Dalal Streer

Vol. 37. No.
01 • DEC 06 - 19, 2021
28
Cover Story 23
Contrarian
Investing
Is For All
Seasons!
Recommendations Regulars
10 12 13 06

07
08
Editor’s Keyboard
Company Index
Market View
Choice Scrip Low Priced Scrip Hot Chips 14 Technicals
38 Tax Column
16 Analysis
41
44 Reviews
45 Kerbside
QueryBoard
Poonawalla Fincorp
Potential To Outpace National Growth Subscribers can access
the complete databank
18
consisting of more than
3500 companies on our
Special Feature website www.DSIJ.in
Small is Profitable Too! Communication Feature sections

are advertorials provided by the
company & carried on “as is” basis.
4 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

Think, Strategise and Reinvest
I
n the previous editorials our cautious tone and advice to book profits might have
looked out of sync when the markets just appeared to keep going up day after day. We
also highlighted our concerns regarding valuations and that the risk-reward
relationship was not in favour of the investors. The current market correction, which
has made the market cheaper since November 15, very much validates our advice. And
all those who paid heed are the ones smiling today. Do note that the bears have found a
perfect companion in the form of ‘Omnicron’ to puncture investors’ conviction on equity
returns.
The risk-off trade has already pushed FIIs on the back foot, leading to withdrawal of capital
from the markets. Added to this is the recent announcement of the Federal Reserve tapering
expected to commence earlier than anticipated. We continue to believe that the bulls are not
out of the woods yet. Yes, the markets correcting substantially will lead to creation of pockets
that can deliver outperformance in time to come. Nonetheless, it may be premature to buy
into such pockets as yet. Remain cautious as of now as the sentiment has once again entered
unknown territory. The new unknown may not negatively impact the market moods as it did
at the beginning of 2020.
On the positive side, the market that was relentlessly holding on to its levels at the top is now
providing some rational levels where investors can start negotiating for bargains. Cash, my
dear readers, will be worth in gold in the coming weeks as the equity market starts to get
attractive again. In our cover story on contrarian investing, we have spelt out in no
unambiguous manner the qualities one must possess to beat the markets and to be a
successful contrarian investor. It is in times like today that spell high volatility when the
qualities of a contrarian investor will ensure that you not only stay focused on your original
investment philosophy but also make handsome money.
In our special stories we have highlighted the additional efforts one must make to take
exposure in micro-cap companies. Micro-cap investing can lead your path to discover
multibaggers. The kind of returns one can gain by micro-cap investing is mindboggling;
however, the path towards micro-cap investing is not convenient and traditional investment
parameters may not apply most of the times. The current issue also carries an in-depth report
on the plastic industry and covers the various opportunities the plastic industry stands to
offer from an investor’s perspective. The bright outlook may excite some of our long-term
investor readers. Looking at the market condition which is in a corrective mood, it is
important that you stay away from the popular stocks that are over-owned.
It is easy to be clingy in times like now where our recent memory of select popular stocks’
outperformance does not allow us to get rid of them even when the so-called stocks are
showing weakness. It is time to be unemotional and it is time to protect gains and have some
cash to buy when the risk-reward ratio is utterly in favour of the investors. Trading by
headlines regarding the new variant of the virus in the past few days shows the lack of
confidence on the part of the bulls and it is likely that bears will have an upper hand in the
coming weeks. However, this does not mean one should short in the market. Churn your
portfolio and stick with high-quality defensive names for the moment. Pharmaceutical and
IT stocks can provide the alpha. A slow and staggered investment approach spread across the
next 4-6 weeks can be a strategy to consider.
RAJESH V PADODE
Managing Director & Editor

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Founder Graphics
Late V B Padode Vipin Bendale
Current Assets and Liabilities
Managing Director & Editor Subscription & Customer Service
Rajesh V Padode Utkarsh Sawale The cover story in your latest issue on the relevance of value investing was
simply bona fide. A particular criterion for stock selection using value investing
Executive Editors Compliances and Internal Audit
Arvind Manor
principles was that current assets should be at least two times the current
Yogesh Supekar
Shashikant Singh
liabilities. Could you elucidate the same? -
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Farid Khan - VP
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Copy Editors
Avalokita Pandey Mumbai:
Huned Contractor Editor Responds: We appreciate your query and are pleased to hear that you
Anand Chinchole - Sr. Manager
found our cover story in the recent issue fruitful. Current assets are those assets of
Research Delhi: a company that are expected to be sold or used as a result of standard business
Srinivasa Sharan Shammo Teshwar - Sr. Manager operations over the next year. These include cash, cash equivalents, accounts
Karan Bhojwani
Domain Experts receivable, inventory, marketable securities and other liquid assets. Current
Vinayak Gangule
Anthony Fernandes Hemant Rustagi liabilities are a company’s short-term financial obligations that are due and
Shreya Chaware Jayesh Dadia expected to be settled within the next one year. These include accounts payable,
short-term debt, dividend payable and tax payable and are typically settled using
current assets. If a company has current assets at least two times its current
liabilities, it illustrates that the company is highly capable of remaining solvent for
a longer period and will rarely face problems to meet its short-term financial
obligations. Hope this helps. Keep writing to us!
DSIJ Private Limited
Recommendations
For Customer Service Company/Scheme Reco. Price (`) Column Page No
Affle (India) Ltd l Buy 1149.25 Queryboard 42
020-66663803 OR  service@DSIJ.in
Apollo Hospitals Enterprise l Buy 5726.65 Technicals 15
Mumbai Office
419-A, 4th Floor, Arun Chambers, Tardeo, Next to AC Market
Goodyear India Ltd l Buy 966.55 Queryboard 43
Mumbai - 400034 022-43476012/16/17 HDFC l Hold 2676.40 Reviews 44
Pune Office Hindustan Unilever l Buy 2318.45 Kerbside 45

Office No. 211, Vascon Platinum Square, Indian Energy Exchange l Buy 744.05 Choice Scrip 10
Next to Hyatt Regency, Viman Nagar, Pune- 411014
020-66663-800 / 801 Indian Railway Catering & Tourism Corp. l Hold 794.35 Queryboard 43
IRB Infrastructure Developers l Hold 205.80 Queryboard 41
Kopran l Buy 258.85 Technicals 15
Max Healthcare Institute Ltd l Buy 380.20 Hot Chips 13
To advertise, mail us on ads@dsij.in
Minda Corporation Ltd l Buy 163.70 Kerbside 45
Printer and Publisher: Nitin Sawant, Editor: Rajesh V Padode for DSIJ Pvt
Ltd. on behalf of Achievements Merchandise Pvt Ltd. Printed at Mudran NMDC l Buy 133.25 Low Priced Scrip 12
Print N Pack Pvt Ltd, Plot No. – A-180/4, TTC Industrial Area, MIDC,
Koparkhairane, Navi Mumbai – 400703 and published from 419-A, 4th PI Industries l Hold 2876.70 Reviews 44
Floor, Arun Chambers, Tardeo, Next to AC Market, Mumbai - 400034
 All rights reserved.  While all efforts are made to ensure that the Poonawalla Fincorp l Hold 188.30 Analysis 16
information published is correct and up-to-date, Dalal Street Investment
Journal holds no responsibility for any errors that might occur. All PVR l Hold 1272.95 Queryboard 42
material contained herein is based on fundamental and technical analysis
and other in-house methods, which though reliable, are not infallible. The Suryaamba Spinning Mills l Buy 183.40 Hot Chips 13
information given in the magazine is of an advisory nature. Readers are
advised to consult experts before taking any investment decision and Dalal Thermax l Buy 1751.60 Kerbside 45
Street Journal holds no responsibility for any losses that may arise due to
investment decisions made on the basis of information given within the Vascon Engineers Ltd l Exit 21.80 Queryboard 41
magazine. No reproduction is permitted in whole or part without written
consent from Dalal Street Journal  All disputes are subject to the Wockhardt l Buy 435.50 Kerbside 45
exclusive jurisdiction of competent courts and forums in Mumbai only.
 Dalal Street Investment Journal is a member of INS/ABCs.
BP - Book Profit • BPP - Book Partial Profits • BL - Book Loss
DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 7

Market Watch
A Reuters’ poll of
New Virus Variant Weakens The Markets economists found that
I
India’s economic recovery
ndian frontline equity indices
BSE Sensex and Nifty 50 tumbled
Indian stock market history. has likely strengthened in
by ~5.90 per cent each during the The Paytm debacle dimmed the mood the previous quarter,
fortnight. These benchmarks fell and added woes to investor sentiment.
to their lowest level in three As a consequence, other technology boosted by services
months, suffering their worst single-day
drop since April 12, 2021 on November
start-ups such as MobiKwik and Oyo
may delay their IPO by a few months.
activity that recovered
26, 2021 on weak global cues as a Goldman Sachs in its recent Macro after pandemic-related
consequence of the detection of the new Outlook 2022 note has revised its
corona virus variant, the Omicron, projection for gross domestic product mobility restrictions were
which could possibly be vaccine-
resistant. Nifty 50 briefly dropped below
(GDP) to 9.1 per cent from the earlier
estimate of 8 per cent for calendar year
eased.
its key psychological level of 17,000 to hit 2022, while for FY22 it has pegged to boost average revenue per user
an intraday low of 16,985 and Sensex economic growth at 8.5 per cent. The (ARPU) and improve its financial
plunged by as much as 3 per cent i.e. global research and brokerage house health. Immediately following Bharti
1,801 points. On similar lines, BSE expects a rise in core inflation as Airtel’s price hike, Vodafone Idea raised
Mid-Cap and Small-Cap indices plunged manufacturers pass on input cost its prepaid tariff plans today by 25 per
5.77 per cent and 3.97 per cent to close at increases to consumers and pegs India’s cent. Likewise, later in the week Reliance
24,846.51 and 28,071.41, respectively. headline consumer price inflation at 5.8 Jio announced up to 21 per cent hike in
per cent on a year-on-year basis in 2022 its prepaid tariffs starting December 1,
BSE Realty index nosedived 10.68 per from 5.2 per cent in 2021. 2021, indicating an end to the low tariff
cent over the recent two-week period, regime in the telecom sector. Trading
emerging as the top loser. BSE Metal and Over the fortnight, Bharti Airtel data shows that both DIIs and FIIs were
Auto indices corrected by ~7.60 per cent announced that it will raise tariffs for all net buyers during the fortnight to the
each to close at 18,703.68 and 24,330.73, its prepaid users by up to 25 per cent tune of `15,712.70 crore and 9,805.89
respectively. Only the BSE Healthcare from November 26, 20221 in a major bid crore, respectively.
index ended in the green territory with
gains of 1.86 per cent. As per the Reserve
Bank of India (RBI), India’s foreign
exchange reserves increased by USD 289
million to USD 640.401 billion for the
week ended November 19, 2021. Foreign
currency assets (FCA), a major
component of the overall reserves,
increased by USD 225 million to touch
USD 575.712 billion.
A Reuters’ poll of economists found that

India’s economic recovery has likely Performance Of Indices Net Investment In Equity Markets (`/Cr)
strengthened in the previous quarter, 12th Nov., 26th Nov., Gain/Loss Date FIIs DIIs
boosted by services activity that Indices
2021 2021 (%) 26-Nov-21 (447.31) 2,294.11
recovered after pandemic-related Healthcare 25,158.06 25,626.80 1.86
25-Nov-21 (9,403.73) 1,367.80
mobility restrictions were eased. During Power 3,553.47 3,537.79 -0.44
24-Nov-21 (5,736.87) 3,809.62
the fortnight, shares of One 97 FMCG 14,261.64 13,748.54 -3.60
23-Nov-21 (2,220.81) 1,412.05
Communications, the operator of India’s Small-Cap 29,232.53 28,071.41 -3.97
IT 35,351.35 33,839.31 -4.28 22-Nov-21 3,463.76 2,051.18
biggest financial technology platform
Mid-Cap 26,368.78 24,846.51 -5.77
Paytm, hit the lower circuit of 20 per cent 18-Nov-21 1,198.52 1,885.66
Sensex 60,686.69 57,107.15 -5.90
on listing day, eroding its market Nifty 18,102.75 17,026.45 -5.95
17-Nov-21 13,985.53 (61.14)
capitalisation by nearly a third as Bankex 44,235.06 41,117.95 -7.05
16-Nov-21 1,577.82 577.34
compared to its IPO valuation of `1.50 Auto 26,332.80 24,330.73 -7.60 15-Nov-21 3,766.66 1,524.67
lakh crore i.e. USD 20 billion, and Metal 20,259.94 18,703.68 -7.68 12-Nov-21 3,622.32 851.41
making it one of the worst debuts in the Realty 4,310.71 3,850.35 -10.68 Total 9,805.89 15,712.70

Recommendations Equity
cent YoY basis. The robust performance
was driven by substantial increase in
electricity consumption as well as the
Indian Energy Exchange preference by distribution utilities. The
EBITDA exclusive of other income was
CHARGED FOR GROWTH `95.04 crore which saw a rise of 27 per cent
QoQ and an increase of 71 per cent YoY.
The net profit stood at `77.39 crore, again

HERE IS WHY an increase of 24.61 per cent QoQ and a
India’s first and the largest energy exchange rise of 74.55 per cent YoY. For over a
Strong growth momentum decade the company has never recorded
I
High returns for stakeholders’ capital
a drop in its annual profitability. The
earnings have been rising consecutively
ndian Energy Exchange (IEX) is the year on year. The EPS recorded in fiscal
first and largest energy exchange in 2011 was at `0.69 while in fiscal 2021 it
India providing a nationwide, has grown to 8.87. This consistent growth
automated trading platform for in profitability has led to exceptional
physical delivery of electricity. The returns for its stakeholders such that the
exchange platform enables efficient price ROE stood at 47.37 per cent and the
discovery and increases the accessibility ROCE at 61.6 per cent. The company is
and transparency of the power market in almost debt-free. The stock is trading
India while also enhancing the speed and near the PE level of 84.
efficiency of trade execution. It has the
Best of LAST ONE Year
following product offerings: Day-Ahead The company enjoys a near monopoly
Name of Reco Exit/CMP Absolute Annual
Market (DAM) for next day delivery, Company Price Price (`) Gains Returns status. IEX has an overall market share of
Term-Ahead Market (TAM) for delivery (`) (%) (%) more than 95 per cent, (RTM – 99.9 per
up to 11 days, Real Time Market for Trent Ltd. 659.20 928.80 40.90 3471.63 cent, GTAM – 99.9 per cent, DAM+TAM
delivery within one hour, Green Term- KPIT Tech. Ltd. 134.95 198.95 47.42 451.20 – 92 per cent). Electricity volume has
Ahead Market for intraday, daily and Gujarat Gas Ltd. 288.20 435.10 50.97 297.24 grown with a CAGR of 32 per cent since
weekly, and renewable energy certificates Polycab India Ltd. 824.95 1144.40 38.72 282.80 2008, increasing from 2,616 units in FY09
(REC) along with energy saving certifi- ICICI Bank Ltd. 497.45 674.00 35.49 252.48 to 74,638 in FY21. In FY21, highest yearly
cates (ESCERTS). volumes have been recorded at 74 BU.
increased by 17 per cent. The net profit IEX is leveraging and steadily investing in
All these products offer traders various margin for the year ended FY21 stood at technology and deepening the power
opportunities for strategic trading and 64.6 per cent, which is phenomenal. market through new products such as
investing. The company reported net Real-Time Market (RTM). IEX is
sales of `317.85 crore in FY21 compared A strong operational performance with expected to launch some new products
to `257.13 crore in FY20. That is a efficient working capital management was like Long-Duration Contracts, Cross
reasonable growth of nearly 24 per cent. witnessed with a growth of nearly 142 per Border Trade, Green TAM and DAM, and
IEX’s electricity traded volume in FY21 cent in the cash flows from operating Exchange-Based Ancillary Market. With
grew by 37 per cent on a YoY basis. The activities increasing from India’s power consumption expected to
PBIDT stood at `289.01 crore in FY21 as `306 crore in FY20 to `126 crore in FY21. grow at 8-9 per cent during FY 2022, its
against `242.43 crore in the previous Net sales for the quarter ended September management expects significant growth
year. That is a growth of around 20 per 2021 stood at almost for the exchange markets. By virtue of all
cent. Also, the PAT stood at `205 crore `110.38 crore. That’s a growth of 21.26 per these factors, we recommend our
while it stood at `175 crore in FY20. PAT cent QoQ basis and a growth of 55.64 per reader-investors to BUY the scrip. DS
CMP
Monthly Stock Market Returns Shareholding Pattern Last Five Quarters (`/Cr) ( Consolidated)
BSE Code: 540750 CMP: `744.05 (`)
FV: `1 BSE Volume: 6,48,490
as of Sept., 2021 Particulars Sep-21 Jun-21 Mar-21 Dec-20 Sep-20
Date: 30/11/2021 Total Income 110.38 91.03 93.82 85.23 70.92
Promoters --
Other Income 11.92 11.85 6.52 10.86 7.79
Public 90.69 Operating Profit 106.97 86.71 83.97 80.45 63.25
Interest 0.47 0.55 0.48 0.52 0.51
Others 0.31
Net Profit 77.39 62.10 60.86 58.14 44.34
Total 100 Equity 29.86 29.86 29.85 29.85 29.84

Recommendations Equity
NMDC
cent. PAT was reported at `2,338.81
GROWING WITH AN ‘IRON’ HAND

crore, up by 202.54 per cent from
`773.07 crore in the same quarter for the
previous fiscal year. The quarterly results
have been resilient because generally the
HERE IS WHY monsoon has a negative impact on the
production front. But still the company
Largest iron ore producer in India managed to achieve higher production
High returns on capital employed relative to Q1.
High dividend payouts The company has delivered excellent

returns for stakeholders. The ROE stood
N
at 21.71 per cent while the ROCE was
even better at 29.65 per cent. The stock is
MDC Ltd. engages in the trading at a price to earnings multiple of
exploration of minerals. It just 3.76 versus industry PE of 6.46. It
operates through the has a debt-to-equity ratio of 0.07.
following segments: iron PRICED SCRIP NMDC’s operational performance is
ore, pellets, other minerals expected to remain strong over the next
and reconciliation items. NMDC is Best of LAST ONE Year
two years with the potential to ramp up
under the administrative control of the Name of Reco Exit/CMP Absolute Annual
in iron production given the recent
Ministry of Steel, Government of India. Company Price Price (`) Gains Returns resumption of production from the
The company is India’s single largest iron (`) (%) (%) Donimalai mine and above historical
AVT Natural 43.65 66.00 51.20 11071.27%
ore producer. Since 2008 the company average domestic high iron ore prices.
has been categorised by the Department Indraprastha Medical 54.40 71.75 31.89 1852.67% Potential value unlocking from demerg-
of Public Enterprises as ‘Navratna’ public Ashoka Buildcon 80.25 116.95 45.73 525.13% er and strategic sale of its steel plant is a
sector enterprise. NMDC also operates a Bharat Electronics 96.65 145.90 50.96 336.53% key near-term catalyst.
diamond mine, Diamond Mining Project Marksans Pharma 58.00 79.80 37.59 270.09%
at Panna in Madhya Pradesh, which is The company has a history of paying
the only mechanised diamond mine in huge dividends. The dividend yield was
Asia, with yearly production of around activities increasing from `2,125.97 crore recorded at 5.75 per cent. NMDC’s
38,149 carats as of FY 2019. It also has a in FY20 to `7,266.11 crore in FY21. In dividend payout could improve consid-
sponge iron unit of 200 TPD at Paloncha Q2FY22, revenue grew by 204.66 per erably as the strategic sale of the steel
in Telangana. cent YoY to `6,793.51 crore from plant would improve its cash position
`2,229.89 crore in Q2FY21. However, on while the core iron ore mining business
The company recorded net sales of a sequential basis the top-line grew by 4.3 is expected to generate steady EBITDA.
`15,370.06 crore in FY21, a 31.38 per per cent. Valuation of the core iron ore business is
cent increase YoY. PBIDT was recorded attractive given a steep discount to global
at `8,789.27 crore, higher by 46.44 per PBIDT except for other income was mining peers. NMDC has made a
cent. PAT increased significantly by 73.47 reported at `3,112.51 crore, up by 202.53 comprehensive plan to enhance iron ore
per cent when compared to the previous per cent as compared to the year-ago production capacity to 67 MTPA to meet
fiscal to reach `6,247.47 crore.A strong period and the corresponding margin the growing requirements of iron ore of
cash balance was witnessed with a was reported at 45.82 per cent, contract- the Indian steel sector. By virtue of all
growth of nearly 241 per cent as can be ing by 32 basis points YoY. On a QoQ these factors, we recommend our
seen in the cash flows from operating basis, the EBITDA declined by 25.5 per reader-investors to BUY the scrip. DS
CMP
Monthly Stock Market Returns Last Five Quarters (`/Cr) (Consolidated)
Shareholding Pattern
BSE Code:(`)
526371 CMP: `133.25 as of Sept., 2021 Particulars Sep-21 Jun-21 Mar-21 Dec-20 Sep-20
FV: `1 BSE Volume: 349,743
Total Income 6793.51 6512.21 6847.57 4355.10 2229.89
Date: 30/11/2021 Promoters 60.79
Other Income 88.93 144.09 85.18 105.87 88.78
Public 39.21 Operating Profit 3201.44 4320.33 4325.45 2872.64 1117.62
Interest 1.72 3.00 4.13 1.64 1.72
Others --
Net Profit 2338.63 3191.30 2835.54 2108.05 772.53
Total 100 Equity 293.07 293.07 293.07 306.19 306.19

Suryaamba Spinning Mills Ltd. CMP - `183.40
BSE CODE Volume Face Value Target Stoploss

533101 5,084 `10 `205 `165 (CLS)
S
tarted in 1993, Suryaamba Spinning Scrip’s Movement
Mills Ltd. is a leading manufacturer
of speciality synthetic spun yarns. The
core competitive strength of the company
is its innovative product range, specifically
tailor-made for its customers. On a
quarterly basis, net sales and operating
income were posted at `51.17 crore in
Q2FY22, a significant rise from `25.55 2021
crore reported in Q2FY21. The operating

Last Seven Days’ Volume Table
profit of Q2FY21 of `1.99 crore improved
to `5.91 crore in Q2FY22. The company (No. of Shares)
reported net profit of `3.10 crore in Days Volume
Q2FY22 as against net loss of `0.36 crore 22-Nov-2021 3,881
reported in Q2FY21. Synthetic yarn 23-Nov-2021 2,197
products are the most preferred yarns in 24-Nov-2021 16,030
the textile industry due to their unique 25-Nov-2021 26,464
features like lower price and uniform 26-Nov-2021 19,691
availability throughout the year. The future 29-Nov-2021 19,127
for the synthetic textile industry looks 30-Nov-2021 5,084
promising, buoyed by both strong furnishing, automotive and filtration,
domestic consumption as well as export personal care and hygiene applications.
The scrips in this demand in segments of apparel, home Hence, we recommend BUY.
column have been
recommended Max Healthcare Institute Ltd. CMP - `380.20
with a 15-day investment BSE CODE Volume Face Value Target Stoploss
horizon in mind and 543220 1,28,774 `10 `418 `358 (CLS)
carry high risk. Therefore,
M
Scrip’s Movement ax Healthcare Institute Ltd. is one
investors are advised to of India’s largest healthcare
organisations. Almost 85 per cent
take into account their risk of its bed capacity is in metro and Tier I
appetite before investing, cities. The company has witnessed a robust
as fundamentals may jump of 56.44 per cent in net sales and
operating income from `650.94 crore in
or may not back the Q2FY21 to `1,018.33 crore in Q2FY22. The
recommendations. operating profit also soared from `127.34
2021
crore in Q2FY21 to `270.36 crore in
Q2FY22. The quarter saw a net profit of
`144.65 crore as compared to `16.65 crore
in Q1FY21, clocking massive gains. The
Last Seven Days’ Volume Table impressive financial growth was led by
strong volumes on the back of robust
(No. of Shares)
traction in non-pandemic business i.e.
Days Volume
ex-international business. Bearing a range of
22-Nov-2021 23,269 short and long-term growth triggers namely
23-Nov-2021 43,369 recovery in international business, improve-
24-Nov-2021 28,111 ment in payor mix which is the percentage
25-Nov-2021 1,56,221 of hospital revenue coming from private
26-Nov-2021 1,39,096 insurance companies versus government
29-Nov-2021 35,832
insurance programs as well as its expansion
30-Nov-2021 1,28,774
plans, we recommend BUY. DS
(Closing price as of Nov 30, 2021)

Technicals Equity
NIFTY Index Chart Analysis
OMG! IT’S OMICRON NOW!
T
Roadmap for the next 15 trading sessions
he global and domestic Ideas Nifty Levels Action to be Initiated Probable Targets
equity markets are breaking Trading above 17,280 on a weekly closing basis
down as fears of the new Resistance for the medium-term 17,280
would give momentum to the bulls
17,478-17,600
Omicron variant send shivers Close below 16,760 on the weekly chart would
down the spine across the Support for the medium-term 16,760
change the trend and trigger a retreat
16,694
globe. As the bears tightened their grip,
equity benchmarks across the globe correction was limited to 8.3 per cent. the RSI reached 32.2. The weekly RSI is
nosedived during last week. Barring the Any correction above 10 per cent is below the April swing low. This is a clear
pharmaceutical sector, all the sectoral categorised as a clear downtrend. A sign that strength is weakening in the
indices collapsed over 3-5 per cent last majority of corrections were limited to market. The index closed much below
week. Lack of leadership from the just 5 per cent. Forming a bearish the lower Bollinger band and there is a
defensive stocks and heavyweights pulled engulfing candle on a monthly chart possibility of bouncing back into the
down the market to its 13-week low. It confirmed the previous months’ shooting bands. Any recovery in market sentiment
registered one of the biggest weekly falls star candle’s bearish implications. To may lead to a technical bounce towards
in the last 18 months as the Nifty went avoid the bearish implications of this 17,478.
The broader market suddenly

went into a bearish grip. As many
as 16 stocks in the Nifty 50 closed
below their 200 DMA last
weekend. The Nifty 500,
representing 95 per cent of the
market capitalisation, is just
hanging on the 100 DMA
support. Importantly, across
sectoral indices, the relative
performance is declining. Strong
and leading sectors like IT,
metals and pharmaceutical are
nowhere near the leading
quadrant. Sectors in the leading
quadrant such as realty, media,
energy and the PSU banks are
losing their momentum. As Nifty
breached the long rising
down by 509.80 points on Friday. During pattern, the Nifty needs to close above trend-line support drawn from the
last week, Nifty declined by 744 points or the level of 17,672 that currently does not March 2020 lows, it shows that the
4.18 per cent and settled at just above the seem probable. Interestingly, the 100-day 18-month long uptrend is matured and
level of 17,000. moving average is violated and the 50 signalled a reversal.
DMA has begun its downtrend. As
The market breadth has been extremely cautioned earlier, 80 per cent of the head The weekly MACD also has given a fresh
negative during the last three weeks. The and shoulders’ target has been met. sell signal. The distribution day count at
selling pressure from the FIIs intensified six is also a bearish sign. As the market is
as they had already sold over `31,124.46 Importantly, the benchmark index in a clear intermediate downtrend, avoid
crore during the current month, which is decisively closed below the downward new purchases for now. With the above
the highest this year. On the monthly channel support too. It retraced 50 per evidence, the outlook is very negative
chart, Nifty registered the biggest fall on cent of the rally from the low of July 28. and any bounce towards the 17,200-
Friday after April 12 and formed a big In any case, if it fails to move above 17,300 range will be an opportunity to
bearish body candle. Even after this big 17600, the next support is at 16,694, trim down the portfolio. The 150 DMA is
fall, Nifty corrected only 9.79 per cent or which is a 61.8 per cent retracement the key support for the near term. Along
1,822 points from the recent top. level. It would be a strong support zone. with the 61.8 per cent retracement level,
Earlier, during February-April, the Nifty entered into a near oversold zone as it could act as support for now.

