cap stocks. Bajaj Finance 8.11 Banks 24.18
Kotak Mahindra Bank 8.00 Finance 21.52
The fund has a very concentrated portfolio with only 32 stocks HDFC Bank 7.79 Information
7.92
in the portfolio and a whopping 65 per cent of the assets that Avenue Supermarts 6.94 Technology
are invested in the top 10 stocks and around 37 per cent in the Tata Consultancy Services 6.92
top 5 stocks. However, its investment philosophy has helped
this fund to rise above its peers. This fund selects stock based appreciation potential of individual stocks from a fundamental
on bottom-up stock selection process by focusing on perspective. Axis AMC employs a fundamentals-based research
* as on Oct 2019
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process to analyse the appreciation potential of each stock in its sustainable competitive advantages as compared to their
universe. The universe of stocks is carefully selected to include competitors.
companies having robust business models and enjoying
Looking at its performance for the period from December 2010
to November 2019, its 3-year annualised rolling returns stands
at 31.91 per cent which is highest in the category that beats the
category average of 24.60 per cent as well as its benchmark
(S&P BSE 200) that gave 3-year average rolling returns of 12.35
per cent. This shows that even after having a concentrated
portfolio, the fund has delivered consistent returns. Even the
portfolio turnover is on the lower end as the fund manager is
expected to buy those stocks that is believed to deliver superior
earnings growth over a one to two-year period. Hence, this
fund is best suited to those investors who are willing to take
little bit of risk to get rewarded handsomely.
DSP Tax Saver Fund - Direct Plan

Nothing has changed for the DSP Tax Saver fund in terms of its
performance even after a few senior level exits at the fund `6186 `52.93 0.85%
house and buyout of Blackrock’s stake in the company. In last AUM (in Crores) NAV (Rs.) Expense Ratio (%)
one year, it has been able to beat the category and benchmark As on Nov 30, 2019 As on Dec 10, 2019 As on Oct 31, 2019
by a good margin.
Benchmark : NIFTY 500 TRI I Fund Manager : Rohit Singhania
This fund is in the game since 2007 and has gone through two
market cycles. It has given CAGR of 13.41 per cent since Returns 1-Year 3-Year 5-Year
launch. This scheme follows a bottom-up approach for stock Fund 16.34 13.93 11.47
selection by giving due consideration to low price-to-earnings, Category 9.35 12.57 8.74
price-to-book, and price-to-sales ratios, as well as improving
margins, asset turns, and cash flows, amongst others. Top 5 Holdings* Top 3 Sectors*
Company % Assets Sectors % Assets
While considering individual investment opportunities, among HDFC Bank 8.85 Banks 28.74
the defined universe eligible for investment, the fund manager ICICI Bank 8.28 Petroleum 11.96
seeks both value as well as growth investing strategy. While Axis Bank 4.23 Finance 9.42
determining if the stock is a value stock, the fund manager Reliance Industries Ltd. 3.98
looks into the long-term growth potential of the company and Infosys 3.82
evaluates it under different parameters such as strong brand
equity, growing market share, strong management and
technological excellence. If it is not getting reflected in the
current price of the stock, it may form part of the fund.
While evaluating the growth stocks, the supernormal growth of

the company could be due to a new product, a new process,
growing market share, stronger brand equity, technological
breakthrough or unique/predominant position in a market,
among other factors.
This scheme has invested almost 77 per cent of its assets in

large-cap stocks, 14.48 per cent in mid-cap stocks and 8.51 per
cent in small-cap stocks. This investment philosophy has its category average of 24.60 per cent and benchmark (Nifty
helped this fund to do well not just in the long run but also in 500) that gave 3-year average rolling returns of 12.73 per cent
the short run. So, if we look at the 3-year average rolling returns for the same period. This shows the consistency in the returns
of the fund for the period from December 2010 to November of the fund and is aloof to change in the structure of the fund
2019, then it stands at 27.61 per cent which is again higher than house. This fund is suited to a moderate risk-taking investor.
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Invesco India Tax Plan - Direct Plan

Invesco India came up with this scheme in the year 2006 and `977.00 `58.09 1.32%
has given annualised returns of 13.72 per cent since then. This AUM (in Crores) NAV (Rs.) Expense Ratio (%)
fund has survived two market cycles. The best part of this fund As on Nov 30, 2019 As on Dec 10, 2019 As on Oct 31, 2019
is that it performs better when the market falls. Say for instance
in the year 2008, 2011 and 2018, this fund fell less compared to Benchmark : S&P BSE 200 TRI
its benchmark as well as its category. Nevertheless, it performed Fund Manager : Amit Ganatra & Dhimant Kothari
well not just in falling market but also in the rising market. For
example, in the year 2014, it generated return of 57.3 per cent Returns 1-Year 3-Year 5-Year
which was higher than the category as well as the benchmark. Fund 10.09 15.08 11.26
There is no period where it has underperformed its benchmark Category 9.35 12.57 8.74
and category. Currently, it is holding 95 per cent in equity and
equity-related instruments and 5 per cent in cash. It has Top 5 Holdings* Top 3 Sectors*
invested around 71 per cent of its assets in large-cap stocks, 23 Company % Assets Sectors % Assets
per cent in mid-cap stocks and 6 per cent in the small-cap HDFC Bank Ltd. 8.67 Banks 20.92
stocks. The fund has large-cap biased portfolio which helped it Reliance Industries 7.95 Finance 17.37
to sustain the current market turbulence. ICICI Bank 6.84 Petroleum 8.99
HDFC 6.41
This fund tends to follow blend of top-down and bottom-up Tata Consultancy Services 5.30
approach for stock selection. The fund focuses more on sector
selection and then uses bottom-up approach to identify stocks.
The scheme at all times aim to have a well-diversified portfolio
for which it uses three levers to construct the portfolio viz.
stock selection, capitalisation bias and sector allocation.
If we look at its performance from December 2010 to

November 2019, then the 3-year average annualised rolling
returns stand at 27.17 per cent whereas, the category average
for the same period stands at 24.60 per cent. It has even
surpassed the benchmark returns (S&P BSE 200) which gave
3-year average rolling returns of 12.35 per cent in the same
period. This shows the consistency in terms of returns. Looking fund in the falling market, we can say that it is best-suited for
at the fund’s current portfolio and better performance of the conservative investors.
Tata India Tax Savings Fund - Direct Plan

Returns 1-Year 3-Year 5-Year
`2063 `20.17 0.64% Fund 16.64 16.09 12.69
AUM (in Crores) NAV (Rs.) Expense Ratio (%) Category 9.35 12.57 8.74
As on Nov 30, 2019 As on Dec 10, 2019 As on Oct 31, 2019
Top 5 Holdings* Top 3 Sectors*
Benchmark : S&P BSE Sensex TRI Company % Assets Sectors % Assets
Fund Manager : Rupesh Patel & Ennettee Fernandes ICICI Bank 9.45 Banks 34.96
State Bank of India 8.28 Pharmaceuticals
11.18
The funds managed by Tata AMC in recent years, has been HDFC Bank 7.85 and Healthcare
gaining momentum as some of its equity funds are performing HDFC 6.00 Finance 10.67
well. Similarly, the ELSS managed by the AMC has proved itself Infosys 5.73
to be in the list of DSIJ’s Top 5 ELSS. Tata had launched this
scheme in the year 1996 and since then, it gave CAGR of 18.77 equity and equity-related instruments and remaining 2 per cent
per cent. Tata India Tax Saving Fund has the lowest expense in cash. Being a focussed multi-cap, it makes its portfolio more
ratio of 0.64 per cent, thereby making it one of the cheapest concentrated in nature. Its 58 per cent of the assets are invested
among the Top 5 ELSS. This scheme follows focussed multi-cap in Top 10 stocks and 37 per cent in Top 5 stocks. As it is
approach and holds only 35 stocks and S&P BSE Sensex being benchmarked against S&P BSE Sensex, almost 80 per cent of
its benchmark. The fund holds 98 per cent of the assets in the assets are invested in large-cap stocks, 14 per cent in
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mid-cap stocks and 6 per cent in small-cap stocks. Due to its

