Subscription copy of [lokincredibl@gmail.com]. Redistribution prohibited.

SCAN TO
INVEST

A. HDFC TOP 100 Fund - SIP Performance^ - Regular Plan - Growth Option
Since Inception* 15 year SIP 10 year SIP 5 year SIP 3 year SIP 1 year SIP
Total Amount Invested@ (` in lacs) 32.80 18.00 12.00 6.00 3.60 1.20
Market Value as on January 31, 2024 (` in lacs)$$ 786.64 59.61 26.94 10.31 5.05 1.46
Returns& (%)$$ 18.90 14.61 15.44 21.78 23.17 41.75
Benchmark Returns (%)# N.A. 14.08 14.76 18.45 16.93 33.95
Additional Benchmark Returns (%)## 14.67 13.87 14.69 17.55 15.44 25.27
@
Assuming ` 10,000 invested systematically on the first Business Day of every month since October 11, 1996 (Scheme Inception Date). &CAGR returns are computed after accounting
for the cash flow by using XIRR method (investment internal rate of return) for Regular Plan - Growth Option. The above investment simulation is for illustrative purposes only
and should not be construed as a promise on minimum returns and safeguard of capital. SIP - Systematic Investment Plan. HDFC AMC/HDFC MF is not guaranteeing or assuring
any returns on investments in the Scheme.

B. HDFC Top 100 Fund - Performance^ - Regular Plan - Growth Option NAV as at January 31, 2024 ` 994.989 (per unit)
Period Scheme Returns Scheme Benchmark Additional Benchmark Value of investment of (`) 10,000
(%)$$ Returns (%)# Returns (%)##
Scheme (`)$$ Benchmark (`)# Additional Benchmark (`)##
Last 1 Year 33.91 26.56 22.10 13,391 12,656 12,210
Last 3 Years 23.37 18.36 17.11 18,799 16,595 16,076
Last 5 Years 16.37 16.23 16.00 21,349 21,224 21,008
Since Inception* 19.20 N.A. 13.87 12,13,198 N.A. 3,47,691
Common notes for the above table A & B: Past performance may or may not be sustained in future and is not a guarantee of any future returns. *Inception Date: October
11, 1996. The scheme is managed by Mr. Rahul Baijal since July 29, 2022. # NIFTY 100 (Total Returns Index). ## S&P BSE SENSEX (Total Returns Index). $$ All Distributions
declared prior to the splitting of the Scheme into IDCW & Growth Options are assumed to be reinvested in the units of the Scheme at the then prevailing NAV (ex-
distribution NAV). N.A. Not Available. ^Above returns are as on January 31, 2024.

C. Performance of Other Funds Managed by Mr. Rahul Baijal, Fund Manager of HDFC Top 100
Fund (who manages total 3 schemes of which 2 schemes have completed one year) Returns (%) as on January 31, 2024

Scheme Managing Scheme since Last 1 year (%) Last 3 years (%) Last 5 years (%)
HDFC Business Cycle Fund November 30, 2022 33.66 N.A. N.A.
Benchmark - NIFTY 500 (Total Returns Index) 33.81 N.A. N.A.
Past performance may or may not be sustained in future and is not a guarantee of any future returns. Returns greater than 1 year period are Compounded Annualised
(CAGR). Load is not taken into consideration for computation of above performance(s). Different plans viz. Regular Plan and Direct Plan have different expense structure.
The expenses of the Direct Plan under the scheme will be lower to the extent of the distribution expenses/commission charged in the Regular Plan. The above returns are
of Regular Plan - Growth Option. Returns as on January 31, 2024. N.A. Not Available.

HDFC TOP 100 FUND (An open ended equity scheme predominantly investing in large cap stocks) is suitable for investors who are seeking~:
z To generate long-term capital appreciation / income z Investment predominantly in Large-Cap companies
~Investors should consult their financial advisers, if in doubt about whether the product is suitable for them.
Name and Riskometer of Name of Riskometer^^ of the Scheme Name and Riskometer of Name of Riskometer^^ of the Scheme
Benchmark scheme Benchmark scheme
NIFTY 100 (Total Returns Index) NIFTY 500 (Total Returns Index)
rate Moderately Modera
oderate High tely
o Mode High o te M
Modera w t erate Hi
Modera
t
w era Hi
oderate High tely oderate High tely
Mo Lo

Mo Lo
gh

gh
d

o M
d

w t erate o M HDFC
Hi HDFC Top w t erate Hi
Mo Lo

Business
Very

Mo Lo

Very
gh

gh
High
Low

High
Low
d

100 Fund
d

Cycle Fund
Very

Very
High
Low

RISKOMETER
High
Low

RISKOMETER
Investors understand that their principal will be at Investors understand that their principal will be at
RISKOMETER very high risk RISKOMETER very high risk
Benchmark and Scheme Riskometer as on January 31, 2024.
^^For latest riskometer, investors may refer to the Monthly Portfolios disclosed on the website of the Fund viz. www.hdfcfund.com

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
Subscription copy of [lokincredibl@gmail.com]. Redistribution prohibited.
 3

Aim to navigate
business cycles
with ease.
Invest in
ICICI Prudential
Business Cycle Fund

To invest, contact your Mutual Fund Distributor IPRUTOUCH App | www.iciciprumf.com

*Inception date is 18 Jan 2021
ICICI Prudential Business Cycle Fund (An open ended equity scheme following
M E RISKOME
business cycles based investing theme) is suitable for investors who are seeking*:
C HE TE
R

• Long term wealth creation

S

• An equity scheme that invests in Indian markets with focus on riding business
cycles through dynamic allocation between various sectors and stocks at
different stages of business cycles.
̴UŨǍğơƭųƙơ͘ơŀųƵŝė͘ĐųŨơƵŝƭ͘ƭŀğņƙ͘ǦŨñŨĐņñŝ͘ñėǍņơğƙơ͘ņķ͘ņŨ͘ėųƵĎƭ͘ñĎųƵƭ͘ǎŀğƭŀğƙ͘ƭŀğ͘ Investors understand that their
product is suitable for them. principal will be at Very High risk
»ŀğ͘¦ņơř̿ų̿Ŧğƭğƙ̹ơ̺͘ơƖğĐņǦğė͘ñĎųǍğ͘ǎņŝŝ͘Ďğ͘ğǍñŝƵñƭğė͘ñŨė͘ƵƖėñƭğė͘ųŨ͘ñ͘ŦųŨƭŀŝǔ͘Ďñơņơ̩
Please refer www.icicipruamc.com/news-and-updates/all-news for more details on scheme riskometers.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Subscription copy of [lokincredibl@gmail.com]. Redistribution prohibited.
 March 2024 VOLUME XVII, NUMBER 9

47 Cover Story
EDITORIAL POLICY

Imitation
The goal of Wealth Insight, as with all
publications from Value Research, is
not just limited to generating profitable
ideas for its readers; but to also help
them in generating a few of their own.

investing
We aim to bring independent, unbiased
and meticulously-researched stories
that will help you in taking better-in-
formed investment decisions, encour-
aging you to indulge in a bit of research
on your own as well.
All our stories are backed by A guide to stealing ideas
quantitative data. To this, we add
rigorous qualitative research obtained by
speaking to a wide variety of
from experts
stakeholders. We firmly stick to our
belief of fundamental research and val-
ue-oriented approach as the best way to
earn wealth in the stock market. Equally
important to us is our unwaveringly
focus on long term planning.
Simplicity is the hallmark of our
style. Our writing style is simple and
so is the presentation of ideas, but that
should not be construed to mean that
we over-simplify.
Read, learn and earn – and let’s
grow and evolve as we undertake this
voyage together.

EEDITOR-IN-CHIEF Dhirendra Kumar

COPYEDITING Aditya Roy, Khyati Simran

Nandrajog, Mithilesh Bhaumik and
Ujjal Das

RESEARCH & ANALYSIS Aditya Gupta,

Ashish Kumar Pal, Hemkesh Khattar,
Karthik Anand Vijay, Nipun Arora, Ravikant
Prasad, Samridh Rela, Satyajit Sen, 44 Words Worth Wisdom 60 Interview
Shubham Dilawari, Sneha Suri,
Udhayaprakash J and Vishal Goyal “Hindustan Lever “Nobody knows
DESIGN Aman Singhal, Anand Kumar,
Aprajita Anushree, Harish Kumar, Kamal
is after us” anything about anything
Kant Koner, Mukul Ojha and Nitin Yadav
Harsh Mariwala beyond a point”
DATA SOURCE FOR STOCKS AceEquity Chairman of Marico
Alok Bahl Chief Investment Officer,
MARKETING Aastha Tiwari, Helios Mutual Fund
Aditya Roy, Ashish Jain, Jash Ashar
and Kasturi Kaushik

PRODUCTION MANAGER & CIRCULATION

Hira Lal +91-9958058407

ADVERTISING
Venkat K Naidu +91-9664048666
Biswa Ranjan Palo +91-9664075875

CUSTOMER SUPPORT
Email: subscription@valueresearch.in
Phone: +91-9999322422

EMAIL editor@valueresearch.in

4 Wealth Insight March 2024

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CONTENTS
28 Monthly Agenda 63 Main Street
by SAURABH MUKHERJEA
Quarterly result update
How various sectors have performed The rapid rise of female
in Q3 FY24 in terms of revenue, profit entrepreneurs in India
and margins and which companies Exploring the boom in women
stand out entrepreneurship