STOCK RECOMMENDATIONS
KOPRAN LTD. ............................ BUY ............................. CMP `258.85

BSE Code : 524280 Target 1 .... `305 | Target 2 ..... `340 | Stoploss....`240 (CLS)
Kopran is an integrated pharmaceutical company
manufacturing a large range of products that include
both active pharmaceutical ingredients and finished
dosage forms. It has state-of-the-art manufacturing
facilities and products with various accreditations and
approvals by major global regulatory authorities. It
exports to over 50 countries. Two products were
commercialised during the last six months. And
research and development for another two products has
been completed. Technically, the stock has broken out
of a 16-week cup pattern. For the last four weeks, the
volume has been above average and indicates
accumulation. The stock is trading well above the key
moving averages and 19 per cent above the 50 DMA
and 39 per cent above the 200 DMA. The MACD gave a
fresh buy signal last week and the histogram shows strong momentum. The RSI is in a bullish zone. As the stock is at a new
lifetime high, the ADX is very at 36.84 and displays trend strength. It is above the +DMI and -DMI. The Elders impulse system
shows a bullish sign. The Mansfield relative strength is at 2.62 and indicates outperformance compared to the broader market. It
is also above the anchored VWAP resistance. In short, the stock is in a strong bullish zone. A move above `261 is positive and it
can test `305 with medium-term target of `340. Maintain a stop loss at `240.
APOLLO HOSPITALS ENTERPRISE LTD. ......... BUY ....... CMP `5,726.65

BSE Code : 508869 Target 1 ..... `6,056 | Target 2 .... `6,552 | Stoploss....`5,410 (CLS)
Apollo Hospital was established in 1983 as India’s first
corporate hospital. It is acclaimed for pioneering the
private healthcare revolution in the country and has
emerged as Asia’s foremost integrated healthcare
service provider with a robust presence across the
healthcare ecosystem, including hospitals, pharmacies,
primary care and diagnostic clinics and several retail
health models. The group also has telemedicine
facilities across several countries along with health
insurance services, global projects consultancy, medical
colleges, medical university for e-learning, colleges of
nursing and hospital management and a research
foundation. The stock is trading at a new high with
better relative strength.
After an eight-week cup breakout, the stock has

consolidated within the range for the last eight trading sessions. It is comfortably placed above its key moving averages and
around 22 per cent and 49 per cent from 50 DMA and 200 DMA. Its relative price strength is at 75. The Mansfield relative
strength is as high as 4.15, a better strength compared to the broader market. The stock is above the anchored VWAP. For the last
two weeks, the volumes recorded above average and show accumulation. The weekly ADX of 56.03 shows solid strength in the
trend. The MACD histogram displays strong momentum. The RSI is in a strong bullish zone. A move above `5,700 is positive and
it can test `6,056 in the short-term and `6,552 in the medium-term. 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 Nov 29, 2021)
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
POONAWALLA FINCORP
POTENTIAL TO OUTPACE NATIONAL GROWTH
The company is a diversified asset financier both in term of products as well as geographies, which helps
mitigate risks. It possesses a sound business model with a presence in high-yield, high-growth business
segments and superior sustainable returns
P
oonawalla Fincorp Limited (formerly known as orientation and prompt provision of services have typically
Magma Fincorp Limited) is a non-deposit taking, differentiated NBFCs from banks. Considering the reach and
non-banking finance company (NBFC), registered expanse of NBFCs, these are well-suited for bridging the financ-
with the Reserve Bank of India (RBI). Magma Fincorp ing gap. Systemically important NBFCs have demonstrated
Limited went into business in 1988. In more than three decades, agility, innovation and frugality to provide formal financial
the company emerged as a trusted NBFC, addressing the services to millions of Indians.
growing and widening needs of more than 5 million customers,
largely rural and semi-urban. The Poonawalla Group of Over the last decade, NBFCs have witnessed phenomenal
Companies acquired a majority stake in Magma Fincorp growth. From being around 12 per cent of the balance-sheet
Limited in the first quarter of FY 2021-22, following which it size of banks in 2010, these are now more than a quarter of the
emerged as the promoter group of the company. size of banks. The business model of the NBFC sector was
severely tested in FY21. The overall loans and advances
The new promoter owns 60 per cent of the company’s equity. contracted in H1FY21 due to weak demand on the back of
The company has a widespread coverage and presence across 21 nationwide lockdown. However, as the economic activities
states, 297 branches and the customer base stands at approxi- gradually resumed, loan disbursements gained momentum in
mately 5.4 million with a loan book of more than `14,000 crore. H2FY21. Collection efficiency also gradually improved to be
They offer a bouquet of financial products including SME near normal in Q4FY21. The fact that many NBFCs have
finance, mortgage finance, unsecured loans and general managed to overcome these severe stresses without significant
insurance. The company’s physical presence is complemented impact is a testimony to their resilience.
by a digital footprint that empowers field executives to conduct
business from channel and customer locations, enhancing sales The growth in FY22 is envisaged to be driven by the improve-
productivity, deepening market coverage and improving the ment in demand from all key target segments vis-à-vis the
customer experience. current fiscal, which was impacted by the pandemic-related
lockdown. Growth would be contingent upon access to
Sector Overview adequate funding lines i.e. incremental bank loans to non-
NBFCs have become important constituents of the financial banks, which would in turn depend on overall bank credit
sector and have been recording higher credit growth than growth. With superior capital adequacy, better margins, frugal
scheduled commercial banks (SCBs) over the past few years. cost management and lower non-performing assets (NPAs), the
NBFCs are continuously leveraging their superior understand- NBFC sector is well-poised to seize the opportunity provided in
ing of regional dynamics, well-developed collection system and the post-pandemic revival cycle. The revised regulatory
personalised services to expedite financial inclusion in India. framework proposed by the RBI intends to make the NBFC
Lower transaction costs, quick decision-making, customer sector more resilient.

Financial Overview
Quarterly : In terms of quarterly consolidated
financial performance, the company registered a 15
per cent fall in its interest income to `483 crore in
Q2FY22 versus `566 crore in Q2FY21. Its total
income during Q2FY22 fell nearly 15 per cent to `513
crore as against `603 crore in Q2FY21. The company
reported a 2.53 times jump in its Q2FY22 net profit to
`96 crore, relative to net profit of `38 crore during the
corresponding quarter of the previous financial year.
The company continues to maintain a strong liquidity
position with around `1,700 crore of surplus liquidity,
with additional term loan sanctions in the hand of
`1,750 crore. Collections showed an improving trend
from 93.1 per cent in June 2021 to 98 per cent in July
to further 99.9 per cent in September 2021.
Source: Investor Presentation Q2FY22, Poonawalla Fincorp Ltd
Assets under management (AUM) grew nearly 6 per
cent quarter-on-quarter to `15,275 crore at the end of Septem- upgrading from first-time buyers finding a value proposition in
ber 2021. In terms of annual consolidated financial perfor- pre-owned cars.
mance, the company registered a 8.21 per cent de-growth in
total income from `2,562.88 crore in FY20 to `2,352.48 crore in The company is increasing weight of the pre-owned cars
FY21. The company reported net loss of `564.45 crore in FY21, financing in their portfolio as financing penetration is ~20 per
in comparison to a profit of `28.06 crore. The company’s net cent of overall sales, which is less than one-third of the new
interest margin (NIM) increased to 8.2 per cent in FY21 as cars’ value sold under finance (which is 75 per cent). Only 30
compared to 7.6 per cent in FY20 on account of decreased per cent of the pre-owned car market access is organised; with
finance cost. The write-offs and provision increased from the digitisation of sale of products, focus of OEMs on second-
`485.79 crore in FY20 to `1,447.99 crore in FY21 as the hand asset sales and increase in formal financing, the market is
company has moved to stricter write-off policy and made getting organised. In FY21, Poonawalla Fincorp touched an
additional provision for likely adverse impact of the second estimated 7 per cent market share in the organised pre-owned
wave of the pandemic. car financing segment and is relatively well-positioned to grow
in the segment based on a low cost of funds.
During FY21, the consolidated disbursements declined by 43
per cent i.e., from `6,428 crore in FY20 to `3,680 crore in FY21. Despite FY21 being unusually challenging, the company
The decline was mainly due to disruptions in business, induced emerged with a robust balance-sheet marked by a capital
by the pandemic. Within the company, there was a focus on adequacy ratio higher than that mandated by the Indian central
maintaining portfolio quality in the light of adverse economic bank, relatively low delinquency when compared with the
trends. Hence, the company followed a cautious policy with Indian average for undocumented customers and multi-year
respect to lending. Assets under management declined 12 per business sustainability better than the broad sectoral average.
cent i.e., from `16,134 crore in FY20 to `14,225 crore in FY21. The company prudently protected the integrity of its balance-
On a standalone basis, the capital risk adequacy ratio (CRAR) sheet with adequate cash on the books, unutilised credit limits
for the year FY21 was 20.3 per cent as against the RBI stipulated and a strong disbursement pipeline that could be growth-ready
norm of 15 per cent for non-deposit-taking asset finance at all times. With a conservative policy in place the company
companies. holds provision of `1,192 crore as on March 31, 2021 to counter
the pandemic-related impact on their prospective profitability.
Outlook
The company’s asset-backed financing (ABF) business is the Poonawalla Fincorp is a diversified asset financier both in term
largest, accounting for 59 per cent of the company’s overall of products as well as geographies, which helps mitigate risks.
assets under management as on March 31, 2021. With the The company possesses a sound business model with a
recent sizable net worth infusion by the new promoter group, presence in high-yield, high-growth business segments and
there is optimism of faster business growth than the retrospec- superior sustainable returns. The company is present in
tive average. The company intends to right-size its portfolio business verticals that are likely to grow faster than national
with the following products being discontinued: pre- owned growth and has invested heavily on technology as a
trucks, pre-owned construction equipment, tractors and strategic enabler which has helped it to run operations even
automotive leads. The company plans to focus on the pre- during the pandemic. Other strengths include customer focus,
owned car segment, which is growing at 10-11 per cent CAGR product innovation and superior delivery. Hence, we recom-
with increasing demand from the middle-income customers mend HOLD. DS

Special Report
Small is Profitable Too!
The biggest risk in equity market investment is not the volatility
but the risk of wiping out of the capital. The risk of capital erosion
is at its maximum when one invests in micro-cap companies – at
least that is what the perception is. Shreya Chaware explores
the pros and cons of micro-cap investing while also highlighting
the performance of the tiny treasures
W
hen it comes to equity investing, one of the Micro-Cap Portfolio Building
important questions every investor struggles to To start with, it is important to distinguish between penny
find an answer to is how much of the total stocks and micro-cap stocks. Penny stocks are the ones whose
portfolio money should be allocated to small- share price is less than `10 per share or even `20 for that matter
caps, mid-caps and large-caps. Often the fine judgement of and the market capitalisation is lower than the small-caps.
portfolio allocation across market capitalisation comes with Micro-cap stocks have low market capitalisation and usually
experience and after studying the risk profile of individual trade with low volumes on the bourses. Typically, micro-cap
investors. For a conservative investor it is recommended that 90 companies can be the ones below market capitalisation of
per cent of the portfolio money allocated for equity investments `1,000 crore. Then we also have something called nano-caps.
should be parked in large-caps and the remaining 10 per cent in Stocks with market capitalisation less than `100 crore or even
mid-caps and small-caps. If the investor’s risk profile suggests `200 crore are at times called nano-caps. Historically speaking,
higher risk-taking ability, in that case the allocation can be 50 we find that micro-cap companies are almost always risky for
per cent in small-caps and mid-caps with 50 per cent in investment.
large-caps.
This is not only due to inherent volatility but also on account of
For a moderate risk-taker, the recommended portfolio the probability of wiping out of the complete capital. Says
allocation is 70 per cent in large-caps and 30 per cent in Chetan Tupe, a micro-cap investor: “I think micro-cap
small-caps and mid-caps. If one sticks to the above suggested investing is grossly underrated by individual investors. There is
portfolio allocation derived after a thorough risk profiling is lot of money to be made in micro-cap stocks and the so called
done, chances are the experience in the equity market will be nano-cap stocks. If one applies the basics of investing principles
good as the portfolio will be aligned to the risk-taking ability of to micro-cap stocks, a market-beating portfolio can be
the individual investors. Now, how does one accommodate constructed. Yes, there is a risk of not only capital erosion but a
micro-cap stocks in a portfolio that shows promise? What are complete wiping out of the capital if a wrong micro-cap is
micro-cap stocks and should micro-cap stocks be included in selected, but overall if a portfolio is constructed of hand-picked
the portfolio at all? It is perceived that micro-cap stocks are micro-cap stocks after through research, beating market returns
highly risky and not for conservative investors. However, for is a cake-walk.”
those investors with higher risk-taking ability, micro-cap
investing is not untouchable. “As to whether it is a high-risk, high-reward game, definitely

yes. It is an extremely rewarding experience in my view. In my
portfolio I have invested at least 20 per cent of my capital in Micro-cap investing is a great form of investing
micro-cap companies. The trick in micro-cap investing is for those who have the ability to operate in the
portfolio diversification and understanding the businesses of
small-sized companies. Reading the balance-sheet and profit market in a disciplined manner and believe in
and loss statements will not suffice while investing in micro-cap portfolio diversification. The diversification
companies. One will have to try to listen to the promoter.
Understand the strategic initiatives that the promoter is needs to be wider when one invests in micro-
focusing on and try to translate those initiatives into earnings. cap companies.
These days the promoters of micro-cap companies who have a
solid story to tell do interact with investors online. I ensure to
attend those investors’ meets on a regular basis,” he adds.
Conclusion
Attending such meets or interactions provides a realistic Micro-cap investing is a great form of investing for those who
perspective on a company’s business growth which in turn helps have the ability to operate in the market in a disciplined manner
build conviction. A basic hygiene check is just a mandatory task and believe in portfolio diversification. The diversification
to scan opportunities in the micro-cap investing world. A needs to be wider when one invests in micro-cap companies. By
thorough fundamental analysis is a must; however, there are wider diversification what we mean is that instead of holding
practical problems while analysing data for micro-cap 12-14 stocks in the portfolio one needs to have at least 20-25
companies because of the lack of comprehensive data on stocks with small allocation spread over 5-10 micro-cap stock
company financials. One has to dig deeper for the data and rely bets. Overall exposure can be restricted to 20-25 per cent of the
on annual reports for basic information about the micro-cap portfolio at the maximum if one is a high-risk investor. By
companies. The following table highlights the outperformance doing so the portfolio can generate an alpha and it will be
of the micro-cap companies: possible to beat the market in the long run. No advance
research technique is required to beat the markets. One just
Top Performing Micro Cap Companies needs to keep it simple and focus on the growth levers.
Latest Market Cap 1 year return
Company Name
(`crore) (%) It is more important to understand whether the promoter is
Equippp Social Impact Technologies 1016.00 30696.88 capable of delivering on the growth promises. A good amount
Flomic Global Logistics 144.61 14246.43 of time should be spent on understanding the capabilities of the
TTI Enterprise 122.45 6079.49 promoter. This additional effort of estimating promoter
Radhe Developers (India) 861.66 3639.89 strength while analysing the prospects of any micro-cap
Jindal Photo 474.04 3248.55 company can be the deciding factor. When one invests in any
Jindal Poly Investment and Finance Co. 441.76 3152.71 large-cap company the promoter track record is more or less
3I Infotech 1810.14 3145.59 proven. The promoter is assumed to be a wealth-creator. Such
NCL Research & Financial Services 95.54 2886.36 comfort is not available to investors of micro-cap stocks and
Ushdev International 173.99 2605.26 hence there is an additional unknown when investing in
Digjam 14.67 2501.06 micro-caps. The lack of track record of the promoter is clearly
Rohit Ferro-Tech 228.12 2437.97 the additional risk one takes while investing in micro-cap
JITF Infralogistics 495.18 2308.12 companies along with the unavailability of information about
Available Finance 100.56 2155.15 the company.
Cosmo Ferrites 229.05 2116.53
Gita Renewable Energy 56.32 1950.15 However, micro-cap companies these days are seen reaching
Mukat Pipes 18.30 1883.33 out to investors via various mediums and every attempt should
Xpro India 835.39 1824.22 be made by the investors to study the details of the business
Indian Infotech & Software 343.18 1700.00 model before investing in a micro-cap company. Micro-cap
Lloyds Steels Industries 1097.31 1644.29 companies are also notorious for being operated by certain
Pan India Corporation 67.92 1568.42 punters who tend to be manipulative. Because micro-cap
Unistar Multimedia 14.50 1511.11 companies are low-liquid stocks, even a small above average
GRM Overseas 2165.40 1471.64 buying quantity can move the prices substantially. Hence,
Sportking India 1733.51 1440.32 micro-cap companies are prone to manipulation by the
Sharp Investments 66.58 1427.78 so-called market operators. However, a carefully selected micro-
Waaree Renewable Technologies 431.28 1364.31 cap company with a durable business model will eventually see
Megri Soft 55.42 1346.31 buyers’ participation on the rise which leads to volume increase
ANG Lifesciences India 570.63 1319.60 in the counter in the long run, thus leading to profitable exit
Raghuvir Synthetics 1430.65 1309.16 opportunities. DS

Communication Feature

We Have Been What is flexible packaging? What is your take on global
flexible packaging markets and business outlook of UFlex?
Sailing On The Tide

Flexible packaging is a light-weight packaging made out of
polymer structures. While it is used for a variety of applications,
it’s most common use is in primary food packaging to protect
Of Expansion
food from degrading and extending its shelf life. Flexible
packaging delivers several other virtues and values such as
barrier properties, aesthetics, convenience of transportation,
storage and use, security and easy recyclability to all its
stakeholders that includes manufacturers, brands and
In this exclusive interaction, Rajesh Bhatia, consumers and finally for the environment as well. Common
Group CFO, UFlex, outlines the company’s examples of flexible packaging include bags, pouches, shrink
strategy in terms of sustainability while also films, tubes, blister packs, etc.
sharing information about how the company has
As per a report by Allied Market Research, the global flexible
been on an expansion spree in recent times both packaging market has been valued at USD 182.3 billion in 2020
in India and outside and owing to its CAGR of 6.2 per cent is projected to reach
USD 325.6 billion by the year 2030. This growth is witnessed on
account of higher per capita income, increased focus on hygiene
and packaged foods since the outbreak of the pandemic and
innovation-driven focus of packaging converters and brands.
Also, the ease of recycling flexible packaging has seen an
increased shift from rigid to flexible packaging.
As the biggest flexible packaging company in India, UFlex has

been sailing on the tides of expansion, robust order book and
volume growth. Since the last fiscal, with the commissioning of
greenfield and brownfield projects for packaging film
manufacturing facilities at strategic locations across the globe,
UFlex has achieved almost 40 per cent YoY jump in its H1 sales
volume in FY22 for packaging films. In FY22, H1 revenues were
up by 37 per cent YoY and for the entire fiscal year 2021-22 as a
whole, we are confident of maintaining the momentum.
What steps are being taken by UFlex to grow its market

share?
UFlex’ strategy to grow its market share has been to identify
potential markets which have large population base but are
currently being fed largely through imports and just about ripe
to justify local production facility, which gives us the first mover
advantage. It is with this approach of manufacturing locally and
being close to customers that we planned our recent spate of
expansions in packaging films. In FY2020-21, we moved our
Dubai 30,000 TPA capacity BOPET line to Russia through
greenfield expansion to leverage on the already existing markets
we had created for our packaging materials.
Then, we commissioned a new BOPP line with capacity of

42,000 TPA in Hungary, which is the first BOPP facility in that
country. Likewise, our most recent expansion was in Nigeria
Rajesh Bhatia, Group CFO, UFlex where we have installed a first-of-its kind 10.6 m wide BOPET

packaging film line to manufacture 45,000 TPA, which again is
What are the new growth opportunities facing UFlex at
the first BOPET facility in Nigeria. As all our existing this juncture?
packaging films plants were running at almost full capacities While flexible packaging is one of the best solutions to minimise
owing to greater demand, we commissioned an additional food waste due to its unmatchable barrier properties,
BOPET line in Poland with 45,000 TPA and 42,000 TPA BOPP conversations around the menace of plastic waste have opened
line in our Egypt plant. doors to the dire need for sustainable formats of packaging. It is
interesting to take note of green packaging ruling the game and
With these expansions, we are today the largest thin BOPET combined with other critical aspects, desired by Gen Z, to drive
film producers in the European Union. We are also the major changes in consumer packaging. This is further propelled
second-largest in the world and well on our way to become by regulators who are designing guidelines that prompt CPG
world leaders in BOPET film manufacturing after the and other FMCG brands to make bold commitments to improve
commissioning of our new plant in Dharwad in South India. both, the sustainability of their packaging and fundamentally
We are also coming up with a CPP film line in our Dubai plant. re-think their packaging ecosystem.
On the packaging front, our aseptic liquid packaging facility at
Sanand is also set to double its production capacity in the UFlex was able to identify, many decades ago, that sustainability
short-run and will pack an additional 3.5 billion packs for holds the key to a prosperous tomorrow for people and the
Asepto clients. Moreover, the portfolio of sustainability-led planet and this will also drive our business growth. Our
products that we are offering is also helping us acquire more developments in products and technology has always held this
clients in each business vertical, especially in packaging, and purpose at its core and is now gaining recognition and
thus helping us gain a larger market share as well. acceptance due to regulatory reforms and brands’ interest. Some
of our flagship developments that helped brands move closer to
What is the impact of the rising raw material prices on the their sustainability goals includes our up to 100 per cent
profit margins of UFlex? PCR-based green packaging film ‘Asclepius’, paper-based tubes
‘Kraftika’, and water-based inks and adhesives along with easily
Rising raw material prices in our industry are normally passed recyclable mono-material packaging structures.
on to the customers either instantly or with a bit of a lag,
depending on the customers’ contract. Our raw material prices We are also coming up with our ground-breaking enzyme-
are linked to crude prices and well-established indices. Since the based biodegradable development in flexible packaging that
onset of the pandemic last year, raw material prices have been quickly breaks down packaging waste into biomass, if left
quite volatile. While initially the raw material prices declined uncollected for recycling. In a nutshell, the decade will witness
substantially in Q1FY21, these have been steadily increasing performance-based packaging where it will be judged not only
thereafter and there has been a lot of volatility because of supply on the basis of its barrier structure and convenience but also by
chain as well as raw material availability issues due to local its ability to define a life beyond its original use. In short, the
lockdowns. In the last two quarters, the raw material prices have call of the moment is that all products manufactured across the
been continually increasing, which impacted our margins in world must adhere to the norms of sustainability since it is our
Q2FY22. However, we believe that once the raw material prices responsibility and commitment to turn this world into a better
stabilise, the margins will also stabilise. place. And this is where the opportunity lies ahead for us.

Communication Feature
Total Revenue
H1FY22 (6 Month) `215.54 Cr 315%
H1FY21 (6Month ) `86.55 Cr
EBIDTA
H1FY22 (6 Month) `49.09 Cr 756%
H1FY21(6Month ) `6.49 Cr
PAT
H1FY22 (6 Month) `33.78 Cr 2221%
H1FY21(6Month ) `5.50 Cr
Ang Lifesciences India

On A Healthy Growth Curve
A
NG Lifesciences India Limited was incorporated in company owns and operates 7 state of the art manufacturing
the year 2006. It embarked upon its journey as a facilities & manufactures over 1000+ formulations at Baddi
pharmaceutical formulation manufacturer in 2008 (H.P). These facilities are laced with latest machinery and
with a new plant at Baddi for the manufacture of designed to meet the requirements of both advanced as well as
finished pharmaceutical formulations in a dosage emerging market opportunities.
form of sterile dry powder injection (DPI) in vials. To implement
its plans related to growth and product diversification, the The Company’s products portfolio include 100+ products.With
company has acquired three pharmaceutical formulation plants strength of over 800+ employees, the company currently
at Baddi recently. The company has already completed operates a strong manufacturing setup consisting of 5
acquisition of one plant at Jodapur, Barotiwala from MBP formulation facilities now under its 7 manufacturing locations.
Pharmaceuticals Private Limited and is manufacturing tablets, These state-of-art facilities have integrated process development
capsules and dry syrups in the beta-lactum segment. The plant is teams with in-house engineering capabilities & maintains a
presently operating as Unit 4 of the company. strong analytical capability presence through Quality Assurance
and Product Development Teams. The company is ISO
ANG Lifesciences India acquired the penicillin formulation unit 9001:2008 Certified & The plants are approved by WHO-GMP
of Star Biotech in 2019. The plant is under modification and and GLP.
expansion and is expected to be operational at the end of current
FY 2021-22. This plant will generate additional revenue of `250 Furthermore, in November 2021, ANG Lifesciences India
crore. Moreover, ANG Lifesciences India acquired two decided to acquire 100 per cent equity shares of ANG
formulation plants of Ind-Swift Limited for `60 crore in August Healthcare India Private Limited. Therefore, ANG Healthcare
2021. This plant is now running as Unit 5 and Unit 6, respectively. India will become a wholly owned subsidiary company of ANG
The company expects a potential sales turnover of `500- 600 Lifesciences India. This acquisition will help the company in
crore with 100 per cent capacity utilisation basis from this plant. brand-building, domestic branding and direct marketing
initiatives for the purpose of staying close to the customer.
ANG Lifesciences India also acquired Mansa Print and
Publishers Limited located at Baddi as a wholly owned During 2017, the company came up with an IPO and got listed
subsidiary company on April 1, 2021 with the purpose of cost on the SME platform of BSE. The company had announced a
optimisation and timely availability of packaging products for its bonus issue in the ratio of 1:1 in August 2021. The company
formulation business. In November 2021, ANG Lifesciences migrated from the SME platform to the main board of BSE on
India decided to acquire 51 per cent stake in Baddi Agro November 8, 2021. Recently, the company declared for payment
Private Limited which will become a subsidiary company. The interim dividend of `1 per equity share which is 10 per cent on
purpose of this acquisition is to manufacture menthol API the face value of `10 each on the equity shares of the company
derivatives and other products at the manufacturing plant for the financial year 2021-22. During H1 of FY 2021-22 which
situated at Baddi in Himachal Pradesh. It was formerly known was the challenging phase of the second wave of the pandemic,
as Surya Pharmaceutical Ltd. The plant capacity is 10,000 MT ANG Lifesciences India was able to generate EBIDTA of `49
which is 20 per cent of the global overall capacity. crore in H1FY22 (6Month). The company is confident of
achieving revenue of `400 crore for FY 2021-22 and has given
The company has geographical presence across India, Africa, revenue guidance of `800 crore for FY 2022-23 with healthy
Latin America, Gulf Countries & ROW etc . Presently, the bottom-line.