large-cap bias, it has helped this fund tide the current market
volatility. The long-term performance of the fund is impressive
and in the long run, it has never underperformed its peers.
Interestingly, this scheme follows the mix of top-down and

bottom-up stock selection process. The sector selection is done
based on the analysis of business cycles, regulatory reforms,
competitive advantage, future outlook, etc. post which selective
stock picking is done from these shortlisted sectors. The Stock
selection is done based on the fundamentals of the business,
the industry structure, the quality of management, corporate
governance trends, sensitivity to economic factors, the financial benchmark and category by 2.47 per cent and 2.15 per cent
strength of the company and the key earnings drivers. respectively. Even on the trailing basis, the fund has consistently
beaten its category in 1-month, 3-month, 6-month, 1-year,
This investment strategy has helped Tata India Tax Saving 3-year, 5-year, 7-year as well as 10-year period. We suggest this
Fund to earn consistent returns. This scheme gave 13.01 per fund for moderate risk-taking investor.
cent returns in last 10 years and has outperformed its
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Financial Planning
MF page -08
fund investors to go 'long' on China.
Weak rupee equals good US returns: A stronger

dollar mean investors in the US get more money when they
convert their returns into rupees. This is a benefit that Indian
investors derive from US-focussed mutual funds available in
Ajay Laddha India. The Indian rupee has over the last 20 years depreciated at
around 4.5 per cent against the US dollar. This is due to the
Director, Autus Wealth
Management Pvt. Ltd. higher inflation in India of 7.7 per cent versus much lower
inflation of around 2.5 per cent in the US.
RELEVANCE OF US FUNDS Through investment in US-focussed funds, Indian investors are

likely to gain 4.5 per cent per annum alone from this continued
IN MF PORTFOLIO
depreciation of the domestic currency. The US-focussed MF
portfolio level appreciation can add further potential returns.
A
re you worried about falling domestic GDP growth? Developed markets create higher returns : There
If you are, maybe it is just the excuse you need to add is a popular myth that emerging markets like India deliver higher
the 'American' touch to your investment portfolio. returns than developed markets like the US. However, the fact
The Indian mutual fund industry allows you to tells a different story. The Nasdaq and Dow Jones-two of the most
invest in US funds and it may be a good time to consider popular benchmark stock indices in America have appreciated at
investing in them now. Remember that though the Indian stock a CAGR of 17 per cent and 11 per cent respectively, against India's
market has thousands of listed stocks, the actual investable Sensex CAGR of 9.3 per cent over the last 10 years. This
universe is much smaller. In the true spirit of diversification, challenges the belief that emerging markets like Indian markets
one must go beyond a narrow universe of Indian stocks to both create higher returns than developed markets. Nonetheless,
de-risk their portfolio and also add zing to returns. observing the effect of Indian rupee depreciation, these markets
have returned 21 per cent and 15 per cent for the Nasdaq and
Best of the best : The global and domestic economy, as we Dow vs 9.3 per cent for the Sensex.
know it, is transforming. Emerging business areas like
e-commerce, social media, cab-hailing, software products, US: A popular destination for next-gen : US-
content streaming, and high-tech are the promising areas of focussed mutual funds available to Indian investors can also play
futuristic growth. While Indians as a customer market contribute a vital role. Middle-class parents nowadays, aspire to send their
to the profits of these US listed companies, Indians as investors children for higher education abroad. Hence, it makes US as the
do not have domestic plays on these lucrative themes. This is number one destination for higher education.
where US-focussed mutual funds offer a great window to
potential wealth creation by having a stake in the profits From Stanford to Massachusetts Institute of Technology (MIT),
generated by these America-listed firms. Silicon Valley to Detroit, America's bulwarks has created an
atmosphere that delivers high-quality education as well as a
Tech that : Some of the world's biggest listed companies like satisfying professional career. So, US-bound Indian students'
Apple, Microsoft, Amazon, Alphabet (Google), Berkshire, family can use their investments in US funds i.e. to create foreign
Facebook, JP Morgan Chase come from America. US funds assets that will pay and support the future foreign liabilities.
provide an easy and simple way for Indian investors to play
American stocks. You may ask: Are American stocks giving Choose funds wisely : If you are looking for a good
better returns? The answer to this question is that you should US-focussed mutual fund, choose a fund with a reasonable track
look at how some of the biggest US stocks have performed! record (of at least 5 years). Next, choose a fund that has its own
Between 2003 and 2018 i.e. in 15 years, the Apple stock gave a expertise of directly investing money in US stocks. Look at the
US dollar denominated return of 206 times. The Indian rupee fund's returns and compare them with both its benchmark and
denominated return is bigger at 274 times. Netflix gave 212 times US funds peer average for different time periods.
and 282 times in US dollar and Indian rupee terms. Amazon
gave 66 times and 88 times return in the same way. US-focussed mutual funds are suitable for all investors looking
In fact, 9 of the top 20 internet leaders globally are Chinese for higher returns over a medium-term period. Allocate 10-15
companies like Alibaba and Tencent which are listed only in the per cent of your MF portfolio to US funds in order to enhance
US markets. Investing directly in China-listed companies is your overall wealth creation journey.
almost impossible for Indian investors, but the US-listing for
some of the Chinese giants makes it possible for Indian mutual Happy Investing!
The writer is a Director, Autus Wealth Management Pvt. Ltd. n Email : ajay_laddha@yahoo.co.in n Website : www.autusindia.co.in
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Special Report
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Low Beta
Funds
H
One of them is investing in ‘low beta’ funds or stocks. Among
istorically, attractive equity market return is several finance theories proposed by the academia, there are very
often followed by the uncertainty and few which is being adopted by the practitioners and even lesser
turbulence. The current volatility in the equity that is being used as widely as Capital Asset Pricing Model
market (not to be misled by lifetime high of (CAPM). This fundamental theory of finance suggests that return
frontline equity indices, which is led by on any investment is directly dependent upon the risk you take,
extraordinary performance of few stocks) is followed by the which in this case is represented by ‘beta’. Hence the conventional
spectacular rise in the stock market during 2017. In the year wisdom will say that higher beta funds should generate better
2017, the frontline indices generated 28 per cent while the returns in long run. This is because market after all often goes up
broader index moved even more. Mid-cap and small-cap in the long run and hence, fund with higher beta should generate
indices moved up by 48.13 per cent and 59.64 per cent higher returns. A fund with beta of more than 1 means it is more
respectively in the same period. The following two years had volatile than its benchmark and moves widely relative to its
been painful for the broader indices that witnessed continuous benchmark in both directions. While beta of less than one means
fall for two years (2018 and 2019). the movement in fund’s net asset value (NAV) will be less than the
movement in its benchmark in either direction. Nevertheless, this
Understanding ‘Beta’ does not happen in reality. It is actually lower beta fund on an
The equity market goes in a cycle and is very hard to predict its average outperform the high beta fund in the long run.
exact tenure. Hence, many smart investors try to find the ways
in which they can overcome the cyclicality of the market and This can be clearly viewed in performance difference of the
generate returns better than their benchmarks. funds with beta greater than one and less than one.
Average of Return (%)10 yrs
Category High Beta (>1) Low Beta (<1)
Tax Planning 10.06 11.17
Index 9.42 8.93
Infrastructure 5.04 6.55
Large & Mid cap 8.03 11.2
Large cap 10.59 10.08
Multi Cap 11.02 11.67
Value/contra 6.2 11.11
To understand if the lower beta actually helps a fund to
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outperform in longer period, we studied the performance of the equity dedicated funds that have generated best and worst returns
in the last 10 years.
Following are the tables that shows the top and bottom performing equity funds in terms of returns in the last 10 years
Top 10 Funds In Terms of Returns in the last 10 years Bottom 10 Funds In Terms of Returns in the last 10 years
Fund Return (%) Fund Return (%)
Funds Category Funds Category
Manager 10 yrs Manager 10 yrs
Canara Rob Emerg Equities JM Large Cap Fund(G) Asit Bhandarkar EQ-LC 6.73
Miyush Gandhi EQ-L&M 18.59
Fund-Reg(G) Taurus Largecap Equity Fund-Reg(G) Prasanna Pathak EQ-LC 6.92
SBI Small Cap Fund-Reg(G) R. Srinivasan EQ-SML 17.79 BOI AXA Large & Mid Cap Equity Fund-Reg(G) Alok Singh EQ-L&M 7.14
SBI Focused Equity Fund-Reg(G) R. Srinivasan EQ-MLC 17.18
JM Core 11 Fund(G) Asit Bhandarkar EQ-LC 7.19
Aditya Birla SL MNC Fund-Reg(G) Ajay Garg EQ-MNC 17.01
Baroda Multi Cap Fund(G) Dipak Acharya EQ-MLC 7.29
ICICI Pru FMCG Fund(G) Atul Patel EQ-CONS 16.89
HDFC Growth Opp Fund-Reg(G) Vinay R. Kulkarni EQ-L&M 7.36
Aditya Birla SL India GenNext Fund(G) Anil Shah EQ-CONS 16.61
DSP Small Cap Fund-Reg(G) Vinit Sambre EQ-SML 16.5 LIC MF Multi Cap Fund(G) Yogesh Patil EQ-MLC 7.38
ICICI Pru Banking & Fin Serv Fund(G) Roshan Chutkey EQ-FIN 16.44 HSBC Small Cap Equity Fund(G) Ankur Arora EQ-SML 7.44
Invesco India Multicap Fund(G) Taher Badshah EQ-MLC 16.42 Quant Tax Plan(G) Rochan Pattnayak EQ-ELSS 7.82
HDFC Mid-Cap Opportunities Fund(G) Chirag Setalvad EQ-MID 16.03 IDFC Focused Equity Fund-Reg(G) Sumit Agrawal EQ-MLC 7.9
Out of the above, we selected four funds to check if there is any truth in the fact that low beta funds prove better long-term bet.
The following graph shows the relative performance of the funds since year 2010. You can clearly see how the Invesco multicap
fund and Canara Robeco have outperformed the other two funds namely, JM Large cap and Baroda Multi cap.
The above chart has three segments. The top part of the chart shows the cumulative return generated by the funds since April 2010.
It shows the movement of every penny that you had invested since the beginning of April 2010.
It means that each rupee invested in Canara Robeco have gradually turned four times its actual worth if compared to the current
market price. The second part of the chart shows the daily returns of the funds, which varies from negative 4 per cent to positive 4
per cent. The last part of the chart shows the drawdown (maximum fall from their recent high) of the funds. You can see that funds
with better returns have lower drawdown.
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Next we checked the beta of these funds with respect to their and hence need to rise even lesser to outperform the
benchmarks and found out that the funds that have performed benchmarks. What also works for the low beta strategy is its
better in the last 10 years to have lower beta. For example, Baroda relationship with the market cycle. Outperformance of these
Multi cap fund had generated annualised return of 7.29 per cent funds typically come in periods of market fall, while any lag in
in the last 10 years as compared to Invesco Multi cap fund which performance comes when the markets are rising. Nevertheless,
has a beta of 0.78 and it gave a return of 16.42 per cent. a smart fund manager can always shift his assets towards higher
beta stocks while market is rising.
The table below shows beta of the funds in rising as well as in