30 Market Compass 66 Straight Talk

7 Edit by ANAND TANDON
by DHIRENDRA KUMAR z Institutional moves
Revisiting diversification:
z Change in promoter stake
‘Monkey see, monkey do’ The must-have tool for
won’t do z Pledging tracker
investors
Crafting your own unique path to Why diversifying your portfolio is more
success in investing 35 ABCD ETF of a necessity than a choice
Passive equity funds
8 Twitter for savers
Meet the pharma pundit
Unseen Bio (Sajal Kapoor) 36 Analyst’s Diary
@unseenvalue | 140k
z Out of season
z Glass titan’s rise
10 Market Reporter 68 Everyday Economics
z Decoding AU Small
Buzz of the month by PUJA MEHRA
Finance Bank’s success
z Satellite view
Economic stability over
14 Stock Story populism
Understanding the interim budget and
From Lakmé to Zudio 46 vis-a-vis what more needs to be done
Trent’s success was not an easy ride
Pharmaceutical pioneers
70 Stock Screen
16 Big Moves
Top-rated stocks
The most significant price
All stocks with five-star Stock Ratings
movements

74 Wordsworth Now
22 Index Watch
Quotable words from
S&P BSE Oil & Gas
prominent figures
24 IPO Tracker ‹9DOXH5HVHDUFK,QGLD3YW/WG
58 Stock Advisor
D-Street debutants Wealth Insight is owned by
by DHIRENDRA KUMAR
Value Research India Pvt. Ltd.,
5, Commercial Complex, Chitra Vihar, Delhi 110 092.
Value Research
26 Market Barometer Monkey/Goat Advisor Editor-In-Chief: Dhirendra Kumar.
Printed and published by Dhirendra Kumar on behalf
Trends and trails Even when stocks go down sharply, of Value Research India Pvt. Ltd. Published at 5,
Here are some charts that will help you there is a difference between being Commercial Complex, Chitra Vihar, Delhi 110 092.
Printed at Option Printofast, 46, Patparganj Industrial
make sense of the current market in invested in good ones vs just Area, Delhi-110092
terms of valuations and return potential following the herd Total pages 76, including cover

',6&/$,0(5
The contents of Wealth Insight published by Value Research India Private Limited (the ‘Magazine’) are not intended to serve as professional advice or guidance and the Magazine takes no responsibility or liability, express or implied, whatsoever for any investment
decisions made or taken by the readers of this Magazine based on its contents thereof. You are strongly advised to verify the contents before taking any investment or other decision based on the contents of this Magazine. The Magazine is meant for general reading
purposes only and is not meant to serve as a professional guide for investors. The readers of this Magazine should exercise due caution and/or seek independent professional advice before entering into any commercial or business relationship or making any
investment decision or entering into any financial obligation based on any information, statement or opinion which is contained, provided or expressed in this Magazine.
The Magazine contains information, statements, opinions, statistics and materials that have been obtained from sources believed to be reliable and the publishers of the Magazine have made best efforts to avoid any errors and omissions, however the
publishers of this Magazine make no guarantees and warranties whatsoever, express or implied, regarding the timeliness, completeness, accuracy, adequacy, fullness, functionality and/or reliability of the information, statistics, statements, opinions and
materials contained and/or expressed in this Magazine or of the results obtained, direct or consequential, from the use of such information, statistics, statements, opinions and materials. The publishers of this Magazine do not certify and/or endorse any
opinions contained, provided, published or expressed in this Magazine.Reproduction of this publication in any form or by any means whatsoever without prior written permission of the publishers of this Magazine is strictly prohibited. All disputes shall be subject
to the jurisdiction of Delhi courts only. ALL RIGHTS RESERVED

March 2024 Wealth Insight 5

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Subscription copy of [lokincredibl@gmail.com]. Redistribution prohibited.
 by Dhirendra Kumar
EDIT

‘Monkey see,
monkey do’ won’t do
X Crafting your own unique path to he or she can just get the ball over the net and keep that
going for eight or 10 shots, then sooner or later, the
success in investing opponent will make a mistake. Amateurs achieve their
victories by just managing to do the ordinary thing

I
f a kid has just started playing cricket, would competently and consistently. An amateur who tries to
watching videos of Virat Kohli and copying the shots play Djokovic shots will lose every time.
be the right strategy? Kids do that, but a moment of Do you see how this fits into investing? It’s not as if
thought will tell you that, no, that’s unlikely to be the amateurs cannot invest well. However, they are unlikely
path to success. I’m not saying that no kid watching can to invest well by mimicking professionals. If they choose
have the kind of talent that Kohli has – I’m sure many their own path based on their own advantages and
would. The difference is that the beautiful cover drive keeping in mind their own limitations, then they can do
that the kid sees and wants to copy is just the tip of the even better than professionals. However, the strategy
iceberg. It’s the end result of a process and a support cannot be a copy. Blindly following the moves of a
system that has lasted a lifetime in which talent was just renowned investor without a solid grasp of the
one input. Moreover, it’s particularly suited to the exact underlying rationale is like an amateur tennis player
kind of advantage that Kohli has. Copying the result is attempting a Nadal backhand – it’s ill-suited to their
unlikely to produce the same result. abilities and more likely to lead to a flubbed return than
So am I saying that one cannot learn from an expert? a point won.
What about the oft-repeated saying that to win, one must Instead, successful amateur investors must focus on
play like a winner? That’s one of those corny understanding their own strengths and weaknesses.
‘inspirational’ things that people say, and we implicitly Perhaps you have a knack for identifying solid, long-term
believe it to be true. In the investment world, too, this companies or excel at maintaining a balanced portfolio
idea of mimicking successful people is quite common. amidst market volatility. Whatever your inherent
Investors are constantly seeking insights into the advantage, the key lies in tailoring your investment
strategies of more prosperous counterparts with the approach accordingly, focusing on the fundamentals that
intention of replicating them. Since mutual funds have to you genuinely comprehend and can execute reliably.
reveal their portfolios on a schedule, it’s quite easy to do. Consistency and a clear understanding of your own
Here’s the most interesting argument against this game, rather than imitating the flashy plays of the
idea. It was presented by the well-known investor and investment world’s superstars, will ultimately determine
fund manager Howard Marks, who, incidentally, is just your long-term investment success.
the kind of famous investor whom amateurs would like The tendency of beginner investors to mimic experts
to emulate. In a talk that Marks gave many years ago at is a losing formula. Great investors hit winners. They
Google (bit.ly/howmarks), he illustrated this very point achieve success by making profitable investments, using
by drawing an analogy from tennis. He said that top unique skills or experience or a process to identify
tennis players win by playing a lot of shots that are opportunities that elude others. Additionally, since
winners. Djokovic, Alcaraz or Medvedev often play shots investing is not an open book, many conceal their
that few of their opponents can handle and play with failures and only highlight the rare success achieved,
great regularity. However, amateur players can’t play perhaps by mere luck. To use an up-to-date phrase, you
such shots except by rare chance. Marks says that for see only the highlights reel and not the bloopers.
amateurs, the key to winning is not to hit losers, instead Write your own story instead. Read this issue’s cover
of hitting winners. A good amateur player believes that if story to understand more about it.

March 2024 Wealth Insight 7

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TWITTER

Meet the
pharma pundit
Unseen Bio (Sajal Kapoor) This “forward PE” thing fooled many in 2015 Pharma cycle. Go and
@unseenvalue read the broker reports from that era. What were they smoking then??
How on earth do they predict the future? How do they know that US
FDA will not smooch a Pharma company badly??
140k | Followers
Consumption is an exceptional opportunity in India. How you define
Why Follow consumption is up to you! For me, healthcare and education are
mandatory consumptions. I may cut down on restaurants, tourism, and
even gold jewellery for my daughter’s wedding, but not those 2.

A
n operational risk and
regulatory consultant,
Knowledge entails understanding all of the return ratios. Wisdom is
Sajal Kapoor, more
understanding which ones to employ and which ones should be given
famously known as ‘Unseen greater weight in a certain scenario. Management remains sacrosanct.
Value’, is an avid pharma and Unseen lenses.
healthcare industry follower.
On his Twitter handle, he Fundamentally, I’m not really interested in sectors where there isn’t
shares insights about various enough of a sustainable moat, such as basic APIs, commodity
chemicals, and other hyper-cyclical plays. I want to own specialty assets
companies or the overall
that competitors find difficult to emulate due to sustainable barriers.
pharma industry, showcasing
the expertise gained with over US FDA warning letters: stock prices fall only if cash flows are impacted.
two decades of experience. Firms A, B, C, and D: stocks corrected sharply after warning letters, and
Kapoor consistently chases many have not crossed previous highs adjusted for inflation. Oops!!
unnoticed valuation gaps and Firm E: stock is a 25-bagger since the warning letter. Wow!!
regularly highlights the role of
Fund raising requires external validation. Biocon burned shareholder
probability in investments.
capital for 16 years in oral insulin obsession as there was no need for
external validation. The core business kept the tab open for wastage.
Any lessons from failures?
UV: Fasting has long-lasting benefits.

Follow us on
social media
@VROStocks vrostocks VROStocks

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 6DYH7D[ADQGDLP
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-UTUAL&UNDINVESTMENTSARESUBJECTTOMARKETRISKS READALLSCHEMERELATEDDOCUMENTSCAREFULLY

Subscription copy of [lokincredibl@gmail.com]. Redistribution prohibited.

