10 Most Asked Questions in the Stock Market

10 Most Asked Questions in the Stock Market
by Nikita Bhoota 23/12/2020
The individuals who are starting their journey into investing through the stock market may have many questions.  They might be confused about how to invest in the stock market? Or what homework is to be done before investing in the share market? that will help to select the right stocks for investment which will reap huge benefits in the long-run.

Here, we have tried to cover some of the questions that individuals would have who are planning to invest in the stock market or are already market players (investors) in the share market.

1. How to find good companies as there are many publicly listed companies in the Indian stock market?
An easier way is to use a stock screener. A stock screener is a tool to choose a few companies from a pool of all the listed companies on a stock exchange using filters. The individuals can apply some filters like valuations, the market cap of the company etc. The filters should be specific to the industry that the individual is analysing and get a list of stocks based on the criteria applied.

2. How much time should I spend while researching stocks?
It depends on whether the individual is selecting the stock for trading or for long-term investment. If the individual is trading in stocks, then there is no need to spend a lot of time on fundamentals. Rather, here the person should read charts, trends, patterns etc and get more involved in the day-to-day market activity.

On the contrary, if the person is investing for the long-term then more time should be invested while studying the stocks. It is essential to check the fundamentals of the company, its management, financial, competitors etc if the investment horizon is of more than 1 year.

3. Where can I get the company’s financial report and other information?
The company information is easily available on stocks exchanges (NSE, BSE), company website under investor relations or about us section of the website. The information is also available on other financial websites like money control, screener.com etc.

We also recommend reading annual reports of the company to have a deep understanding of the company’s business and its future prospects.

4. Should I invest in the upcoming IPOs?
IPOs are the products of the bull market. The companies generally get public when everything is good in the market like people are optimistic, the economy is doing well to earn listing profits. The real test of a company is during the bear market i.e how they survive in the falling market.

If the individual can find such IPOs that are very promising (good business model, strong financials, efficient management, decent valuation etc), then feel free to invest in them.

Also read: What to consider before investing in an IPO?

5. Is investing in small-caps more profitable than bluechip companies?
Small-cap companies have the potential to grow faster compared to bluechip companies. There can be a number of hidden gems in the small-cap industry that are yet not discovered by the market. On the other hand, large-cap companies have already proved their potential to the market.

Besides, the quality of stock is more important than the size of the company. There are a number of large-cap companies which has consistently given good returns to their shareholders. Overall, investing in small caps can be more profitable than large caps only if the fundamentals and future prospects of the business look promising.

6. Should I invest in stocks when the market is at high?
If the market is high, then start making the watchlist of stocks. Keep an eye on the stocks with good fundamentals. If the investor finds some good stocks and is ready to invest, then avoid lump sum investment. Average out the stocks, this will reduce the chances of buying stocks at a high price.

7. What kind of stocks should be avoided for investment?
The individual should avoid investing in stocks having low liquidity. The low liquidity makes it hard to trade in these stocks. Additionally, finding the data for analysing these companies might be hard as information on public platforms is generally not easily available. Thus, lack of research may result in loss-making investments. Additionally, one should also avoid investing in penny stocks.

8. How many stocks should I buy in my portfolio?
The portfolio should not be over diversified as over-diversification does not yield good results and it becomes difficult to keep an eye on all the stocks. Similarly, the portfolio should not also be concentrated in one or two stocks/ industries as a tremendous fall in the price of one stock will adversely affect the overall portfolio performance.

Usually, investors can have 8-10 stocks in the portfolio depending on the amount of investment.

9. How much returns can I expect from the market?
A stock portfolio will include multiple stocks. Sometimes, some stocks will perform exceedingly well, while some will not. The portfolio return will be the result of performing and non-performing stocks.

In the bull market, the portfolio will give attractive returns (the benchmark index Nifty gave a return of ~67% from April 01,2020 till December 18,2020. However, during a bad market- the returns can be as low as 1-2% or market returns can also be negative.

10. How can I track my stock portfolio?
To be a successful investor it is important to do portfolio analysis at regular intervals. But how exactly to track your stock portfolio? Is it only checking the stock price movement? Or is there much more to check?