falling market. In such cases, the benchmark of the respective
fund represents their market. We clearly see that beta of the
performing funds are lower in general. Nevertheless, what helps
them outperform is lower beta during the falling market. We
see beta of the fund changes at different point of time and better
performing funds have higher beta during the rising market
whereas lower beta during the falling market.
Baroda Canara
Why Low Beta strategy performs Risk Stats JM Large
Multi Emerging
Invesco
Many of us must be wondering why low beta works, which is
Beta (Overall) 0.916 0.9938 0.8302 0.7849
actually against the conventional finance wisdom. One of the
main reasons why lower beta works is because of simple Beta(Rising Market) 0.2206 0.9167 0.9859 0.966
mathematics. Suppose there are two funds having their average Beta(Falling Market) 0.9184 0.9949 0.8451 0.8009
return of 10 per cent in 2 years. One fund that has a higher beta
falls by 15 per cent in the first year, then it has to recover 41.2 Low beta funds should ideally be generating no alpha, however,
per cent next year to generate an average return of 10 per cent. in practice it seems that low beta funds are generating higher
However, in case of fund with lower beta falls by 10 per cent in returns than the high beta funds. This is a market anomaly that
the first year, it needs to rise by less than 35 per cent to generate has persisted for long and does not seem to go away. Hence, it is
an average return of 10 per cent in two years. This is the reason likely that low beta funds may keep on generating excess
why lower beta funds generate better return as they fall less returns. DS
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Make Your Short-Term

Money Count
Hemant Rustagi
Chief Executive Officer, Wiseinvest Advisors
M
utual funds are gradually emerging as an ideal redeemed within one year is taxed at 15 per cent and beyond
investment vehicle to practice asset allocation for one year is considered as long-term capital gains and taxed at
investors with varied risk and time horizon. 10 per cent. The DDT for equity-oriented funds is 10 per cent
Investors looking to invest in a combination of (plus surcharge and cess).
both debt and equity and/or generate regular income can
choose the appropriate ones from wide varieties of hybrid Dynamic Asset allocation/Balanced advantage funds:
funds. These funds allow investors to retain control on how Dynamic asset allocation funds manage allocation to different
much money should be invested into each of the asset classes asset classes dynamically. Balanced advantage funds are those
during their defined time horizon so as to suit their risk profile that usually invest in a combination of equity, arbitrage and debt
and investment objectives. in a manner that equity and arbitrage allocation is 65 per cent or
more. These are ideal for investors who have a minimum time
However, choosing the right combination of hybrid funds can be horizon of 3 years and are alright with higher risk as compared
a little tricky as there are six types of funds with a different asset to balanced hybrid funds to earn higher pre and post-tax returns.
mix. Here is a brief description of each category and what do
they offer: Multi asset allocation funds: These funds invest in at least three
asset classes with a minimum allocation of at least 10 per cent
Conservative hybrid funds: These funds invest around 75-90 each in all three asset classes. These are ideal for those who may
per cent in debt instruments and the rest in equity. These funds want some exposure to gold in addition to equity and debt. Most
can be a good option for investors looking to earn slightly of these funds invest more than 65 per cent in equities and hence
higher returns than pure debt funds without taking too much are treated as equity funds for taxation. Ideally, the time horizon
additional risk. The minimum time horizon for investing in should be the same as in the case of aggressive hybrid funds.
these funds should be 3 years. These are considered as debt
funds for tax purposes-any capital gains on units redeemed Arbitrage funds: An arbitrage fund seeks to generate income
within 3 years is considered as short-term capital gain and is through arbitrage opportunities emerging out of mispricing
taxed at one’s nominal tax rate. Any capital gain on units between the cash market and the derivates market. In other
redeemed after 3 years is considered as long-term capital gain words, arbitrage funds capture the ‘interest’ element in the
and taxed at 20 per cent after indexation. For investors opting equity market and offer an opportunity for investors to earn
to get regular income, dividend is tax-free in their hand. healthy returns, without taking an equity market exposure.
However, the fund pays a dividend distribution tax (DDT) of These funds invest in stocks and their futures simultaneously
29.12 per cent (including surcharge and cess). and hence, eliminate the risk of volatility normally associated
with equity funds. Besides, arbitrage funds score over income
Balanced hybrid funds: There are two sub-categories here. funds in terms of tax efficiency as tax benefits of equity funds
First, there are funds that invest 40-60 per cent in debt are applicable to these funds.
securities and the rest in equities. These funds have the
potential to provide higher returns than conservative hybrid Equity savings funds: Equity savings funds usually invest
funds, albeit with higher volatility. Then, there are aggressive around 20-25 per cent in equities, 40-45 per cent in arbitrage
hybrid funds that invest 65-80 per cent in equities and the rest and the rest in debt instruments. These funds can be a better
in debt instruments. The ideal time horizon for investing in option than conservative hybrid, both in terms of pre and
these funds would be 3-5 years and more. For tax purposes, post-tax returns. The ideal time horizon for investing in these
these are considered as equity funds-capital gain on units funds would be 3 years or more. DS
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MF QueryBoard
MF page - 14
I am a 35 years old man and I want to know among buying