 MARKET REPORTER

RBI bans Paytm

The share price of One97 Communications
(Paytm) tanked 36 per cent in two days as
the RBI banned Paytm Payment Banks from
offering several banking services, such as
accepting deposits, fund transfers, UPI, etc.,
effective February 29, 2024. RBI cited the
company’s repeated compliance violations as
Interim Budget the cause behind the ban. Post February 29,

2024-25 highlights existing users will not be allowed to top-up their

accounts. However, they can withdraw their existing balance.
z Capital expenditure budget
capped at `11.1 lakh crore,
up 11 per cent YoY.
z `75,000 crore provisions to
support milestone-linked reforms JSW Steel
by the state governments. partners with
z `80,671 crore allocated under
Pradhan Mantri Awas Yojana, JFE Steel Corp
up 1.4 per cent YoY. JSW Steel, a leading Indian
z A 100 MT coal gasification and steel producer, has entered
liquefaction facility will be into a joint venture (JV) with
established by 2030. Japan-based JFE Steel
z `1 lakh crore corpus established to Tata Steel Corporation. The JV (JSW
JFE Electrical Steel), will be
provide 50-years interest-free
loans for R&D in sunrise amalgamates its the first Indian company to
domains. five businesses produce grain-oriented
electrical steel (used in
Tata Steel has amalgamated electrical transformers).
five out of its nine businesses `5,500 crore will be invested to
with itself. These include Tata set up a manufacturing plant
Steel Mining, Tata Steel Long in Karnataka. Operations are
Products, S&T Mining, expected to commence
Tinplate Company of India and in FY27.
Tata Metaliks. It plans to

`65,000 crore
merge three of the remaining
four businesses by Q1 FY25.
The merger of TRF stands
cancelled as it has improved its
will be invested in Odisha by the performance. Note that Tata
JSW Group for mega projects, Steel announced its
including steel, cement, and amalgamation plan in
power plants. September 2022.

Eris Lifesciences acquires Swiss Parenterals

Eris Lifesciences, an Indian pharmaceutical company, has acquired a
51 per cent stake in Swiss Parentals for a consideration of `638 crore. Swiss Parentals
manufactures sterile dosages (products that are injected directly into the bloodstream)
in India and exports to more than 80 countries. Eris will initially pay `200 crore, and
the balance will be paid in the next 12 months.

10 Wealth Insight March 2024

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RBI stays repo rates ECONOMIC METRICS
Repo rates stay unchanged at 6.5 per cent for .:;JVSSLJ[PVU
the sixth consecutive quarter. The last rate
2,00,000 In ` cr
hike of 25 bps happened in February 2023.
The real GDP growth rate for FY25 is 1,50,000
projected at 7 per cent compared to the FY24’s
1,00,000
estimated 7.3 per cent. CPI inflation for FY25
is expected to be 4.5 per cent compared to the 50,000
FY24’s estimated 5.4 per cent.
0
Jan '22 Jan '24

Quess Corp 0UMSH[PVU!*VUZ\TLY7YPJL0UKL_

announces 8 % change YoY

demerger 7

6
Quess Corp, an HR and business
services provider, plans to 5
demerge into three different
4
firms: Digitide Solutions,
Jan '22 Jan '24
Bluspring Enterprises and Quess
Corp. Digitide will house the
business process management 0UK\Z[YPHSHJ[P]P[`!0UKL_VM
Zee-Sony saga and HR outsourcing services.
Bluspring will provide facility
0UK\Z[YPHS7YVK\J[PVU
20 % change YoY
culminates management and security
10
services, and Quess Corp will
The two-year-long Zee-Sony
offer workforce management 0
merger saga has come to an end.
services. Shareholders of Quess
Culver Max (formerly known as -10
Corp will get one share of each
Sony Pictures) has terminated its Dec '21 Dec '23
of the new entities for one
$10 billion merger with Zee
share held.
Entertainment. In addition, Sony
is seeking a $90 million `]Z
termination fee from Zee for 72 Inverted scale
breaching merger agreements.
75
Post the merger announcement
in September 2021, Zee 78
underwent a tumultuous period,
81
including a SEBI ban on its CEO
Punit Goenka from holding any 84
key managerial position. Feb '22 Feb '24

*Y\KLVPS

`30.3 lakh crore

150 Brent $/barrel

120
is the total market value of Tata Group
90
companies, making it India’s first
conglomerate to breach the `30 lakh crore 60
mark (as of Feb 19, 2024). Feb '22 Feb '24

March 2024 Wealth Insight 11

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 MARKET REPORTER

GFCL to invest Vedanta to double its oil

`6,000 crore in & gas production capacity
EV batteries In India Energy Week 2024, held in Goa, Anil
Agarwal, Chairman of Vedanta, said that the
Gujarat Fluorochemicals
company will invest $4 billion (around
(GFCL) will invest
`33,000 crore) over the next three years to double
`6,000 crore over the next four
its oil & gas production capacity to 3 lakh barrels
to five years in electric vehicle
per day. This is 114 per cent more than its current
(EV) battery solutions through
capacity of 1.4 lakh barrels per day.
its subsidiary GFCL EV. These
investments aim to secure the
supply of approximately
200 GWh annually of electric
vehicle and Energy Storage Moody’s upgrades
System (ESS) battery
solutions. The company plans
four Adani firms
to spend `3,200 crore on capex Moody’s, a renowned global credit rating
till FY26. agency, has upgraded its credit ratings of
four Adani group companies, including
Adani Green, from negative to stable. The
agency had previously downgraded the
group companies a year ago, in the wake
of the Hindenburg fiasco. Moody’s has
stated that equity infusion from various
institutions and ability to repay debt are
the key reasons for this upgrade.

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Subscription copy of [lokincredibl@gmail.com]. Redistribution prohibited.
 STOCK STORY TRENT

From Lakmé to Zudio

Trent’s success was not an easy ride

The cosmetic divestment

T
rent, a prominent Tata clothing, footwear and accessories
group company, is a leading Originally established as Lakmé in under the ‘Westside’ brand. After
retailer in India. It owns 1952, the company manufactured witnessing reasonable success in
715 fashion stores and 67 grocery and sold cosmetic products. this venture, it diversified its
stores. As of February 8, 2024, its However, in 1998, the company operations and entered the food
six-month return is 124 per cent. divested this cosmetics business retail segment in 2005 by
Recently, it crossed the `1 lakh and shifted focus to branded launching the first ‘Star India
crore market cap milestone, apparel by acquiring Littlewoods Bazaar’ store. Aiming to become a
making it the talk of the town. International. Lakmé rebranded one-stop shop retailer, Trent took
However, the company’s itself as Trent in the same year. the path of acquisition and
journey was not always smooth. Trent started selling branded partnership. With the acquisition

Profit and loss statement break-up of Trent Exceptional items 3

Figures in ` crore Finance costs 378
Operating profit (including Share of associates Profit before interest, tax Tax 255
other income) and minority interest and exceptional items
1,473 Profit after
1,358 115 tax 837

Raw material
cost 6,454

Operating
expenses Employee
Total expenses 882
Revenue income 10,199
11,260 11,558 Depreciation and
amortisation 595
Occupancy cost
Other
(incl. rent) 965
income
298 Other expenses
1,304
Data for trailing twelve months ending December 2023

Trent Sensex Sensex rebased to stock price

Sep 12, 2006

Jan 03, 2000
`242
`13

Oct 2004 Aug 31, 2005 Sep 18, 2007 Aug 12, 2008 Feb 5, 2009 Jul 22, 2011
The company Acquired 79 per cent Partners with Benetton Association with Entered an MOU with Entered an MOU
opened its first interest in Landmark Group for the Tesco Plc (UK’s Spain’s Inditex Group with the same
hypermarket store (the largest book expansion of the Sisley leading retailer) to develop and Inditex Group to
under ‘Star India and music retailer). brand in India. promote Zara stores develop and
Bazaar’. in India. promote Massimo
Dutti stores in India.

14 Wealth Insight March 2024

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of Landmark for book and music Revenue and profit after tax Operating profit and margin
retailing, the introduction of Sisley Revenue (` cr, left side) Operating profit (` cr, left side)
and Zara brands to India, and a joint Profit after tax (` cr, right side) Operating profit margin (%, right side)
venture with Tesco, Trent was 9,000 600 750 12
actively present on all fronts.
6,000 400 500 8
3,000 200 250 4
The turnaround with Zudio
While these moves helped with 0 0 0 0

revenue growth, the company was -3,000 -200 -250 -4

barely profitable and couldn’t find its FY14 FY23 FY14 FY23
identity. Although Westside and Star Feb 08, 2024
Bazaar were successful, Trent wanted Store count `3,843
something more. In 2016, it launched Westside Zudio
a value fashion brand called ‘Zudio’. 400
Its goal, as the company puts it, was
300
‘fashion at irresistible prices for men, Jan 08, 2024
`3,044
women and children.’ This entry into 200
the low-priced segment seemed to
100
have done magic for the company as
its numbers exploded. 0
Zudio’s initial success shifted the FY18 FY23

company’s focus towards prioritising

this brand. This can be seen in the Capital efficiency
pace of store openings. Over FY18-23,
ROE (%) ROCE (%)
the number of Zudio stores grew by
45
119 per cent annually compared to
11 per cent for Westside. 30
This success is reflected in the 15
numbers. Profit margins and
capital efficiency improved, and 0 Apr 06, 2022
`1,329
revenue and profit after tax grew -15
by 29 and 32 per cent, respectively, FY14 FY23
annually over FY17-23. Zudio is the
Jan 27, 2023
formula that Trent was searching Feb 24, 2020 `1,177
for a decade and a half to slingshot `795
itself into leadership.
By Vishal Goyal
Feb 26, 2019
`323
Sep 14, 2016 Mar 23, 2020
`239 `404
179

Mar 21, 2014 Apr 24, 2015 Sep 2016 Sep 28, 2019 May 22, 2023
Tesco invests Launched Sports Zone Launched the first Acquired Signs JV with MAS Amity
`850 crore in Trent (Portugal’s largest Zudio store. 51 per cent stake Pte for intimate apparel
Hypermart for a 50:50 sports chain) in India. in Booker India. and related products.
joint venture.

March 2024 Wealth Insight 15

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 BIG MOVES

Large caps
3M returns Price to 3Y avg 3Y earnings
Stock Rating (%) earnings RoE (%) growth (%)

IRFC Unrated 117.2 4.3* 14.6 18.9

Posted its highest-ever revenue in Q3 FY24.