D E M O C R A T I Z I N G W E A L T H C R E A T I O N
P R E S E N T
Special Feature
on Plastic Industry
Special Feature
Plastic Takes A Profitable Turn
Even if activists around the world would rather put a complete ban on plastic products, several triggers
such as the pandemic-driven change in work and lifestyle, increasing urbanisation, growth in
infrastructure and demand from the agriculture industry, among other factors, have boosted production
in the plastic pipe and packaging sectors. In this report, Armaan Madhani highlights the salient growth
drivers while also pointing out the key challenges
M
arket growth and diversification – these are the demand in the chemical as well as the oil and natural gas
two factors that have contributed to the rapid sectors. Other industries such as automotive and mining are
strides taken by the Indian plastic industry in also likely to boost the demand for plastic pipes. The growth
recent years. Latest reports indicate that the drivers are as follows:
industry is likely to see increasing demand in the post-pandem-
ic era. In fact, among the very few industries to have done so, n Low Per Capita Consumption : Globally, the average per
the Indian plastic industry has shown resilience by staging capita consumption of plastic is around 30 kg while that of
healthy recovery from the pandemic-induced slowdown in the India is only about 11 kg, which is relatively very low. Tradi-
first two quarters of FY21. In this special feature, we delve tional materials dominate the applications of plastic. However,
deeper to understand the plastic piping and plastic packaging over the past 3-4 years, low crude oil prices and superior
sectors. properties of plastic have increased the usage of plastic in India.
Hence, it is expected that the per capita consumption will inch
Plastic Piping Sector closer to the global average. CRISIL Research expects demand
for polymers to grow at a healthy 7-9 per cent CAGR from
The global plastic piping market is valued at USD 55.96 billion 2019-2024.
and expected to grow at a CAGR of 2.8 per cent from 2021 to
2025 to reach USD 62.41 billion by 2025. In terms of volume, n Substitution and Replacement Demand : Superior real
the global PVC pipe market has reached 24.51 million tonnes in estate properties and low prices have led to the substitution of
2020 and is expected to reach a volume of 30.25 million tonnes metal pipes by plastic pipes. The increase in the availability of
by 2025. The Indian plastic pipe and fittings industry is raw materials such as PVC, PE and PPR followed by the
expected to reach `500-550 billion by 2025, growing at a CAGR commissioning of new petrochemical facilities in India will
of 10 per cent from the current level of `290-300 billion. The further support the plastic pipe industry. Also replacement of
primary driver of growth in the piping and fitting industry is older pipes with plastic pipes will help in driving the demand.
the rapid pace of urbanisation and infrastructure development.
Increasing urbanisation calls for larger and cost-effective n Sectoral Consolidation : In recent times, several smaller
sewage lines, among other applications. This has also led to players in the PVC pipe sector have been impacted by volatility
in PVC prices, liquidity crisis and working capital constraints,
which has led them to close their operations. It has been
observed that the market share of top players has increased due
to the shutdown of operations by the smaller unorganised
players. This creates an opportunity for sectoral consolidation.
n Focus on Irrigation : The irrigation sector is the key end-user

for plastic pipes, accounting for 45-50 per cent share of the
industry. India has 142 million hectares of cultivated land but
only around 50 per cent of the land is irrigated. Hence, in FY16
the central government converged irrigation schemes under the
Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) to expand
the area under cultivation by 2.85 million hectares in FY17 and
8 million hectares by FY20, outlining a spending target of `500
billion until 2020. The key schemes converged are Accelerated
Irrigation Benefits Programme, Integrated Watershed Manage-
ment Programme, On Farm Water Management and Per Drop
More Crop. Investment in the sector is expected to rise in the
next five years owing to the push from state governments to

increase irrigation penetration in the states. `260 billion for FY21 from `80 billion to boost the housing
sector and has also relaxed an Income Tax provision to enable
Healthy growth in government investments towards water developers to reduce property rates by up to 20 per cent
supply and sanitation (WSS) and plumbing are the second- compared to the existing circle rates. The Indian government
largest segments for plastic pipes, accounting for 35-40 per cent will infuse `60 billion as equity in the National Investment and
share of the plastic pipe market. In the past five fiscal years i.e. Infrastructure Fund’s debt platform as India readies for a
from FY14 to FY19, the government expenditure on the sector massive `111 trillion infrastructure pipeline.
rose at 22 per cent CAGR to about `624 billion in FY 2019. This
was led by several central government schemes, coupled with n Government Push for Infrastructure : The Indian govern-
rising emphasis by municipal authorities. The government has ment and large private sector companies have planned capex
also proposed a ‘Nal se Jal’ scheme, a component of the Jal Jivan over the next 3-5 years with meaningful spending on applica-
Mission, which promises to provide piped drinking water to tions such as plumbing, insulation, sewage drainage, fire
every household in the country by 2024. sprinklers and urban infrastructure. Plastic pipes account for
5-10 per cent of the total project capex and implies sustainable
n Real Estate Development: Real estate is a key end-user demand for PVC pipes going forward. Given the country’s
sector for plastic pipes and fittings in India. Housing for All ambition to modernise infrastructure, advance its cities with
2022 – National Mission for Urban Housing will also provide a smart development and boost employment, India is expected
boost to the industry. The Government of India has increased to become the third-largest construction market in the world
the allocation for the Pradhan Mantri Awas Yojana (PMAY) to by 2025.
Performance of Top 25 Listed Plastic Product Companies

Market Cap* (` Returns* (%)
Company Name TTM PE* ROE (%) ROA (%)
Cr) 1 Month 3 Month YTD 1 Year
Astral Ltd. 43,003.95 85.59 24.46 16.74 0.51 8.61 63.06 90.46
Supreme Industries Ltd. 26,955.74 23.37 30.65 21.06 (9.61) 4.54 25.94 33.24
Finolex Industries Ltd. 12,539.84 13.47 28.16 20.09 (10.67) 19.48 54.13 64.76
Prince Pipes and Fittings Ltd. 8,642.56 33.52 23.65 13.61 5.43 27.85 152.36 195.65
EPL Ltd. 6,247.92 26.53 15.25 8.47 (8.83) (13.74) (24.13) (22.72)
Polyplex Corporation Ltd. 5,608.73 12.15 28.35 14.07 5.23 20.37 149.39 138.57
Jindal Poly Films Ltd. 4,671.57 5.14 35.18 17.19 10.16 12.85 132.29 128.38
Tarsons Products Ltd. 4,469.33 64.90 24.35 17.60 - - - -
Nilkamal Ltd. 3,565.89 28.94 10.27 6.81 (3.85) (12.74) 58.75 76.86
Responsive Industries Ltd. 2,988.09 154.92 2.55 1.87 (4.84) (8.91) (40.23) (32.86)
Cosmo Films Ltd. 2,574.26 8.08 29.91 11.77 (2.84) 13.18 211.16 222.93
Apollo Pipes Ltd. 2,290.21 41.07 13.95 8.91 (0.20) 16.45 142.91 167.69
Jai Corp Ltd. 2,169.94 20.06 6.85 5.91 (3.26) (3.34) 28.34 34.07
Jain Irrigation Systems Ltd. 2,000.36 41.45 (12.61) (3.19) (8.41) 38.25 112.66 107.20
Mold-Tek Packaging Ltd. 1,955.01 31.31 21.93 11.59 0.15 39.97 142.56 138.43
Garware Hi-Tech Films Ltd. 1,933.75 12.62 8.49 7.15 (11.65) (18.34) 99.01 163.99
Huhtamaki India Ltd. 1,770.99 - 13.24 6.23 (2.26) (11.48) (24.80) (24.22)
Time Technoplast Ltd. 1,752.64 10.54 5.73 3.17 8.09 7.49 56.72 71.27
Shaily Engineering Plastics Ltd. 1,605.36 44.34 12.91 5.19 (4.02) (2.74) 113.69 181.26
Kingfa Science & Technology (India) Ltd. 1,132.33 50.46 1.51 0.84 (5.33) (13.13) 58.40 70.34
Ester Industries Ltd. 1,010.32 7.63 53.71 31.91 (12.62) (9.25) 1.76 (2.30)
Sintex Plastics Technology Ltd. 973.31 - (55.88) (11.35) 175.18 274.08 365.05 553.85
Shri Jagdamba Polymers Ltd. 855.61 15.26 36.36 24.37 (8.51) (25.05) 80.14 184.50
Xpro India Ltd. 835.39 26.20 9.72 2.70 29.66 112.29 1,949.71 1,920.43
Sintex Industries Ltd. 804.15 - (52.04) (12.80) 175.00 244.99 201.57 337.13
*Data as on 26 November 2021

Special Feature
full-fledged resumption of construction and development
Key Concerns or Threats activities will help post growth. In the coming years, different
Some of the key concerns that affect the plastic end-user applications, value-added products, a shift from metal
pipe industry are as follows: to plastic pipes, ongoing consolidation and infrastructure
demand will help the large domestic plastic pipe manufacturers
n Volatility in Raw Material Prices: The primary raw materials to post healthy double-digit volume growth. It is believed that
comprise UPVC, CPVC, PPR and HDPE resins, which are large organised manufacturers with pan-India facilities will
derived from crude oil by-products. Crude oil prices are volatile take advantage of this opportunity to increase market share
and any fluctuations in the prices of crude oil would lead to over the coming years.
fluctuations in the prices of the raw materials required to
manufacture its products. India is a net importer of PVC and PE
as demand growth has outpaced capacity addition. Although
capacity expansion plans are in action by major domestic
manufacturers, growth in domestic output won’t be evidenced
in the near term. Thus, companies are not only vulnerable to the
exchange rate but demand supply mismatch also is a key risk
faced by players in the pipe and fittings industry.
n Softening of Agriculture Pipe Demand: Commodity prices
skyrocketed in FY20-21 and this resulted in inflation and a
consequential hike in PVC prices. There is an imminent threat
of a decline in pipe volumes’ demand due to farmers deferring
agriculture pipe purchases in the hope of a price correction.
The first quarter of FY22, which is typically a busy season for
agriculture pipes, has been impacted by both the second wave
of the pandemic and higher PVC prices. However, this segment
is expected to do well in terms of volumes in H2FY22 as the
prices have slowly started to narrow down.
n Lower Spending by Consumers: In FY 2020-21, there was a

drastic shift of consumer spending towards more modest levels,
especially due to a lot of job losses and wage reductions during
the pandemic. The ongoing uncertainty will certainly play on
the minds of consumers and investors. In commercial real
estate, there is also some concern about the impact of wide-
spread ‘work from home’ policies adopted by Indian corporates
during the lockdowns. Spending on construction is projected
to be more cautious.
Future Outlook of Piping Sector

The plastic pipe sector has shown resilience by recovering from Plastic Packaging Sector
the pandemic-induced slowdown in the first two quarters of
FY21. In the second half of FY 2020-21, plastic pipes and The global packaging market is projected to grow to USD
fittings witnessed a sharp recovery in their volumes, mainly on 1,012.6 billion by 2021. It was estimated to be valued at USD
the back of a sustained rise in demand. The Indian PVC pipe 909.2 billion in 2019. People are now more than ever conscious
industry has witnessed greater realisation supported by a sharp about food packaging worldwide amidst this pandemic, due to
rise in PVC prices in FY21. However, PVC prices have now which demand for packaging is set to increase. The Indian
started easing and may stabilise in the near future. The packaging market was valued at USD 75 billion in 2020 and is
Government of India’s initiative for affordable housing, expected to reach USD 204.81 billion by 2025, registering a
irrigation sector and focus on rural water management along CAGR of 26.7 per cent during the period of 2020-25. Packag-
with higher capex for infrastructure growth continue to be the ing is amongst the high growth industries in India and the
major drivers for the growth of the PVC pipe industry in the country is becoming a preferred hub for the packaging
country, particularly for organised players. industry.
It is likely that going forward, market consolidation, steadiness With the arrival of the pandemic, people have become more
in higher PVC prices, opportunities in the infrastructure pipe conscious of the food products they consume. The food
segment that is expected to pick up with the government’s industry has increased its focus towards better and safer
strong emphasis on infrastructure in the budget and the packaging for its consumers, resulting in robust demand for

plastic packaging industry move forward. These
include:
n E-Commerce: The already fast rise in e-commerce has got a
big boost due to the pandemic with consumers opting to buy
products online and with hygienic packaging. The rise in
e-commerce could place an intense focus on increased
packaging requirements, including new products, along with
last-mile delivery innovations.
n Digitalisation and Internet of Things (IoT): Digital efforts

are being used both to simultaneously drive down costs and
gain a competitive edge with consumers, as for example,
generating greater customer value and service by integrating
technology in packaging. With Internet of Things (IoT) already
ruling the roost, packaging as an enabler will be far more
intuitive and help provide instantaneous information to the
consumers about the packed products.
packaging material. It has also helped in prolonging the shelf
life of many products. In fact, this validates the increasing n Innovative Packaging: Brands are well-personified assets
demand for packaged consumer goods. Moreover, in India, one and enjoy an image that the marketers are very conscious and
can find a large base of raw materials to manufacture packaging sensitive about. Several FMCG companies world over are
products. Besides, there is an increasing trend of using opting to give their packaging designs a fresher look in line
eco-friendly or recyclable materials in packaging. The com- with the attributes that their brand stands tall for. The mantra
paratively low manufacturing costs open opportunities to is: ‘good packaging protects your product, while great packag-
foreign companies and technology too. ing protects your brand’. Domestic players in the sector are
geared towards developing innovative packages that are aimed
The packaging industry has experienced rapid growth globally at attracting customers to drive sales.
as a result of greater innovation and customer preferences for
global brands. Packaging sales in the emerging markets are n Sustainability Requirements: Sustainability is ubiquitously
expected to continue to show strong momentum as both on the rise at every step of the value chain with rising activists’
increased consumption and demand for consumer goods drive scrutiny. Notably, while the use of plastic has soared, the
the need for more sophisticated packaging. Currently the ecological burden is provoking heavier restrictions with the
fifth-largest sector of India’s economy, the industry has demand for sustainable solutions becoming more vociferous.
reported steady growth over past several years and shows high Leading Indian companies in the segment are witnessing
potential for much expansion, particularly in the export escalating awareness on sustainable packaging requirements as
markets. Costs of processing and packaging food can be an opportunity and are developing capabilities to cater to the
substantially lower than parts of Europe which, combined with impending demand.
India’s resources of skilled labour, make it an attractive venue
for investment. Future Outlook of Packaging Sector
In the course of the pandemic consumers stocked up as
A high degree of potential exists for almost all user segments governments announced quarantines and stay-at-home
which are expanding appreciably – processed foods, hard and measures. This boosted packaging consumption – and thus the
soft drinks, fruit and marine products. In India, the fastest demand for rigid plastics increased in many markets, including
growing packaging segments are laminates and flexible Europe. Over the last few years, the packaging industry has
packaging. PET is produced in India in huge volumes and been an important sector driving technology and innovation
majority of the demand in the country is satisfied by domestic growth in the country and adding value to the various manu-
production. PET resin demand is projected to grow at a CAGR facturing sectors, including agriculture and FMCG. Change in
of 6.75 per cent in 2022-2030, according to a report by consumption patterns and lifestyle, consumer awareness
ChemAnalyst. India’s demand for PET in the packaging of food surrounding packaged food, and a boom in e-commerce and
and beverages has witnessed a further increase during the organised retail is expected to enhance the growth of the plastic
pandemic, boosted by the higher awareness of hygiene and packaging industry and per capita consumption in the near
enhanced procurement of disposable and packaged items for future. Rising purchasing power due to the growth in the per
reducing the chances of viral infection. capita income of the Indian middle-class is fuelling the Indian
packaging market in adopting better packaging methods, mate-
Growth Drivers rials and machinery to ensure quality factors for Indian
There are certain well-defined triggers to help the businesses. DS

Cover Story
Contrarian
Investing Is
For All
Seasons!
The market is finally showing signs
of weakness after a one-way
movement from the time it hit the
lows in March 2020. This correction
in stock prices will create
opportunities for investors. However,
the question is about which strategy
will work best in the current market
situation. Will contrarian investing
approach suit in the current market
conditions? Yogesh Supekar
explains why contrarian investing
approach is for all seasons and how it
works
T
he benchmark index Sensex has fallen by
about 8 per cent from its all-time high In the recent fall we have seen that metal stocks too have
levels. This fall has been across merely 27 tumbled along with those of private banks. The BSE Metal
trading sessions. Thus, a sudden change in index is down by more than 10 per cent in the past one month.
trend has taken several bulls by surprise Interestingly, even real estate and energy stocks have been a
even though, to be fair, a correction was part of this correction. If we look at the performance on YTD
expected by market participants. It is the
depth of the correction and the speed that
has surprised a few. What is interesting to note is the
performance of the private banks. BSE Private Banks index is
The trend is your friend, at least
now the worst performing sectoral index and is down by more until the bend in the end.
than 13 per cent in the past one month. Banks have indeed
underperformed the markets even though PSU Banks has
shown relative strength when compared to private peers. Anonymous

basis it is the metal stocks, power-sector related stocks and real
estate stocks that have outperformed the markets handsomely. Embracing risk and losses in
The broader markets have been able to give confidence to
investors as the BSE Small-Cap index has fallen by less than 2 good times is the way to
per cent while BSE Sensex is down by about 7 per cent in the
past one month. The broader market outperformance is prosper in a crisis.
remarkable in the current fall.
Mark Spitznagel, Fund Manager
The change in market trend is always a testing time for long-
term investors. The extent of market correction is not easily
estimated and more often than not investors have no clue as to contrarian investing is not an easy strategy to adopt and execute.
how long any such correction may last. The price and time It is the opposite of the trend following strategy or momentum
correction can frustrate even the best of investors. In such investing. In momentum investing strategy one just buys stocks
difficult times when market volatility is unnerving and that are gaining momentum and on most occasions the
valuations are stretched, what investing strategy can work best? valuations are ignored. Comments Mandar Mulay, an equity
investor who believes in long term investing: “I have made
money in the market consistently by following market trends. I
Follow the course opposite to do not think I need to change my investment style as I am
getting good returns on my risk capital. However, when the
custom and you will almost market valuations are stretched, and the market trend changes
suddenly I tend to get lost a little bit.”
always be right.
“A close friend mentioned that he has been following the
contrarian style of investing for several years and it has helped
Marc Faber him beat market returns. I have not practiced contrarian
investing because I am not aware of the detailed process that
What if we apply the principles of contrarian investing in the one needs to adopt while practicing contrarian investing. I do
current times when the valuations are stretched and market think, however, that a different approach to investing will come
participation is at a record pace? in handy especially now that the market trend is a little
uncertain and volatility is on the rise. I am actively considering
Contrarian Investing adopting a contrarian style of investing. I sincerely believe that
In simple terms, contrarian investing is doing the opposite of searching in unpopular areas of the market certainly doesn’t
what the majority of investors are doing. In a contrarian bet you guarantee success but it can be a good way to explore
are going against the market and hence the strategy of opportunities,” he adds. There are some basic rules to follow
What is Contrarian Investing?

Contrarian investing in simple terms means
going against the trend. It means that if How Does Contrarian Investing Work?
everyone is following the herd mentality by
As a result of panic sell off,
buying stocks because of the bullish trend in
people sell quality stock at
the market, a contrarian investor will short a low price
sell his investments and vice versa. The Market decline, leading to
belief behind this strategy is that this type massive sell off
of investor has a strong conviction that the
markets are overvaluing certain stocks and
undervaluing those which have real growth
potential in the future and that herding is Contrarian investor take
advantage of sell off and buy
causing exponential valuations of the stocks Finally sell it when stock is quality stock at a bargain
and the market in general. trading at a fair price, making
multi-fold gains

Cover Story
Warren Buffet and Contrarian Investing
Warren Buffet is often however, Warren Buffet has repeatedly demonstrated his
considered one of the best ability and preference to invest at the bottom of the cycle. His
exponents of contrarian big-ticket investments during the global financial crisis are
investing. Apart from being legendary and most of his big contrarian bets have been
super-smart and guided by made when optimism was in short supply.
an overarching investment Another easy to recognize investment behaviour of Warren
philosophy, he is always Buffet is that he has long-term focus almost in all his
considered unemotional decisions and that he is unconcerned about the market
and mentally flexible. These volatility. Warren Buffet is considered a perfect exponent of
are the very qualities that his contrarian investment style as he has shown a tendency
make Buffet a top-notch contrarian investor. He is indeed an to be fearless about his big bets and best ideas. His
iconoclast and true contrarian if one studies his investment willingness to remain inactive and high on conviction in his
decisions. ideas makes him successful in exploring contrarian investing.
When you observe the investments done by Warren Buffet, it Any investor willing to exploit a contrarian approach can
is not difficult to recognize that he is countercyclical. It is benefit by observing Warren Buffet’s investing pattern and
emotionally easy to invest when the economy is improving, behaviour.
while investing the contrarian way: 20 per cent since June 2021. Here, a contrarian investor
will avoid stocks that are popular or in favour by
1) It is observed that when a stock begins to hit the investors.
headlines, the positives are already factored in and there
is very little room left in the stock to outperform. In the 2) Buy when everyone wants to sell and sell when everyone
case of many stocks that create a buzz, by the time wants to buy. When adopting a contrarian style, it is
investors make up their mind to invest in them the stock important to have an independent view which is opposite
starts underperforming as it is over-owned. For example, to what the majority of investors think. When the market
the shares of Praj Industries climbed from `87 per share is at an all-time high and trending, it is common to see
in November 2020 to `398 per share in June 2021, thus investors actively participating since most are trend
generating 326 per cent returns in quick time. The stock followers. The uptrend and price momentum ensures
started attracting investors’ attention and was in the news that more and more investors get on board on the long
almost on a daily basis. However, after being highlighted side and that is where the contrarian investor must take a
by the media and analysts, it began to view that goes against the market view. Contrarian
heavily underperform the market. It is down by about investors can use advance decline indicators and track
INTERVIEW
Roop Bhootra, CEO - Investment Services, Anand Rathi Shares and Stockbrokers
What is contrarian investing according to you and does it work in a bullish market environment like the current one?
Contrarian investing is a style of investing in stocks, sectors or themes that are currently out of flavour in the market. This investing
style works well even in bull markets, but it totally depends on the stock-picking ability of the investor. Yes, contrarian stock
selection works in any kind of market scenario, including the current one. The key trigger points can be the turn of an economic
cycle or a company’s business cycle
What contrarian bets would you suggest in the current market condition?
PSU banks, other PSUs, real estate and capital goods were out of favour for many years now and can be interesting contrarian bets
with a timeframe of 2-3 years. So far, in the last 3-5 years we have seen a strong performance in the consumption theme but now
may be the time to look at the investment theme. But focus more on stock selection and bet on those companies where there is
strong visibility of earnings with good corporate governance.
What are the most important things to keep in mind while taking a contrarian bet?
Contrarian investing requires deep understanding of the business cycles, future moats for business and management quality and a
track record of who is at the helm of the business. In a way contrarian bets are also known as turnaround stories. The contrarian
bets in your portfolio may underperform the market in the short term but over a long term can be a big positive surprise on the
upside. One should do a review of contrarian bets at least on a quarterly basis.

Contrarian Investing and High Dividend Yield Stocks
Value investing and contra investing is often used interchangeably. Value investing is often considered as contra investing because
value investor usually purchases those stocks that are out of fashion. Margin of safety should be high for a value investor to buy a
stock. High dividend Yielding stocks usually offer value and somewhat fit into the contrarian style of investing. High dividend
yielding stocks however are low growth stocks and do not promise extraordinary price gains, in short term at least. One need to be
patient while investing in high dividend yielding stocks.
Santosh Meena, Head of Research, Swastika Investmart Ltd.