a house using home loan and continuing to live in a rented make, let us assume that you wish to buy a home worth Rs. 1
crores and you pay 20 per cent, that is, Rs. 20 lakhs as down
place, which one would be a wiser choice. , I have saved payment. The remaining 80 per cent, that is, Rs. 80 lakhs, you will
sufficiently for the down payment. pay through home loan, which will have a 20-year loan tenure. As-
- Vikram Chauhan suming that you take the loan for the period of 20 years at 8.4 per
A
cent rate of interest, the EMI that you would be paying would be
lmost everyone has a dream of owning a house, even if it approximately Rs. 68,000 per month.
means to take a loan and pay hefty Equated Monthly
Installments (EMIs) for years. As you said, you are Now, let's say, you have an option to rent the same property by
currently staying at the rented place, I am sure this would be paying a rent of Rs. 20,000 per month. In this case, you will be left
yours dream as well. Assuming that this will be your first home with Rs. 48,000 per month to invest in large cap equity mutual
that you will own, by all means you should go ahead with buying fund. The 3-year average rolling returns for the period of 10 years
it, as this is for your emotional comfort, which cannot be of the large cap funds is 12.68 per cent. If we consider that it will
quantified. continue to give the same compounded annual growth rate
(CAGR) for the next 20 years, then systematic investment plan
Nonetheless, keeping emotional part aside, it does not make (SIP) of Rs. 48,000 per month, along with a lump sum of Rs. 20
sense to buy a house; renting one, instead, is a much better lakhs, will lead you to accumulate approximately Rs. 7 crores at
option. Should you buy a house by taking a loan or rent a place the end of 20 years, which may be more than even what your
and invest the remaining proceeds in equity mutual funds, can be property would be worth after 20 years. However, here we have
explained with the help of the following illustration. assumed that the rent of property in the above illustration would
remain constant throughout the period and, according to the
As we do not know the worth of the home that you are planning above illustration, renting a house, rather than buying by
to buy and neither do we know the down payment you are able to leveraging your asset, seems to be more beneficial.
Trailing Returns (%)

1-Week 1-Month 3-Month 1-Year 3-Year 5-Year 10-Year
I want to invest money for the period of 3 months and was 0.05 0.5 1.32 6.7 6.33 7.12 7.97
looking for a good ultra-short duration fund. How do I select
good ultra-short duration fund? There are two factors to look at while investing in them, which are
- Darpan Singh explained below:
Returns : Many people select funds that have provided better
U
returns. However, while investing in ultra-short duration fund you
ltra-short duration funds are suitable for investments that need to do exactly the opposite. This means that you need to avoid
need to be made for few months. As per SEBI's re-catego- investing in the funds with the highest returns. This is because if
rization circular, ultra-short duration funds are those, the fund is giving highest returns then there are high chances that
which invest in debt and money market instruments, with it might be taking risk, which is not required for the investment
Macaulay duration of 3 months to 6 months. horizon of 3 to 6 months. So, there might be chances of loss there.
For investing in a fixed income for a short span of time, you
Generally, ultra-short-bond funds give better returns than bank should avoid any sort of unnecessary risk. Even you should check
fixed deposits (FDs). Basically, these funds stay away from the the Yield to Maturity (YTM) of the fund. Higher the YTM, higher
equity market and only invest in bonds, with a maturity period of the risk that fund is carrying.
3 months to 6 months, and this is why they can get some sort of
predictable returns; however, not a guaranteed one. Following is Expense ratio : Another thing to look at is the expense ratio of
the category returns of the ultra-short duration fund across a the fund. Higher expense ratio eats up your returns. This is why it
period to gauge the returns that you can expect from it. Nonethe- is better to select a fund with the lowest possible expense ratio. On
less, you can ignore the returns provided in the long term, as you the contrary, you might also consider investing in the direct plan
want to invest only for a period of 3 months. However, there are via the website of a fund house. Usually, for direct plans, the
times when you would wish to invest in a fund for safety purpose, expense ratio is less than regular plans of the same fund in the
which can provide better returns than bank FDs. In such a case, range of 0.50 per cent to 0.75 per cent. So, investing in direct plan
knowing how it will perform in the long run is important. would necessarily reduce the overall cost. DS
Readers are requested to send only one query at a time so that more readers get a chance. Have questions relating to any aspect of
personal finance. Ask DSIJ at editorial@DSIJ.in and get your queries resolved.
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MF Data Bank
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With Ranking
T
Key To Databank
he following table lists top-ranked equity funds based on Category Rank: Category wise ranking as on Dec 16th 2019
DSIJ's proprietary research methodology. We have Scheme Name: This is the name of the mutual fund scheme
evaluated each funds underlying portfolio of stocks and NAV (`): Net asset value per unit of a mutual fund or an exchange-traded fund
ranked them based on their expected portfolio returns. In a similar (ETF) on a specific date
way we calculated the risk of a fund based on its constituents. This AUM (`Crore): This is the total market value of financial assets held by the mutual
helps us to ‘rank’ and assign ‘risk’ to newly launched funds also. fund scheme on a specific date.
We continuously evaluate equity funds based on the changed Weightage: Large-Cap: This is a percentage of total assets held by a fund in the
large-cap stocks as defined by AMFI for the current period.
ratings of their underlying stocks and the change in their prices.
Mid-Cap: This is a percentage of total assets held by a fund in mid-cap stocks as
Therefore, this list is quite dynamic and reflects the best possible
defined by AMFI for the current period.
return potential of the funds for the next one year. Small-Cap: This is a percentage of total assets held by a fund in small-cap stocks as
You can use this ranking to create your own mutual fund defined by AMFI for the current period.
portfolio. Depending on your risk profile, return expectations and Total No of Companies: This is a total number of securities held by a mutual fund
overall asset allocation, you can add the best performing fund scheme at the end of a specific month.
category to your portfolio. For clarity and to include more funds, Expenses Ratio: This is the latest expense ratio disclosed by the mutual fund scheme
we have not included ‘Direct’ and ‘close-ended’ funds. You can visit Return_1Years: This is the past one-year return given by the scheme.
our website (www.dsij.in/mutual-fund) to check the entire list Expected 1-yr return: This is based on our analysis of the portfolio of mutual fund
along with equity-oriented hybrid and close-ended funds. scheme and their expected growth in the next one year, assuming the underlying
remains the same.
This ranking can also be used for reviewing different holdings
Current Rank: Rank as on Dec 16th 2019
in your fund portfolio. Hence, a consistently laggard performer of a
Previous Rank of Nov 29th 2019 is shown under bracket ()
category can be looked at as 'Switch' or 'Exit' advice.
Risk : Risk as on Dec 16th 2019
Expense Return 1Expected