Adani Green  101.9 206.5 32.5 105.5

Raised $1.4 billion to construct its renewable energy park.

Oracle Financial  88.6 31.6 26.7 10.8

Its profit after tax grew 69 per cent YoY in Q3 FY24.

Adani Total Gas  87.7 185.4 23.8 9.5

Signed an MoU with Shigan Quantum for decarbonisation collaboration.

Indian Oil  82.6 5.7 16.8 153.7

Q3 FY24 profit after tax rose 12 times YoY.

Hindustan Petroleum Corporation  79.6 4.8 10.1 21.8

Q3 FY24 profit after tax was up 60 per cent YoY.

NHPC  78.8 28.1 11.4 7.1

Signed an MoU with GPCL for `4,000 crore in 750 MW hydro storage project.

LIC Unrated 73.1 16.6 81.3 137.6

Q3 FY24 profit after tax is up 50 per cent YoY.

Indian Overseas Bank  67.9 5.4* 9.8 58.9

Signed an MoU with IREDA. Q3 FY24 profit after tax is up 30 per cent YoY.

BHEL  64.1 - -2.1 24.8

`19,422 crore order from NLC India to build a thermal power plant.

Bharat Petroleum Corporation  63.7 4.9 21.7 70.7

Partners with Tata Motors to set up 7,000 electric vehicle charging stations.

Punjab National Bank  61.7 1.4* 3.5 11.2

Profit after tax more than tripled on a YoY basis in Q3 FY24.

General Insurance Corporation Unrated 58.9 9.9 12.6 52.0

Q3 FY24 profit after tax is up 17 per cent YoY.

UCO Bank  56.5 3.1* 4.8 153.5

Profit after tax rose 25 per cent sequentially in Q3 FY24.

Central Bank of India  44.1 2.1* 2.3 14.2

Gross advances rose 14 per cent YoY.

*Price-to-book ratio. Our large-cap universe has 134 large companies, making the top 70 per cent of the total market capitalisation. The list mentions the stocks that have fluctuated most wildly in
the last three months. Data as of February 15, 2024.

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 BIG MOVES

Mid caps
3M returns Price to 3Y avg 3Y earnings
Stock Rating (%) earnings RoE (%) growth (%)

Housing & Urban Development Corp  150.1 2.5* 12.1 11.2
Profit after tax grew 104 per cent YoY in Q3 FY24.

Inox Wind  128.4 - -38.2 13.7

Received a letter of intent from NLC India for a 50 MW wind project.

GE T&D India  112.9 208.9 0.3 39.2

Bags order worth $74 million from UK Grid Solutions.

MRPL  108.8 9.8 22.8 49.3

Profit after tax grew 301 per cent YoY in Q3 FY24.

IFCI  108.7 - -34.6 23.9

Q3 FY24 revenue is up 31 per cent YoY.

NBCC  103.8 66.1 14.8 17.8

Received a `1,500 crore order from National Cooperative Development Corp.

Sterling and Wilson Renewable Unrated 91.8 - -164.9 -251.2

Raised `1,500 crore from institutional investors.

IRB Infra  84.9 72.9 3.7 32.7

Received an order worth `1,683 crore from NHAI.

Schneider Electric  76.7 64.7 194.2 150.8

Q3 FY24 profit after tax rose 109 per cent YoY.

The New India Assurance Unrated 66.4 43.7 5.2 -14.5

Net premium written is up 15 per cent YoY in Q3 FY24.

SJVN  66.3 49.4 10.3 -15.3

Received a letter of intent from GUVNL for a 200 MW solar project.

Jai Balaji Inds  63.8 26.3 - 83.8

Raised `559 crore in debt from Tata Capital.

Rail Vikas Nigam Unrated 63.6 37.2 19.3 20.8

MoU with REC for multi-modal infra projects up to `35,000 crore.

Electrosteel Castings  60.5 18.0 4.5 82.7

Profit after tax more than tripled YoY in Q3 FY24.

MMTC  54.3 91.4 29.1 28.2

The stock is up due to the current rally in PSU stocks.

*Price-to-book ratio. Our mid-cap universe has 304 mid-sized companies, making the next 20 per cent of the total market capitalisation. The list mentions the stocks that have fluctuated most wildly
in the last three months. Data as of February 15, 2024.

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 BIG MOVES

Small caps
3M returns Price to 3Y avg 3Y earnings
Stock Rating (%) earnings RoE (%) growth (%)

Unitech Unrated
270.2 - -207.1 -3.2
New management can begin construction activities.

Tine Agro Unrated

238.9 128.5 - 257.7
Revenue and profit after tax are up 12 and 550 times YoY, respectively, in Q3.

Advait Infratech Unrated

218.5 174.3 17.9 146.8
Signed MoUs with the governments of Gujarat and Uttarakhand.

Waaree Technologies Unrated

208.5 - -3.6 -280.9
MoU with Israel-based 3DBattery for advanced energy solutions.

Waaree Renewable  182.3 78.8 40.4 197.2

Won an order worth `547 crore to build a solar power plant.

Hazoor Multi Projects  166.2 10.6 32.8 667.2

Won order of `1,130 crore to upgrade National Highway 66.

Urja Global  158.0 625.9 0.8 16.7

Profit after tax is up 54 per cent YoY in Q3.

Panorama Studios  152.9 17.8 44.1 -4.3

Announced new movies in Hindi and regional languages.

Cupid  136.6 111.0 19.3 -9.4

Acquired land to increase production capacity by 1.5 times.

VL E-Governance Unrated
136.3 134.3 2.7 -
Shares have been going up due to general market conditions.

Oriental Rail Infra  131.3 79.7 12.6 -3.9

Won an order worth `485 crore from the Indian Railways.

Websol Energy System  120.5 - 8.7 -279.3

The stock rallied due to general market conditions.

Pritika Auto Industries  114.3 61.2 8.8 85.5

NCLT approved the demerger of Pritika Industries from the company.

MSTC Unrated
111.8 28.6 29.4 77.0
Stock is up due to general market conditions.

Artemis Electricals Unrated

73.8 80.7 -2.1 -19.5
Stock is up due to general market conditions.

Our small-cap universe (minimum market capitalisation `650 crore) has 1,082 small-cap companies, making the last 10 per cent of the total market capitalisation. The list mentions the stocks that
have fluctuated most wildly in the last three months. Data as of February 15, 2024.

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Money & Business

Forbes Harvard Business Review

Bloomberg Businessweek Business India Entrepreneur inc ET Wealth
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Barron's Fortune International Financing Review Business Today
Outlook Money Shares Value Research Smart Investment
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Science, History & Environment

National Geographic National Geographic Kids New Scientist

Down to Earth Scientific American
Popular Science Astronomy
Smithsonian Net Geo History
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BBC History

Literature, Health & General

Interest

The Writer Publishers Weekly TLS

prevention OM Yoga Reader's Digest
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 INDEX WATCH

S&P BSE Oil & Gas

Over the last three months, S&P BSE Oil & Gas returned 49 per cent, making it
the best-performing index in the market. It has outperformed the BSE Sensex
over five years. While its P/E ratio looks cheap, the recent rally may have pushed
its P/B and dividend yield to expensive levels compared to its five-year median.
.H\QXPEHUV ,QGH[PRYHPHQW
z BSE Oil & Gas z Median z BSE Sensex

8.9
Price to earnings
1.8
Price to book
30,000

24,000

18,000

2.59 31.8 12,000

6,000
Dividend yield (%) Market cap (` lakh cr)
Sensex rebased to index
0
Feb 2019 Feb 2024

,QGH[ZHLJKWV 3ULFHWRERRNYDOXH 3%

GAIL Others 4
3.9 7.6
3
Bharat
Petroleum Corp. 2
1.4
4.4
1
Indian Oil In %
8.7 0
Feb 2019 Feb 2024
ONGC Reliance
9.5 Industries
65.9 3ULFHWRHDUQLQJVUDWLR 3(
40

32

24
9DOXDWLRQVGLYLGHQGVDQGUHWXUQV
16
   Dividend 1Y
Company P/B P/E yield (%) return (%) 8 10.6
Hindustan Petroleum Corp. 1.8 4.8 0.00 144.5 0
Indian Oil 1.5 5.7 1.58 138.9 Feb 2019 Feb 2024

Bharat Petroleum Corp. 1.9 4.9 0.61 97.0

GAIL 1.6 15.0 2.71 93.3
'LYLGHQG\LHOG
In %
ONGC 1.1 8.3 4.06 87.9 6.0

Linde India 14.2 111.7 0.21 54.8 4.8

3.61
Petronet LNG 2.4 11.9 3.61 25.0 3.6
Reliance Industries 2.6 28.5 0.31 21.1 2.4
IGL 3.3 16.0 2.92 2.0
1.2
Adani Total Gas 32.5 185.4 0.02 -6.6
0
Data as of February 15, 2024 Feb 2019 Feb 2024

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 Invest with confidence

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 IPO TRACKER

D-Street debutants
Here is how the S&P BSE IPO Index has performed over the last one year
and how the biggest IPOs have fared
Highest %6(6HQVH[YV%6(,32
Listing-Day Gain
With a slew of IPOs, the IPO Index has performed well in the last few months
Tata Tech
190
140%
z BSE Sensex z BSE IPO

170
Highest
Listing-Day Loss 150
Yatra Online
130
-8.5% 110

Highest 90
Post-Listing Gain
IREDA 70 Rebased to 100

253.5% February 2023 February 2024

Highest Highest Lowest Biggest

Post-Listing Loss Subscribed IPO Subscribed IPO IPO Total
Issue Size
Ideaforge Tech BLS E-Services Yatra Online Mankind Pharma