The individual can read this on How can an investor track his equity (stock) portfolio?
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7 Stocks to Buy in 2021

7 Stocks to Buy in 2021
by Nikita Bhoota 04/01/2021

Outlook: 
The Indian economy has fared relatively better than expected in 2020. Nifty 50 and Sensex have jumped 15% and 16% respectively from January 01,2020- December 31,2020 respectively. The efforts taken by the GoI and RBI aren’t glorified enough and have played a major role in rural revival. Favourable policies and rural tailwinds are expected to be key drivers whilst urban economy nurses back to recovery. Some economic & health indicators are pointing at gradual normalisation which sets the stage for upwards revision to GDP forecast. Political stability is an important factor that will support the markets. Although the valuations are expensive and are factoring most positives, uptick in commodity prices pose a risk to inflation. However, the impact on our recommended portfolio is not expected to be significant. We have picked stocks that either have resilient business models which stood the test of time or are available at compelling valuation and/or have attractive dividend yield.

Top Picks for long-Term:

Reliance Industries (RIL)

CMP: Rs 1,985
Target: Rs 2,204 
Upside: ~11% 

Reliance Industries (RIL), India’s largest company by market capitalization, has major presence across petroleum refining & marketing, petrochemicals, retail and telecom & technology. RIL’s has a highly integrated and complex O2C operation which provides cushion during volatile periods. The refining margins are under pressure however, RIL has the ability to adjust its product slate in-line with changing product crack and it stands to benefit the most from improving middle distillate cracks. As for petchem, RIL has high level of flexibility to choose feedstock which enhances its margins and we believe that RIL stands to benefit from sharp spike in margins of key petchem products. The Retail and Jio businesses have enabled significant deleveraging and have transformed the company which has provided support during volatile period for O2C. Factors like tariff hikes, entry in post-paid & enterprise segments and collaboration with Google for entry-level smart phone would drive growth for Jio. New store opening and scale up of JioMart along with inorganic opportunities are main drivers for R-Retail.

 

 

Year

Revenue(RsCr)

EBIDA(%)

EPS(Rs)

PE(x)

FY21E

6,06,888

12.2

65.3

30.4

FY22E

6,89,424

13.5

73.1

27.2

Source: 5paisa Research, Price and valuations as on December 31, 2020


 HCL Technologies:

CMP: Rs 946
Target: Rs 1,048
Upside: ~11% 

HCL Tech is India’s third largest listed IT services company by revenue and is the only company with major presence across services and products. It also has a leadership position in IMS. The company has been witnessing solid traction in deal wins and the pipe line remains robust which provides good revenue visibility. We believe that HCL’s portfolio is relatively insulated vs. peers as it has lower concentration to verticals like travel, energy, hospitality, etc. and higher exposure to low-impact verticals like BFSI, healthcare and technology. Moreover, it has ~37% exposure to IMS (resilient service line) where it has strong partnerships and capabilities that can enable it to capitalize on opportunities in areas of cloud migration and network security. HCL Tech has been successful in strengthening its Products & Platform segment by acquiring IBM products, which have yielded positive results in the first year. This BU too has shown resilience and provides recurring revenue stream.
 

Year

Revenue(RsCr)

EBIT(%)

EPS(Rs)

PE(x)

FY21E

75,523

20.9

45.6

20.7

FY22E

83,513

20.9

51.1

18.5

Source: 5paisa Research, Price and valuations as on December 31, 2020

Power Grid Corporation of India

CMP: Rs 190
Target: Rs 220
Upside: ~16% 

Power Grid Corporation of India Ltd. (POWERGRID) one of the world’s largest electrical power transmission utilities should benefit from steady capitalization and the regulated ROE model which should drive standalone PAT over the next few years. The company has orders in hand worth ?41,000cr and the company has guided that it has projects in pipeline of ~?17,900cr for inter/intra state transmission work works. Additionally, projects of 20GW from Rajasthan, 20GW from Gujarat and 10GW Leh-Ladakh RE Parks are under consideration with opportunity size of ~?28,000-30,000cr. We believe that current orders and pipeline offers growth visibility for next 3 years. Although the lack of significant new orders has resulted in declining order book, the management has indicated in the past that it will maximize payout of dividend if there is no capex to meet. Hence, we expect dividend to increase form ?10 per share in FY20 to ?14.3 and ?15.0 per share in FY22E and FY23E respectively. Moreover, the company is best placed to gain from pick up in transmission investments over the long run.
 