Category Weightage (%) DSIJ Current
NAVNo of AUM
Scheme Name Companies Ratio (%) 1 Years yr return Rank Risk
Rank (`) (` Cr)
Large Cap Mid Cap Small Cap (%) (%) (16 Dec 19)
Equity - Large Cap
1 HDFC Top 100 Fund - Reg. Plan 497.32 18,748 92.42 7.08 0.00 53 1.73 9.33 20.23 53 (64) Moderately High
2 Nippon India Large Cap Fund 35.27 13,010 81.13 13.43 4.93 43 1.74 7.66 16.09 106 (104) Moderately High
3 Franklin India Bluechip Fund - Growth 468.84 6,753 90.73 1.38 0.00 31 1.88 6.07 15.36 123 (158) Moderately High
4 Mahindra Pragati Bluechip Yojana 10.74 97 84.71 10.95 0.00 25 2.67 ** 14.90 130 (117) Moderately Low
5 Aditya Birla Sun Life Frontline Equity Fund 231.34 21,255 83.62 9.52 1.54 63 1.80 8.13 14.79 132 (169) Moderate
6 Essel Large Cap Equity Fund 23.99 100 83.72 7.72 3.34 44 2.35 11.38 14.58 138 (238) Moderate
7 Mirae Asset Large Cap Fund 54.00 16,519 82.70 10.99 1.54 59 1.69 12.79 13.83 187 (182) Moderate
8 Invesco India Largecap Fund 29.76 202 86.08 7.16 4.80 28 2.60 9.86 13.71 196 (200) Moderately Low
9 ICICI Prudential Bluechip Fund 44.10 24,132 84.52 3.17 0.26 54 1.80 10.31 13.36 208 (193) Moderate
10 Union Largecap Fund 11.29 204 98.28 0.00 0.00 65 2.56 11.56 12.41 226 (296) Moderate
11 IDFC Large Cap Fund 33.81 459 83.23 3.47 4.85 30 2.19 9.99 12.35 227 (291) Moderately Low
12 DSP Top 100 Equity Fund 223.58 2,689 94.98 2.08 2.12 46 2.11 14.78 12.10 235 (302) Moderately High
Equity - Large & Mid Cap
1 UTI Core Equity Fund 60.61 866 53.21 34.54 9.84 60 2.54 0.68 21.21 40 (44) Moderate
2 ICICI Prudential Large & Mid Cap Fund 328.95 3,714 55.92 36.15 4.48 59 2.12 5.97 18.42 72 (74) Moderate
3 Franklin India Equity Advantage Fund 78.87 2,608 54.90 35.26 6.36 57 2.09 2.29 16.94 89 (85) Moderate
4 IDFC Core Equity Fund 45.31 2,831 51.48 35.90 10.56 66 2.01 3.38 15.82 112 (116) Moderate
5 HDFC Growth Opportunities Fund - Reg. Plan 115.44 1,374 61.07 36.68 1.00 46 2.40 7.86 15.51 117 (167) Moderately High
6 DSP Equity Opportunities Fund 232.80 5,623 58.19 36.91 3.10 62 1.94 12.27 15.40 119 (176) Moderately High
7 BOI AXA Large & Mid Cap Equity Fund 35.46 176 57.00 36.48 5.17 49 2.87 9.14 14.78 133 (305) Moderate
8 Invesco India Growth Opportunities Fund 36.12 1,991 57.78 35.76 1.85 44 2.17 12.00 14.65 136 (186) Moderate
9 Essel Large & Midcap Fund - Reg. Plan 15.65 105 42.49 35.06 19.85 46 2.85 9.73 14.64 137 (182) Moderately Low
10 Motilal Oswal Large and Midcap Fund 10.55 330 49.39 40.36 5.82 21 2.43 ** 14.51 140 (217) High
Others - Index Funds/ETFs
1 Nippon India CPSE ETF 23.02 11,269 86.71 13.05 0.00 10 0.01 -0.48 38.10 2 (1) Moderate
2 ICICI Prudential Bharat 22 ETF 34.36 10,982 88.75 10.28 0.98 22 0.01 -1.05 29.30 13 (7) Moderate
3 DSP Equal Nifty 50 Fund 9.79 109 99.87 0.00 0.00 50 0.88 3.23 26.94 14 (8) Moderately High
() There are some blanks in the previous ranking column. This is because these funds were not in our last ranking
** These funds are yet to complete one year
Assets managed by the Indian mutual fund industry have grown from Rs. 23.59 lakh crore in November 2018 to
Rs. 26.94 lakh crore in November 2019. That represents a 14.21% growth in assets over November 2018.
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NAV AUM No of
Rank (`) (` Cr)
4 Nippon India ETF Nifty Midcap 150 62.44 192 1.89 95.21 2.71 149 0.31 ** 20.70 44 (56) Moderately High
5 Nippon India ETF NV20 578.79 31 99.23 0.00 0.00 20 0.16 6.91 20.64 45 (53) Moderately Low
6 Motilal Oswal Nifty Midcap 150 Index Fund 10.92 27 1.87 93.70 2.55 150 1.03 ** 20.27 51 () Moderately High
7 ICICI Prudential Private Banks ETF 176.92 390 92.15 7.66 0.00 10 0.16 ** 20.25 52 (60) High
8 Nippon India ETF PSU Bank BeES 282.80 94 63.58 31.30 4.90 12 0.50 -14.07 19.62 60 (120) High
9 Kotak PSU Bank ETF 254.69 38 63.71 31.36 4.92 12 0.49 -14.19 19.06 67 (118) High
10 Motilal Oswal Midcap 100 ETF 17.69 32 2.50 94.81 2.24 100 0.20 -2.64 18.87 68 (48) Moderately High
11 ICICI Prudential Midcap Select ETF 65.23 40 18.84 81.08 0.00 30 0.45 -2.20 17.28 83 (100) Moderately High
12 ICICI Prudential Nifty Low Vol 30 ETF 90.76 62 99.93 0.00 0.00 30 0.42 3.77 17.02 87 (128) Moderately Low
13 ICICI Prudential Bank ETF 320.82 412 96.56 3.34 0.00 12 0.16 ** 16.13 104 (177) High
14 Aditya Birla Sun Life Banking ETF 319.67 140 96.18 3.45 0.00 12 0.17 ** 16.12 105 (181) High
15 Nippon India ETF Bank BeES 3,267.42 6,705 96.62 3.35 0.00 12 0.19 19.69 16.05 109 (174) High
16 ICICI Prudential S&P BSE 500 ETF 158.26 53 81.09 12.77 5.73 501 0.29 8.96 15.58 115 (164) Moderately High
17 Nippon India ETF Junior BeES 291.36 1,238 92.45 7.42 0.00 50 0.15 2.16 14.45 142 (148) Moderately High
18 IDBI Nifty Junior Index Fund 21.18 53 92.31 7.27 0.00 50 1.04 1.35 14.41 145 (152) Moderately High
19 DSP Nifty Next 50 Index Fund 10.84 46 92.30 7.41 0.00 50 0.59 ** 14.39 147 (153) Moderately High
20 ICICI Prudential Nifty Index Fund 117.19 515 100.49 0.00 0.00 50 0.45 12.84 14.31 149 (216) Moderate
21 Mirae Asset Nifty 50 ETF 122.51 127 99.98 0.00 0.00 50 0.07 13.63 14.26 151 (207) Moderate
22 UTI Nifty Exchange Traded Fund 1,280.26 15,801 100.18 0.00 0.00 50 0.07 13.50 14.24 152 (220) Moderate
23 HDFC Nifty 50 ETF 1,268.59 374 100.00 0.00 0.00 50 0.05 13.47 14.23 153 (225) Moderate
24 ICICI Prudential Nifty ETF 127.35 1,363 99.98 0.00 0.00 50 0.05 13.49 14.23 153 (221) Moderate
25 IDBI Nifty Index Fund 22.32 228 99.89 0.00 0.00 50 1.03 12.35 14.23 153 (217) Moderate
26 UTI Nifty Index Fund 79.35 1,794 100.02 0.00 0.00 50 0.17 13.28 14.22 156 (221) Moderate
27 Nippon India ETF Nifty BeES 1,280.65 2,108 99.76 0.00 0.00 50 0.05 13.51 14.22 156 (228) Moderate
28 Kotak Nifty ETF 125.29 904 99.98 0.00 0.00 50 0.14 13.37 14.21 159 (225) Moderate
Equity - Sectoral/Thematic
1 Aditya Birla Sun Life MNC Fund - Gr 783.69 3,879 24.74 58.95 14.59 39 2.09 5.26 49.39 1 (6) Moderately Low
2 Nippon India Power & Infra Fund 92.37 1,292 31.15 15.00 49.84 38 2.29 -1.71 37.21 5 (2) Moderately High
3 UTI Healthcare Fund 84.41 393 59.96 25.84 12.87 23 2.70 1.14 33.11 10 (15) Moderately Low
4 IDFC Infrastructure Fund 13.66 789 36.58 19.58 43.05 42 2.39 -3.87 31.94 11 (3) High