Do high dividend-yielding stocks outperform? amount while choosing any stock for the high dividend. The
It is utterly unclear to say that high dividend-yielding stocks dividend yield is a ratio that helps investors understand how
tend to outperform. They are generally considered low-risk, much dividend a company pays out each year relative to its
low-return stocks. High dividend-yielding stocks are stock price. The formula for the dividend yield is annual
conventionally a good investment idea as they provide a regular dividend ×100 per share price. This ratio is an excellent way to
source of income. In India, dividend yields above 5-6 per cent compare the dividend-paying capability of different companies.
are considered to be high dividend-yielding stocks. Typically, The primary thing that investors must keep in mind is that they
the dividend story is not exactly a favourite among institutional should not focus only on the dividend yield to make investment
and small investors because dividend yield stocks are low- decisions.
growth stocks.
Since the yield is a ratio of dividends to stock price, if the
Also, the market is always willing to give a higher PE ratio for market price of the share falls, the dividend yield can be
growth stocks than regular income stocks. Therefore, dividend high. Investing in such stocks without analysing the reason
yield stocks rarely see a re-rating of the PE ratio. A high behind the drop in the stock price can be risky. Some of the
dividend yield stock is seen as a company that has limited important parameters that should be considered while
investment opportunities in the business and therefore market choosing stocks for dividend income are a history of paying
remains conservative while giving valuations to these dividends consistently, consistent increase in the dividend yield
companies. Globally and in India, high dividend-yield stocks and payout ratio.
tend to be in sectors like utilities and commodities which are
not exactly high-growth stories. Which are your top picks from high dividend-yielding stocks?
ITC, Bajaj Auto, Britannia, VEDL and HCL Tech are our top
How can one pick high dividend-yielding stocks? picks from the private sector while Powergrid, REC Ltd. and
Investors should look for dividend yield instead of dividend BEL are preferred bets in the PSU basket.
True Blue Contrarians Beaten Down Pharma Stocks

Latest Market 1 year
John Neff : He ran the Vanguard Windsor fund for 31 years and Company Name Cap (` crore) Return (%)
averaged 13.7 per cent growth per year, beating the S and P 500 by an Biofil Chemicals & Pharmaceuticals Ltd. 97.56 -72.32
average of 3 per cent. Hemo Organic Ltd. 2.79 -50.31
Bliss GVS Pharma Ltd. 1038.33 -41.77
Jesse Livermore : He took huge huge short positions before the 1906
IOL Chemicals And Pharmaceuticals Ltd. 2800.84 -38.88
San Francisco earthquake and the Wall Street Crash of 1929. Many of
Source Natural Foods and Herbal Supplements 67.17 -37.94
his bold moves are considered legendary today — in a time when Ltd.
analysis was a largely new concept and breaking away from market Strides Pharma Science Ltd. 4595.08 -33.04
sentiment and public opinion was far less common and far more risky. Kobo Biotech Ltd. 10.7 -32.48
Lasa Supergenerics Ltd. 237.12 -31.37
Ray Dalio: Famously quoted for saying, “You can’t make money agree
Astrazeneca Pharma India Ltd. 7946.88 -29.96
with the consensus view,” he is a powerhouse investor running the
Aarti Drugs Ltd. 4774.92 -27.92
largest hedge fund in the world. His contrarian style of investing has
Procter & Gamble Health Ltd. 8300.35 -27.31
allowed him to predict and act defensively regarding several market
Aayush Food & Herbs Ltd. 7.79 -26.61
drops, including the housing crisis of 2008.
Anuh Pharma Ltd. 528.68 -26.53
Marc Faber : He rallied against popular opinion to forecast Black Granules India Ltd. 7734.06 -24.39
Monday in 1987, the Japanese bubble in 1990, the gaming stock crash Tyche Industries Ltd. 170.61 -23.31
of 1993 as well as the Asia Pacific crisis of 1997. Aurobindo Pharma Ltd. 39735.43 -21.88

Cover Story
Beaten down Stocks
Company Name Industry 1 month return (%)
IndusInd Bank Ltd. Bank - Private -20.93
Graphite India Ltd. Electrodes & Welding Equipment -19.48
Manappuram Finance Ltd. Finance - NBFC -19.03
PVR Ltd. Film Production Distribution & Entertainment -17.13
BASF India Ltd. Pesticides & Agrochemicals -15.84
Firstsource Solutions Ltd. BPO/ITeS -15.78
Tata Steel Ltd. Steel & Iron Products -15.52
Jindal Steel & Power Ltd. Steel/Sponge Iron/Pig Iron -15.41
JM Financial Ltd. Finance - Investment -15.2
Dilip Buildcon Ltd. Construction - Real Estate -14.99
Company Name Sector YTD returns (%)

Dhani Services Ltd. Finance -45.43
Amara Raja Batteries Ltd. Automobile & Ancillaries -32.53
Yes Bank Ltd. Bank -31.14
Astrazeneca Pharma India Ltd. Healthcare -30.95
Jubilant Pharmova Ltd. Healthcare -29.95
Johnson Controls - Hitachi Air Conditioning India Ltd. Consumer Durables -29.41
Bandhan Bank Ltd. Bank -29.12
CreditAccess Grameen Ltd. Finance -28.91
Procter & Gamble Health Ltd. Healthcare -28.38
Aurobindo Pharma Ltd. Healthcare -26.92
the number of 52-week high stocks to estimate when the Conclusion

market is near its top. It goes without saying that the market trend has reversed. The
‘sell on rally’ kind of market mood was visible for more than 2-3
Technical analysis also helps to estimate if the market weeks now and a broad-based correction was expected in the
is in an overbought situation. In a bull run the market markets. Now that at the key benchmark index level we are
tends to be in an overbought situation for months; down by almost 8 per cent, the question remains whether it is a
hence, a lot of patience if required to taste success while good time to buy and whether a contrarian investing style can
adopting contrarian investing. The same can be said when be adopted in the current market situation. Contrarian
the markets are down and in a corrective phase. A investing, like any other strategy, succeeds depending on the
contrarian investor must show courage extraordinaire to way it is executed. Looking at the current market situation there
buy when a majority of investors are selling. It takes a lot are plenty of opportunities that may fit the description of
of practice to do so and the skill-set to think and act contrarian investing style, as for example, in sectors such as
contrarian comes with experience. As if often said, most pharmaceuticals, automotive and FMCG. Before finding a
people fall prey to the herd mentality and would rather contrarian bet it is important that we understand the ‘trigger’
take the path of least resistance. A contrarian investor that may lead to a rise in the stock price.
does the exact opposite and chooses to tread the
unknown path. Whether it is an earning upgrade, selling of non-core assets,
change in government regulation, opening up of a sector for
3) Don’t take tips or advice and don’t believe in external private investments, etc., there are multiple factors that can
research. As it takes loads of conviction to take a view and drive stock prices higher. However, there could also be just one
position against the market view, a typical contrarian single factor that could be leading to the re-rating of the stock
works alone without tips or recommendations from any prices, as for example, in the case of Zen Technology the trigger
brokerage houses. The decisions should not be made was the government allowing drones for private commercial
based on the research reports published by brokerage purposes. This announcement re-rated the stock and its price
houses or any advisory services. At the heart of contrarian climbed by more than 100 per cent in no time. Till that time it
investing is independent or original thinking that had been ignored by investors. Contrarian investing as a
contradicts the market opinion and view. If one works strategy has no flaws but investors may make an execution error
with tips and acts according to the research reports one that could lead to losses. Wrong selection of stocks and timing
may align his or her views as per the market trend. can lead to losses and heavy underperformance. DS

Interview

We are focusing on increasing
our market presence globally
We are focusing on improving our product mix to better value-
added products over the next few years, says Parag Jhaveri,
Managing Director and CEO, Yasho Industries Limited.
What is your outlook on the Indian speciality chemicals

sector? We have 35 products which are
The Indian speciality chemicals segment continues to grow
significantly, with businesses all across the globe looking for an REACH registered, which has
alternate supplier to China. This has led to a steady increase in
demand for the Indian speciality chemicals domain. helped us to increase our sales in
Furthermore, India is the manufacturing hub of 70,000
chemicals, which can cater to a wide variety of speciality the European region.
chemical clients across the globe. Since speciality chemicals are
value-added chemicals with multiple uses across industries,
they will always find utility. Yasho Industries has completed capacity expansion through
debottlenecking to serve incremental demand in H2FY22.
In Q2FY22, the company reported its highest quarterly and Can you throw some light on the same?
half-year performance on various parameters. What factors Our strategic presence across the major ports and relationships
contributed the most to help you outperform? with clients in over 50 countries has helped us to gain a
As a company serving over 1,000 clients, and catering to some competitive edge in all our markets. The decision was taken in
of the largest companies across industries, we have always order to cater to the growing demand for our products. At our
focused on continuous growth and expansion. We have three units, we have extended our capacity from 9,200 MTPA to
continued this growth streak for FY22, recording our highest 11,000 MTPA. All three of our units are located in Vapi, Gujarat
ever quarterly and half-year performance, on the back of our to ensure easy access for import of raw materials and export of
varied product offerings and steady focus on the future, finished goods. 1800 MTPA was added through
through activities like capacity expansion and further debottlenecking at Unit 1 and Unit 2.
improving our product mix for high margin products. Indian
chemical suppliers like us could also benefit from the
worldwide trend of de-risking the Chinese supply chain, with What are your top strategic priorities?
many global MNCs looking for alternate suppliers. Being a speciality chemical company, our R&D is the backbone
of Yasho Industries. It has contributed greatly to the growth and
Furthermore, our robust R&D strategy as well as steadily expansion of our company and is one of our key priorities. We
building up our expertise in production and global distribution are focusing on improving our product mix to better value-
over the last few years has further helped boost our profits. We added products over the next few years. The company has
have also made it a priority to adhere to international standards recently opened an office in the Netherlands to increase its
for our products. We have 35 products which are REACH reach in the European market. We now have 35 products that
(Registration, Evaluation, Authorisation and Restriction of are REACH registered. Exports contribute to more than 60 per
Chemicals) registered, which has helped us to increase our sales cent of our revenue so we are focusing on increasing our
in the European region. market presence globally. DS

Interview

Our expertise lies in the express logistics
space, backed by a hub and spoke model
In this interview, Aneel Gambhir, CFO, Blue Dart, outlines the operational strategy of the company in the
logistics sector that is increasingly tilting towards providing sustainable solutions and cost-efficient delivery
Could you discuss in brief the recent announcement made by

safeguard the planet for future generations. As early as 2011, we
the company regarding the 9.6 per cent increase in average were the first in the nation to launch an end-to-end ‘go green’
shipment price from January 1, 2022? solution across all the products we offered domestically and
Our persistent need to consistently update our systems and internationally, called the Carbon Neutral Service (CNS). CNS
processes has ensured that we remain one step ahead of the offers all our customers an ecologically friendly shipping option
curve even during unprecedented times. To continue providing to offset the carbon emissions generated during their
a resilient, reliable and efficient solution to customers, Blue shipments’ journey.
Dart adjusts its prices annually, taking into account inflation,
currency dynamics, fuel cost fluctuations, rising regulatory Moreover, Blue Dart, as a part of the Deutsche Post DHL
costs and other mandatory costs such as expenses related to Group, firmly aligns itself with the group’s credo of ‘Connecting
compliance for the workforce with enhanced security People, Improving Lives’ and makes an active effort, year on
regulations across the 35,000+ locations it services. year, to improve carbon efficiency by leveraging greener
solutions supported by digitisation. Our sustainability roadmap
The general price increase (GPI) will be effective from January 1, guides the organisation towards creating positive change for all
2022, with a shipment price increase of 9.6 per cent as compared our stakeholders by calling for cleaner operations for climate
to 2021, dependent on the shipping profile. Customers signing protection by ensuring that we remain a great company to work
up from October 1 to December 31, 2021 will not be impacted for all as well as building a highly trusted company. We have
by the price increase. We want to make sure that our customers launched many initiatives to aid the world in its battle against
receive high-quality service and the annual increase enables us to climate change and global warming.
sustain service quality and various cost increases.
We also aim to achieve zero carbon emissions by 2050 under
According to the global outlook on the logistics industry, the ‘Mission 2050’ target set by the Deutsche Post DHL Group,
companies will be focusing more on ‘green logistics’. How wherein our goal is to limit global warming to less than 2
degrees Celsius and drive the business towards zero emissions
does Blue Dart plan to adopt this trend? logistics. Blue Dart is also the first to set a quantified carbon-
Blue Dart has always been working towards being a ‘sustainable efficiency target. Our goal was to increase our CO2 efficiency
provider of choice’ for all our stakeholders. We are amongst a by 10 per cent by the year 2012 and 30 per cent by the year
selected few companies world over that invest wisely in 2020. Against the 30 per cent target, we have achieved 36 per
promoting the Sustainable Development Goals (SDGs) to cent CO2 efficiency in 2020. Thus, we are setting the standard

for the future of the logistics sector and doing our part to help resources provided to us by the Government of India are on the
the world. list of our current strategic priorities. Technology has been our
backbone, and its significance was further reinforced during the
A carbon credit is a permit that allows the company that holds it pandemic. As part of the DPDHL Group, we firmly adhere to
to emit a certain amount of carbon dioxide or other greenhouse the group’s ‘Strategy 2025 – Delivering Excellence in a Digital
gases. Blue Dart’s carbon credits go to a biomass power plant in World’. The pandemic propelled innovation at Blue Dart further
India, amongst others, for the generation of electric energy as per to ensure supply chain continuity as the nation’s trade facilitator.
the Certified Emission Reduction (CER) Gold Standard. Under
the Mission 2050 initiative, for over four years, Blue Dart has Our customised initiatives ensured lean operations that helped
contributed to over 10 per cent of the DPDHL Group’s global us ramp up and achieve high service levels at short notice.
target of planting 1 million trees every year. Adapting to the need of the hour, we pioneered the contactless
delivery service and activated payment through 16 digital
Apart from our tree plantation drive that would offset over 9 wallets, net banking, credit and debit card, UPI, BHIM and QR
million kg of carbon emissions on maturity and our digital code. To accelerate this seamless experience, we also launched
initiative to go paperless, we also incorporate various green the ‘My Blue Dart’ mobile application that helps customers track
practices to improve our CO2 efficiency. This includes their package, find out the most cost-effective prices to send
introducing a fleet of electric vehicles and our soon-to-be their shipments across horizons as well as access important
operated drones to incorporate dynamic route planning and contact information, etc. in a user-friendly and ‘on-the-go’
improve efficiency which helps reduce our carbon footprint. manner.
We also improve our load factor utilisation, use bicycles for
pickup and delivery wherever possible, reduce emissions To turn this ‘crisis’ into an opportunity, we launched the Blue
through energy-efficient fixtures, equipment and temperature Dart Med-Express Consortium to operate experimental drones
control, and ensure that even our packaging is eco-responsible. for delivery of vaccines and emergency medical supplies safely
and reliably to the remotest parts of the country. We successfully
Setting up micro warehouses to cater to the increasing concluded the Visual Line of Sight (VLOS) and Beyond Visual
demand for same-day and next-day delivery is gaining Line of Sight (BVLOS) drone trials in September 2021. Going
forward, through the Blue Dart Med Express Consortium we
attention. Do you plan to set up some micro warehouses for plan to deploy drone flights through an immersive delivery
faster and efficient last-mile logistics? model to optimise the current healthcare logistics within
Blue Dart’s expertise lies in the express logistics space, backed Telangana.
by a hub and spoke model. A hub and spoke model is a
distribution model that can be best explained using an example We aim to be a brand that provides long-term sustainability and
of the shape of a bicycle wheel. In the middle of a wire-spoke shows corporate responsibility through our environmental and
wheel is what is known as the hub. It is this hub that allows each societal initiatives. Following the sustainability roadmap that
of the spokes, sprawled out in all directions around the wheel, we, as a part of the DPDHL Group, align ourselves to, we work
to meet at a centralised location at the centre of the wheel. This towards clean operations for climate protection (environment),
model enables us to provide efficient and reliable services to our being a great company to work for all (social) as well as being a
customers in a time-definite manner, thereby tying in with us highly trusted company (governance). We continue to innovate
being the nation’s most preferred express logistics provider. in this area as well to reach our goal of being a sustainable
logistics provider of choice. One of the other lessons from the
Blue Dart has been an industry leader in the time-definite space pandemic was the importance of risk management. One cannot
since 1984 and our premium service quality, which is only eliminate risk but timely intervention can help minimise its
propelled further, year on year, continues to provide reliability, effects on business.
resilience, and responsiveness. Our supply chain network has
always prioritised a seamless first, middle and last-mile logistics Risk management will continue to be a key priority to ensure
experience for our customers and this will only catapult further our stakeholders’ interests are safeguarded. Lastly, policies like
as we move forward. As a customer-centric organisation, we are the National Logistics Policy, the National Air Cargo Policy, the
consistently revisiting our product portfolio and updating it planned dedicated freight corridors, the new initiatives
based on market demand. Keeping this in mind, we will announced in the Union Budget for FY 2022, and now the Draft
continue to introduce new and more efficient ways of operating Drone Rules 2021 point towards bridging the gap, bringing
to ensure better customer experiences. down cost and increasing efficiency for the logistics industry.
Further, the prime minister has announced around `100 lakh
What are your top strategic priorities? crore for the ‘Gati Shakti’ master plan to accelerate the
Digitisation and automation, leveraging the power of development of transportation and logistics infrastructure in
technology to strengthen our sustainable supply chain, risk the country. With all these policies in place, this sector is set to
assessment and management across verticals and building on become a lot more streamlined and a lot less fragmented. DS

Real Estate Market Watch
Anuj Puri
Chairman, ANAROCK Property Consultants
Technology Disrupting
The Construction Sector
By adopting innovative technologies like automation in construction, innovative
designs, sustainability, use of prefabricated material and online marketing, developers
can value-engineer their product, opines Anuj Puri, Chairman, ANAROCK Group
T
echnology has disrupted almost every facet of the real Given the rapid rate at which technology is reimaging everything
estate business today. However, the creation of the in modern life, it would perhaps be rash to tag 3D printing in
core product is and will remain the most important construction as ‘hopelessly futuristic’. It will happen sooner than
aspect of this business, and advanced technologies are we may expect. While 3D printing in the construction sector is
certainly playing a major role there. By adopting innovative yet to kick-start in India, robotic construction company Apis
technologies like automation in construction, innovative Cor built the world’s largest 3D-printed two-storey office
designs, sustainability, use of prefabricated material and online building in Dubai. As proclaimed by the company, it took 17
marketing, developers can value-engineer their product. More days to print the basic form of this 2,690 sq. feet office building,
so, with labour shortage looming large across cities due to the which was made of a layered cement mixture. Interestingly, the
pandemic, developers may look for alternate construction labour cost was claimed to be nearly 50 per cent less than a
methods that focus on saving time or subverting costs. If not conventional building of similar size.
entirely, at least some stages of the entire construction cycle
may become labour-free. Let’s look at some of the existing and Likewise, in Mexico, a gigantic 3D printer was used to print a
upcoming technology disruptions in real estate construction. new neighbourhood with each house taking just 24 hours to
complete. The potential of this highly disruptive construction
3D Printing technology is therefore beyond dispute. Of course, there are
Among the many new technologies already adopted by the considerable costs involved in this technology. 3D printing
construction sector, 3D printing which is the large-scale machines usable in the construction sector can cost as much as
printing of homes is anticipated to change the way real estate is USD 2 million. Also, their current capacities are limited to
built over the next decade. Though still very nascent, 3D structures of less than 33 feet (10 metres) in height, with a
printing can potentially replace a substantial amount of throughput of less than 550 pounds (250 kilograms) per hour.
construction across major segments, including residential, In other words, 3D printing technology in the construction
commercial or even retail. This will be a massive paradigm shift sector can change the way real estate functions but currently it
in real estate development. Apart from seriously reducing is largely limited to printing small buildings. For large-size
waste, cost and labour requirements, 3D printing will help buildings, including multi-storey offices or large malls,
builders penetrate the hitherto inaccessible areas of dense machines of considerably higher capacities would be needed.
urban centres, where it is impossible to set up heavy machinery
for construction. 3D printing technology will eventually also Building Information Modelling (BIM)
involve the printing of internal structures such as walls, An existing construction technology which is fast gaining
plumbing, electrical systems, venting, and so on. ground is Building Information Modelling (BIM) software that

allows designers to produce 3D mock-ups of planned structures Some of the other major technologies disrupting construction
along with providing critical information about costs and include:
construction timelines. Many small and medium organisations n Drones: Although expensive, the use of drones is
are shying away from the adoption of BIM technology as it gaining popularity for managing and inspecting sites.
involves high implementation fees and training costs, including Drones allow developers to map a site and create 2D as
the cost of hiring experts and training the existing workforce well as 3D images. Most of the advanced drones use a
apart from the investment in the technology itself. Since many coordinate-based system which helps achieve absolute
of India’s developers simply don’t have budgets to meet these accuracy in measurements.
additional expenditures, they prefer to follow traditional n Bricklaying Robots: Construction is a highly labour-inten-
methods. sive industry. However, labour costs can be significantly
reduced, and quality and precision standards considerably
However, BIM technology has certainly found a foothold in increased by using robotics for repetitive, mechanical
India. Some examples of companies using BIM software include functions such as bricklaying. We have already seen the
the Nagpur Metro Rail Corporation (NMRC) that adopted 5D introduction of a semi-automated mason aptly called ‘SAM’.
BIM technology for practical completion of the project and This robot, which lays bricks rapidly and precisely, has been
create an Issue-Based Information System (IBIS) for each phase designed and engineered by Construction Robotics. It is the
of the project. In Amritsar, a rapid transit system was first commercially available bricklaying robot which works
constructed using virtual design and construction technology. in collaboration with human masons and increases their
Spread over 4 km, this rapid transit system is one of the finest productivity up to five-fold. For all its innovativeness, it is
examples of the application of BIM technology in India. definitely only the first iteration of many even more efficient
machines to come.
Virtual or Augmented Reality To conclude, all this is important if we consider that while
Technology technology can and is replacing humans in various ways and
Across the globe, including India, construction companies that an entirely new alternate ‘online universe’ has now
have begun using virtual or augmented reality technology to opened up, humans themselves will always require
enhance construction worker safety training. VR allows constructed buildings to live and work in. There is no
workers and work managers to visualise the more serious immediate foreseeable way of catering to all the physical needs
construction site hazards and prepare for them adequately. of mankind purely by means of technology. In other words,
Firms also use apps that link VR or AR technology to their real estate will remain relevant no matter how rapidly
BIM software. This allows contractors and developers to technology evolves – the virtual space has inherently
create virtual walkthroughs of a structure even before it is insurmountable limitations when it comes to serving organic
complete, enabling them to make more informed design life forms. However, a lot of ‘human inputs’ related to the
decisions early in the construction stages and save on both conception and creation of the required real estate can and is
time and costs. either being replaced or improved upon by technology. DS

Tax Column
have been a non-resident up to the be taxable. For your information, if you
financial year 2019-20. I was told that an sell the residential house and buy a new
amendment has been brought to the residential house by investing the capital
gain, you are entitled to full deduction
definition of resident or deemed resident under Section 54 of the Income Tax Act.
in the Income Tax Act. Can you explain The option of investing capital gain is not
what that amendment is and what would available under Section 54 F of the
be my status if I am a resident of Dubai Income Tax Act.
where there is no tax liability on income?
My Indian income on account of interest, The Government of India has extended
capital gain and rental is approximately the due date for filing IT returns for the
`20 lakhs. current financial year i.e. assessment year
2021-22. Does this mean that the due
Jayesh Dadia The amendment in the form of Sub- date of payment of self assessment tax
Chartered Accountant Section 1 A to Section 6 of the Income has also been extended? What about
Tax Act was introduced in the Finance interest and penalty chargeable on late
Act with effect from April 1, 2021 where
In the current financial year I have signed an individual, being a citizen of India, filing of return?
with total Indian income exceeding `15 Vide Circular No. 17 dated September 9,
one sale agreement as a power of 2021, the government has extended the
attorney holder on behalf of the property lakhs during the previous year shall be
deemed to be resident in India in that due date for filing IT return on account
owner. The sale consideration was previous year if he is not liable to tax in of difficulties being reported by taxpayers
received in my name and was credited to any other country or territory by reason in the electronic filing of tax return on
my bank account which subsequently I of his domicile or resident criteria. Since account of technical glitches on the tax
have transferred to the account of the there is no tax liability for a person portal. From the language of the circular
it is very clear that the Central Board of
owner. The agreement was registered and residing and earning in Dubai, by virtue
Direct Taxes (CBDT) has extended only
my PAN is mentioned. Is there any tax of the new Sub-Section 6 (1 A) read with
Section 6 (6) (d) of the Income Tax Act, the due date of filing the return but not
implication since the sale deed was extended the due date of making
your tax status would be ‘resident but not
registered and disclosed my name? If the ordinary resident’ (RNOR). However, payment of self assessment tax. In other
owner does not disclose capital gain in his your foreign income will not be taxed in words, self assessment tax shall will still
hand, will the Income Tax Department India even if you ceased to be non-resi- be required to be paid on or before the
make me liable to pay tax? dent as RNOR status also enjoys this original due date of filing the return to
As a power of attorney holder you exemption. In case you stay in India for avoid any levy of interest at 1 per cent per
cannot be treated as the rightful owner more than 182 days, your status becomes month under Section 234 A of the
of the income which has arisen on sale of ‘resident’ and your foreign income will Income Tax Act. However, if self
property. Your action was only in be taxed. assessment tax payable does not exceed
representative capacity. The sale deed `1 lakh, there is no interest under Section
must clearly disclose the fact that you are 234 A of the Income Tax Act.
I am an individual and have sold a listed
a power of attorney holder for a limited company’s shares for a total consideration
purpose and it must also disclose the The circular extending the due date of
details of the owner including his PAN,
of `5 crore. After considering the index- filing the return has specifically provided
address, etc. Therefore, under the ation cost, the long-term capital gain works that despite extension of the due date,
provision of the Income Tax Act, you out to `3 crore. I want to invest in new interest at 1 per cent shall be required to
cannot be made liable for Capital Gain house as I don’t have any house in my be paid in case the balance tax payable
Tax. Further, you have also transferred name. Thus, can I invest in a new house exceeds `1 lakh. Further, those taxpayers
the sale consideration received in your who are liable to pay advance tax and
bank account to the account of the legal
with `3 crore being net capital gain? where such advance tax falls short of 90
Yes, since you don’t have any house in per cent of the assessed tax will be
owner. Therefore, you are not a benefi-
your name, you can certainly invest in a required to pay interest at 1 per cent per
ciary of any part of the sale consider-
residential house and enjoy exemption month under Section 234 B of the
ation. However, initially you may receive
from Capital Gain Tax under Section 54 Income Tax Act. Thus, the present
an inquiry from the IT Department
F of the Income Tax Act. However, if you circular has only extended the due date
regarding the sale transaction but if you
want full exemption, you have to invest of filing the return but not extended the
respond with the correct facts, I am sure
the entire sale consideration of `5 crore due date for payment of taxes. The only
there shall be no further proceedings.
in a residential house and not the capital relief by this circular is non-levy of fees
gain of `3 crore. If you invest a lesser of `5,000 for late filing of the return
I am an individual and in employment amount, you will get proportionate under Section 234 F of the Income
with a UAE company situated in Dubai. I
DS
exemption and the balance amount will Tax Act.