-87.8% 162.5 times 1.6 times `4,326 cr `50,488 cr

7RS,32VE\LVVXHVL]H
Subscription Issue Issue List Current Listing Change post Sensex Current
Company Listing date ratio (times) size (` cr) price (`) price (`) price (`) gain (%) listing (%) change (%) P/E
Mankind Pharma 09-May-23 15.3 4,326 1,080 1,300 2,210 20.4 70.0 16.7 51.3
JSW Infra 03-Oct-23 37.4 2,800 119 143 222 20.2 55.1 10.0 63.0
Tata Tech 30-Nov-23 69.4 2,251 500 1,200 1,108 140.0 -7.7 7.6 72.0
R R Kabel 20-Sep-23 18.7 1,965 1,035 1,179 1,469 13.9 24.6 7.9 87.3
Honasa Consumer 07-Nov-23 7.6 1,702 324 324 447 0.0 37.9 10.9 -
Concord Biotech 18-Aug-23 24.9 1,551 741 900 1,406 21.5 56.2 10.9 61.3
IREDA 29-Nov-23 38.8 1,501 32 50 177 56.3 253.5 7.7 5.8*
Inox India 21-Dec-23 61.3 1,459 660 933 1,163 41.4 24.6 1.7 69.1
Cello World 06-Nov-23 38.9 1,430 648 831 821 28.2 -1.1 10.9 65.5
SAMHI Hotels 22-Sep-23 5.3 1,370 126 131 192 3.6 47.1 9.2 -
Sai Silks 27-Sep-23 4.4 1,201 222 230 242 3.6 5.1 9.0 38.0
DOMS Industries 20-Dec-23 93.5 1,201 790 1,400 1,566 77.2 11.8 2.2 99.2
India Shelter Finance 20-Dec-23 36.7 1,200 493 613 641 24.3 4.6 2.2 2.6*
Medi Assist Healthcare 23-Jan-24 16.2 1,172 418 465 508 11.2 9.2 2.4 47.2
SBFC Finance 16-Aug-23 70.2 1,025 57 82 86 43.8 5.2 9.9 3.4*

*Price-to-book ratio. Data as of February 15, 2024.

24 Wealth Insight March 2024

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 MARKET BAROMETER

Trends and trails

Here are some charts that will help you make sense of the current market in
terms of valuations and return potential
z Max Current z Median z Min

Sensex’s movement The Sensex is the most convenient indicator to

In ’000 tell the state of the Indian market. The 10-year
75
72,427 graph presented alongside shows the secular
run in the markets. However, this rally was
72,427
60 punctuated by several bearish phases.
The most prominent ones include the follow-
ing: Chinese growth concerns in 2015, demon-
45 etisation blues in 2016, the sell-off in 2018
due to US-China trade war and the March
2020 COVID-19 shock. After staging a remark-
30 able recovery from the lows of March 2020,
the markets yielded to the Russian invasion of
21,120 Ukraine and rising interest rates.
15 However, with recessionary fears easing,
Feb ’14 Feb ’24 Sensex reached a new all-time high.

Sensex’s price-to-earnings ratio The price-to-earnings ratio of the Sensex is a

40 simple market-valuation ratio. A general
guideline to help understand the valuation is:
35 35.1 Highly undervalued
(mouthwatering Fairly Dangerously
30 valuations) valued overvalued

25 23.3 24.6 P/E

12 16 20 24

20 Undervalued Overvalued

16.8
15 This graph is based on standalone data of Sensex companies.
Feb ’14 Feb ’24 If one takes the consolidated data, the P/E will likely be lower.

Sensex’s price-to-book value

4.0 The price-to-book value ratio tells us how
3.83 many times an investor is ready to pay for
3.65 a rupee of net assets. Since book value is
3.6
stable and less volatile than earnings, some
consider it better than the P/E as a measure
3.2 3.04 of valuation.
If:
2.8 P/B > Median P/B = Overvalued
P/B < Median P/B = Undervalued
2.4
2.36
2.0
Feb ’14 Feb ’24

26 Wealth Insight March 2024

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Sensex’s dividend yield
1.6% Dividend yield is nothing but the return an
1.52 investor gets in the form of dividend on his
investment. It is measured as dividend per
1.4 share divided by price per share. Generally
speaking, when stocks are cheap, dividend
yields are high.
1.2
1.22 1.13 If:
Dividend yield > Median dividend yield
1.0 = Undervalued
Dividend yield < Median dividend yield
= Overvalued
0.8
0.72
0.6
Feb ’14 Feb ’24

Market cap to GDP

150% Here we have considered the market
capitalisation of all the listed companies on
131 the BSE.
120
131 This measure is Buffett’s personal favourite.
He said, “It is probably the single best
83 measure of where valuations stand at any
90
given moment.”
If:
60 Market cap > GDP = Overvalued
56
Market cap < GDP = Undervalued

30
Considering market cap of all the listed companies
on the BSE, revised estimate of FY22 nominal GDP,
provision estimate of FY23 nominal GDP and first
0 advance estimate of FY24 nominal GDP.
FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24

10Y G-sec yield vs Sensex’s earnings yield

4.6% The spread between G-sec yield and Sensex’s
earnings yield is another valuation measure.
3.97 G-sec yield is the yield of the 10-year
3.8 government bond. Sensex’s earnings yield
is the inverse of the Sensex’s P/E ratio.
2.91 The greater the deviation from the median
3.0 3.03 in either direction, the greater the degree
of overvaluation or the undervaluation
of the Sensex.
2.2
If:
Spread > Median = Overvalued
1.4 Spread < Median = Undervalued
0.94
0.6
Feb ’14 Feb ’24 All data as of February 16, 2024

March 2024 Wealth Insight 27

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 MONTHLY AGENDA

Quarterly result update

How various sectors have performed in Q3 FY24 in terms of revenue, profit and
margins and which companies stand out
Change in median

2EVENUE
GROWTH

/PERATING
PROÜT
GROWTH

0!4
GROWTH

OPERATING
PROÜT
MARGIN

PT

Sector QoQ YoY QoQ YoY QoQ YoY QoQ YoY

Automobile 1.4 18.2 4.8 57.5 13.7 59.7 0.3 2.5
Bank 4.4 29.5 - - 3.1 23.9 - -
Capital Goods 1.0 16.5 3.2 25.7 -8.5 17.5 0.2 0.8
Chemicals -7.1 -19.7 -30.4 -51.3 -33.4 -52.4 -2.3 -4.5
Communication 3.0 6.2 1.8 43.8 23.4^ 35.3^ -0.2 4.2
Construction 8.4 17.6 8.2 29.4 -8.6 56.5 0.0 1.2
Consumer Discretionary 39.2 -16.5 15.4 -8.3 15.9 -12.0 -0.6 0.3
Consumer Staples -0.6 1.5 -1.4 -1.7 3.9 5.7 -0.1 -0.4
Diversified -0.8 -4.3 23.3 -18.8 34.7 -27.7 2.2 -2.0
Energy 6.6 0.3 -26.4 22.4 -27.1 34.0 -4.2 1.7
Financial 5.6 25.3 - - 0.6 19.2 - -
Healthcare 0.2 10.3 -2.3 19.7 0.0 -2.1 -0.4 1.3
Insurance 6.1 6.0 - - 17.9 36.5 - -
Materials 5.0 5.3 31.4 36.3 28.6 24.3 3.2 3.6
Metals & Mining -3.8 2.1 -2.3 51.5 57.1 101.2 0.2 3.7
Services 12.6 13.5 48.1 51.9 82.6 51.9 2.2 2.3
Technology 2.1 3.3 5.5 2.4 5.1 1.9 0.6 -0.2

Textiles -3.9 4.2 3.4 10.7 26.8 58.4 0.5 0.4

/PERATING
PROFIT
IS
REPRESENTED
BY
EARNINGS
BEFORE
INTEREST
AND
TAX
EXCLUDING
OTHER
INCOME 
>INDICATES
INCREASE
OR
DECREASE
IN
LOSS
0ROFIT
AFTER
TAX
IS
ADJUSTED
FOR
DISCONTINUED
OPERATIONS
AND

exceptional items; Q3 FY24 data available for 1,554 companies as on February 15, 2024. Minimum market capitalisation of `500 crore
4O
FIND
OUT
WHICH
COMPANIES
ARE
INCLUDED
IN
EACH
OF
THE
SECTORS
VISIT
HTTPSWWWVALUERESEARCHONLINECOMSTOCKS SCREENER

7RSFRPSDQLHVE\4UHYHQXH 7RSFRPSDQLHVE\4SURILWDIWHUWD[
In ` cr In ` cr
2,27,970 2,26,892
Reliance Industries
17,265
1,65,569
HDFC Bank
1,29,985 1,18,484 17,258

SBI
16,034

Tata Consultancy Services

11,729

Reliance Indian Oil ONGC Bharat Hindustan ICICI Bank

Industries Corporation Petroleum Petroleum
Corporation Corporation 11,053

28 Wealth Insight March 2024

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7RSFRPSDQLHVE\4UHYHQXHJURZWK %RWWRPFRPSDQLHVE\4UHYHQXHJURZWK
In %, YoY In %, YoY
Jindal Poly Deep
69,792
Investment Naperol Energy
MMTC and Finance Investments PC Jeweller Resources

47,865

-91.5

14,505

4,341 -95.3
1,474

Blue Cloud SG TCC Diamond Swan

Softech Mart Concept Power Energy -99.1 -99.1
Solutions Infrastructure -99.9

7RSFRPSDQLHVE\4RSHUDWLQJSURILWJURZWK %RWWRPFRPSDQLHVE\4RSHUDWLQJSURILWJURZWK
In %, YoY In %, YoY
89,000
Solara Sun Pharma
BGR Energy Active Astec Advanced Kanoria
Systems Pharma Lifesciences Research Chemicals
59,100
50,500