5 Aditya Birla Sun Life Infrastructure Fund 29.10 497 30.51 27.83 38.46 49 2.64 -3.87 31.24 12 (5) Moderately High
6 Taurus Ethical Fund 51.83 39 47.17 38.86 11.37 66 2.53 3.21 24.98 20 (130) Moderately Low
7 HSBC Infrastructure Equity Fund 14.67 87 43.44 16.44 38.20 36 2.57 -13.65 24.18 23 (9) High
8 Invesco India PSU Equity Fund 18.29 72 63.30 25.22 7.31 16 2.46 14.67 23.50 27 (33) Moderately High
9 Invesco India Infrastructure Fund 17.15 41 31.32 28.96 37.10 27 2.66 7.46 23.40 28 (25) Moderate
10 ICICI Prudential Exports and Services Fund 57.23 705 66.28 23.65 9.11 25 2.53 5.86 22.36 30 (20) Moderately High
11 ICICI Prudential Infrastructure Fund 49.20 1,122 54.10 8.48 35.17 50 2.36 3.19 22.23 31 (41) Moderately High
12 HDFC Infrastructure Fund - Reg. Plan 15.33 727 53.74 12.64 31.16 36 2.46 -0.18 21.22 39 (44) High
13 ICICI Prudential FMCG Fund - Growth 246.87 541 71.37 11.07 10.99 20 2.59 5.77 21.00 42 (68) Low
14 UTI MNC Fund 195.33 2,295 55.01 30.50 9.55 39 2.40 -1.85 20.64 45 (137) Low
15 Kotak Infra. & Economic Reform Fund - Reg. Plan 19.58 356 30.63 38.55 30.35 39 2.52 5.22 20.52 48 (40) Moderately High
16 Franklin India Opportunities Fund 72.96 571 71.57 12.18 10.52 33 2.57 5.54 19.98 56 (55) High
17 ICICI Prudential India Opportunities Fund 10.34 2,105 72.43 18.24 6.69 33 2.26 ** 19.91 58 (52) Moderately High
18 UTI Infrastructure Fund 52.97 1,281 57.26 21.31 20.22 41 2.32 8.15 19.81 59 (61) Moderately High
19 Canara Robeco Infrastructure 44.32 111 48.85 20.51 27.67 32 2.60 4.38 19.43 62 (39) Moderately High
20 Franklin Build India Fund 41.38 1,263 71.73 2.94 19.53 34 2.24 7.53 19.22 66 (58) High
21 DSP Tiger Fund 90.85 1,064 59.29 13.72 25.28 60 2.36 7.46 18.76 69 (59) Moderately High
22 BOI AXA Manufacturing & Infrastructure Fund 14.82 43 24.59 34.19 38.35 51 2.54 1.86 18.40 73 (22) Moderately High
23 Aditya Birla Sun Life Digital India Fund 53.34 430 60.30 14.93 17.57 22 2.63 5.27 17.58 79 (50) Moderately Low
24 DSP Healthcare Fund 10.60 247 31.71 35.74 24.44 20 2.45 5.86 17.41 81 (143) Moderate
25 Franklin India Technology Fund 160.19 241 58.91 5.86 6.42 12 2.46 4.83 17.22 85 (85) Moderate
26 Aditya Birla Sun Life Pharma & Healthcare Fund 10.56 173 48.73 29.01 18.73 23 2.71 0.00 17.00 88 (134) Moderately Low
27 ICICI Prudential Banking and Financial Services 69.48 3,445 59.98 19.07 13.86 28 2.12 17.23 16.60 98 (93) Moderate
28 ICICI Prudential Manufacture in India Fund 10.30 1,084 64.76 24.53 7.05 54 2.19 2.18 16.58 99 (135) Moderately Low
29 Mirae Asset Great Consumer Fund 37.05 952 52.88 31.63 14.34 37 2.24 9.32 16.27 102 (168) Moderate
The proportionate share of equity-oriented schemes is now 42.5% of the industry assets in November 2019,
up from 42.1% in November 2018.
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NAV AUM No of
Rank (`) (` Cr)
30 ICICI Prudential Technology Fund 56.61 422 88.07 0.00 5.67 10 2.85 -2.88 16.26 103 (75) Low
Equity - Focused
1 ICICI Prudential Focused Equity Fund 28.74 669 74.28 6.80 4.06 22 2.62 1.99 17.46 80 (97) Moderately Low
2 HDFC Focused 30 Fund - Reg. Plan 76.90 512 79.63 5.76 12.03 28 2.56 5.28 17.09 86 (124) Moderately High
3 Nippon India Focused Equity Fund 46.82 4,281 62.92 22.59 9.88 28 1.94 6.86 16.76 95 (142) High
4 Franklin India Focused Equity Fund 41.97 8,994 72.85 3.99 12.80 27 1.84 12.79 16.69 97 (104) High
5 Aditya Birla Sun Life Focused Equity Fund 62.35 4,407 81.74 10.62 0.00 29 2.09 12.26 15.58 115 (111) Moderately Low
6 IDBI Focused 30 Equity Fund 10.10 196 92.89 4.16 0.00 30 2.55 6.20 12.86 214 (189) Moderate
7 Union Focused Fund 11.16 200 78.96 16.00 0.00 25 2.48 ** 12.20 231 (310) Moderate
8 IIFL Focused Equity Fund 17.88 476 64.27 23.14 5.35 27 2.40 26.61 12.11 234 (292) Moderate
Equity - Mid Cap
1 Taurus Discovery (Midcap) Fund 43.14 50 12.09 73.97 9.28 72 2.53 1.75 24.73 21 (92) Moderately Low
2 ICICI Prudential MidCap Fund 94.00 1,847 9.12 65.10 20.17 67 2.39 -0.36 20.56 47 (67) Moderate
3 Aditya Birla Sun Life Midcap Fund 272.13 2,368 17.07 63.54 16.95 57 2.28 -3.04 20.15 54 (36) Moderately High
4 Invesco India Mid Cap Fund 49.35 621 12.02 67.57 15.84 42 2.55 4.80 17.33 82 (70) Moderate
5 HDFC Mid-Cap Opportunities Fund - Reg. Plan 52.93 22,792 8.37 65.45 18.99 75 1.70 0.79 16.90 90 (77) Moderately High
6 Mirae Asset Midcap Fund 11.10 1,196 20.71 66.25 7.53 47 2.24 ** 15.76 114 (81) Moderate
7 Franklin India Prima Fund 953.60 7,604 16.00 68.81 8.89 61 1.86 4.10 15.40 119 (114) Moderate
8 IDBI Midcap Fund 10.25 196 11.74 70.86 8.51 50 2.57 -2.57 15.22 125 (96) Moderately High
9 Nippon India Growth Fund 1,122.21 6,818 15.73 67.71 13.20 86 1.89 6.01 14.78 133 (122) Moderately High
Equity - Small Cap
1 Aditya Birla Sun Life Small Cap Fund 29.95 2,260 3.34 12.61 78.28 62 2.35 -10.84 33.32 9 (4) High
2 HDFC Small Cap Fund - Reg. Plan 37.87 9,034 4.77 15.56 69.03 73 2.08 -10.03 26.57 15 (11) Moderate
3 HSBC Small Cap Equity Fund 42.64 385 5.18 13.32 79.19 48 2.36 -11.99 26.50 16 (16) High
4 Franklin India Smaller Companies Fund 48.61 6,953 15.71 10.99 66.27 75 1.87 -5.92 22.21 32 (18) Moderately High
5 Invesco India Smallcap Fund 10.55 394 0.00 30.42 64.96 42 2.57 3.23 21.84 33 (34) Moderately High
6 Principal Small Cap Fund 10.11 159 16.07 9.90 64.19 62 2.52 ** 21.46 37 (43) Moderately High
7 IDBI Small Cap Fund 8.81 132 5.99 17.27 68.75 53 2.54 -6.08 21.36 38 (47) High
8 Kotak Small Cap Fund - Reg. Plan 71.53 1,300 5.57 25.35 68.34 61 2.22 4.41 21.00 42 (26) Moderate
Hybrid - Aggressive
1 HDFC Hybrid Equity Fund - Reg. Plan 54.77 20,926 59.03 11.13 7.04 76 1.71 7.61 21.57 36 (37) Moderately High
2 UTI Hybrid Equity Fund 166.15 4,860 55.81 19.76 6.79 76 1.96 2.04 18.01 75 (90) Moderately Low
3 ICICI Prudential Equity & Debt Fund 138.02 23,950 70.85 6.94 6.49 114 1.74 9.71 17.74 76 (82) Moderately High
4 Nippon India Equity Hybrid Fund 54.43 8,763 73.32 2.47 4.86 53 1.76 3.91 15.03 129 (180) Moderately High
5 BOI AXA Mid & Small Cap Equity & Debt Fund 11.88 345 0.00 56.40 25.97 43 2.67 -4.73 14.53 139 (204) Moderately High
6 Principal Hybrid Equity Fund 76.60 1,511 68.90 7.38 3.94 54 2.29 2.34 14.42 144 (259) Moderately Low
7 LIC MF Equity Hybrid Fund 109.18 394 58.98 14.59 3.42 52 2.53 13.29 13.76 192 (204) Moderate