Global Market Watch
Virus Strikes
Again!
The threat furnished by the new virus variant is a
further addition to existing investor woes such as
slowing growth, spiralling inflation and possible
tightening of monetary policy in the near future
T
he new corona virus variant, Omicron, first detected GLOBAL INDICES
from South Africa last week, was recently designated as a Indices 12-Nov-21 26-Nov-21 Gain / Loss (%)
‘variant of concern’ by the World Health Organization Dow Jones Ind 36,100.31 34,899.34 -3.33%
(WHO). A ‘variant of concern’ is the WHO’s top S&P 500 4,682.85 4,594.62 -1.88%
category of worrying virus variants. Omicron is the fifth variant to Nasdaq 15,860.96 15,491.66 -2.33%
carry such a designation. The WHO has said that Omicron has a FTSE 100 7,347.91 7,044.03 -4.14%
large number of mutations, some of which are worrisome and DAX 16,094.07 15,257.04 -5.20%
preliminary evidence suggests an increased risk of re-infection CAC 40 7,091.40 6,739.73 -4.96%
with this variant, in comparison to other variants. There are Hang Seng 25,327.97 24,080.52 -4.93%
growing concerns globally that the pandemic and associated Nikkei 29,609.97 28,751.62 -2.90%
lockdown restrictions will persist for far longer than hoped. Shanghai 3,539.10 3,564.09 0.71%
Straits Times Index 3,228.45 3,166.27 -1.93%
News of the Omicron variant triggered an alarm of heavy BOVESPA 106,334.54 102,224.26 -3.87%
selling pressure which resulted in global equity indices falling S&P/TSX Composite 21,768.53 21,125.90 -2.95%
sharply. The US frontline benchmark indices Dow Jones, S & P OMX Copenhagen 20 1,897.09 1,806.59 -4.77%
500 and Nasdaq ended the fortnight in the red territory, down SET Index (SETI) 1,633.94 1,610.61 -1.43%
by 3.33 per cent, 1.88 per cent and 2.33 per cent, respectively. SZSE Component Index 14,705.37 14,777.17 0.49%
London Stock Exchange’s FTSE 100 index tumbled by 4.14 per Kospi 2,968.80 2,936.44 -1.09%
cent and on the last trading day of the two-week period suffered
S&P/ASX 200 7,443.00 7,279.30 -2.20%
its biggest one-day sell-off in percentage terms since June 2020.
European benchmark Brent Crude also plummeted by more month was double the 0.6 per cent gain in the month of
than 10 per cent on Friday, November 26, 2021, hitting a September. Concurrently, consumer prices rose 5 per cent
two-month low as the new variant added to concerns that a compared with the same period last year, the fastest 12-month
supply surplus could swell in the first quarter. gain since the same stretch ending in November 1990. Personal
incomes ascended by 0.5 per cent in October after having slipped
The US central bank policymakers had unanimously decided at by 1 per cent in the previous month, exhibiting a distinct
their meeting held last month to begin reducing the USD 120 reflection of a drop in government support payments.
billion in monthly purchases of treasuries and mortgage-
backed securities, which was initiated in early 2020 to help During the fortnight, the German DAX index and the French
nurse the economy through the pandemic. The minutes of the CAC 40 index corrected sharply by 5.20 per cent and 4.96 per
Federal Reserve’s latest policy meeting exhibited that the cent, respectively. Hong Kong’s benchmark index Hang Seng
policymakers would be open to speeding up the elimination of tanked by 4.93 per cent to close at 24,080.52. Technology giants
their bond-buying programme if high inflation held and moved JD and Netease along with China Resources Beer and ENN
more quickly to raise interest rates. Energy Holdings will be added to the Hang Seng index effective
December 6, 2021. The latest update increases the number of
Consumer spending in the United States staged a decent stocks under the main index to 64 from the current 60 stocks.
recovery in October 2021, rising by 1.3 per cent along with The threat furnished by the new virus variant is a further
inflation, rising over the past year at the fastest pace in more than addition to existing investor woes such as slowing growth,
three decades. The country’s commerce department reported on spiralling inflation and possible tightening of monetary policy
November 24, 2021 that the jump in consumer spending last in the near future. DS

Commodity Market Watch
Negative
Developments Spook
Global Markets
Increasing supply concerns due to release of oil
reserves following a request by the US amid fresh
virus outbreaks in Europe and increase in inflation
levels might keep oil under pressure
B
eing qualified as a ‘variant of concern’ by the World Commodities 12-Nov-21 26-Nov-21 Gain/Loss (%)
Health Organization’s technical advisory group, the
MCX Cotton 32360.00 31640.00 -2.22
new strain of corona virus has resulted in fresh travel
restrictions around the globe. In the commodity MCX Copper 744.95 727.65 -2.32
markets, investors are worried about hits to demand as MCX Lead 190.10 184.90 -2.74
recoveries potentially face speed bumps. The commodities MCX Gold 49314.00 47960.00 -2.75
were seen trading in negative territory during the recent MCX Zinc 277.20 268.85 -3.01
fortnight and the biggest hit was observed to be for oil prices.
MCX Aluminium 216.40 208.65 -3.58
WTI crude oil rattled by 15.57 per cent whereas Brent crude oil
declined heavily by 11.31 per cent. Oil slipped along with global MCX Silver 67144.00 62965.00 -6.22
equities markets on account of the fear that the variant Brent Oil 81.99 72.72 -11.31
Omicron could dampen economic growth and fuel demand. Crude Oil 80.72 68.15 -15.57
Britain and European countries have restricted travel from to release of oil reserves following a request by the US amid
South Africa where the variant was detected to find out if the fresh virus outbreaks in Europe and increase in inflation levels
mutation is vaccine-resistant. Increasing supply concerns due might keep oil under pressure. On MCX, cotton and copper
futures were squeezed by 2.22 per cent and 2.32 per cent,
respectively. During the fortnight, most of the industrial metals
were seen under pressure as a stronger USD reflecting bets over
a sooner-than-expected rate hike undermined the outlook for
the entire pack. Copper futures faced slowdown amid the
Gold traded lower as the dollar and the US’ decline in global prices.
treasury yield strengthened on expectations of
However, the losses were somewhat curbed for MCX Copper
rate hike by the US central bank. Gold also futures due to weakness in Indian rupee. On the other hand,
MCX Zinc descended by 3.01 per cent whereas MCX
witnessed a fall after US President Joe Biden Aluminium recorded a decrease of 3.58 per cent. Among
nominated Federal Reserve Chair Jerome bullion, MCX Gold dipped 2.75 per cent during the fortnight
whereas MCX Silver contracted 6.22 per cent. Gold traded
Powell for a second four-year term which lower as the dollar and the US’ treasury yield strengthened on
expectations of rate hike by the US central bank. Gold also
increased bets towards an early rate hike witnessed a fall after US President Joe Biden nominated Federal
Reserve Chair Jerome Powell for a second four-year term which
increased bets towards an early rate hike. DS

QueryBoard
Investment Horizon
Query-Specific
VASCON ENGINEERS LTD IRB INFRASTRUCTURE DEVELOPERS LTD.

I own 500 shares of Vascon Engineers bought at I had purchased 170 shares of IRB Infrastructure
an average price of `30 per share. Please advise Developers at an average price of `163.24 per
further action. share. Should I hold or exit?
- Prateek D’Souza - Pravin K
EXIT HOLD
BSE/NSE Code 533156 / VASCONEQ BSE Code 532947 / IRB
Face Value `10 Face Value `10
CMP `21.80 CMP `205.80
52-Week High `31.75 / Low `13.30 52-Week High `346.95 / Low `97.75
Your Current (27.33 per cent) Your Current 26.07 per cent
Profit/(Loss) Profit/(Loss)
V I
ascon Engineers has more than 30 years of experience in RB Infrastructure Developers Ltd. (IRB) is India’s largest
conceiving, developing, constructing and managing integrated private toll roads and highways infrastructure
varied projects. It has a presence across multiple sectors. developer in India with an asset base of over `54,000 crore
The latest consolidated quarterly financials of the company show in 10 states across the parent company and two infrastructure
that net sales and other operating income for Q2FY22 stood at investment trusts. The company’s quarterly consolidated
`152.87 crore, growing by 27.92 per cent from `119.50 crore in financials recorded net sales and other operating income for
Q2FY21. Operating profit for Q2FY22 came in at `6.77 crore Q2FY22 of `1,465.24 crore, up by 30.44 per cent from
versus an operating loss of `0.13 crore in Q2FY21. The company `1,123.33 crore in Q2FY21. Operating profit also climbed by
reported net loss of `3.13 crore in Q2FY22 relative to net loss of 26.02 per cent from `600.54 crore in Q2FY21 to `756.85 crore
`10.23 crore in Q2FY21. in Q2FY22. Net profit for Q2FY22 stood at `77.93 crore,
soaring by 3.5 times relative to `22 crore in Q2FY21. In terms of
In terms of annual performance on a consolidated basis, the annual performance, the net sales and other operating income
company recorded net sales and other operating income of were reported to be `5,298.63 crore for FY21, which descended
`506.88 crore in FY21, exhibiting marginal growth of 4.52 per by 22.67 per cent in comparison to `6,852.22 crore in FY20.
cent from `484.98 crore in FY20. Operating profit plunged by Operating profit contracted by `14.68 per cent from `3,166.36
99.68 per cent from `37.93 crore in FY20 to `0.12 crore in FY21. crore in FY20 to `2,701.56 crore in FY21. Consequentially, net
The company recorded net loss of `39.17 crore in FY21 in profit descended by 61.59 per cent from `736.71 crore in FY20
comparison to net profit of `3.80 crore in FY20. The company to `282.94 crore in FY21. With the onset of the festival season in
has delivered a poor sales growth of -2.96 per cent over the past India and more relaxations announced by the government,
five years along with a low return on equity of 0.19 per cent for traffic movement is expected to significantly improve, further
the last three years. Hence, we recommend EXIT. resulting in much stronger earnings in the coming quarters.
Hence, we recommend 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
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QueryBoard
Investment Horizon
Query-Specific
AFFLE (INDIA) LTD PVR LTD.

I am holding 10 shares of PVR purchased at
Is it the right time to buy shares of Affle (India)? `1,510.90 each. Should I book profit or hold?
- N Nitesh
- Priya Jain
BUY HOLD
BSE/NSE Code 542752 / AFFLE BSE/NSE Code 532689 / PVR
CMP `1,149.25 CMP `1,272.95
52-Week High `1,259.25 / Low `705.09 52-Week High `1,838.00 / Low `961
Your Current -- Your Current (15.76 per cent)
A P
ffle is a global technology company with a proprietary VR is the largest and the most premium film exhibition
consumer intelligence platform that delivers consumer company in India. Since its inception in 1997, the brand
engagements, acquisitions and transactions through has redefined the way entertainment is perceived in the
relevant mobile advertising. While Affle’s consumer platform is country. PVR currently operates a cinema circuit comprising
used by online and offline companies for measurable mobile 856 screens at 179 properties in 72 cities across India and Sri
advertising, its enterprise platform helps offline companies to Lanka, serving over 100 million patrons annually. PVR offers an
go online through platform-based app development, array of formats in the premium screen category, which stands
enablement of O2O commerce and through its customer data at eight screens of Director’s Cut, 39 screens of LUXE, four
platform. screens of Sapphire, nine screens of IMAX, 18 screens of 4DX,
nine screens of P(XL), 13 screens of Playhouse and one screen
The company’s quarterly consolidated financials recorded of PVR Onyx across the country.
Q2FY22 net sales and other operating income of `274.70 crore,
growing two-fold relative to `134.95 crore in Q2FY21. On The latest consolidated quarterly financials of the company
similar lines, operating profit also soared by 86.6 per cent show that the company recorded three-fold growth in net sales
from `36.04 crore in Q2FY21 to `67.24 crore in Q2FY22. Net and other operating income from `4.45 crore in Q2FY21 to
profit for Q2FY22 stood at `47.82 crore, jumping by 77.26 per `120.32 crore in Q2FY22. Operating profit for Q2FY22 stood at
cent from `26.98 crore in Q2FY21. Their CPCU business `86.76 crore, relative to an operating loss of `14 crore in
continued the growth momentum, delivering 4.9 crore of Q2FY20. The company reported net loss of `153.27 crore in
converted users in Q2FY22, an increase of 73.3 per cent on a Q2FY22 as compared to net loss of `183.62 crore in Q2FY21.
YoY basis. In terms of annual performance on a consolidated During the quarter, PVR continued with its strategy for keeping
basis, net sales and operating income for FY21 came in at operating costs low and maintaining adequate liquidity. In
`516.78 crore, growing by just a little over 50 per cent from terms of annual consolidated financials, the company recorded
`333.78 crore in FY20. net sales and other operating income of `280.01 crore in FY21,
down by 91.8 per cent from `3,414.44 crore in FY20 due to
Operating profit soared by 82.16 per cent from `93.98 crore in countrywide pandemic-related restrictions on theatres, malls
FY20 to `171.19 crore in FY21. Net profit for FY21 stood at and multiplexes.
`135.04 crore, surging two-fold from `65.52 crore in FY20.
With advertisers consistently accelerating their digital spends, The operating profit shrunk by 87.94 per cent from `1,114.38
resulting in broad-based and persistent growth across the top crore in FY20 to `134.14 crore in FY21. The company reported
industry verticals coming from domestic as well as net loss of `747.20 crore in FY21 versus net profit of `27.84 crore
international markets, the company continues to witness strong in FY20. PVR was able to successfully conclude discussions with
optimistic market opportunity. Affle (India) furnishes a landlord partners for rental waivers or discounts in respect of 80
differentiated business model, fundamentally inspired to deliver per cent of its properties and achieved savings of 75 per cent. The
innovation-led profitable growth backed by sustained total available liquidity on the balance-sheet is over `700 crore as
investments in augmenting their strategic defensibility globally of September 30, 2021. A healthy recovery is forecasted from
along with a prudent balance-sheet and robust cash flows. Diwali onwards and business is expected to bounce back strongly.
Hence, we recommend BUY. Hence, we recommend HOLD.

Investment Horizon
Query-Specific
INDIAN RAILWAY CATERING & TOURISM CORP. LTD. GOODYEAR INDIA LTD
I have bought 100 shares of IRCTC at `758.72.
Please advise whether I should sell, hold or book
profit? What is your view on Goodyear India’s shares?
- Samanvay S - Jaya Ramachandran
HOLD BUY
BSE/NSE Code 542830 / IRCTC BSE/NSE Code 500168 / GOODYEAR
CMP `794.35 CMP `966.55
52-Week High `1,278.60 / Low `267.19 52-Week High `1,330.30 / Low `823.60
Your Current 4.74 per cent Your Current --
I G
RCTC as a public sector undertaking provides a single- oodyear India is one of the world’s largest tyre
window solution to all travel, tourism, internet ticketing and companies. It employs about 72,000 people and
hospitality-related services. It has completely redefined manufactures its products in 54 facilities across 23
travel and tourism in India. With a host of services ranging countries around the world. In the farm segment, the company
from online ticket bookings to hotel and flight bookings, the is a market leader in the original equipment segment and
online portal meets varied travel needs with just a few clicks. supplies to all major tractor companies in India. The company
The company operates through four major divisions – catering also trades in passenger car tyres and has been offering
and hospitality, internet ticketing, travel and tourism, and technologically advanced products that offer better driving
packaged drinking water under the brand name ‘Rail Neer’ – experience to its consumers.
offering a comprehensive range of products and services that
meet the needs and expectations of millions. The company’s quarterly standalone financials reveal that net
sales and other operating income for Q1FY22 was at `534.15
As regards the standalone quarterly performance of the crore, recording a rise of 135.38 per cent as compared to net
company, net sales and other operating income for Q2FY22 sales and operating income of `226.93 crore for Q1FY21. The
stood at `404.94 crore, recording a hefty rise as compared to net company recorded an operating profit for Q1FY22 at `50.33
sales and operating income of `88.56 crore for Q2FY21. The crore which zoomed upward significantly as compared to an
company posted an operating profit for Q2FY22 at `227.63 operating profit of `7.9 crore registered for Q1FY21. Net profit
crore which grew significantly as compared to an operating for Q1FY22 was `26.89 crore as against net loss of `4.49 crore in
profit of `14.58 crore registered for Q1FY21. The company Q1FY21. In terms of annual performance, the net sales and
achieved net profit of `158.57 crore in Q1FY22 as compared to other operating income were reported to be `1,791.71 crore for
net profit of `32.64 crore achieved in Q1FY21, clocking FY21, which improved by 2.64 per cent when compared to
attractive gains. In terms of annual performance, the net sales `1,745.57 crore for FY20. FY21 reported an increase of 40.04
and other operating income were reported to be `783.05 crore per cent in operating profit at `239.34 crore as compared to
for FY21, which squeezed by 65.42 per cent when compared to `170.91 crore for FY20.
`2,264.31 crore for FY20.
The net profit stood at `136.26 crore in FY21 in comparison
FY21 reported a decline of 64.55 per cent in operating profit at with net profit of `88.84 crore reported in FY20. The company is
`275.92 crore as compared to `778.44 crore for FY20. The net expecting the farm economy to further grow in financial year
profit stood at `189.90 crore in FY21 in comparison with net 2021-22 based on favourable monsoon outlook and high focus
profit of `513.11 crore reported in FY20, 62.99 per cent lower. from the government. The company will continue to
The company bears a resilient business portfolio that can be concentrate on sustaining leadership delivered by a best-in-class
scaled and based on core competencies. The expansion plans of team. After the opening of the lockdown, the company has seen
the firm indicate signs of potential upside in the stock in the gradual recovery in the passenger tyre industry and this is
long run. Besides, the company has been expanding its business expected to continue to improve. Good Year India is optimistic
to bus, air tickets as well as tour and travel planners. This is about the long-term industry outlook and would focus on
likely to build up new potential opportunity for the firm to various strategic initiatives to strengthen its position in the
strengthen its position. Hence, we recommend HOLD. market. Hence, we recommend BUY.

Reviews
In this edition, we have reviewed PI Industries Ltd. and Housing Development Finance Corporation Ltd. We
suggest our reader-investors to HOLD PI Industries and Housing Development Finance Corporation
Change
PI Industries Ltd. HOLD 7.63 Per Cent
CMP - `2,876.70
BSE CODE Reco. Price Face Value

523642 `2,672.80 `1
W
e had recommended PI Operating profit climbed marginally by
Industries Ltd. in Volume 36, 1.91 per cent from `313.70 crore in
Issue No. 12 dated May 10-23, Q2FY21 to `319.70 crore in Q2FY22. Net
2021, under the ‘Choice Scrip’ segment. profit for Q2FY22 came in at `230.10
The recommended price for the stock crore, up by 5.7 per cent from `217.70
was `2,672.80. We had recommended crore recorded in Q2FY21. In terms of
the stock on the basis of the company’s annual consolidated financial perfor-
future growth potential, good return on mance, the company posted net sales and
capital employed and focus on cost operating income for FY21 at `4,577 recent QIP proceeds. The sector outlook
reduction. PI Industries is a leading crore, up by 35.96 per cent from continues to remain positive owing to
player in the agro-chemicals space. The `3,336.50 crore in FY20. Operating profit late rains and adequate water level at
company currently operates a strong ascended by 48.31 per cent from reservoirs. The company’s net sales to
infrastructure set-up consisting 3 `766.70 crore in FY20 to `1,137.10 crore fixed assets ratio has improved to 2.04
formulation facilities as well as 15 in FY21. Consequentially, net profit (September 2021) relative to 1.89 (March
multi-product plants at its four climbed 61.01 per cent from `455.80 2021). Over H1FY22, the company’s
manufacturing locations. The quarterly crore in FY20 to `733.90 crore in FY21. production throughput improved
consolidated financial performance of through process efficiencies, accommo-
the company reveals that net sales and Over Q2YF22, PI Industries has dating the growth of other products. It
operating income for Q2FY22 stood at increased inventory levels to avert supply has also initiated manufacturing of
`1,354.20 crore, exhibiting growth of chain disruptions and meet customer electronic chemicals with global
16.97 per cent in comparison to supply schedules or continued opera- customers. The order book continues to
`1,157.70 crore in Q2FY21. tions. The company has a surplus cash remain robust at USD 1.4 billion. Hence,
net of debt of `2,062 crore including we recommend HOLD.
Change
HDFC LTD. HOLD 4 Per Cent
CMP - `2,676.40
BSE CODE Reco. Price Face Value

500010 `2,573.55 `2
W
e had recommended HDFC relative to `3,493.83 crore in Q2FY22.
Ltd. in Volume 36, Issue No. The dividend income for Q2FY22 came
11, dated April 26, 2021 to in at `1,171 crore, up by more than 3.63
May 9, 2021, under the ‘Cover Story’ times over the same period in the
segment. The recommended price for the previous year. The board has also granted performing assets (GNPAs) improved by
stock was `2,573.55. We had its approval for the issuance of secured 24 basis points to 2 per cent at the end of
recommended the stock on the basis of redeemable non-convertible debentures Q2FY22, from 2.24 per cent in Q1FY22.
the company’s strong balance-sheet, aggregating to `75,000 crore, in various Individual gross NPA declined to 1.1 per
collection efficiency and margin tranches, on a private placement basis. cent from 1.37 per cent and non-
expansion. Incorporated in 1977, HDFC On the annual consolidated financial individual gross NPA fell to 4.69 per cent
is a pioneer in housing finance in India, performance front, FY21 total income from 4.87 per cent sequentially. Collection
engaged in financing the purchase and came in at `1,39,071.24 crore, exhibiting efficiency for individual loans on a
construction of residential houses and a surge of 36.62 per cent relative to cumulative basis improved to 98 per cent
real estate. In terms of quarterly `1,01,795.90 crore in FY20. On similar during the quarter ended September 30,
consolidated financial performance, the lines, net profit descended by 20.58 per 2021. Growth in home loans was seen in
company reported 8.67 per cent growth cent from `17,080.37 crore in FY20 to both the affordable housing segment as
in total income from `64,049.79 crore in `13,566.08 crore in FY21. well as in high-end properties during
Q2FY21 to `69,600.64 crore in Q2FY22. Q2FY22. The demand for home loans
The company’s asset quality improved continues to remain strong. Hence, we
Its net profit climbed marginally by 2.97 sequentially, particularly in respect of recommend HOLD. DS
per cent from `3,392.98 crore in Q2FY21 individual loans. Its gross non- (Closing price as of Nov 30, 2021)

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
IMPRESSIVE ORDER BOOK Thermax a leading energy and

THERMAX LTD. environment solutions provider
BSE Code: 500411 and one of the few companies in
CMP: `1,751.60 the world that offers integrated
innovative solutions in the areas
of heating, cooling, power, water
and waste management, air pollution control and chemi-
cals. It has recently bagged an Rs 830 crore order from
an Indian power private sector company to set up flue
gas desulphurisation (FGD) systems for their three units
of 660 MW capacities each in Uttar Pradesh. The stock
technically looks poised for a decent up-move in the
near term as the prospects for the company are quite
bright in the long run.
HEALTHY PROFITS BIG NEWS IN THE PIPELINE

WOCKHARDT LTD.
BSE Code: 532300 Minda Corporation Ltd
CMP: `435.50 BSE Code: 538962
CMP: `163.70
The company continues to
build on its intellectual Minda Corporation is one of the leading automotive component
property base with manufacturing companies with a pan-India presence and significant
cumulative patents filed and international footprint. The company has a diversified product portfolio
763 cumulative patents that encompasses mechatronics, information and connected systems,
granted as of March 31, 2021. interior plastic and electronic components for automotive OEMs. These
This demonstrates its deep products cater to two and three-wheelers, passenger vehicles,
commitment to build a new commercial vehicles, off-roaders and the aftermarket. It has a
foundation in the next few diversified customer base including Indian and global OEMs and Tier I
years. As such, this is a good customers. As per our sources, the company may soon disclose a big
stock to accumulate at the
current levels. development in the coming weeks that could spark the stock price.
PRODUCTS IN DEMAND
Hindustan Unilever is a
HINDUSTAN UNILEVER LTD. consumer goods company and
BSE Code: 500696 its products include foods,
CMP: `2,318.45 beverages, cleaning agents,
personal care products, water
purifiers and other fast-moving consumer goods.
Considering the high volatility expected in the markets till
there is more clarity about the new variant of the corona
virus and whether the vaccines are effective against it,
defensive stocks are likely to witness buying interest. The
murmur on D-Street is that FMCG stocks could witness good
buying in the coming days. Given the scenario, it would be a
good option to buy stocks of this company at the current
juncture. DS

MF Page - 01
facebook.com/DSIJin twitter.com/DSIJ
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enquiry@dsij.in linkedin.com/in/DalalStreetInvestmentJournal
Insurance is Must
Lower Your Return I have found your magazine to be very insightful. After going
through the article titled ‘Insurance is a Must’, I realised that I
Expectation need personal accident insurance. However, I have a doubt

about whether I should increase my life insurance if one more
I
member adds up in a family who is dependent on me?
n the world of investing, it becomes very difficult to - Jaimin Shah
avoid the recency bias. Investors, while making their
Editor Responds : It’s good to know that you immediately
financial plan, extrapolate the recent returns. The reviewed your insurance requirement after reading the article. It
recency bias is more prominent among millennials or is very crucial to review your life insurance plan and implement
those who have started investing recently. They do not it if there are any changes in life. One needs to revise the life plan
have the experience of going through different cycles of in case there are any life changes such as marriage, childbirth,
returns. They believe that the current returns will continue death of any member, changes in standard of living, demise of
in the future too. Nevertheless, returns from investment the spouse, loss of income, etc. In your case, one dependent has
always revert to mean. Currently, about 400 equity- been added and so, you need to revise your life insurance plan
dedicated mutual funds are giving average SIP return of and need to consider the same member in your plan in order to
27.2 per cent for the last three years. protect all your dependents from any financial crisis.
Compare this with the average SIP return of 16 per cent
for five years and 10.64 per cent for 10 years. This shows
that in the long term you cannot expect the recent returns
to continue. Recency bias can lead investors to deviate
Content
from their carefully laid investment plans, which can have
damaging long-term consequences to their finances and
financial goals. For example, in 2019 there were many
Cover Story MF Page
02
funds such as Quant Small-Cap Fund and PGIM India Passive Or Active Funds:
Mid-Cap Opportunities Fund that were giving negative What’s The Right Choice?
SIP returns for a period of five years. The same funds are
now giving SIP returns in excess of 30 per cent for a period
of five years. Financial Planning MF Page
07
So, if you would have selected these funds for any reason at
that time and assumed them to generate similar returns,
you would have made more investment in these funds Special Report MF Page
10
than required. The takeaway is that short-term market Is It The Right Time To
moves caused by recency bias can determine long-term
results, making it more difficult for investors to reach their Invest In Credit Risk Funds?
financial goals. Hence, take a broader view of how the
markets tend to move over time and the larger trends
instead of short-term movements. Hence, the current fall
Special Report MF Page
14
in the equity market should help us to correct our recency Buying A Car? Opt For
bias and adjust our return expectation for future returns,
which should be lower than what we have seen in the last Subscription Instead!
18 months.
Special Report MF Page
20
SHASHIKANT A Guide To Claiming Life Insurance
Cover story
MF page - 02
Passive Active
Funds Funds
Passive Or Active Funds:
What’s The Right Choice?
In the last few years we have been witnessing exponential rise in assets under management of
passively managed funds. These have outstripped growth in actively managed funds. Even in
terms of inflows, passively managed funds have seen better inflows than actively managed
counterparts. The report compares the two to know which is better
T
here is a massive shift that is happening globally in cheap index mutual funds and exchange traded funds (ETFs),
the investment world. Since 2008, investors are now which together come under the term passive index funds. ETFs
moving towards passive investment strategies. and index mutual funds are technically different, but they share
Worldwide, after the great financial crisis many the fundamental feature that both seek to replicate existing
investors both at the retail level as well as at the stock indices while minimising expense ratios.
institutional level have started shifting their investments from
relatively expensive actively managed mutual funds to relatively In contrast, active funds employ fund managers who strive to