Year

Revenue(RsCr)

EPS(Rs)

PE(x)

FY21E

39,299

20.6

9.2

FY22E

42,738

23.9

7.9

Source: 5paisa Research, Price and valuations as on December 31, 2020, *standalone numbers

Tata Consumer Products (TCPL)

CMP: Rs 590
Target: Rs 688
Upside: ~17% 

Tata Consumer Products (TCPL), the second largest branded tea player in the world is transforming from being a largely branded tea & coffee player into a diversified FMCG company. We believe that TCPL would be a key beneficiary of gradual shift from unbranded to branded tea in a market where top two (TCPL & HUL) account for ~45% by value and the unorganized segment accounts for ~40-45% share. Apart from its already established two key brands (Tata Tea and Salt), the company intends to drive growth from its relatively smaller portfolio of pulses and spices (Tata Sampann). We believe that there is significant opportunity for TCPL to leverage on the direct reach of the tea portfolio. Moreover, the integration of food business is expected to yield synergies of 2-3% of sales of the combined entity and only part of the synergy has been realized so far.
 

Year

Revenue(RsCr)

EBIDA(%)

EPS(Rs)

PE(x)

FY21E

11,231

14.3

10.6

55.7

FY22E

12,061

14.6

11.5

51.3

Source: 5paisa Research, Price and valuations as on December 31, 2020

Coforge (COFO):

CMP: Rs 2,706
Target: Rs 3,043
Upside: ~13% 

Coforge (erstwhile NIIT Technologies), a part of Baring Private Equity, is mid-size IT services company which has been posting sector leading growth profile after change in management and reorientation of its Go-To-Market strategy. COFO has continuously invested in building digital capabilities and its specialisation in emerging tech, including digital integration, in verticals such as insurance, BFS and transportation has given it scale that is equivalent to a large peer. Consistent focus on client mining and deal wins have aided the sector leading growth rates. This has enabled it to perform well despite significant impact on its travel vertical (~19% of revenue) in Q1FY21. Coforge has a healthy deal pipeline and executable orders of USD489mn over the next 12 months. The healthy order intake on TTM basis implies a book-to-bill ratio of 1.3x. Led by consistent top-quartile growth, COFO has traded at ~19% premium to mid-cap peers over the past two years. We believe the stock will continue to command premium valuations, given its strong execution capabilities.
 

Year

Revenue(RsCr)

EBIDA(%)

EPS(Rs)

PE(x)

FY21E

4,675

13.3

80.7

33.5

FY22E

5,474

15.1

109.7

24.7

Source: 5paisa Research, Price and valuations as on December 31, 2020

RBL Bank:

CMP: Rs 231
Target: Rs 300
Upside: ~30% 

RBL Bank, one of India’s fastest growing private sector banks with an expanding presence across the country, is an attractive play given the steep discount to peers and improved business model. RBL has an adequate capital positioning with a Tier-1 CAR of 15.1% and total CAR of 16.5% as on Q2FY21. This is further set to strengthen after infusion of ~?1,566cr via preferential allotment in 3QFY21, which would add ~230bps to CET-1 capital. Stronger internal accruals, potential resolution and Corporate portfolio consolidation will ensure good capitalisation for the near-to-medium term. RBL’s overall profitability is expected to improve going ahead on account of improvement in NIMs and lower credit cost. Improvement in NIM going forward would be driven by the increasing share of retail loans, deposit rate cuts and run-down of excess liquidity while improving asset quality is expected to bring down credit cost from peak levels. On the liability side, RBL has delivered a strong 32% yoy growth in H1FY21 and shed bulk deposits. Despite improving profile, RBL is currently trading at a higher discount to peers like IndusInd, City Union and AU than its average discount since listing; similarly, it is trading at a far lower premium to Federal Bank than its average premium.
 