8 Franklin India Equity Hybrid Fund 123.47 1,830 64.19 7.85 1.51 40 2.14 8.43 13.49 202 (270) Moderate
9 Invesco India Equity & Bond Fund 11.05 428 46.38 32.37 1.51 45 2.50 10.98 13.30 209 (244) Moderately Low
10 Kotak Equity Hybrid Fund - Reg. Plan 26.42 1,466 52.96 15.64 12.09 54 2.14 13.88 13.22 211 (261) Moderate
11 HSBC Equity Hybrid Fund 11.37 641 61.99 14.44 3.99 38 2.42 10.55 12.50 220 (209) Moderately Low
12 Baroda Hybrid Equity Fund 55.20 531 73.37 15.57 3.29 44 2.45 3.62 12.45 221 (194) Moderate
Equity - Multi Cap
1 Parag Parikh Long Term Equity Fund 26.28 2,480 44.64 9.59 11.28 21 2.03 11.88 23.69 26 (32) Moderate
2 ICICI Prudential Multicap Fund 294.95 4,533 72.35 14.96 10.48 78 2.24 6.24 20.31 50 (54) Moderate
3 Taurus Starshare (Multi Cap) Fund 111.69 219 76.14 10.71 9.57 49 2.63 4.12 20.06 55 (287) Moderate
4 ITI Multi Cap Fund 11.18 66 59.69 16.61 17.24 90 2.59 ** 19.40 63 (128) Moderate
5 HDFC Equity Fund - Reg. Plan 667.05 23,674 88.53 6.30 4.12 46 1.70 8.35 17.23 84 (131) Moderately High
6 Franklin India Equity Fund 585.37 11,459 73.50 11.81 5.57 53 1.80 3.77 16.84 91 (136) Moderately High
7 Nippon India Multi Cap Fund 96.62 10,379 56.68 24.36 18.67 48 1.84 2.65 15.15 127 (119) Moderately High
8 LIC MF Multi Cap Fund 50.41 299 67.47 19.27 5.15 53 2.54 13.52 13.72 193 (188) Moderately Low
9 Mahindra Mutual Fund Badhat Yojana 11.65 317 70.44 20.16 6.85 52 2.46 14.04 13.44 205 (283) Moderate
10 Principal Multi Cap Growth Fund 143.10 742 79.25 14.67 5.10 49 2.39 4.36 12.44 222 (276) Moderate
11 Invesco India Multicap Fund 48.08 945 40.92 28.86 25.77 41 2.45 4.68 12.42 225 (253) Moderately High
12 Aditya Birla Sun Life Equity Fund 753.48 11,858 73.72 15.80 6.42 65 1.91 8.41 12.22 229 (319) Moderately High
13 Shriram Multicap Fund 10.73 59 70.81 15.28 4.15 44 2.60 5.61 11.98 238 (271) Moderately Low
The proportionate share of debt-oriented schemes is 28.4% of industry assets in November 2019,
down from 29.6% in November 2018.
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NAV AUM No of
Rank (`) (` Cr)
14 Kotak Standard Multicap Fund - Reg. Plan 37.14 28,348 72.06 16.75 1.48 53 1.70 12.66 11.94 239 (277) Moderately Low
Equity - Value/Contra
1 Aditya Birla Sun Life Pure Value Fund 45.89 4,199 42.98 20.83 34.21 81 2.19 -9.74 26.42 17 (13) Moderately High
2 HDFC Capital Builder Value Fund - Reg. Plan 282.85 4,564 68.67 7.17 21.11 60 1.94 -0.01 25.25 19 (14) Moderately High
3 Quantum Long Term Eq. Value Fund - Reg. Plan 52.44 914 77.52 12.87 1.45 27 1.78 -2.53 24.63 22 (28) Moderately Low
4 IDFC Sterling Value Fund 46.92 3,162 16.94 37.46 41.16 76 2.09 -6.87 24.14 24 (12) Moderately High
5 Templeton India Value Fund 239.83 505 67.59 15.66 12.54 43 2.56 -0.69 22.74 29 (30) High
6 IDBI Long Term Value Fund 10.29 132 61.90 22.52 12.40 49 2.53 2.08 21.20 41 (46) Moderately High
7 ICICI Prudential Value Discovery Fund 140.89 15,462 67.47 14.77 3.10 46 1.92 1.32 18.25 74 (83) Moderate
Equity - ELSS
1 Aditya Birla Sun Life Tax Relief 96 32.25 9,998 47.32 40.24 10.32 43 1.98 5.15 37.42 3 (24) Moderately Low
2 Quantum Tax Saving Fund - Reg. Plan 51.95 78 75.49 12.55 1.37 27 1.78 -2.51 23.97 25 (31) Moderately Low
3 Mahindra Kar Bachat Yojana 11.79 340 78.84 14.38 2.56 42 2.33 5.25 21.58 35 (121) Moderately Low
4 Taurus Tax Shield 80.88 67 74.84 17.14 6.31 53 2.48 7.11 19.23 65 (217) Moderate
5 HDFC TaxSaver - Reg. Plan 514.76 7,449 83.77 8.04 4.05 48 1.97 4.78 16.81 94 (132) Moderately High
6 ICICI Prudential Long Term Equity Fund 386.21 6,525 72.29 9.75 13.91 57 2.13 8.54 16.74 96 (98) Moderately High
7 IDFC Tax Advantage (ELSS) Fund 54.43 2,107 48.65 18.45 28.54 72 2.14 1.40 15.97 110 (109) Moderately High
8 UTI Long Term Equity Fund 90.74 1,247 61.26 25.98 9.88 68 2.51 10.30 15.17 126 (150) Moderately High
9 Principal Tax Savings Fund 206.05 407 75.36 14.95 6.21 60 2.55 2.61 15.09 128 (190) Moderate
10 Franklin India Taxshield 570.84 4,101 77.88 12.32 4.15 49 1.91 5.82 14.43 143 (202) Moderate
11 Essel Long Term Advantage Fund - Reg. Plan 14.78 59 53.08 23.09 20.88 44 2.25 7.80 14.29 150 (185) Moderately Low
12 Mirae Asset Tax Saver Fund 18.89 2,877 74.32 17.56 7.33 54 1.89 13.75 14.12 170 (238) Moderately High
13 HSBC Tax Saver Equity Fund 38.05 158 72.14 16.79 7.98 33 2.50 9.56 14.04 179 (156) Moderate
14 DSP Tax Saver Fund 51.20 6,186 77.94 11.98 8.08 65 1.90 15.07 14.03 180 (201) Moderately High
15 Invesco India Tax Plan 53.32 962 69.93 17.51 7.68 40 2.38 9.37 13.48 204 (237) Moderately Low
Hybrid - Equity Savings
1 UTI Equity Savings Fund 10.37 267 67.18 9.82 0.66 52 1.51 4.44 19.59 61 (66) Moderately Low
2 Edelweiss Equity Savings Fund 14.44 116 46.27 15.36 2.49 61 1.74 7.13 13.99 182 (403) High
3 Principal Equity Savings Fund (Growth Accum) 36.85 50 69.84 4.55 1.14 43 2.69 5.07 13.67 198 (336) Moderately Low
4 HDFC Equity Savings Fund - Reg. Plan 37.43 4,503 71.43 6.46 5.03 103 1.95 6.12 13.25 210 (245) Moderately Low
5 AXIS Equity Saver Fund 13.42 813 62.03 11.16 1.29 64 2.37 8.31 11.56 251 (316) Low
6 Nippon India Equity Savings Fund 11.74 868 69.12 2.78 4.13 46 2.28 -5.57 11.55 252 (278) Moderately Low
7 DSP Equity Savings Fund 13.08 860 57.00 17.28 4.57 100 2.18 7.71 10.39 280 (275) Moderately Low
8 ICICI Prudential Equity Savings Fund 14.57 1,488 64.10 8.32 3.03 55 1.35 10.13 10.28 282 (358) Low
9 Aditya Birla Sun Life Equity Savings Fund 13.95 738 39.18 31.99 6.02 52 2.43 7.81 10.18 284 (364) Moderately Low
Hybrid - Dynamic Asset Allocation/Balanced Advantage
1 HDFC Balanced Advantage Fund - Reg. Plan 199.72 44,345 76.31 7.92 5.72 83 1.56 8.40 19.93 57 (71) Moderate
2 Nippon India Balanced Advantage Fund 93.58 2,612 48.06 19.23 3.03 64 2.13 8.35 12.12 233 (235) Moderately Low
3 Shriram Balanced Advantage Fund 10.34 42 68.95 5.75 0.00 45 2.64 ** 11.73 247 (335) Moderately Low
4 Kotak Balanced Advantage Fund 11.18 3,067 59.32 9.56 3.57 109 2.12 12.39 11.73 247 (304) Moderately Low
5 ICICI Prudential Balanced Advantage Fund 37.81 28,287 69.49 6.72 2.48 129 1.73 11.04 10.77 266 (350) Low
6 Baroda Dynamic Equity Fund 11.11 408 62.25 8.62 0.67 36 2.48 10.44 10.27 283 (330) Moderately Low