32,333

18,100 -914 -911 -728

-1,203

Blue Cloud Tine Agro Cropster Integrated Sarla

Softech Agro Indus. Perform.
Solutions Fibers -3,518
Excluding banking, financial services and insurance companies Excluding banking, financial services and insurance companies

7RSFRPSDQLHVE\43$7JURZWK %RWWRPFRPSDQLHVE\43$7JURZWK
In %, YoY In %, YoY
54,900 Solara Active TCNS GMR
Pharma Clothing Power and Astec
46,500 Sciences Company Urban Infra Lifesciences TARC

40,600

31,120 -3,160 -2,996 -2,656

30,733

-10,424

Tine Cropster Blue Cloud Adani Integrated -51,522

Agro Agro Softech Power Industries
Solutions

March 2024 Wealth Insight 29

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 MARKET COMPASS

Institutional
moves
The top five companies across
market caps in which
mutual funds have significantly
changed their holdings
(in terms of per cent of equity)
between September and
December 2023

,QFUHDVHLQSRVLWLRQ 'HFUHDVHLQSRVLWLRQ
Large caps Change Large caps Change
Company Sector Dec ’23 Sep ’23 (% pt) Company Sector Dec ’23 Sep ’23 (% pt)

Mankind Pharma Healthcare 7.6 3.9 3.7 Suzlon Energy Capital Goods 1.3 4.7 -3.4
Bank of India Bank 4.3 1.2 3.1 Persistent Systems IT 22.4 24.1 -1.7
Indian Bank Bank 10.5 8.0 2.5 Cholamandalam Inv. and Fin. Finance 15.0 16.7 -1.7
Lupin Healthcare 18.9 16.7 2.2 Bank of Baroda Bank 8.6 9.8 -1.2
Tech Mahindra IT 14.2 12.4 1.8 UltraTech Cement Const. Materials 12.5 13.6 -1.1

Mid caps Change Mid caps Change

Company Sector Dec ’23 Sep ’23 (% pt) Company Sector Dec ’23 Sep ’23 (% pt)

CAMS Finance 11.3 3.8 7.5 Indiabulls Hsg. Finance Finance 0.2 7.6 -7.4
Fortis Healthcare Healthcare 25.0 18.5 6.5 Tata Motors (DVR) Auto & Anc. 20.3 25.7 -5.4
Petronet LNG Inds. Gases & Fuels 9.9 4.8 5.1 MCX Finance 30.7 35.1 -4.4
JK Tyre & Industries Auto & Anc. 4.5 0.0 4.5 Natco Pharma Healthcare 5.2 7.7 -2.5
Kaynes Technology Electricals 15.5 11.7 3.8 Atul Chemicals 17.1 19.3 -2.2

Small caps Change Small caps Change

Company Sector Dec ’23 Sep ’23 (% pt) Company Sector Dec ’23 Sep ’23 (% pt)

Nazara Technologies IT 14.1 7.2 6.9 MTAR Technologies Capital Goods 18.2 22.9 -4.7
TeamLease Services Business Services 33.1 27.9 5.2 Orient Paper & Inds. Paper 2.9 7.5 -4.6
Fusion Micro Finance Finance 15.8 10.7 5.1 Delta Corp Hospitality 12.2 15.7 -3.5
Arman Financial Services Finance 4.7 0.0 4.7 Tracxn Technologies IT 12.0 15.6 -3.6
Sequent Scientific Healthcare 5.0 1.0 4.0 Alembic Healthcare 0.0 3.4 -3.4

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 MARKET COMPASS

Change in promoter stake

Companies that have seen a rise or decline in promoter stake in Q3 FY24

H
igher promoter holding shows that The tables below list the companies in
promoters are bullish about which the promoter stake has changed
their company. In contrast, a notably over the last quarter. We took
fall in promoter stake is usually a companies where the promoter stake
negative development. in the previous quarter was at least
However, corporate actions, such 25 per cent. In the case of an increase
as rights issue, mergers and promoter in promoter stake, we set a threshold
reclassification, can also impact of 2 percentage points. In the case of a
promoter holdings. Hence, one needs to decrease in promoter stake, we set a
dig deeper while tracking promoter stake. threshold of 8 percentage points.

,QFUHDVHLQSURPRWHUVWDNH
Companies where the promoter stake in the previous quarter was at least 25 per cent and has risen by at least 2 percentage points
Promoters’ stake (%)
Company Sector M-cap (` cr) Dec '23 Sep '23 Increase in promoter holdings (% pt) 3M return (%)
Tide Water Oil Company Auto & Anc. 2,793 62.3 57.3 5.0 16.2
Krishana Phoschem Chemicals 1,300 69.9 66.2 3.7 1.5
Capacit'e Infraprojects Realty 2,246 38.3 35.7 2.6 21.1

)DOOLQSURPRWHUVWDNH
Companies where the promoter stake in the previous quarter was at least 25 per cent and has fallen by at least 8 percentage points
Promoters’ stake (%)
Company Sector M-cap (` cr) Dec '23 Sep '23 Decrease in promoter holdings (% pt) 3M return (%)
Polyplex Corporation Plastic Products 2,914 26.7 51.0 -24.3 -9.1
SG Mart Textile 6,156 53.8 75.0 -21.2 59.0
Sterling and Wilson Ren. Infrastructure 13,511 53.0 67.6 -14.6 19.8
Inox Wind Capital Goods 18,757 52.9 64.6 -11.7 159.1
Sky Gold Jewellery 1,457 62.1 73.6 -11.5 213.2
EFC Trading 2,142 46.0 56.8 -10.8 67.7
Sapphire Foods FMCG 8,536 31.3 41.7 -10.4 -2.2
Fusion Micro Finance Finance 5,584 57.7 67.9 -10.2 -3.2
KFin Technologies Finance 10,832 39.1 49.1 -10.0 2.7
Paramount Comm. Electricals 2,858 53.5 62.7 -9.2 39.7
TCNS Clothing Textile 2,540 52.1 61.1 -9.0 3.6
Texmaco Rail & Engg. Auto & Anc. 7,404 50.2 58.7 -8.5 33.0
Thomas Cook (India) Hospitality 7,942 63.8 72.3 -8.5 13.5
Bank of India Bank 65,035 73.4 81.4 -8.0 2.9
Ircon International Infrastructure 21,806 65.2 73.2 -8.0 18.3
Shalimar Paints Chemicals 1,667 31.9 39.9 -8.0 9.9
Market capitalisation of more than `1,000 crore as of February 15, 2024. Returns as of December 2023.

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 MARKET COMPASS

Pledging tracker
Companies that have seen a rise or decline in promoter pledging in Q3 FY24

P
romoter pledging is an important is high and the promoter is unable to pay back
analytical parameter. When promoters the dues. This may force the financing
pledge shares, they keep shares as institution to sell the pledged stake,
collateral with a financial institution, which can result in a sudden fall in
such as a bank, to raise money. It’s just the stock price and the dilution of
like mortgaging something for money. promoter stake in the company.
Pledging is not always bad. Many Generally speaking, a high pledged
times, promoters pledge their stake for stake also indicates a bad
sound business reasons and later management. Investors should stay
release their pledged shares. But pledging away from companies that have high
takes an ugly turn when the pledged stake levels of pledging.

,QFUHDVHLQSOHGJLQJ
Companies in which promoter pledging has gone up by 10 percentage points and the minimum promoter stake is 25 per cent

M-cap Pledged stake (%) Increase Promoter 3M stock Debt-to-

Company Sector (` cr) Dec '23 Sep '23 (% pt) stake (%) return (%) Z-Score F-Score equity
Tide Water Oil Company Auto & Anc. 2,793 54.2 0.0 54.2 62.3 16.2 4.5 6 0.0
Kesoram Industries Const. Materials 5,219 51.6 21.3 30.3 43.4 101.0 2.3 4 5.3
India Cements Const. Materials 7,314 45.5 25.6 19.9 28.4 11.1 3.1 5 0.5
Orient Green Power Power 2,412 93.2 76.5 16.7 29.4 68.0 2.7 7 1.0
Wockhardt Healthcare 6,392 74.5 64.4 10.1 54.9 80.2 1.5 3 0.6

'HFUHDVHLQSOHGJLQJ
Companies in which promoter pledging has come down by 11 percentage points and the minimum promoter stake is 25 per cent
Pledged stake (%)
M-cap Decrease Promoter 3M stock Debt-to-
Company Sector (` cr) Dec '23 Sep '23 (% pt) stake (%) return (%) Z-Score F-Score equity
Ambuja Cements Const. Materials 1,13,539 0.0 100.0 -100.0 63.2 22.6 12.3 6 0.0
Jindal Stainless Iron & Steel 49,328 0.0 77.5 -77.5 58.7 20.3 4.3 4 0.4
Sanghi Industries Const. Materials 2,902 22.2 98.9 -76.7 72.6 11.7 2.1 2 1.4
Kuantum Papers Paper 1,398 0.0 30.0 -30.0 70.3 -2.7 3.3 8 0.4
Tilaknagar Industries Alcohol 4,527 0.0 23.9 -23.9 40.3 18.8 7.5 6 0.3
Kilburn Engineering Capital Goods 1,275 0.0 21.3 -21.3 54.6 55.8 6.2 7 0.5
Themis Medicare Healthcare 2,174 2.4 23.5 -21.1 67.2 17.6 8.9 3 0.3
Jaiprakash Associates Infrastructure 6,242 0.0 20.5 -20.5 30.0 65.4 1.6 7 -8.8
Prakash Industries Iron & Steel 3,274 16.7 32.8 -16.1 44.2 17.3 3.4 6 0.1
Deepak Fert. and Petrochem Chemicals 6,437 0.0 14.5 -14.5 45.5 5.1 2.9 6 0.8
Mafatlal Industries Textile 1,031 0.0 11.9 -11.9 70.2 -1.9 2.8 5 0.1
ACC Const. Materials 49,541 0.0 11.7 -11.7 56.7 9.7 11.5 6 0.0
Servotech Power Systems Capital Goods 2,147 0.0 11.3 -11.3 60.6 -2.1 17.4 4 0.5

Minimum market capitalisation of `1,000 crore as of February 15, 2024. Returns as of December 2023. Z-Score: Predicts a company’s financial distress or the possibility of its going bankrupt
within two years. A Z-score of more than three is desirable. F-Score: Highlights financial performance as compared to that in the previous year. An F-Score of seven or above is good.
A negative value for debt-to-equity implies a negative net worth.