Year

NII(RsCr)

PPOP(RsCr)

EPS(Rs)

P/BV

FY21E

3,950

2,880

10.1

1.0

FY22E

4,450

3,110

19.5

0.9

Source: 5paisa Research, Price and valuations as on December 31, 2020, *standalone numbers

Kaveri Seeds

CMP: Rs 520
Target: Rs 714
Upside: ~37% 

Kaveri Seeds is one of India's leading seed producers, with a broad product portfolio that includes hybrids for cotton, corn, paddy, bajra, sunflower, sorghum and various vegetables. Kaveri Seeds has not raised any external money in the form of either equity or debt, and meanwhile has paid out ~?850cr to shareholders (including FY20) via share buybacks & dividends. This reflect the company’s strong FCF generation. The non-cotton portfolio now contributes around half of total seed revenues but nearly 70% of total seed EBITDA. The non-cotton portfolio is likely to grow faster than the cotton portfolio (barring approval for new technology in cotton) and also generates higher margins. Kaveri remains ignored by most investors despite steady EPS growth, ~45% ‘core’ ROE (ex-cash), and a 7-8% dividend + buyback yield. At 9.8x FY21E PE, it looks clearly undervalued. We believe the shift in earnings mix towards the non-cotton business – which is less regulated, higher-margin and faster-growing – could drive an expansion in margins and an increase in valuation multiples over time.
 

Year

Revenue(RsCr)

EBIDA(%)

EPS(Rs)

PE(x)

FY21E

10,560

29.0

53.3

9.8

FY22E

11,716

29.6

59.5

8.7

Source: 5paisa Research, Price and valuations as on December 31, 2020

 

 

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Equity Mutual Funds Recommendations For January 2021

Equity Mutual Funds Recommendations For January 2021
by Mrinmai Shinde 08/01/2021

When it comes to your financials, we are all geared up to make 2021 your best yet! And in the move we are now going to recommend you top funds which you can consider investing into. 

We all know that disciplined investment is the key to achieve your financial goals. But to make these investment, you need to take informed decisions. So through this article, we are aiming at helping you gain all the vital information about the top performing funds to help you churn out maximum profits by making your money work harder for you, than you do for it. 

Here’s all you need to know about the top performing Equity Mutual Funds.
 

Scheme

AUM(?cr)

6M(%)

1Y(%)

MiraeAssetLargeCapFund(G)

20,797

33.4

13.7

IIFLFocusedEquityFund(G)

1,210

38.3

23.8

UTIEquityFund(G)

13,546

46.4

31.5

AxisMidcapFund(G)

7,878

33.3

26

NipponIndiaSmallCapFund(G)

10,398

45.3

29.2

(Note: Returns less than 1 year are absolute; Returns greater than 1 year are CAGR; AUM is as on November 2020; Returns are as on December 31, 2020) 
Source: ACE MF


Mirae Asset Large Cap Fund : 
It is an equity fund that primarily invests (at least 80% of AUM) in top Nifty companies by market capitalization. Remaining 20% is invested in high conviction mid cap ideas.  The key investment strategy involves investing in high quality businesses available at a reasonable price and holding the same over the period of times. Thus, the scheme focuses to identify companies which have sustainable competitive advantage in their space and therefore have strong pricing power.
 

  • As of November 2020, the fund had invested 86% of AUM in large cap stocks while 11% was invested in mid cap stocks. 
  • The fund had highest allocation to Banks (25.8%) followed by Information Technology (12.8%).
  • Its top stock holdings consist of HDFC Bank (11.2%) followed by Reliance Industries (9.0%) and Infosys (8.3%).

Investors who prefer to invest in a diversified portfolio of blue chip stocks can invest in this fund to create wealth in the long term. This scheme is suitable for investors with moderately high risk appetite and at least 5 years of investment horizon. 

IIFL Focused Equity Fund

Focused category mutual fund schemes aim to generate superior return through a concentrated portfolio of equity & equity related instruments. IIFL Focused Equity Fund’s key objective is to generate long term capital appreciation from a portfolio of equity & equity related securities by investing in maximum 30 stocks of various market capitalisation.

The scheme follows multi-cap approach with orientation towards large cap companies. Its stock selection criteria is based on three attributes viz. (1) companies which are prime beneficiaries of secular growth, (2) companies which are poised for strong uptick in performance due to cyclical upturn, (3) defensives which are poised for higher growth. 
 
  • As of November 2020, the fund had invested 67% of AUM in large cap stocks while allocation to mid cap and small cap stocks was 16% and 14% respectively.
  • The fund had highest allocation in Banks (20.2%) followed by Pharma (12.4%). 
  • It top holdings consist of ICICI Bank (9.7%) followed by HDFC Bank (6.7%) and Infosys (5.6%).

Investors with moderately high risk appetite and an investment horizon of at least 5 years, can look to invest in this scheme to accumulate wealth in the long run. 