Solution Oriented
1 Aditya Birla Sun Life Retirement Fund - The 30s Plan 10.34 120 44.63 38.63 10.56 44 2.65 ** 37.42 3 (17) Moderately Low
2 Aditya Birla Sun Life Bal Bhavishya Yojna - Wealth Plan 10.74 208 44.51 38.54 10.60 44 2.60 ** 36.84 6 (23) Moderately Low
3 Aditya Birla Sun Life Retirement Fund - The 40s Plan 10.34 76 37.02 29.28 8.14 46 2.56 ** 34.08 8 (34) Low
4 HDFC Retire. Savings Fund - Equity - Reg. Plan 17.02 825 46.51 12.49 25.11 58 2.60 5.13 18.66 70 (69) Moderately High
5 HDFC Retire. Savings Fund - Hybrid Equity - Reg. Plan 17.00 360 52.68 8.09 22.24 56 2.73 7.11 16.82 93 (100) Moderate
6 HDFC Childrens Gift Fund - Reg. Plan 123.84 3,063 49.18 12.34 11.69 64 2.13 7.50 16.54 100 (98) Moderate
7 Nippon India Retirement Fund - Wealth Creation Scheme 13.31 1,703 76.23 7.24 11.40 60 2.01 5.21 16.09 106 (161) Moderately High
Hybrid - Multi Asset Allocation
1 ICICI Prudential Multi Asset Fund 272.22 11,534 63.38 7.06 5.38 72 1.91 7.83 15.50 118 (166) Low
Equity - Dividend Yield
1 ICICI Prudential Dividend Yield Equity Fund 15.67 174 55.27 13.74 25.28 40 2.70 -2.79 25.95 18 (10) Moderately Low
2 Templeton India Equity Income Fund 45.58 909 39.08 18.39 14.67 41 2.40 2.50 21.74 34 (42) Moderate
3 UTI Dividend Yield Fund 64.76 2,463 70.19 18.06 8.60 51 2.19 3.30 17.59 78 (79) Low
All the NAV figures are for date Dec 16, 2019. Trailing returns are also calculated for the same date. AUM, weightage of a stocks, number
of companies and expense ratio are for the period ending Nov. 2019. All the raw data is provided by Dion Global Solutions Ltd.
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