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Passive equity funds for savers
Indians cling fiercely to Recent household Pension funds (excluding PPF) 3.2% Bank
physical assets, bank financial savings data deposits
deposits, and small- from the RBI paints a Mutual funds 45.2%
savings investments. startling picture: as of 8.4%
These are deep-rooted March 2023, a
Other investments
behaviours that are staggering 55% of
(including PPF)
tough to shake off. financial assets 9.7%
held by Indian Financial assets
households were parked Currency and mix of Indian
in bank deposits non-banking households
deposits
and other 11.9%
investments,
including the Public Life insurance Data as of
Provident Fund. funds 21.5% March 2023
Source: RBI

Other investments are a slew of schemes that the government offers. Similar to bank deposits,
investors receive an assured interest on the capital invested in these schemes.

While some of the traditional investments can be useful in

accumulating capital, they are not sufficient for growing wealth.

For wealth creation, one can Passive funds simply

embrace equity exposure. To that track an underlying index
end, mutual funds may be an and seek to generate returns
attractive choice. And for those as per that. They comprise
new to investing, passive funds index funds and exchange-
may be a good starting point. traded funds/fund of funds.

For instance, the Nifty 50 Index consists of India’s top 50 listed

companies in terms of market capitalisation. By investing in passive funds
tracking such an index, you may seek to get underlying index returns.

The views expressed here constitute only the opinions and do not constitute
Thus, saving through passive funds any guidelines or recommendation on any course of action to be followed by the
is as easy as… reader. The data/information/opinions are meant for general reading purposes
only and are not meant to serve as a professional guide/investment advice
for the readers. Readers are advised to seek independent professional advice
and arrive at an informed investment decision before making any investments.
An investor education and awareness initiative by Mirae Asset Mutual
Fund. All Mutual Fund investors have to go through a one-time KYC (Know
Your Customer) process. Investors should deal only with Registered Mutual
Funds (RMF). For further information on KYC, RMFs and procedure to lodge a
complaint in case of any grievance, you may refer the Knowledge Center section
available on the website of Mirae Asset Mutual Fund.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

March 2024 Wealth Insight 35

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 ANALYST’S DIARY

Out of season
Unloved stocks in a bull market

Y
ou have heard the sirens. “Everything is too focusing on
expensive.” “Do not invest now!” driving growth
But amid this surging bull market, a few hidden in the patented
gems are trading at 52-week lows despite posting a molecule segment to

AI generated image
10 per cent annual growth in earnings over the past five increase its revenue share and
years. Yet, these stocks seem to be ignored by investors. new launches while also exploring export opportunities.
In our analysis, 41 companies (as of February 9, 2024)
with a market capitalisation of at least `1,000 crore Rajratan Global Wires
were trading within 5 per cent of their 52-week low It is a leading tyre bead wire manufacturer with operating
price. The number came down to 13 after applying the facilities in India and Thailand. The company draws
following filters: 64 and 36 per cent of its revenue from India and Thailand,
z A five-year median ROE of at least 20 per cent. respectively, as of the nine months ending December 2023.
z An annual profit after tax growth of at least 10 per cent The uptick in automobile sales post-FY20 and
over the last five years. subsequent growth in the tyre industry helped the
Among them, we look at the top five companies based company record consistent growth in the domestic
on their five-year profit after tax growth to understand market. Additionally, the pandemic-induced supply-
the possible reasons for the market’s lack of interest. chain disruptions in China allowed the company to
outgrow its Chinese counterparts, which historically
Best Agrolife dominated the Thai market, and gain a peak market
Formerly known as Sahyog Multibase, the company share of nearly 30 per cent in FY22.
adopted the “Best” brand name after amalgamating with However, the relaxation of lockdown measures in
Best Agrochem in FY20. Best Agrolife manufactures a China triggered intense price competition, squeezing
wide range of crop protection products in both generic Rajratan’s operating profit margin. Additionally,
and patented molecule segments. declining raw material prices compelled a downward
The company witnessed a remarkable FY23, recording adjustment in product prices. The company’s operating
a YoY revenue and profit after tax growth of 44 and profit margin has significantly declined, which raises
83 per cent, respectively. The growth was driven by new concerns about its profitability.
product launches, increased sale touchpoints, and
favourable raw material costs, leading to a four GMM Pfaudler
percentage point jump in the operating profit margin. It is a global leader in the corrosion-resistant glass-lined
However, this trend did not continue in FY24. The equipment used in the production facilities of
company’s profitability declined due to pricing pressures pharmaceutical and chemical industries. The company
and an unfavourable product mix. The management is earned nearly 73 per cent of its revenue from

Robust financials, yet out of favour

Rajratan GMM SBI Cards Tatva Chintan Alkyl Amines
Company Best Agrolife Global Wire Pfaudler and Payment Pharma Chem Chemicals
Stock Rating    Unrated Unrated 
Market cap (` cr) 1,486 3,124 6,247 68,294 2,981 11,340

5-year profit after 141.9 42.4 31.3 30.3 28.5 28.2

tax growth (% pa)

5-year median ROE (%) 42.1 25.7 20.4 25.8 30.0 25.3

36 Wealth Insight March 2024

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 performing assets, and higher impairment costs led to
Recent performance: TTM December 2023 this decline. Moreover, it witnessed a YoY decline of
YoY change (%) 19 per cent in the new cards issued.
Operating profit The silver lining remains a double-digit growth in
Company Revenue Operating profit margin (% pt)
overall spending and receivables on credit cards.
Best Agrolife 10.6 -26.6 -6.9 However, how it will navigate through an increase in
Rajratan Global Wire -5.8 -31.2 -4.6 competition from other banks, NBFCs, and fintech
GMM Pfaudler 22.6 37.3 1.1 companies in the retail and MSME credit market
remains to be seen.
SBI Cards and Payment* 28.0 4.4 -3.2
Tatva Chintan Pharma Chem 5.6 -17.8 -3.2
Tatva Chintan Pharma Chem
*Profit after tax and net profit margin. TTM refers to trailing twelve months. The company’s expertise lies in producing specialty and
intermediate chemical products with diverse
international business as of TTM December 2023. applications across industries. It boasts an extensive
Consistent growth in its core glass-lined equipment client portfolio featuring prominent names such as Divi’s
business, acquisitions and diversification into Laboratories, Asian Paints, and SRF, among others. The
complementary segments are the key factors behind growing prominence of the Indian pharma and chemical
the company’s growth. It boasts a diverse set of industry in the global market and the long list of major
products and services for laboratories and production clients have helped the company in previous years.
plants of its clients. Like many chemical companies, Tatva Chintan
GMM Pfaudler relies heavily on the pharma and navigated a challenging landscape in the past year.
chemical industries for its growth. Unfortunately, the Despite a nearly 30 per cent increase in sales volume,
capex from these industries has slowed down in the declining raw material costs compelled the company to
current financial year, leading to a decline in revenue adjust its prices downward, resulting in a YoY decrease in
and operating profit margin in domestic businesses. operating profit as of nine months ending December 2023.
Moreover, despite growth in consolidated numbers, the On the bright side, the company’s cash flow from
company is yet to find its winning stride. operations turned positive in the first half of FY24
because of improving operational efficiencies. The
SBI Cards and Payments management remains optimistic about the future
It is India’s second-largest credit card issuer, holding a outlook, citing acquiring new clients, commercialising
market share of nearly 19 per cent in December 2023. new products, and capacity expansion in FY25.
The company’s total accounts have grown annually by
16 per cent in the last five years, with 1.85 crore total Conclusion
active cards as of December 2023. Technological Evidently, these companies are facing some challenges.
advancements and the growing penetration of credit The real question is whether these challenges are
cards made this growth possible. temporary or indicative of deeper structural issues. This
While the revenue recorded a YoY jump of 25 per cent distinction will determine if these companies represent a
in nine months ended December 2023, profit after tax good investment opportunity.
only grew by 5 per cent. Increased interest expense, non- By Hemkesh Khattar

Stock Rating and price data as of February 9, 2024. Financials as of FY23.