UTI Equity Fund

The fund aims to generate long term capital appreciation by investing predominantly in equity and equity related securities of companies across the market capitalisation. The scheme focuses on high quality businesses that have an ability to show strong growth for a long period of time and are run by seasoned managements. The fund follows a bottom up stock selection with well-defined metrics of free cash flows, capital efficiency and ability to compound earnings
 
  • As of November 2020, the fund had invested 64% of AUM in large cap stocks while 28% was invested in mid cap stocks. 
  • The fund had highest allocation to Banks (15.2%) followed by Information Technology (14.2%)
  • Its top stock holdings comprise of Bajaj Finance (7.0%), HDFC Bank (6.3%) and Kotak Mahindra Bank (5.1%)

Investors who prefer to invest in a diversified portfolio of stocks can invest in this fund to create wealth in the long term. This scheme is suitable for investors with moderately high risk appetite and at least 5 years of investment horizon. 

Axis Midcap Fund

It is an equity based fund that aims to generate capital appreciation by actively managing a diversified portfolio of a mid cap stocks, that is the companies ranked from 101st to 250th by market capitalization. The fund looks to identify and invest in midcap companies that have the potential to deliver superior returns due to potential of faster earnings growth.
 
  • As of November 2020, the fund had invested 71% of AUM in mid cap stocks, while 24% was invested in large cap stocks. 
  • The fund had highest allocation to Pharma (11.4%) followed by Banks (10.3%).
  • The scheme’s top holdings comprise of Cholamandalam Investment & Finance (4.9%), PI Industries (4.4%) and Voltas (4.0%).

Investors looking for inflation-beating superior returns in the long run can invest in this scheme. Mid cap funds are suitable for those investors who have high appetite for market volatility and investment horizon of 7-8 years. 

Nippon India Small Cap Fund

The scheme predominantly invests in equity and equity related instruments of small cap stocks, that is the companies ranked 251st and beyond by market cap. The scheme identifies small cap companies which are mid-caps of tomorrow and offer dual advantage of high growth prospects and relatively low valuation. Thus ,the fund focuses on good growth businesses with reasonable size, quality management and rational valuation. 
 
  • As of November 2020, 78% of its AUM was invested in small cap stocks while 12% was invested in mid cap stocks. 
  • It has highest allocation to Chemicals (7.6%) followed by Auto Ancillaries (6.3%).
  • The fund’s top stock holdings comprise of Deepak Nitrite (4.6%), Navin Flourine (3.3%) and Tube Investments (3.1%).

Investors who are seeking to invest in a diversified portfolio of small cap stocks and desire for risk adjusted returns in the long run can invest in this scheme. This open ended scheme is relevant for investors who have high risk appetite with investment horizon of 8-10 years.

 

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Investing In Indian Markets vs US Markets

Investing In Indian Markets vs US Markets
by Vested Team 14/01/2021

“Never invest in a business you cannot understand”. An oft repeated quote from Warren Buffet, but one that perhaps takes different interpretations now as Indian investors warm up to investment opportunities outside the country – the USA, in particular. The intelligent investor would now rather understand the US market and begin his investment journey there as well, instead of skipping the market for exclusively domestic opportunities. After all, investors are often advised to diversify their investments geographically by investing in both national and international markets.

US investing is often sold by statements such as “The US indices have outperformed Indian markets by 8-15% in the last decade”. But if investors give into such statements on face-value and expect the same level of performance in the future, they’re likely to be met with disappointment. Past performance is no guarantee of future returns, after all. Which is why we’ve come up with some factors against which both the US markets and Indian markets can be compared, to help you make the right decision.

Portfolio Diversification

“What’s interesting about US stocks is that you not only get exposure to the United States but also to the world, as many companies have global operations but are listed there.” This statement by Viram Shah, co-founder and CEO of Vested Finance, sheds light on the many advantages provided by investment opportunities in the US market.

Due to the ongoing coronavirus pandemic, equities globally fell together, with decline in the range of over 20-30%. Diversification of investments would have proven to be effective and beneficial during this time. By 8th June 2020, the S&P500 had already recovered all of its coronavirus-induced losses. The Sensex meanwhile, was still 17% down.

Currency

The currency you trade in and invest with can have significant implications on your portfolio, which can be both positive and negative. They play a pivotal role when it comes to investing in US markets.