MF page - 03
buy stocks that will outperform, which leads to higher expense AUM (` Cr.)
ratios. Between 2009 and 2020, passively managed funds have Months Passive Funds Active Funds
witnessed their asset under management (AUM) increasing Mar-20 1,54,551.69 5,78,507.69
from USD 6 trillion to USD 22 trillion, showing an annual Apr-20 1,74,003.12 6,60,070.27
growth of 13 per cent compared to 10 per cent overall growth May-20 1,70,609.82 2,90,256.60
witnessed by the mutual fund industry. Passive products Jun-20 1,86,508.87 7,01,016.04
recorded their highest growth in the pandemic-affected year. Jul-20 2,10,551.41 7,37,608.12
Passive AUM rose by 17 per cent globally during 2020 with Aug-20 2,19,002.12 7,69,115.16
strong net inflows and market growth. India has not remained Sep-20 2,17,816.34 7,64,309.50
immune to this tectonic shift. Oct-20 2,23,348.47 7,77,292.19
Nov-20 2,47,969.86 8,57,510.40
In the last few years we have been witnessing exponential rise in Dec-20 2,71,496.33 9,06,766.98
AUM of passively managed funds. These have outstripped Jan-21 2,72,130.76 8,91,399.41
growth in actively managed funds. Even in terms of inflows, Feb-21 2,90,752.78 9,63,358.24
passively managed funds have seen better inflows than actively Mar-21 2,95,094.99 9,79,367.20
managed counterparts. Since the start of March 2020, passively Apr-21 2,97,996.86 9,91,362.64
managed funds, including ETFs and index funds, have seen a May-21 3,22,569.44 10,67,899.26
cumulative inflow of Rs 1.04 lakh crore. Comparatively, actively Jun-21 3,31,265.73 11,10,025.49
managed funds in the same period were able to garner little less Jul-21 3,40,392.75 4,11,901.60
than half of that at Rs 0.5 lakh crore. Aug-21 3,74,342.87 12,33,142.23
Sep-21 3,96,761.17 12,79,647.20
If we look at the monthly inflows we find that out of the last 20 Oct-21 4,07,864.04 12,96,559.44
months ending October 2021, in eight months between July
2020 and February 2021 actively managed equity funds saw a Growing Clout of Passively Managed Funds
continuous net outflow. Whereas in the case of passively The rise of passively managed assets in developed markets such
managed funds we saw that only in the month of October 2021 as the US was mainly due to the underperformance of active
was there some net outflow. The AUM of the passively managed funds compared to their respective benchmarks, the lower cost
funds in the last 20 months has increased by 263 per cent of passive funds measured through expense ratio as compared
compared to 224 per cent of actively managed equity funds. to active funds, and the change in regulations and policies that
They are now 31.5 per cent of the total equity-based mutual favoured passive investments. The same reasons stand true for
fund AUM compared to 26.5 per cent at the start of the Indian investors who are driven to embrace passively managed
pandemic. funds such as index funds and plain vanilla ETFs.

Cover story
MF page - 04
According to S&P Indices versus Active Funds (SPIVA) them to perform better in the long run. It is a well-established
scorecard for India for the period ending June 30, 2021, over 80 fact that expense ratio remains one of the few factors that have a
per cent of the funds in the equity large-cap category have definite impact on the future performance of the funds.
underperformed the benchmark over one, three and five-year
periods. For a ten-year period, almost 66 per cent of the
Category Expense Ratio (%)*
Index Regular 0.68
large-cap funds have underperformed their benchmark. The
SPIVA India scorecard compares the performance of actively Index Direct 0.48
managed Indian mutual funds with their respective benchmark Actively Managed Funds Regular 2.09
indices over one, three, five and ten-year investment horizons. Actively Managed Funds Direct 0.97
*expense ratio of Large Cap and Index funds at the end of October 2021.
The following table depicts that how many funds within the
category underperformed the benchmark in 1-year, 3-year, The table above shows that the difference in expense ratio
5-year and 10-year: between a regular index fund and actively managed fund is
1-Year 3-Year 5-Year 10-Year more than 1.4 per cent. This difference may seem insignificant,
Fund Category Comparison Index but over a long period these costs add up. The cost of funds is
(%) (%) (%) (%)
Indian Equity Large-Cap S&P BSE 100 86.21 86.67 82.72 65.93 considered a significant factor in value creation over the long
Indian ELSS S&P BSE 200 53.66 76.19 76.19 48.57 term. For example, if you invest Rs 5,00,000 in a fund that has
Indian Equity Mid-/ S&P BSE 400 an expense ratio of 2.1 per cent per annum, then it means that
Small-Cap MidSmallCap Index
57.14 48.65 69.57 40.3 you need to pay Rs 10,500 per year to the fund to manage your
Indian Government S&P BSE India money. Also, if the fund returns equal 20 per cent and has an
Bond Government Bond Index
70.83 51.85 71.43 86 expense ratio of 2.1 per cent, you would get a return equal to
S&P BSE India Bond 15.9 per cent. The net asset value (NAV) of a fund is reported
Indian Composite Bond
Index
50 97.9 97.87 100 after deducting all fees and expenses.
Source: S&P Dow Jones Indices LLC, Morningstar, and Association of Mutual Funds in India.
Data as of June 30, 2021. Returns are shown in per cent The next big factor that is favouring the rise of index funds or
ETFs is government policies and the beneficial regulatory
The table shows the comparison of the performance of different environment that promotes passively managed funds. First, in
fund categories with respect to their benchmarks. It clearly 2017, Securities and Exchange Board of India (SEBI) came out
shows that in the last one year most of the equity-based funds with the re-categorisation and rationalisation of mutual fund
have underperformed their benchmarks. The worst underper- schemes, according to which fund houses are required to
formance comes from large-cap funds in the last three-year manage only one product offering in each style category and
period. On the surface, it looks that actively managed funds are also the investment universe. Earlier, a large-cap dedicated fund
not able to outperform their benchmarks in different time would have invested only 50 per cent of its net assets into
periods – which we will explain why this can be misleading – large-cap stocks and rest into mid-cap and small-cap stocks still
and hence investors are moving towards passively managed benchmarked to a large-cap index. This would make large-cap
funds. funds’ performance better than their benchmarks in the long
run assuming that the broader market stock performs better
The second reason why passively managed funds are being than the large-cap stocks.
widely accepted is due to their low cost structure. Passively
managed funds by their construct have lower expense ratio. To Now with rationalisation and categorisation such inconsisten-
manage a passively managed fund, asset management does not cies have been weeded out and apples are being compared to
need a high paying research analyst or need a frequent apples. This has enhanced transparency since investors can
churning to generate alpha – all of this goes into savings for easily compare the performance of fund offerings in each style
passively managed funds and ultimately towards the returns of category. At the same time, it has made it difficult for large-cap
the fund. So every rupee saved will add to the returns of the funds to show outperformance. SEBI also mandated that fund
fund. In case of actively managed funds, a fund manager is managers should benchmark the performance of equity funds
supported by analysts and a research team to carry out research against total return indices (TRI) and not the price return index
and track the performance of the companies in which invest- (PRI). This was done in order to emphasise the importance of
ment is being made. dividend payments in addition to capital appreciation when
evaluating portfolio returns.
Since the people involved in the process are well-paid, it adds to
the cost of the fund management, leading to comparatively Assuming dividend yield of 1.5 per cent, it increased the thresh-
higher expense ratios of actively managed funds. Our study of old level for a fund manager by similar percentage to outper-
expense ratio for the large-cap dedicated funds shows that form their benchmarks. This has also helped passive investment
index funds and ETFs have much lower expense ratio that helps strategies as now even a lower number of funds can show

MF page - 05
outperformance. Besides, the

government launched disinvest-
3-Year Rolling Returns Of Large-Cap Funds & Large-Cap Index
ment drives through ETFs. This
announcement helped create large
awareness and interest in ETFs. In
2015 it even allowed Employees’
Provident Fund Organisation
(EFPO) to invest in equities
through large-cap ETFs. The total
EPFO allocation in ETFs was Rs
1.03 lakh crore as of March 31,
2020.
Caveat Emptor
The report by SPIVA is quite
comprehensive in its coverage;
however, it represents a single
3-Year Rolling Returns Of Mid-Cap Funds & Mid-Cap Index
point of comparison out of many
such possible points. Hence we
decided to check the performance
of the funds and their outperfor-
mance or underperformance
compared to the benchmarks on a
rolling basis. This will give us good
enough points to come to a proper
conclusion. For our analysis we
took the average returns of the
funds on a daily basis and con-
verted them into rolling three-year
and five-year returns. Similarly, we 5-Year Rolling Returns Of Large-Cap Funds & Large-Cap Index
did this for their respective
benchmarks. We did this exercise
for large-cap-dedicated funds and
mid-cap-dedicated funds and took
the regular plan with a longer
history.
Following this exercise an entirely

different picture appeared in terms
of the average performance of
funds with respect to their
benchmarks. Large-cap-dedicated
funds have appeared to perform
better than their benchmarks most
5-Year Rolling Returns Of Mid-Cap Funds & Mid-Cap Index
of the times both in a three-year
and five-year timeframe. For
example, out of the total 2018
instances in large-cap-dedicated
funds there were only 337
instances when the funds’ average
return was worse than the index
return. What seems to be quite
clear is that the outperformance of
the large-caps fund has been in a
declining mode in the recent

Cover story
MF page - 06
period. The rolling return graph of the funds against their The reason for such allocation, as he puts it, is, “Till 2015 many
benchmarks reflects the same. actively managed funds were outperforming passively
Nevertheless, in case of mid-cap-dedicated funds in a longer managed funds; however, the table has turned since then as a
period of five years, we did not see any single period of handful of funds have consistently been able to do so. Since
underperformance by them. Nevertheless, in a three-year the expense ratio of the passively managed funds is significantly
period there were some instances of underperformance by the lesser than the actively managed funds, a more significant
funds. The reason why mid-cap-dedicated funds on an average allocation can be justified.” Nevertheless, in the case of
do better than their benchmarks is because of information mid-cap and small-cap funds, Joshi is of the opinion that
asymmetry that still exists in this category. As compared “many of the funds are consistently outperforming the passive
large-cap stocks, there is very less information asymmetry and funds.”
they are well-researched so that a fund manager has little
chance to generate alpha. Hence, where there is inefficiency in However, a few deliver significant alpha over more extended
the market, it gives opportunities to fund managers to identify timeframes of three and five years. As a result, it may make
investment opportunities and generate superior returns, sense to veer away from passively managed funds and rely more
resulting in a higher preference for actively managed funds on an active investing style as there is a huge room for alpha
versus passive funds. creation in the mid and small-cap space. We believe that the
Indian equity market and investor are yet to mature as a
Passive versus Active developed market and till that time actively managed funds
Now the moot question for an investor is whether he should especially dedicated to the broader market still stand a good
adopt a passive or active strategy to build his portfolio. chance to generate better returns than their benchmarks.
According to Prashant Joshi, Co-Founder and Partner, Therefore, we suggest building a portfolio which is mix of both
Fintrust Advisors LLP, “Given the Indian context, there is no actively and passively managed funds. Beginners would do well
strait-jacket answer to it. In the large-cap space, one can to to mark large-cap allocation towards index funds and
allocate up to 40-60 per cent towards passively managed funds.” well-managed active funds. DS

Financial Planning
MF page - 07
Ambrish Agarwal rebalancing.
Director, Eastern Financiers Ltd With FOMO, it’s quite difficult to jump off a speeding equity
train to invest in low-return debt investments. Two, you may
face time constraints in putting your tactical allocation plan
into action. If you own a fairly large portfolio, deciding what to
sell and what to retain, and implementing this, can take time.
You also need to factor in variables such as short versus
long-term capital gains implications and the exit load structure
of your funds, while rebalancing.
Asset Allocation Schemes

Helping an investor overcome such dilemmas is the balanced
advantage fund (BAF) or the dynamically managed asset
allocation scheme category present within the hybrid mutual
fund universe. This category of fund gets around your behav-
ioural biases by automating the rebalancing process mostly
based on quantitative models that take emotions out of the
Asset Allocator: decision. BAF juggles between equity and debt asset classes by
rebalancing the portfolio as and when required in an attempt to
deliver a smoother return journey to investors.
The Right Choice

In order to take advantage of equity taxation, such funds always
own a gross equity position that is above 65 per cent. But to
reduce risks and usher in benefits of dynamic allocation they
B
use a combination of pure equity exposures and derivatives to
ull markets can spell tough times for prudent investors make up this equity allocation. When market levels are high,
trying to strike a balance between enjoying the ride in BAFs own a low net equity position, with higher debt assets.
stock prices and shielding the portfolio against a When markets fall, they add to their net equity positions,
sudden fall. The present bull market is no exception. thereby helping an investor to buy low and sell high. In a rising
With the Sensex more than doubling from its March 2020 lows, market, the pure equity portion offers participation in upside.
the last 18 months have certainly been rewarding for investors In falling markets, derivative positions hedge against downside
who have kept faith in equities. But there’s no getting away and in flat markets, the debt allocation props up returns.
from the fact that with market valuations well above long-term
averages and macro risks looming, equity investors need to However, within this category, there is a wide variety in terms of
brace for a bumpier ride ahead. how the house houses choose to manage their portfolio. Broadly,
there are three ways in which funds are managed within this
From the pace of India’s recovery post-pandemic to RBI and category. There are schemes which maintain a high exposure to
Federal Reserve policies on normalising rates, to sticky inflation equities, i.e. upwards of 70 per cent while on the other end there
and state elections, there are quite a few upcoming events that are funds with very conservative equity allocation i.e. less than
could precipitate two-way market moves. Should earnings or 20 per cent and the third option is the middle-of-the-ground
growth disappoint, investors also need to prepare for a valuation approach with equity allocation hovering between 35-40 per
reset. Faced with such known unknowns, investors often tend cent. In an up-trending market, higher equity allocation will
towards extremes. Some over-cautious investors have jumped surely be a winner but as the market turns volatile, middle-of-
completely off the equity bandwagon in early 2020 to wait for a the-ground approach tends to be very helpful.
further correction, but that has led to missed opportunities.
In case an investor is looking to add gold to the mix of asset
Aggressive investors have let their equity allocations rise classes, then an interesting option to consider is the Asset
without check, but they risk losing money as market volatility Allocator Fund. The interesting aspect is that the fund has a
picks up. The solution to this eternal dilemma lies in prudent fund of fund structure which allows the fund manager to take
asset allocation. But this is easier said than done. Even if you exposure to a wide spectrum of market instruments and
are good at timing and have your entry and exit strategy all segments within a single fund. To conclude, if you are an
mapped out in your mind, putting tactical allocation moves investor looking for lump sum investment opportunities in the
into action presents practical difficulties. First, there are current market environment, an asset allocator or BAF can be
behavioural biases that will egg you on to postpone your your first order of consideration. DS
The writer is Director, Eastern Financiers Ltd n Email: Ambrish@easternfin.com n Website: www.easternfin.com

MF QueryBoard MF page - 08
I am a regular reader of DSIJ’s ‘Mutual Funds Unlocked’ section. I have started saving and investing for my child’s education
which is five years away from today. The total amount invested is `5,000 per month via SIP in the following funds: Parag
Parikh Flexi Cap Fund (`1,500), Mirae Asset Emerging Bluechip Fund (`1,500), Axis Small Cap Fund (`1,000) and Tata Digital
India Fund (`1,000). This is to request you to kindly review the funds and suggest changes, if any.
- Athu Dhakshna
W
e assume that you have properly calculated the your portfolio.
requirement for your child’s education. As
regards to your mutual fund portfolio, these As far as your present allocation is concerned, we suggest you to
funds are more suitable from a long-term continue investing in Parag Parikh Flexi Cap Fund and Mirae
perspective. When we say long-term what we mean is an Asset Emerging Bluechip Fund. However, we would request you
investment horizon of seven years and above. However, the to either divert your systematic investment plan (SIP) in Axis
investment horizon mentioned by you for your child’s education Small Cap Fund and Tata Digital India Fund towards your
is five years, which according to us is medium-term. Therefore, retirement goal or straightaway stop the SIP in these funds. The
your mutual fund portfolio should be a good mix of equity and rationale behind the same is that these funds are more suitable
debt. That said, you have not mentioned your risk profile to for long-term goals. In fact, Tata Digital India Fund being a
recommend you any asset allocation. Assuming you are a sectoral fund requires active management. In case of debt funds,
moderate risk-taker, we would suggest an asset allocation of 40 we would recommend you to add SIP of `2,000 for Aditya Birla
per cent equity and 60 per cent debt. Sun Life Corporate Bond Fund and `2,500 in Axis Short Term
Fund.
After you assess your risk profile you can tweak the asset
allocation accordingly. If you are an aggressive investor then Assuming you get 12 per cent returns from equity funds and 8
have your portfolio tilted more towards equity and if you are a per cent from debt funds, your total expected portfolio returns
conservative investor, increase your exposure more towards work out to around 10 per cent. So, if we assume you invest
debt. Considering your risk profile to be moderate, in equity as `7,500 (`3,000 in equity plus `4,500 in debt) per month at an
well we would suggest investing in large-cap funds and mid-cap annualised returns of 10 per cent, at the end of five years you
funds and for debt consider investing in short duration funds, would be able to accumulate `5.78 lakhs. Moreover, we would
banking, PSU debt funds and corporate bond funds. We recommend you to move the accumulated amount in equity
recommend having exposure to debt funds because presently we every year to debt. This will help you book profits in equity and
are witnessing a bull run. However, when the markets will be in a comfortable position. It is not advisable to take
correct or move southwards, it is debt funds that would cushion unnecessary risk when it concerns your child’s education.
The market is heading down day by day. So, is it the right time to invest in mutual funds?
- Paras Jain
W
e agree with the observation that indeed the market is into a correction mode. Coming to your question, as a
market (hereon referred as Nifty 50) is not so mutual fund investor you do not need to time the market. In
cheerful. From October 19, 2021 it has been fact, you can simply invest in a Nifty or Sensex index fund via
moving downwards. Moreover, on November SIP and relax. SIP has the benefit of rupee cost averaging which
15, 2021 it failed to move above the high made on October 19, helps you tide the downside risk in the long run. Does this mean
2021. However, it did make a low of 17,216 which is lower than you cannot time the market with mutual funds?
the low made on October 29, 2021. That said, at present its
support zone is placed between the levels of 17,216 and 17,453. No, that’s not the case. In fact, there are sectoral funds which do
On the upside, its resistance zone is between the levels of 18,342 require timing the market. Also, one can try timing the market
and 18,605. Therefore, breaching the abovementioned levels on with index funds as well. However, we do not advocate timing
either side would direct the market’s next move. Moreover, it the market if you are investing for specific financial goals.
takes very good support on 100-day exponential moving Timing the market involves risk which you can take once you
average (EMA) and 50-day EMA. have made provisions for your financial needs. Therefore, we
always recommend dividing a portfolio into core and satellite. A
Therefore, unless it heads below the 100-day EMA it would be core portfolio would be aligned with your goals and more
difficult to say if the market is headed towards a big fall. probably would adopt strategic asset allocation. When it comes
Moreover, a downfall would also be confirmed if it continues to to a satellite portfolio where wealth creation is the main
make lower highs and lower lows. Technically speaking, the objective, tactical allocation is preferred the most.

Expert Speak
MF page - 09
Rocking The Boat

Never Helps
Hemant Rustagi
Chief Executive Officer, Wiseinvest Pvt Ltd.
I
nvesting money judiciously is the key to achieving your knowledge and use it in your investment process. If you find it
investment goals. It is equally important to imbibe certain overwhelming to analyse this information, take the help of an
traits that can, not only help you in starting the process advisor. Once you start working with an advisor, listen to him
right but also in ensuring that it remains on track through or her carefully as that can go a long way in allowing you to
your defined time horizon. However, despite investing money tackle the complexities of the investment world. The
judiciously, you may still have to face a number of challenges unwillingness to listen and allowing behavioural biases to
during your defined time horizon. The level of investment impact your investment decisions can make it difficult for you
success that you may achieve over time will depend upon how to adapt to the ever-changing investment and economic
you manage to either avoid these surprises or tackle them environment.
judiciously. Here’s what you need to do:
Be Open to Realignment
Create a Roadmap Your investment process, as well as options, must provide
You must create a roadmap at the start of your investment the flexibility required to realign the portfolio in line with
process. It is quite common to see investors investing randomly your changing circumstances as well as economic and
in different asset classes and exiting from them depending on political environment. Besides, you may have to contend
how these asset classes behave at certain points. Remember, a with volatility and non-performance of some of the
haphazard approach like this can not only make you miss out investments in your portfolio. Therefore, investing in mutual
on opportunities in the market but also expose you to funds can be a much better option than investing in traditional
unwarranted risks. Therefore, it is always advisable to look at options that do not allow you to the required flexibility.
the bigger picture and establish your goals to be achieved over However, don’t get tempted to make frequent changes just
short, medium and long-term horizons. A goal-based because you have the flexibility to do so. Another important
investment process will encourage you to follow budgeting, aspect is resisting the temptation of discussing your portfolio
give risk management it’s due and follow an asset allocation with all and sundry as conflicting views on your portfolio
model. composition can make you lose your focus and compel you to
make investment decisions that may compromise your
Stay Committed to Time Horizon financial future.
Once it is ascertained how much time you have to achieve each
of your goals, you must remain committed to it. This will help Avoid Emotional Investing
you in keeping focus on your goals without worrying too much You must avoid getting emotionally attached to your
about the impact of intermittent volatility on the portfolio in investments as that would make it difficult for you to make
the short term. Besides, if you continue your investment changes, when required. While tracking the portfolio plays a
process without interruption during market uncertainties, you significant role in keeping investments on track to achieve your
benefit from averaging. investment goals, it is equally important to be open to make
changes in the portfolio in case some of the investments
Keep Learning underperform their peer group and benchmarks for prolonged
Today, a lot of information is available on various investment periods. However, it should be done only after giving sufficient
options and strategies to invest in them through different time to fund managers to perform and prove their worth over
mediums. However, the key is to make efforts to absorb this different market cycles. DS

Special Report
MF page - 10
Is It The Right Time

To Invest In Credit
Risk Funds?
As this report indicates, there is room for credit
risk funds to provide better returns as the
spreads between AAA and AA are still attractive,
though not as attractive as they were in the
aftermath of the Franklin Templeton fiasco
M
oody’s on October 5, 2021 changed the outlook credit rating, thus giving them the name ‘credit risk’ funds.
on India’s sovereign ratings to stable from Credit risk funds in India are mandated to allocate at least 65
negative and maintained its rating at Baa3 for per cent of their portfolio in debt instruments which are rated
India’s foreign currency, local currency long-term less than ‘AA’.
issuer ratings and the local currency senior unsecured rating.
The change in outlook was because they believed that the Investors began to exit from this category when Franklin
downside risks from negative feedback between the real Templeton shut down its six debt MF schemes in April 2020. As
economy and financial system are declining. As previously of October 2021, the fund house has distributed around 88 per
anticipated by the rating agency, with capital cushions and cent (`23,999 crore) to investors of the total of `27,333 crore
greater liquidity, banks and non-bank financial institutions assets under management (AUM) of the six shut schemes.
carry much lesser risk to the sovereign. Nevertheless, another
rating agency, Fitch reaffirmed its BBB sovereign ratings on
India, which is the lowest investment grade to India’s sovereign
rating. Fitch Ratings maintained its negative outlook as it is of
the opinion that India has a high public debt, a weak financial
sector and some lagging structural issues.
Fitch Ratings warned that India might witness a rating

downgrade if it fails to reduce the general government debt and
GDP ratio. A structurally weaker real GDP growth outlook due
to continued financial sector weakness or lacking reform
implementation could further weigh on the debt trajectory.
That said, India is witnessing a rapid economic recovery from
the pandemic. Moreover, financial sector pressures are also
easing and even the risks are narrowing. The lending institu-
tions expect the demand for corporate loans to rebound by the
end of FY22. This is because in order to meet the rising demand
for goods and services amid revival in the economic activities,
corporates would look at capital expenditure.
Improving Economy and Credit Risk Funds

For a mutual fund investor who is interested in investing in
debt funds, improving economic growth presents a good
opportunity to take exposure to credit risk funds. Last year due
to erratic credit events along with some headwinds faced by the
economy, credit risk funds had begun to witness the heat well
before the pandemic. Credit risk funds are a type of debt-ori-
ented mutual funds that invest in securities that have a lower

MF page - 11
As can be seen, the AUM of credit risk funds had fallen

drastically post the Franklin Templeton fiasco. Even though
the AUM has been stable thereon, the net inflows have been
rising from February 2021 and in May 2021 these moved
into positive territory. This shows that gradually interest is
building up in credit risk funds. Institutional investors, who
are considered to be smarter than retail investors and
dominate debt-oriented schemes (almost 63 per cent of the
AUM), have increased their investment in these funds,
which is reflected in the accompanying graph. Hence, AUM
and rise in net inflows towards credit risk funds gives a lot of
idea on what we can expect going ahead. Besides, what also
favours credit risk fund is better credit off-take. Although
there is no direct relationship between rise in credit and
returns by credit risk funds, better credit growth signals
good economic revival and lower risk towards low-rated
papers. During FY22, credit off-take improved with
non-food credit growth increasing to 6.8 per cent year-on-
year (YoY) basis on September 24, 2021 from 5.1 per cent a
year ago. This is more evident from the chart below.
Credit growth among public sector banks remained modest, while there has been some uptick in case of private sector banks that
have provided the bulk (56.7 per cent) of incremental credit extended by scheduled commercial banks (SCBs) on a YoY basis as on
September 24, 2021. On the back of a favourable monsoon and measures to support the farm sector, even public sector banks
recorded credit growth on YoY basis in August 2021.

Special Report
MF page - 12
It is quite evident from the above graphs that the bank credit to industry has started to improve and can see a good improvement
on YoY basis. Credit to infrastructure – which accounts for around 38 per cent of industrial credit – also showed improvement, led
by credit to roads and airports. The primary driver of the overall credit growth to industry was infrastructure, followed by textiles.
Credit growth to the services sector slowed to 3.5 per cent in August 2021 from 10.9 per cent in the same month last year. This can
largely be attributed to the slowdown in credit to NBFCs that have been raising resources mainly from money and debt markets.
The above graph clearly shows that the overall domes-

tic credit growth has been improving after making a
decadal low of 5.35 per cent in May 2021. Credit
growth has not yet reached its pre-pandemic levels.
However, looking at the revival in economic activity, it
seems that the credit growth is going to be robust in the
near future. The second factor that gives some sense of
how these funds can perform is debt-weighted credit
ratio. The credit ratio, calculated as number of
upgrades to downgrades, has maintained its ascending
stance in the first half of FY22. According to CRISIL,
there were 488 upgrades and 165 downgrades for the
first half of FY22. When we calculate the ratio giving
weight to debt, it shows debt-weighted credit ratio.
Historically we have seen there is a positive relation between debt-weighted credit ratio and returns generated by credit risk funds.
In years 2014 and 2016 we saw credit risk funds generating returns in double-digits and it is no coincidence that both these years
we saw the debt-weighted credit ratio improving. During FY17 we saw that although the credit ratio remained flat, the debt-
weighted credit ratio was at a five-year high. Similarly in 2014, we saw a marked improvement in debt-weighted credit ratio from
below 0.3 to around 0.5.
Rising credit ratio means lower risk and hence higher return as yield declines and value of bond increases. At the end of H1FY22,
debt-weighted credit ratio stands at greater than 2, which is a positive sign for such funds. The year-till-date returns from this
category of funds already give a sense of the returns that we can expect from such funds. The following table shows the calendar
year returns of credit risk funds:
Fund Name 2014 2015 2016 2017 2018 2019 2020 YTD On a YTD basis credit risk funds
UTI Credit Risk Fund - Regular Plan 11.46 8.86 10.3 6.9 5.45 -4.79 -27.78 20.92
on an average gave 8.56 per cent
Baroda Credit Risk Fund- Plan A - - 11.3 8.43 5.9 2.09 2.4 18.71
returns but there were funds such
IDBI Credit Risk Fund - Regular Plan - 8.6 8.94 5.2 5.62 -5.36 -3.5 15.55
as UTI Credit Risk Fund, Baroda
Credit Risk Fund, IDBI Credit
Franklin India Credit Risk Fund 11.89 9.29 8.71 8.27 8.4 3.99 -0.18 12.82
Risk Fund, Franklin India Credit
Nippon India Credit Risk Fund 10.97 8.78 10.01 7.03 6.03 1.94 -5.89 12.8
Risk Fund and Nippon India
BOI AXA Credit Risk Fund - Regular Plan - - 11.22 9.32 -0.29 -45.23 -44.43 9.11
Credit Risk Fund that gave
PGIM India Credit Risk Fund - Regular Plan - 10.79 9.98 7.27 5.04 3.02 -2.18 8.3
double-digit returns of 20.92 per
HDFC Credit Risk Debt Fund - Regular Plan - 9.01 10.96 6.57 5.33 8.65 10.91 6.43
cent, 18.71 per cent, 15.55 per
Aditya Birla Sun Life Credit Risk Fund - Regular Plan - - 10.3 8.09 6.56 2.09 9.36 5.83
cent, 12.82 per cent and 12.80 per
ICICI Prudential Credit Risk Fund 10.97 9 9.54 6.77 6.61 9.48 9.79 5.79
cent, respectively.
Axis Credit Risk Fund - Regular Plan - 8.7 9.79 6.43 5.86 4.35 8.21 5.51
L&T Credit Risk Fund 11.42 9.41 10.05 7.2 5.55 2.26 4.98 5.36
Kotak Credit Risk Fund Regular Plan 11.13 9.09 10.43 6.56 6.17 8.97 6.61 5.09 Should you Invest in
SBI Credit Risk Fund 10.62 9.71 10.48 6.89 6.15 6.5 9.78 4.56 these Funds?
IDFC Credit Risk Fund - Regular Plan - - - - 4.97 9.15 7.44 3.63
To conclude, we believe that still
DSP Credit Risk Fund 10.76 9.64 10.6 6.43 -2.61 4.39 4.83 2.65
there is room for credit risk funds
Invesco India Credit Risk Fund - Regular Plan - 9.09 10.92 7.09 4.07 -4.53 7.98 2.54
to provide better returns as the
spreads between AAA and AA
are still attractive, though not as attractive as they were in the aftermath of the Franklin Templeton fiasco. We are of the opinion
that this is for an aggressive risk-taking investor who should not invest more than 10 per cent of his debt portfolio in credit risk
funds. Moreover, this should be included in the satellite portfolio and not be made a part of your core portfolio. Also, credit risk
funds need to be managed actively depending upon the credit situation and overall performance of the companies and the
economy. So, if you understand these nuances you can always invest in such funds as part of your tactical investment strategy.

MF Select
MF page - 13
Canara Robeco Bluechip Equity Fund - Direct Plan

Equity: Large Cap 19.59%
Scheme Category *Expected Return In Next Two Years
S&P BSE 100 TRI

`5,070 Cr 44.89 0.37%
Expense Ratio (%)
AUM (`Cr): Oct. 31, 2021 NAV (`) Nov., 26, 2021 Oct 31, 2021 Benchmark
1% for redemption within 365 days Shridatta Bhandwalkar & Vishal Mishra
Exit Load Fund Manager
Reason for recommendation TOP 10 Holdings
COMPANY NAME % TO NET ASSETS
The equity market across the world is at present on slippery ICICI Bank 8.01
ground with the emergence of the new variant of the corona
Infosys 7.84
virus. This has also put a question mark on the continuation of
the current pace of economic recovery. Therefore, it makes HDFC Bank 7.32
sense to invest in large-cap-dedicated funds as they have more Reliance Industries 7.29
levers to manage any economic downturn. In such a scenario, HDFC 4.38
Canara Robeco Bluechip Equity Fund remains one of the best Larsen & Toubro 3.73
funds from the large-cap category. What favours the fund is its State Bank of India 3.60
beta of 0.85 which is lower than that of the market i.e. 1 and Axis Bank 3.42
also is less than the category average of 0.95.
Bajaj Finance 3.22
In a volatile market it helps to contain loss in case the market Tata Consultancy Services 2.80
falls further. The fund has one of the best Sortino ratios of 1.18 sector. Even in the financial sector it has allocated more
as against the category average of 0.89 and S & P BSE 100 TRI towards banking stocks. Given the underperformance of banks
which is 0.94. If we look at the fund’s one-year rolling returns to the market in the last one and half years, we believe that they
spread across the period November 2015 to November 2021, are going to outperform in the future. Therefore, this fund
only 10 per cent of the times has it given negative returns makes more sense in the current market situation. Moreover,
whereas 36 per cent of the times it generated return between 10 investing in a staggered manner would be more beneficial as
to 20 per cent. In terms of its portfolio, the fund is quite bullish investors won’t have to worry about catching bottom of the
on financial, technology and energy sectors. downward move. Therefore, in view of how the overall
economy is developing at present the fund seems to have the
It has the highest weightage of 34 per cent in the financial highest potential to withstand turbulent times. DS
Monthly Returns

Special Report
MF page - 14
Buying
A Car?
Opt For
Subscription When it comes to owning a car, the first and
sometimes the only option that comes to mind is
that of purchasing it through a vehicle loan that
Instead! offers the advantage of easy monthly

instalments. But now there is an alternative –
the subscription model in which case you use the
car for a fixed fee every month. What works out
better? Read ahead to know
W
hen it comes to buying a car, all of us wish to In association with Revv, which is engaged in the car subscrip-
possess one that can cater to our needs, be tion business, Hyundai Motor Company offers the scheme
comfortable and not be too heavy on the wallet. across its entire model range but limited only to 20 cities. On
Thus, most people prefer to buy a car through a the other hand, Maruti Suzuki provides such a service in
vehicle loan. A majority of lenders provide 80 per cent of collaboration with Orix Auto Infrastructure Services India,
finance on the on-road price while some go up to 90 per cent which is a subsidiary of Japan-based Orix Corporation.
on the ex-showroom price. There have been instances when Currently, Maruti Suzuki offers its subscription model across
even 100 per cent finance has been provided to buyers with eight cities. The table below offers a comparison between taking
sound financial credentials. The advantage is that such a loan a Hyundai car on loan as against subscription. We have
can be paid off in easy monthly instalments. But there is assumed a loan tenure and subscription period of 36 months
another way of using a car as its owner – the subscription and rate of interest at 7.5 per cent. Moreover, we have assumed
model – which is gaining traction these days. So how does it that an individual can get 90 per cent of the ex-showroom price
work? as a loan while he bears the cost of down payment.
Hyundai's Grand i10 Nios - Sportz - Petrol – Manual
A subscription model for a car works on similar lines to Particulars Loan Subscription
subscribing for a magazine or a direct-to-home (DTH) A] On-Road Cost 7,95,043 7,95,043
connection. When you subscribe to a car, you need to pay a fee B] Ex-Showroom Cost 6,66,950 N/A
every month or for a pre-decided period in order to use the car C] % Loan on ex-showroom price 90.00% N/A
during the specified subscription period. Therefore, a subscrip- D] Loan Amount (90% x B) 6,00,255 N/A
tion service allows an individual to drive home a vehicle of his E] Down Payment (A – D) 1,94,788 N/A
choice for a monthly fee. This gives him full access to the F] Rate of interest 7.50% N/A
vehicle without having to make any down payment. In fact, G] Processing Fees @ 0.25% of Loan Amount 1500 N/A
subscribers only need to pay an all-inclusive monthly fee that H] Loan Tenure (in Months) 36 N/A
takes care of complete maintenance, insurance as well as I] Loan EMI 18672 N/A
roadside assistance. There is an option for the subscriber to opt J] Insurance Renewals (Monthly) 1150 N/A
out for maintenance. While Hyundai Motor Company started K] Maintenance Cost (Monthly) 300 300
such a subscription scheme in March 2019, it was soon L] Net Total Monthly Outflow (I + J + K) 20122 18630
followed by Maruti Suzuki in September 2020.
M] Total outflow during 36 months (L x 36) 7,24,380 6,70,680

The difference, you might opine, is not too much. As indicated,
during the period of loan and subscription, the total outflow for The Subscription Model
loan works out to `7.24 lakhs whereas for subscription it is
`6.7 lakhs. This creates a difference of `53,700 which translates As a customer, you only need to subscribe to the service and pay a
into a monthly variance of `1,492. However, when you opt for monthly fee. Of course you have to pay for the fuel yourself. All other
subscription you also save the one-time cost of `1.95 lakhs for expenses including maintenance and insurance would be taken care
down payment and `1,500 as loan processing fee. Moreover, the by the leasing company and the operators. The subscription plan
subscriber also saves on insurance renewals worth `1,150 per offers tenure options of 24 months, 36 months and 48 months. Once
month. If the saved amount is invested in a debt fund for three the subscription tenure is completed, the subscriber has various
years offering 6 per cent rate of returns, then at the end of 36 options such as extending the tenure, opting for an upgrade of the
months your savings of `2.91 lakhs will grow to `3.38 lakhs. If
you buy a car, there is an additional cost of `72,000 by way of vehicle or buying it at the market price. There are two kinds of
interest. number plates that are offered in the subscription model – white and
black. In case of a white number plate, the car is registered in the
Hyundai's Grand i10 Nios - Sportz - Petrol – Manual subscriber’s name and is hypothecated to the leasing company while
Particulars Loan Subscription for a black number plate the car is registered in the name of the
A] Down Payment 1,94,788 N/A leasing company.
B] Net Total Monthly Outflow 20122 18630
C] Total outflow during 36 months (B x 36) 7,24,380 6,70,680
D] Total amount paid for the car (A + C) 9,19,168 6,70,680 months would be `9.19 lakhs.
E] Insured Declared Value (IDV) / Market Value after
3,45,000 N/A
36 Months Conclusion
F] Net amount post resale of car after 36 months (D – E) 5,74,168 6,70,680
There are two ways of using a car – either you can buy it or you
In the above table we can clearly see that if you choose to sell can choose the subscription model. In order to understand the
the car after three years, you stand to benefit when compared to better option of the two, we carried out a study, arriving at the
subscribing. Here we have assumed that the insured declared conclusion that subscribing a car financially makes more sense
value would be the market value of the car post 36 months. than owning it. However, there is one thing that is not available
Interestingly, as a subscriber you have an option to buy a car at with the subscription model and that is the positive emotion of
the market value post the subscription tenure. So, logically after owning the car. Logically and financially though, the subscrip-
36 months you can buy the same car at almost 43 per cent lower tion model makes more sense. In fact, it makes even more sense
than the original on-road price. Moreover, you have already for those who have a tendency to change the car every three to
saved the one-time cost and monthly savings that post 36 four years. It also works in favour of those who have a transfer-
months would be worth `3.38 lakhs. Technically, in case of able job. Also, those having poor CIBIL score can drive the car
subscription, your actual cost would be `3.33 lakhs i.e. `6.71 of his choice via subscription model without having to worry
lakhs minus `3.38 lakhs. Moreover, if you buy the same car at about getting a loan and high interest rates. So, if you are not
`3.45 lakhs, your total cost of owning the car would be `6.78 too high on the emotional quotient, choose the subscription
lakhs. In case you buy a car, your total ownership cost after 36 model.

MF Data Bank
MF Page - 16
With Ranking
T
Key To Databank
he following table lists top-ranked equity funds based on Category Rank: Category wise ranking as on Nov. 26th 2021
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 two years. 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 2-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 Nov. 26th 2021
in your fund portfolio. Hence, a consistently laggard performer of a
Previous Rank of Nov. 11th 2021 is shown under bracket ()
category can be looked at as 'Switch' or 'Exit' advice.
Risk : Risk as on Nov.26th 2021
Category NAV AUM

No of Expense 1Return Expected DSIJ Current
Weightage (%)
Scheme Name Years 1 yr return Rank Risk
Rank (`) (` Cr)
Companies Ratio (%) (%)
Large Cap Mid Cap Small Cap (%) (26 Nov., 21)
Equity - Large Cap
1 DSP Top 100 Equity Reg Gr 290.11 2,882 81.57 18.43 0.00 28 1.12 36.41 21.26 31 (99) Low
2 Aditya BSL Frontline Equity Gr 343.01 22,461 88.40 10.39 1.21 65 2.37 28.06 20.89 55 (59) Moderately Low
3 PGIM India Large Cap Gr 246.18 360 86.94 9.38 3.68 38 2.52 53.66 20.49 60 (79) Moderately Low
4 HDFC Top 100 Gr 687.69 21,596 90.49 8.70 0.81 49 2.10 32.64 20.34 65 (83) Moderate
5 Mahindra Manu Lrg Cp Pragati Yjn Reg Gr 15.82 137 97.37 2.63 0.00 31 2.14 49.43 20.25 68 (123) Moderately Low
6 SBI Bluechip Reg Gr 61.49 32,031 85.28 13.25 1.46 55 2.51 39.54 19.97 74 (89) Moderately Low
7 Baroda Large Cap A Gr 21.80 51 93.19 6.81 0.00 34 2.15 43.36 19.67 86 (73) Moderately Low
8 Principal Large Cap Reg Gr 14.81 429 96.80 0.00 3.20 47 2.05 52.43 19.63 88 (71) Moderately Low
9 HSBC Large Cap Equity Gr 317.30 806 94.40 5.60 0.00 31 1.73 45.52 19.61 89 (106) Moderately Low
10 Canara Robeco Bluechip Equity Reg Gr 41.62 5,055 90.40 9.60 0.00 48 1.65 37.80 19.59 90 (107) Moderately Low
11 Taurus Largecap Equity Gr 102.36 34 87.09 7.51 5.40 54 1.97 41.28 19.58 91 (116) Moderately Low
12 Axis Bluechip Fund Gr 46.60 33,967 100.00 0.00 0.00 32 2.60 48.25 19.55 93 (90) Moderately Low
Equity - Large & Mid Cap
1 DSP Equity Opportunities Fund Reg Gr 357.48 6,969 53.17 39.09 7.74 57 2.11 17.65 20.97 49 (62) Moderately High
2 IDFC Core Equity Gr 69.11 2,414 54.58 36.40 7.74 60 1.00 41.37 20.37 64 (88) Moderately Low
3 Tata Large & Mid Cap Reg Gr 327.60 2,705 52.97 38.72 8.31 39 2.11 14.36 17.63 178 (120) Moderately Low
4 Kotak Equity Opportunities Reg Gr 193.44 8,206 54.79 40.40 4.81 55 2.00 58.82 17.39 193 (244) Moderately High
5 UTI Core Equity Reg Gr 100.20 1,212 48.61 38.32 13.08 62 1.68 45.62 17.34 198 (240) Moderately High
6 HSBC Large & Mid Cap Equity Reg Gr 15.94 539 50.86 37.92 11.22 59 2.30 31.57 17.15 210 (239) Moderate
7 Principal Emer Bluechip Gr 182.11 3,200 50.86 40.35 8.79 62 2.45 51.02 16.60 239 (193) Moderately High
8 Quant Large and Mid Cap Gr 67.81 33 59.82 35.92 0.00 22 2.39 26.68 16.41 255 (226) Moderately High
9 Nippon India Vision Gr 824.86 3,301 53.74 46.26 0.00 91 2.65 49.65 16.09 269 (299) Moderately High
10 BOI AXA Large & Mid Cap Eq Reg Gr 55.74 212 54.31 39.28 6.41 51 1.58 36.74 15.60 293 (269) Moderately High
11 Canara Robeco Emerging Eqs Reg Gr 163.17 11,773 55.47 40.56 3.96 60 2.07 53.92 15.58 295 (291) Moderate
Others - Index Funds
1 Motilal Oswal Nifty Bank Index Reg Gr 13.38 148 94.44 5.56 0.00 12 2.60 32.36 25.08 9 (7) Low
2 DSP Equal Nifty 50 Fund Gr 15.51 262 100.00 0.00 0.00 51 0.55 38.00 21.46 29 (33) Moderately Low
() 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
Asset Under Management of passively managed funds has significantly risen from 2,49,099.48 Cr. in October
2020 to 4,49,185.82 Cr. in October 2021. That represents 80.32 per cent increase in assets over October 2020.

MF Page - 17
Expense Return 1Expected

Category Weightage (%) DSIJ Current
NAV AUM No of
Scheme Name
Companies Ratio (%) 1 Years
yr return Rank Risk
Rank (`) (` Cr)
Large Cap Mid Cap Small Cap (%) (%) (26 Nov., 21)
3 DSP Nifty 50 Index Reg Gr 16.34 130 100.00 0.00 0.00 51 1.28 44.02 21.19 33 (45) Low
4 Tata Index Nifty Reg 105.90 208 100.00 0.00 0.00 51 0.50 40.42 21.19 34 (41) Low
5 Motilal Oswal Nifty 50 Index Reg Gr 14.37 111 100.00 0.00 0.00 50 0.89 39.40 21.19 35 (34) Moderately Low
6 IDBI Nifty Index Gr 31.94 221 100.00 0.00 0.00 50 0.40 41.12 21.19 36 (35) Low
7 SBI Nifty Index Reg Gr 150.11 1,609 100.00 0.00 0.00 50 0.30 41.41 21.19 37 (38) Low
8 HDFC Index Nifty 50 160.49 4,085 100.00 0.00 0.00 50 0.50 40.75 21.19 38 (36) Low
9 UTI Nifty Index Reg Gr 115.93 5,380 100.00 0.00 0.00 50 1.05 40.03 21.19 39 (37) Moderately Low
10 Nippon India Index Nifty Gr 29.01 401 100.00 0.00 0.00 50 0.59 40.64 21.19 40 (39) Moderately Low
11 Aditya BSL Index Gr 172.24 293 100.00 0.00 0.00 50 0.52 40.57 21.19 41 (40) Low
12 L&T Nifty 50 Index Reg Gr 19.58 79 100.00 0.00 0.00 50 0.70 40.72 21.19 42 (42) Moderately Low
13 IDFC Nifty Gr 36.63 340 100.00 0.00 0.00 51 0.37 40.27 21.19 43 (43) Low
Equity - Sectoral/Thematic
1 HDFC Infrastructure Gr 20.55 604 51.69 6.82 41.50 40 2.58 43.16 106.21 1 (335) High
2 UTI Infrastructure Reg Gr 78.96 1,512 52.44 28.85 18.71 42 2.55 35.92 29.85 2 (410) Moderate
3 SBI Banking & Financial Svcs Reg Gr 24.91 3,106 79.07 13.73 7.20 20 2.33 73.26 26.49 5 (12) Low
4 Baroda Bank & Fin Srvs A Gr 29.34 55 92.23 5.89 1.88 16 2.80 29.66 26.10 6 (4) Low
5 Sundaram Fin Services Opp Reg Gr 60.67 485 84.57 6.59 8.59 25 1.03 32.14 25.91 7 (2) Low
6 LIC MF Banking & Fin Serv Reg Gr 14.04 63 86.63 6.85 6.52 16 2.47 39.39 25.69 8 (6) Low
7 IDBI Banking & Financial Serv Gr 13.66 100 84.76 10.31 4.93 25 2.20 44.35 24.93 10 (9) Low
8 UTI Banking & Fin Svcs Gr 119.52 768 86.93 6.56 5.21 22 2.46 47.11 24.30 11 (13) Low
9 Aditya BSL Bkng & Fin Srvcs Reg Gr 39.32 2,228 82.01 3.40 14.58 26 1.97 34.25 23.82 12 (10) Moderately Low
10 DSP Quant Reg Gr 16.98 1,212 79.80 20.20 0.00 48 2.67 38.48 23.79 13 (16) Moderate
11 Mahindra Manu Rural Bharat&Consmp Reg Gr 13.88 49 74.34 17.54 8.12 28 0.40 38.19 23.66 15 (8) Moderately Low
12 Invesco India Financial Serv Gr 79.02 393 79.69 1.68 18.63 21 2.61 34.59 23.52 16 (15) Moderately Low
13 Nippon India Banking & Fin Srvs Gr 358.85 3,282 68.05 17.23 14.71 26 1.84 57.11 23.03 18 (21) Moderately Low
14 ICICI Pru Banking & Fin Svcs Gr 85.20 5,242 70.01 10.78 17.63 26 2.64 25.85 22.44 20 (23) Low
15 Sundaram Rural & Consumption Gr 58.72 1,289 55.30 32.74 11.96 38 2.06 57.03 22.34 21 (17) Moderately Low
16 Tata Banking & Financial Svcs Reg Gr 26.27 856 87.56 4.95 6.87 20 1.08 37.18 21.70 28 (27) Low
17 DSP Nat Res & New Engy Reg Gr 53.04 785 70.41 28.09 1.51 17 0.30 37.98 21.44 30 (5) Moderately Low
18 HDFC Housing Opportunities Reg Gr 12.99 1,572 72.53 4.99 22.49 36 0.80 55.83 21.25 32 (57) Moderate
19 Aditya BSL PSU Equity Reg Gr 13.94 861 66.41 23.30 10.28 30 2.23 40.97 21.13 47 (72) Moderate
20 ICICI Pru FMCG Gr 328.87 900 70.56 21.36 8.08 22 2.55 36.11 20.80 56 (22) Low
21 Quantum India ESG Equity Reg Gr 17.04 54 67.59 30.57 1.84 45 2.13 52.61 20.76 57 (26) Moderately Low
22 Tata Quant Reg Gr 10.53 56 93.90 6.10 0.00 30 2.60 16.63 20.33 66 (124) Low
23 Invesco India PSU Equity Gr 26.85 356 47.36 30.43 22.20 22 1.74 48.43 19.92 76 (207) Moderate
24 UTI India Consumer Reg Gr 40.61 357 69.86 16.66 13.48 34 1.84 29.62 19.76 82 (85) Moderately Low
25 SBI PSU Reg Gr 12.99 448 68.39 20.06 11.56 22 1.61 46.17 19.54 94 (177) Moderate
26 Tata India Consumer Reg Gr 26.57 1,344 53.47 26.30 20.23 32 1.74 48.14 19.02 112 (103) Moderate
27 ICICI Pru ESG Reg Gr 13.81 1,827 54.28 23.94 21.78 30 2.13 44.55 18.79 120 (65) Low
28 Nippon India Quant Gr 39.68 32 85.68 14.32 0.00 35 2.04 44.83 18.76 122 (195) Moderately Low
29 SBI Equity Minimum Variance Reg Gr 15.55 125 100.00 0.00 0.00 50 2.45 33.53 18.58 124 (77) Low
30 UTI Transportation & Logistics Reg Gr 134.41 1,525 72.48 16.74 10.78 32 2.47 42.38 18.54 128 (117) Moderately Low
31 SBI Magnum Global Reg Gr 289.30 5,387 46.78 22.09 31.13 33 2.10 50.16 18.42 137 (58) Moderately Low
32 Franklin India Opportunities Gr 123.60 702 80.01 8.22 11.78 28 2.43 41.74 18.29 142 (282) Moderate
33 IDBI Healthcare Reg Gr 18.45 75 70.82 17.73 11.45 29 2.58 45.73 17.68 175 (24) Moderately Low
34 Aditya BSL Pharma & Hlthcare Reg Gr 18.59 567 64.78 25.56 9.66 25 2.38 49.43 17.67 176 (61) Low
35 UTI Healthcare Reg Gr 160.77 828 54.86 19.20 25.93 30 1.58 22.03 17.58 184 (55) Moderately Low
36 ICICI Pru Pharma Healthcare Diag Gr 19.90 3,045 56.21 26.31 17.49 27 2.52 30.14 16.97 217 (127) Low
Equity - Focused
1 Sundaram Sel Focus Gr 272.03 1,403 87.67 12.33 0.00 29 1.68 45.18 21.91 26 (47) Moderately Low
2 JM Core 11 Gr 11.70 46 82.48 10.01 7.50 11 0.68 40.08 21.01 48 (163) Moderately Low
3 HSBC Focused Equity Reg Gr 16.18 603 72.15 22.71 5.14 29 2.47 13.13 20.21 69 (84) Moderately High
4 DSP Focus Reg Gr 34.23 2,134 66.73 29.86 3.41 22 2.61 43.25 19.82 81 (183) Low
5 Motilal Oswal Focused 25 Reg Gr 33.31 1,830 77.24 20.17 2.59 20 2.73 40.74 19.58 92 (96) Low
6 Aditya BSL Focused Eq Gr 92.58 5,381 91.60 6.84 1.56 29 2.20 30.95 19.51 96 (162) Moderately Low
7 Axis Focused 25 Gr 46.81 20,404 92.04 7.96 0.00 21 2.44 53.10 19.38 100 (94) Moderate
Net Inflow of passively managed funds has risen from -1,877.74 crores in
October 2020 to 10.758.85 crores in October 2021.