Take the Indian Rupee – which has witnessed a consistent decline in value against the American Dollar. This is a major con because all investments made in the Indian markets are in INR, which means they decline in value over time. In this year alone, the dollar is up 6% against the rupee.

One of the major advantages of investing in US markets is the American Dollar. As it appreciates in value, so do your investments, even if your portfolio itself is unchanged. 

Global Factors

While the Indian start-up ecosystem has been thriving, the US markets continue to host all major corporations leading their sectors with innovative offerings. For investors in India, it isn’t possible to participate in growth stories at home – since Indian laws mandate 3 years of consecutive profits before a company can go public. The story of many start-ups being one of deferred profits for growth and market share, this effectively shuts most Indian investors out of the opportunity to show their confidence in new business models. But relatively lax requirements in the US, means it’s possible for investors globally to participate in the journeys of many innovative models – and we’ve seen often how that plays out. Uber, Amazon, Tesla, Facebook – all these and more are the results of the US market and its model. For many investors, it can be crucial for their investment portfolio to evolve to keep up with these opportunities.

The US market therefore, is a more promising prospect as it allows global exposure and enables investors to grow with the biggest companies in the world, such as Google, Amazon, Facebook, etc. 

Research & Efforts 

It is true that involving yourself in 2 markets would demand attention and research for two economics, in addition to multiple other global factors that influence these markets. To an average investor, this may well be a daunting and time-consuming task. Some may see diminishing returns in this exercise and may be willing to forego the potential for higher profits in favour of lower efforts. This concern may be addressed by investing in US markets by ETFs, which lower risk by diversification. But Indian markets do retain some edge on this aspect for the average investor. 

Volatility

When compared to Indian markets, the US markets have been less volatile in the long run. Indian equities have shown great volatility, with bigger swings in returns over the years. This is another reason experts recommend diversification when it comes to investing, since risks are spread out and diminished. Moreover, investors who choose to diversify by investing in US markets can expect their portfolios to move differently from Indian indices. 

Which market is better? 

Sure, both the Indian and the US markets have their advantages. But in a modern investing climate with access to the international market, it’s easy to see how US markets show more promise. This is in part due to their global affinity and nature, as well as the fact they host some of the most promising companies in the world. While the Indian market should certainly remain a significant part of an investor’s portfolio, there’s no denying that the US makes a strong case for a place in the Indian investor’s portfolio. 
 

Source: Vested Team

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Which are the stocks that generated magnificent returns in the past 10 years?

Which are the stocks that generated magnificent returns in the past 10 years?
by Nikita Bhoota 15/01/2021

It is rightly said that if one stays invested in the equity markets for longer-term, the investment is likely to generate magnificent returns in the long-run.  Mr. Warren Buffet says” If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”

Given the fact that Buffett’s time horizon is a decade, we have also analysed some of the stocks from the Nifty 100 list that have generated more than 20% CAGR over a period of 10 years.
 

Company Name

17-Aug-11

17-Aug-21

10 year CAGR

Bajaj Finance Ltd.

67.3

6,410.1

57.7%

Bajaj Finserv Ltd.

488.4

14,737.3

40.6%

Berger Paints India Ltd.

37.3

815.0

36.1%

Eicher Motors Ltd.

136.0

2,515.7

33.9%

Havells India Ltd.

68.1

1,224.4

33.5%

Shree Cement Ltd.

1,651.3

26,200.3

31.8%

Britannia Industries Ltd.

236.6

3,696.5

31.6%

Info Edge (India) Ltd.

351.2

5,455.3

31.6%

Pidilite Industries Ltd.

168.2

2,216.1

29.4%

Abbott India Ltd.

1,470.1

19,045.3

29.2%

HCL Technologies Ltd.

105.8

1,143.0

26.9%

Aurobindo Pharma Ltd.

71.4

731.5

26.2%

Torrent Pharmaceuticals Ltd.

308.5

3,008.1

25.6%

Asian Paints Ltd.

324.5

3,015.3

25.0%

Titan Company Ltd.

210.4

1,874.5

24.4%

Kotak Mahindra Bank Ltd.

222.8

1,788.4

23.2%

Tech Mahindra Ltd.

179.0

1,413.7

23.0%

Hindustan Unilever Ltd.

316.4

2,483.8

22.9%

Motherson Sumi Systems Ltd.

28.9

216.2

22.3%

Biocon Ltd.

54.3

366.6

21.0%

Marico Ltd.

79.7

520.6

20.7%

HDFC Bank Ltd.

233.8

1,514.7

20.5%

Indraprastha Gas Ltd.

84.3

534.9

20.3%


Disclaimer: The above details is compiled from information available on public platforms. These are not buy or sell recommendations.Source: Ace Equity
*CAGR stands for Compound annual growth rate


Bajaj Finance Ltd:
Bajaj Finance (BAF), erstwhile Bajaj Auto Finance, provides financing for two-wheelers, consumer durables, housing, small businesses, construction equipment and infrastructure finance. BAF continues to be the largest consumer durables lender in India. The stock generated 57.7% CAGR in the past 10 years.

Eicher Motors Ltd.
Eicher Motors is the flagship company of the Eicher Group in India and a leading player in the Indian automobile industry. Eicher manufactures the well-known Royal Enfield (RE) motorcycles in India. The company entered into a 50:50 JV with the Volvo Group to form VE Commercial Vehicles (VECVs). Operational since July 2008, VECV comprises five business verticals – Eicher Trucks and Buses, Volvo Trucks India, Eicher Engineering Components and VE Powertrain. VECV undertakes the complete range of Eicher’s commercial vehicles, components and engineering design businesses as well as the sales and distribution of Volvo trucks. 

Berger Paints India Ltd:
Berger has presence in the decorative paints, industrial coatings segments in the domestic and international markets. Further, it has a presence in external insulation finishing systems. In the industrial coatings segment, Berger caters to the protective coatings, automotive (primarily two-wheeler and three-wheeler and commercial vehicles) and general industrial segments. 

Britannia Industries Ltd.
Britannia Industries is a primarily biscuits company based in Bangalore. Britannia Industries belongs to the Wadia Group, a cotton-to-real estate conglomerate. The company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products. Biscuits contribute more than 80% of the company’s turnover. It has iconic brands like Tiger, Good Day and 50-50 under its belt.

Info Edge (India) Ltd.
Info Edge’s naukri.com, the leading online portal for recruitments in India, was launched in 1997. It also operates Quadrangle, a brick-andmortar executive search service. The company also has other classified based portals, jeevansathi.com (matrimony), 99acres.com (real estate) and shiksha.com (education). Info Edge’s key investments include Zomato and Policybazaar. 


Shree Cement Ltd.
Shree Cement (SCL) is the second-largest cement player in the country, with capacity of 42mtpa. SCL derives ~70% of its sales from the northern + central regions and ~25% from the eastern region, with the balance from the South.

Abbott India Ltd:
Abbott India ltd (AIL) is a healthcare company that discovers, develops, manufactures and markets various products in area of Anesthesia, Animal Health, Anti-Infectives, Cardiovascular, Diabetes Care, Hematology, Immunodiagnostics and Clinical Chemistry, Immunology, Metabolics, Molecular, Neuroscience, Nutrition, Oncology, Pain Care, Point of Care, Renal Care, Vascular, Virology.

Asian Paints Ltd.
Asian Paints, the largest paint manufacturer in India, operates in the decorative as well as the industrial coatings segments (through its JV with PPG Industries) and has been the market leader in the Indian paints industry since 1968. The company is the second-largest automotive coatings player in India and caters for the auto OEM and refinish markets. Asia contributes the largest share of revenue to its international business (46%), with the rest coming from the Middle East (28%), Africa (25%) and South Pacific regions (5%). 

Torrent Pharmaceuticals Ltd.

Torrent Pharma (Torrent) is a fully integrated pharmaceutical company producing branded and generic formulations, API and intermediates. Almost 39% of Torrent’s revenues come from the domestic market where the company has a specialty-focused product basket and a strong marketing set-up. It ranks second in the CVS and third in the CNS segment – two of the faster-growing  therapies in India. 


The Indian stock market has witnessed huge ups and downs in the last 10 years. The factors that largely affect the share market performance are changes in Government policy, economic numbers, activities of FII and DII in the stock market, devastating effects of natural disasters.

Additionally, factors like political changes like election, budget, government intervention, geopolitical issues also have a huge impact on the financial markets. Frequent changes in exchange rates, changes in gold and bond prices also impact the stock performance. Inflation and interest rate also plays a crucial role in deciding the market movement.