MF Data Bank
MF Page - 18

NAV AUM No of
Scheme Name
yr return Rank Risk
Rank (`) (` Cr)
8 Kotak Focused Equity Reg Gr 16.50 2,236 65.07 30.98 3.95 30 1.95 33.25 19.26 104 (137) Moderately High
9 IIFL Focused Equity Reg Gr 30.51 2,480 70.58 17.54 11.88 30 2.55 43.23 18.93 114 (98) High
10 ICICI Pru Focused Equity Gr 49.50 2,387 82.61 9.31 8.07 30 2.00 43.84 17.93 162 (231) Moderately High
Equity - Mid Cap
1 DSP Midcap Reg Gr 91.44 14,190 14.98 68.17 16.85 50 2.46 32.67 21.90 27 (76) Moderate
2 Taurus Discovery Gr (Mid-Cap) 74.12 78 8.63 70.27 21.10 61 2.48 90.90 15.96 274 (322) Moderately High
3 Franklin India Prima Gr 1,535.72 8,083 21.55 68.85 9.60 50 2.07 48.35 15.93 278 (297) Moderate
4 Tata Mid Cap Growth Reg Gr 246.05 1,460 15.24 66.00 18.76 53 1.21 17.05 14.97 318 (326) Moderately High
5 Mahindra Manu Mid Cp Unnt Yjn Reg Gr 17.42 845 10.13 67.85 22.02 59 0.80 50.72 14.60 334 (312) Moderate
6 HDFC Mid-Cap Opportunities Gr 91.57 31,629 6.63 65.45 27.92 63 2.01 50.57 14.58 336 (359) Moderately High
7 Kotak Emerging Equity Reg Gr 72.28 16,485 11.24 68.46 20.30 68 1.96 84.74 14.43 340 (321) Moderately High
8 BNP Paribas Mid Cap Gr 58.58 1,089 7.30 73.69 19.01 55 2.54 17.68 14.05 355 (409) Moderate
9 L&T Midcap Gr 207.98 6,909 9.59 69.92 18.79 59 2.28 89.71 13.73 366 (379) Moderately High
10 Quant Mid Cap Gr 119.53 205 20.57 74.25 2.28 26 2.75 6.87 13.21 376 (350) Moderately High
Equity - Small Cap
1 Tata Small Cap Fund Reg Gr 21.90 1,721 0.00 8.64 91.36 39 2.48 24.44 17.12 212 (172) High
2 ITI Small Cap Reg Gr 15.47 426 0.00 1.29 98.71 20 2.14 91.82 15.93 277 (323) Moderate
3 HSBC Small Cap Equity Gr 90.60 350 2.79 23.76 73.44 40 1.89 56.95 13.09 382 (381) High
4 IDFC Emerging Businesses Reg Gr 22.24 1,433 9.21 10.31 80.48 64 2.11 74.53 12.95 384 (383) High
5 DSP Small Cap Reg Gr 108.59 8,270 0.00 17.79 82.21 64 1.90 62.16 12.36 401 (378) High
6 Kotak Small Cap Reg Gr 168.86 6,180 2.77 22.32 74.91 69 2.49 70.23 12.08 405 (372) Moderately High
7 Sundaram Small Cap Gr 150.26 1,541 0.00 19.49 80.51 64 2.32 66.05 11.68 410 (386) Moderately High
8 ICICI Pru Smallcap Gr 51.91 3,304 0.00 7.88 92.12 56 2.14 74.33 11.16 417 (429) Moderately High
9 BOI AXA Small Cap Reg Gr 26.12 194 1.71 17.39 80.90 68 2.72 60.06 11.16 418 (396) High
Hybrid - Aggressive
1 Shriram Hybrid Equity Reg Gr 22.90 64 92.47 5.66 1.87 49 1.85 53.37 20.44 62 (53) Moderately Low
2 LIC MF Equity Hybrid Gr 138.91 471 72.31 14.13 13.55 47 2.08 48.96 20.27 67 (54) Moderately Low
3 DSP Equity & Bond Fund Reg Gr 237.40 7,559 60.63 24.74 14.63 56 2.46 37.45 19.84 79 (118) Moderate
4 IDFC Hybrid Equity Reg Gr 17.01 593 74.30 14.43 11.27 35 2.03 52.18 19.32 102 (128) Moderate
5 Nippon India Equity Hybrid Gr 66.49 3,500 90.16 6.51 3.33 45 2.42 36.24 19.06 108 (134) Moderately Low
6 Canara Robeco Equity Hyb Reg Gr 245.08 6,902 75.97 22.98 1.05 52 2.44 12.47 19.05 109 (119) Moderately Low
7 Principal Hybrid Equity Gr 112.38 1,107 76.60 19.63 3.76 59 1.97 36.76 19.04 110 (97) Moderately High
8 HSBC Equity Hybrid Fund Reg Gr 15.81 515 71.69 19.38 8.94 49 2.61 47.38 19.03 111 (115) Moderate
9 Tata Hybrid Equity Reg Gr 302.61 3,428 76.34 13.06 10.60 32 1.92 33.10 18.83 119 (110) Moderate
10 UTI Hybrid Equity Reg Gr 251.62 4,326 68.01 16.91 15.08 61 2.69 48.00 18.71 123 (147) Moderately High
11 PGIM India Hyb Eq Gr Opt 98.32 185 51.32 29.48 19.20 52 2.62 51.94 18.49 132 (108) Moderately High
12 Motilal Oswal Equity Hybrid Reg Gr 15.31 416 72.75 21.29 5.96 26 2.48 58.30 18.21 150 (160) Low
13 Mahindra Manu Hy Eq Nivesh Yjn Reg Gr 16.76 315 74.59 13.95 11.46 50 2.55 42.23 18.20 151 (222) Moderately Low
Equity - Multi Cap
1 ITI Multi Cap Reg Gr 14.34 326 36.03 30.92 33.04 21 2.70 28.41 26.90 4 (3) Low
2 Sundaram Equity Reg Gr 16.62 847 45.37 24.84 28.73 60 2.21 11.63 16.80 224 (283) Moderately High
3 BNP Paribas Multi Cap Gr 77.48 599 44.11 25.04 30.85 56 2.13 32.45 16.69 234 (285) Moderate
4 ICICI Pru Multicap Gr 449.97 6,585 44.38 26.11 29.51 76 1.88 47.54 16.06 270 (294) Moderately High
Equity - Flexi Cap
1 Shriram Flexi Cap Reg Gr 14.80 68 69.03 20.59 10.38 40 2.53 22.66 22.00 24 (56) Moderate
2 Parag Parikh Flexi Cap Reg Gr 51.01 17,220 68.01 14.04 17.95 21 1.75 56.01 21.92 25 (18) Moderately High
3 DSP Flexi Cap Fund Reg Gr 67.18 7,345 60.10 25.87 14.03 57 2.65 35.38 20.15 70 (102) Moderate
4 HSBC Flexi Cap Gr 133.65 408 68.37 21.13 10.50 53 0.74 36.81 19.92 77 (78) Moderate
5 SBI Flexicap Reg Gr 76.66 15,462 67.19 17.07 15.74 52 2.52 46.20 19.87 78 (95) Moderate
6 LIC MF Flexi Cap Gr 67.38 428 66.15 18.67 15.18 55 2.81 47.14 19.68 85 (70) Moderate
7 IDBI Flexi Cap Fd Rglr Gr 34.88 385 72.60 14.69 12.71 50 2.13 57.27 19.65 87 (60) Moderately High
8 Motilal Oswal Flexicap Reg Gr 34.70 11,505 85.61 9.10 5.30 29 2.55 34.67 18.39 139 (130) Moderately High
9 Taurus Flexi Cap Gr 148.83 269 70.09 13.59 16.32 58 2.19 15.71 18.25 148 (204) Moderate
10 Kotak Flexicap Reg Gr 52.39 38,521 71.13 26.78 2.09 49 2.25 36.97 18.17 153 (216) Moderately High
Equity - Value/Contra
1 UTI Value Opportunities Reg Gr 100.67 6,661 68.02 20.07 11.03 56 1.75 46.12 20.60 59 (67) Moderately High
Income/Debt Oriented Fund for the month of October 2021, saw net inflows to the tune of 12,984.38 Cr.

MF Page - 19

NAV AUM No of
Scheme Name
yr return Rank Risk
Rank (`) (` Cr)
2 Quantum L/T Equity Value Reg Gr 77.05 921 79.45 20.55 0.00 28 2.79 39.74 20.00 73 (52) Moderately Low
3 Kotak India EQ Contra Reg Gr 82.55 1,189 73.50 26.50 0.00 53 1.75 47.55 19.69 83 (125) Moderate
4 Tata Equity P/E Reg Gr 198.93 5,168 67.99 18.93 11.11 36 1.82 49.97 19.51 95 (91) Moderately Low
5 Invesco India Contra Gr 77.81 8,458 69.44 16.76 13.79 47 2.21 39.11 19.46 97 (112) Moderate
6 Union Value Discovery Fund Reg Gr 16.90 138 70.31 13.92 15.77 41 1.90 40.99 19.08 107 (155) Moderate
Equity - ELSS
1 ITI Long Term Equity Reg Gr ) 14.51 109 32.92 27.65 39.43 24 2.64 44.11 27.51 3 (1) Low
2 Parag Parikh Tax Saver Reg Gr ) 18.49 324 71.03 11.82 17.15 25 1.07 20.66 23.00 19 (11) Moderate
3 DSP Tax Saver Reg Gr ) 81.15 9,805 65.01 23.81 11.19 55 2.04 49.31 22.13 23 (25) Moderately Low
4 Sundaram Diversified Equity Gr ) 147.60 2,177 71.93 18.76 9.31 48 2.33 13.75 20.37 63 (68) Moderate
5 Quantum Tax Saving Reg Gr ) 76.27 103 79.91 20.09 0.00 28 2.35 41.48 20.13 71 (50) Moderately Low
6 Taurus Tax Shield Gr ) 111.97 68 71.84 17.25 10.92 49 2.23 45.26 19.30 103 (121) Moderately Low
7 SBI Magnum Long Term Equity Reg Gr ) 225.97 11,094 64.53 23.21 12.26 61 1.83 37.90 18.85 118 (192) Moderate
8 Shriram Long Term Equity Reg Gr ) 15.80 46 69.07 14.18 16.75 57 0.00 55.53 18.56 126 (139) Moderate
9 Indiabulls Tax Savings Gr ) 13.45 51 80.25 15.29 4.46 45 2.38 15.35 18.43 136 (153) Moderately Low
10 Mahindra Manu ELSS Kar Bachat Yjn Reg Gr ) 18.54 424 71.39 14.68 13.94 49 2.08 46.81 18.30 141 (150) Moderately Low
11 BNP Paribas Long Term Equity Gr ) 60.63 557 66.94 13.90 19.16 49 2.57 43.47 18.29 143 (223) Moderate
12 LIC MF Tax Gr ) 100.30 410 74.23 19.37 5.38 50 2.22 19.92 18.28 145 (143) Moderate
13 HSBC Tax Saver Equity Gr ) 56.42 207 69.19 17.20 13.61 42 2.49 52.18 18.25 146 (164) Moderate
14 PGIM India Long Term Eq Reg Gr ) 23.45 334 76.15 8.27 15.57 31 2.03 46.55 18.25 147 (181) Moderate
15 Kotak Tax Saver Reg Gr ) 72.23 2,323 64.53 24.71 10.75 55 2.53 113.15 18.07 157 (167) Moderately High
Hybrid - Equity Savings
1 DSP Equity Savings Reg Gr 15.83 382 70.27 22.59 1.93 52 2.24 41.06 23.47 17 (14) Low
2 Sundaram Equity Savings Reg Gr 12.57 157 87.02 9.40 0.00 47 2.29 63.30 20.09 72 (69) Moderately Low
3 IDFC Equity Savings Reg Gr 24.73 65 79.01 20.28 0.64 44 2.43 46.95 19.69 84 (63) Moderate
4 UTI Equity Savings Reg Gr 13.15 275 98.15 0.00 1.85 32 2.61 34.81 18.90 116 (259) Moderately Low
5 Kotak Equity Savings Reg Gr 18.35 1,626 78.97 20.44 0.59 71 2.03 17.29 18.28 144 (148) Moderate
6 Axis Equity Saver Reg Gr 16.98 1,053 90.74 8.02 1.24 67 2.57 29.03 18.06 158 (145) Moderate
7 Mirae Asset Equity Savings Reg Gr 14.60 405 64.40 26.35 9.24 85 2.62 58.57 17.62 180 (129) Moderately Low
8 L&T Equity Savings Gr 22.87 102 59.96 29.77 10.27 48 2.37 45.16 17.62 182 (184) Moderate
9 Nippon India Equity Savings Gr 12.33 239 95.15 2.28 2.57 28 2.26 38.40 17.58 185 (355) Low
Hybrid - Dynamic Asset Allocation
1 HDFC Balanced Adv Gr 279.70 42,776 69.69 17.58 12.73 69 2.42 18.59 23.69 14 (248) Moderately High
2 ITI Balanced Advantage Reg Gr 10.89 305 58.74 19.09 22.17 23 2.69 36.01 22.21 22 (20) Moderately Low
3 Shriram Balanced Advantage Reg Gr 13.02 49 89.71 6.28 4.00 62 2.56 27.38 20.47 61 (66) Low
4 Aditya BSL Balanced Advantage Gr 73.14 6,124 84.08 8.83 6.70 90 0.94 54.48 19.37 101 (51) Moderately High
5 Edelweiss Balanced Adv Gr 35.88 6,331 77.43 16.78 5.18 120 2.41 48.28 18.86 117 (82) Moderate
6 Invesco India Dynamic Equity Gr 37.16 693 76.09 15.62 8.29 30 1.78 29.99 18.51 130 (140) Moderately Low
7 Nippon India Balanced Adv Gr 121.83 5,130 72.10 15.17 12.73 69 2.33 19.51 18.30 140 (131) Moderately Low
8 Motilal Oswal Dynamic Reg Gr 15.66 1,144 86.62 8.95 2.46 22 2.15 49.02 17.93 161 (242) Low
9 IDFC Balanced Advantage Reg Gr 18.29 2,743 82.26 12.84 4.90 47 2.07 38.86 17.61 183 (135) Moderately High

Solution Oriented
1 Axis Retirement Savings Cnsrv Reg Gr 12.64 107 55.15 28.18 10.43 24 1.97 53.19 20.61 58 (49) Moderate
2 HDFC Retirement Svgs Hybrid Equity Reg 25.40 748 52.83 7.31 39.86 46 2.47 41.30 18.14 154 (74) Moderate
3 Nippon India Retmnt Wlt Creation Reg Gr 17.98 2,378 67.17 20.49 12.35 64 2.03 51.46 18.07 156 (156) Moderate
4 HDFC Retirement Svgs Hybrid Debt Reg 16.51 145 53.07 3.29 43.64 32 2.44 25.16 18.03 160 (109) Moderate
5 ICICI Pru Ret Hybrid Cnsrv Plan Reg Gr 12.80 70 95.87 4.13 0.00 10 2.04 33.64 17.45 191 (209) Moderately Low
6 Tata Retirement Saving Cnsrv Gr 24.99 189 70.84 19.66 9.50 46 1.94 57.00 17.35 197 (224) Moderately Low
7 Franklin India Pension Plan Gr 160.48 461 77.30 19.04 3.66 30 1.57 40.40 16.98 216 (307) Low
8 Tata Retirement Saving Mod Gr 43.61 1,608 69.55 19.04 11.41 48 2.36 36.39 16.91 218 (234) Moderately Low
9 Aditya BSL Ret Fd 40s Reg Gr 13.27 95 46.34 40.20 13.46 41 2.09 51.82 16.88 219 (212) Low
Equity - Dividend Yield
1 Aditya BSL Div Yield Gr 252.42 860 45.32 20.31 30.70 45 1.80 35.57 18.21 149 (100) Moderately High
2 ICICI Pru Dividend Yield Eq Gr 26.42 530 76.36 11.35 12.29 36 2.20 39.34 17.74 173 (194) Moderate
Global - Other
1 Aditya BSL Intl Equity B Gr 27.18 106 46.83 10.24 42.93 38 2.50 39.41 19.95 75 (81) Moderate
All the NAV figures are for date Nov., 26, 2021. Trailing returns are also calculated for the same date. AUM, weightage of a stocks, number
ofcompanies and expense ratio are for the period ending October 2021.

Special Report
MF Page - 20
A Guide To Claiming
Life Insurance
The article explains in detail the kinds of maturity benefits that may be claimed from the insurance company in
N
case a policy has matured or the policy owner has expired before the maturity date
owadays people are well aware about the fact of the surplus ‘with profit’ to the policyholders in the form of
that life insurance is a crucial component of bonus. Insurance companies invest a huge proportion of
their financial planning. A majority of people premiums collected from policyholders in government-secured
possess life insurance in order to secure their debt instruments and a minor proportion in equities. And
dependents and family in case of the based on earnings from the investments and claim experience,
unfortunate demise of a policyholder. Life the company distributes a part of the surplus ‘with-profit’ to the
insurance is a contract that pledges payment of an amount to policyholders, often known as a participating policy, in the
the person assured (or his nominee) on the happening of the form of bonus. The rate of bonus is determined after taking
event insured against. This insurance comes as a breather in into account several factors like return on investments, level of
difficult times. Whenever anyone purchases a life insurance bonus announced in the preceding years and other actuarial
policy, he or she would always want to know how much money assumptions.
would be due to him and when.
That is precisely the aim behind purchasing a policy. Presently,

life insurance companies being empathetic are creating
hassle-free processes for the deceased’s family as they face
emotional breakdown due to sudden demise. Insurance
companies have an obligation to settle claims promptly as it is
one of the significant services that an insurance company can
provide to its customers. The insurance contract is valid for
payment of the insured amount during the date of maturity or
specified dates at periodic intervals or in case of unfortunate
demise if it occurs during the policy term.
Life insurance is universally acknowledged to be an institution

which eliminates ‘risk’, substituting certainty for uncertainty 1. Simple Reversionary Bonus: Such bonus is declared as a
and comes to the timely aid of the family in the unfortunate percentage rate, applied to the sum assured in respect of
event of death of the breadwinner. Life insurance, in short, is the basic policy benefit. Under this type of bonus, the
concerned with two hazards that stand across the life path of calculation is done on the basis of simple interest. At the
every person: end of each policy year, an annual bonus is declared and
n That of dying prematurely, leaving a dependent family to it is accumulated to be paid at the time of claim or at
paddle their own canoe maturity. The interest of the bonus which has been
n That of living till old age without visible means of accrued does not earn cumulative interest and only the
support. principal amount is considered in the interest calculation.
2. Compound Reversionary Bonus: The calculation is
Let’s discuss some of the benefits which come along with the done on the basis of compound interest i.e. the bonus is
insurance policies. Life insurance companies distribute a part computed as a percentage on the sum assured and on all

MF Page - 21
preceding accumulated bonuses. with it including protection cover will cease to exist. Therefore,
3. Interim Bonus: Interim bonus is payable for those ideally, you should consider terminating the policy only if you
policies that mature as a result of a death claim in believe that you have been sold a policy that does not fulfil your
between two bonus declaration dates. While the policy requirements, or the features prove to be different from what
has already accrued the bonus declared at the end of the was promised to you.
last financial year, there may be a short period in between
the bonus declaration date and the maturity or claim date Proceeding with the Claim
for which the policy has not received bonus. In such When a family faces any sudden or unfortunate demise of their
cases, a bonus is added on a pro-rata basis using the loved one who is the sole breadwinner of the family then they
interim bonus rates declared by the company. may be in need of immediate cash in order to pay off any
4. Cash Bonus: This provides the policyholder an hospital bills or follow any proceedings related to death. So, in
opportunity to receive the bonus year on year rather than this case, beneficiaries need to know how to collect life
the usual way of accruing till bonus maturity. The insurance payments they are entitled to as proceeds from life
insurance company may decide to give the bonus in cash, insurance policies provide quick income for surviving family
i.e. bonus accruing in a year is paid to the policyholder at members. It is common for the policy beneficiary to deal with
the end of the year. the insurance company directly, get the claim process started as
soon as possible and collect benefits. For the same reason one
The most common types of claims are maturity must have answers to the following questions:
claim and death claim: n What type of life insurance policy or policies did the
deceased have?
1. Maturity Claim: At maturity, the insured gets the sum n Were the policies still in force at the time of death?
assured, vested bonus and loyalty additions, if any. n What benefits they will be entitled to?
Maturity claim is associated with the maturity benefit of n Who are the beneficiaries?
the policy. It means that when the policy completes its n How much claim will the beneficiaries receive?
tenure, a certain amount of money, called maturity claim
amount, is settled towards the life assured. It is paid only To claim life insurance benefits, the beneficiary should contact
if the policy completes its due course of time and the the insurance company’s local agent, office or check the
policy has been continued properly, i.e. all due premiums company’s website. Subsequently, a claim form needs to be
have been paid on time. submitted with detailed information. One should not leave out
any details while filling out the claim form. This can lead to
Maturity Value = Sum Assured + outright rejection of your claim. The companies ask
[(Sum Assured*Bonus per 1,000*Term of Policy)/1000] beneficiaries for the following requirements: claimant’s
statement giving details of the deceased, death certificate, ID
2. Death Claim: The primary feature of a life insurance proof of the beneficiary, insurance policy papers, discharge
policy is the death benefit it provides. Permanent policies form (if any), post-mortem report (if death is due to any
provide a death benefit that is guaranteed for the life of unnatural cause).
the insured, provided the premiums have been paid and
the policy has not been surrendered. The death claim In some cases, insurance companies seek for additional
amount is payable in case of policies where premiums are information in case of suspicious death or a large policy
paid up to date or where the death occurs within the days amount. This additional information is required in order to
of grace. Payment from the policy may be lump sum or as verify the genuineness of the claim. Further, if more than one
an annuity, which is paid in regular instalments for either adult beneficiary was named, each should submit a claim form.
a specified period or for the beneficiary’s lifetime. If the insured’s death is suspicious and the policy amount is
large, the insurer may investigate the circumstances
Surrender Value surrounding the death before deciding whether it has an
If in case any policyholder is not willing to continue his or her obligation to pay the claim.
insurance policy during the policy term then he or she has the
option of surrendering the policy. When the policyholder Conclusion
surrenders a policy before the maturity period for its cash value, To conclude, while making claim one should be aware of
life insurance protection ceases and the insurer has no further various components discussed in the above article as it might
obligation under the policy. When an insured surrenders the help you in receiving the right amount of claim with all the
policy before maturity, he or she does not get 100 per cent of benefits. Before claiming insurance the beneficiary should go
paid-up value but a percentage as mentioned in the policy. through the policy document of the deceased so that he does
What is the disadvantage of exiting the policy before maturity? not miss out on any information and ends up with a rejection of
Once you exit the insurance policy, all the benefits associated the claim from the insurance company. DS

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Vol. 37. No.

01 • DEC 06 - 19, 2021

Small is Profitable Too! Communication Feature sections

4 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

6 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

Pune Office Hindustan Unilever l Buy 2318.45 Kerbside 45

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 7

A Reuters’ poll of economists found that

8 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

The net profit stood at `77.39 crore, again

10 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

GROWING WITH AN ‘IRON’ HAND

High dividend payouts The company has delivered excellent

12 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

BSE CODE Volume Face Value Target Stoploss

crore reported in Q2FY21. The operating

(Closing price as of Nov 30, 2021)

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 13

The broader market suddenly

14 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

KOPRAN LTD. ............................ BUY ............................. CMP `258.85

APOLLO HOSPITALS ENTERPRISE LTD. ......... BUY ....... CMP `5,726.65

After an eight-week cup breakout, the stock has

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 15

16 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 17

18 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 19

Sailing On The Tide

As the biggest flexible packaging company in India, UFlex has

What steps are being taken by UFlex to grow its market

Then, we commissioned a new BOPP line with capacity of

20 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 21

Ang Lifesciences India

22 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

n Focus on Irrigation : The irrigation sector is the key end-user

24 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

Performance of Top 25 Listed Plastic Product Companies

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 25

n Lower Spending by Consumers: In FY 2020-21, there was a

Future Outlook of Piping Sector

26 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

n Digitalisation and Internet of Things (IoT): Digital efforts

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 27

28 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

What is Contrarian Investing?

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 29

30 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

Santosh Meena, Head of Research, Swastika Investmart Ltd.

True Blue Contrarians Beaten Down Pharma Stocks

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 31

Company Name Sector YTD returns (%)

the number of 52-week high stocks to estimate when the Conclusion

32 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

What is your outlook on the Indian speciality chemicals

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 33

Could you discuss in brief the recent announcement made by

34 DALAL STREET INVESTMENT JOURNAL I DEC 06 - 19, 2021 DSIJ.in

DSIJ.in DEC 06 - 19, 2021 I DALAL STREET INVESTMENT JOURNAL 35