Above all the challenges, the above-mentioned stocks have surpassed the benchmark index Nifty 50 and Sensex CAGR of 12.6% and 12.7% respectively in the same period. 

However, investors should not select the stocks for investment based only on historical returns. They should also consider the fundamentals of the company before picking up stocks for investment. The stocks with strong fundamentals are likely to earn good returns in the long-run.

Disclaimer: The above details is compiled from information available on public platforms. These are not buy or sell recommendations.

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What people and sectors are expecting from Budget 2021?

What people and sectors are expecting from Budget 2021?
by Nikita Bhoota 25/01/2021
The coronavirus pandemic has severely impacted lives across the world in many ways. Many people have witnessed financial setbacks in the country during the pandemic. The way people spend or save their money has drastically changed due to economic uncertainties. Work from home has become a 'new trend for salaried employees. Buying an insurance product, especially health insurance has gained much more importance over luxury products. 

Finance minister Nirmala Sitharaman is going to present the Union Budget on 1 February, 2021. To boost the economy, the Budget must focus on pushing consumption which means putting more money in the hands of people.
From tax relief to more exemptions, here's what Indian salaried individuals and others expects from Budget 2021

Increase the upper limit of Section 80C
Under Section 80C, an individual is eligible to claim tax deductions of up to ?1.5 lakh on various payments including life insurance premiums, principal payment of home loan, fixed deposits, provident funds etc. Considering the inflation in the recent past, the government may increase this upper limit to up to ?2.5-3 lakh. The rise in the exemption limit will inspire people to spend more on tax-saving instruments backed by the government. The increase in the deduction limit under Section 80C was last increased in 2014.

Hike tax rebate on housing loans
To boost spending and to support the real estate industry, the Union Budget 2021 should introduce more tax exemptions for the homebuyers. Currently, an individual gets ?1.5 lakh exemptions under Section 80C and ?2 lakh under 24B for home loan. The tax rebate on housing loan interest rates under Section 24 should be increased to at least ?5 lakh to generate healthier housing demand.

Increase the upper cap on health insurance premium
The global pandemic has showed us that health insurance is a necessity, not an option anymore. Therefore, the government may increase the upper limit on health insurance premiums under Section 80D.

As per the provisions of section 80D, an individual can claim an exemption of up to ?25,000 (?50,000 or ?75,000 or ?1 lakh if bought for parents) on the premiums paid for the medical insurance of self and family.

Exempt long term capital gain tax:
The government should exempt long-term capital gains on the sale of Indian-listed equity shares. This measure will help the Indian capital markets grow exponentially and also encourage Indian resident investors to invest in the equity market. 


Work from home expenses:
Work from home has become a new trend now. It is expected that the government may provide some relief to taxpayers to compensate for the higher cost incurred while working from home; perhaps some deductions for expenses such as electricity etc or some kind of fixed deduction.

Now let’s talk about what industry expects from the budget:

Aviation and Real Estate:
The sector hopes for a reduction in high taxes and levies as airlines as the sector is highly impacted by Covid19.

Several policy steps have been taken to boost real estate in pandemic-hit 2020. The sector is now expecting the government to expand its affordable housing scheme and give more tax benefits to potential homebuyers.

Automobile, Defence and FMCG:
The auto sector has strongly recovered from the economic shock caused on account of Covid19. Automakers now expect more demand-creating measures in the budget for faster sales recovery.

The government is likely to announce higher budget allocation for the defence sector, with focus on indigenous procurement and R&D.

Like automobiles, the FMCG sector also expects more demand-boosting measures to sustain recovery momentum.

Healthcare:
After the pandemic-hit year, India’s healthcare sector is looking for reforms like reduction in taxes on healthcare and treatment besides higher budgetary allocation. Better allocation for pharma research is also on the cards.

Consumer durables/Electronics and Education:
Businesses engaged in selling consumer durables hopes for a reduction in component prices besides a demand push to boost sales.

The government is expected to allocate more funds towards strengthening technological capacities for improving online education in smaller cities, towns and rural areas. 

Agriculture and Railways
The government may increase its overall agriculture expenditure to pacify farmers protesting against its farm laws. 

Privatisation of trains and infrastructure development remains major priorities for the Indian Railways. Measures may be announced for better public-private partnership (PPP) in passenger train operations.