Sumitomo Polyplex Hindustan

Chemical India Vinati Organics Vedant Fashions TCI Express Corporation Unilever Page Industries
Unrated  Unrated    
19,125 16,818 23,429 5,056 3,069 5,69,588 40,499

28.2 26.1 23.7 19.0 16.9 14.2 10.5

23.3 22.6 24.2 26.7 22.0 28.6 46.5

March 2024 Wealth Insight 37

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 ANALYST’S DIARY

Glass titan’s rise

The curious case of an Indian small-cap company with eight
acquisitions in the last five years

GMM Pfaudler’s acquisition history

Sudarshan
Chemical’s Pfaudler DeDietrich Hydro Air
Target Industrial Mixing International Process HDO Research JDS
Division (erstwhile parent) Systems India Technologies Italia Manufacturing Mixel MixPro

Apr ’19 Sep ’20 Oct ’20 May ’21 July ’22 Aug ’22 Dec ’22 Sep ’23

Mixing Corossion-resistant Glass-lined Alloy process Membrane Glass-lined Mixing Mixing

Niche
technology technologies equipment equipment technologies equipment technology technology

I
n the world of business, certain names stand as price has increased more than four times.
titans, be they tech giants like Microsoft and This article explores the company’s acquisitive capital
Nvidia or consumer behemoths like Amazon allocation strategy and how it gained market dominance.
and LVMH.
Yet, amongst these, there is a gem from India, a A string of acquisitions
small-cap company that has quietly earned the tag of a Acquisitions are a big part of GMM Pfaudler’s growth
global leader. Enter GMM Pfaudler, the worldwide strategy. The company has acquired eight companies in
leader in glass-lined equipment. the last five years. Its acquisition spending amounts to
Traditionally, stainless steel was the preferred `315 crore or about 46 per cent of the cumulative cash
choice for reactor vessels in the chemical and flow from operations since FY18. Note that this doesn’t
pharmaceutical industries. However, it could corrode include the issue of shares worth `170 crore to the
and react with certain chemicals. This is where glass- promoters for transferring ownership of a foreign
lined equipment changed the game. At the forefront is subsidiary to the company.
GMM Pfaudler, which has a global market share of Of the eight acquisitions, five were global. The most
about 40 per cent. Over the last five years, its share notable one was the company’s acquisition of a
majority stake in its US-based parent company,
Pfaudler, in FY21. Given the over 30-year-long
A meteoric rise association between both companies, this acquisition
Tracking the fourfold growth in GMM Pfaudler’s share price over five years has strengthened GMM Pfaudler’s foothold as a leader.
` 2,500 z GMM Pfaudler z BSE SmallCap Index
The company transformed from a domestic player to
a global leader by gaining access to 19 production
2,000 facilities across 10 countries that penetrated the key
markets of the US, Europe, and China. As a result, the
1,500
contribution of exports rose from 11 per cent in FY19 to
1,000 73 per cent in the trailing twelve months (TTM) in
December 2023.
500 The acquisitions helped expand the company’s
capacity in the core business of glass-lined
0
equipment, ultimately making it the global leader.
February 2019 February 2024
However, there are other segments where the
Data as of February 1, 2024. BSE SmallCap Index rebased to the stock price.
company witnessed growth.

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Key business metrics Operating profit margin
Consistent growth in standalone biz along with recent acquisitions have Standalone margin has shrunk while consolidated margin has improved
led to this growth
20 % z Standalone z Consolidated
Metrics FY20 FY21 FY22 FY23 TTM Dec '23

Revenue (` cr) 591 1,001 2,541 3,178 3,572 16

Op. profit (` cr) 90 88 151 312 351
12
Op. profit margin (%) 15.2 8.8 5.9 9.8 9.8
CFO (` cr) 27 157 236 185 -10* 8
ROE (%) 23.8 17.3 16.2 32.2 22.6
Debt-to-equity ratio 0.03 1.21 0.96 1.00 0.60 4
FY19 TTM
*As of TTM September 2023 Dec 2023

Growth in diversification company’s aggressive acquisition strategy has affected

While the glass-lined equipment business proliferated, its balance sheet. Its debt-to-equity ratio increased from
the addressable market remained relatively small. 0.03 in FY20 to 0.6 times as of September 2023.
Hence, the company forayed into complementary Ballooning goodwill is also a potential cause of concern,
product categories, primarily heavy engineering representing nearly 16 per cent of the company’s net
products and mixing systems. worth as of September 2023. Moreover, higher working
The strategic acquisitions in India, Europe, and capital requirements also led to a negative CFO (cash
Canada gave the company access to advanced flow from operations) in the same period.
technologies and ready-to-use production facilities. Generating synergies in operations also remains a
These moves expanded its client base in the pharma challenge as the management requires time to integrate
and chemical industries while opening up new its various businesses. At present, there is a gap
opportunities from oil refineries, petrochemical and between the operating profit margin of the standalone
fertiliser companies. numbers and consolidated numbers.
It now serves as a one-stop shop for a wide range of In FY22, management initiated ‘Project Apollo’ with
requirements. From laboratories to full-scale the sole purpose of gaining operational efficiencies. It
production plants, the company is now involved in all has certainly resulted in an improvement in order
aspects of its clients’ projects to optimise and improve execution and operating profit margin. Whether this
the complete lifecycle of any processing equipment. continues in the future is yet to be determined.
The financials paint a promising picture of the Moreover, the stagnant revenue growth and
company as well. It recorded high double-digit growth deteriorating profitability in the standalone business as
in its non-glass-lined equipment business in FY23. of the twelve months ending December 2023 period
exposed the company’s dependence on the capex cycle
The road ahead of pharma and chemical companies for growth. As of
GMM Pfaudler finds itself in quite a unique position. February 1, 2023, the stock trades at around 0.6 times
While its core business is a source of consistent growth its five-year median P/E. This relatively attractive
and sustainability, the newer diversified product valuation and a quality score of eight have helped the
portfolio brings an opportunity for future expansion. company earn a four-star Stock Rating.
However, it is not all roses for the company. The By Hemkesh Khattar

Invest like pros

Learn the craft of investing by reading about the investment styles
of world-class money managers
https://shop.valueresearchonline.com/store/

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 ANALYST’S DIARY

Decoding AU Small
Finance Bank’s success
How the bank carved its niche in the banking sector

T
he unique market position and financial
performance of AU Small Finance Bank have AU SFB steers clear of microfinancing
captured investors’ attention lately. With a Its loan book is healthier than its peers
market capitalisation of `42,500 crore as of 3.5% z GNPA ratio (FY23) z Share of microfinance in loan book (FY23)
February 1, 2024, the bank stands as the sole large-cap
small finance bank in India, having nearly tripled its 2.8
stock price since its listing in 2017. 72%
2.1 63%
60%
Further, the bank has achieved an industry-leading
growth rate among small finance banks (SFBs), with an 1.4
annual growth rate of 34 and 54 per cent in loan advances
0.7 19%
and deposits, respectively, in the last five years.
Here, we explore the factors contributing to AU’s tag 0
of becoming one of the best-performing SFBs in India.
AU SFB Equitas SFB Ujjivan SFB Utkarsh SFB Suryoday

Sticking to its guns

In FY17, 10 NBFCs (non-bank financial companies) its forte for the last 21 years.
were granted licenses to transition into SFBs. Of these, This move proved beneficial for AU. Given that
only two institutions, including AU Small Finance microfinance lending involves providing small,
Bank, did not engage in microfinance lending. unsecured loans to underserved customers, the
Before 2017, AU Small Finance Bank operated as associated NPAs (non-performing assets) are higher.
an NBFC. The bank has chosen to stay away from The decision to stick to vehicle financing has
microfinance lending and continues to focus on its resulted in lower NPAs (non-performing assets) for
core competency, i.e., vehicle loans, which has been AU compared to its peers. In addition, it boasts a loan
book that is 92 per cent secured.

Growth in advances and deposits A diversified loan book

AU’s focus on digital innovation and underserved customers
The bank’s strategic focus on vehicle loans, which
has led to rapid growth
account for 32 per cent of its portfolio and secured
`75,000 cr z Deposits z Advances business loans (MSME), contributing 31 per cent to
the portfolio, has resulted in superior asset quality
60,000 and a robust balance sheet.
To reduce its reliance on vehicle loans, the bank
45,000 also expanded its share of secured business,
commercial and home loans. Further, its decision to
30,000 launch credit cards in 2021 has been a success,
making it the only small finance bank to do so. The
bank has issued over five lakh credit cards within
15,000
two years, emerging as one of the top 10 issuers in
the country in terms of incremental monthly
0
issuance. As of FY23, credit card loans contribute
FY18 FY23
2.5 per cent of the bank’s loan book.

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 Stable profits
Loan book mix: FY23 vs FY19 Although AU’s profitability (return on asset) appears
Vehicle and MSME loans are the staple lower than other SFBs, it is merely an illusion. Its peers
have significant exposure to high-yielding microfinance
loans, causing their ROAs to shoot up during favourable
Vehicle 32% Vehicle 42% economic conditions.
MSME 31% MSME 32% However, the same loans pose higher risks during
Commercial Small and economic downturns, resulting in increased NPAs and
banking 22% medium reduced profitability. Thus, during economic upturns,
corporate
Home loans 7% 17% AU’s profitability may seem comparatively lower
Others 8% Others 9% within the industry. But, during economic downturns,
FY23 FY19 AU’s profitability appears stable and higher than its
peers, thanks to the conservative loan book that
A distinctive approach protects it from the impact on NPAs and profitability.
The bank implemented a differentiated strategy to attract
retail customers from urban markets by offering higher What lies ahead
interest rates on savings accounts compared to major AU’s growth story is a testament to its unique approach
commercial banks. It then used these deposits to extend of sticking with conservative loans and focusing on its
loans in rural or semi-urban regions. core competencies.
In FY23, the bank received 78 per cent of its deposits However, its success may very well bring more
from urban markets and allocated 63 per cent of its loans challenges given the scale of operations (advances and
to rural or semi-urban areas. deposits of `69,365 crore and `58,422 crore, respectively,
Furthermore, AU’s digital innovation played a crucial in FY23). Despite competing with SFBs, AU may face
role in scaling its business. The launch of digital tough competition from well-established commercial
products and channels accelerated the pace of new banks in the future. It remains to be seen how the bank
customer acquisitions, with 43 per cent of customer will deal with that challenge.
acquisitions in FY23 being attributed to digital products. Furthermore, AU’s current price-to-book (P/B) ratio of
The bank has adopted a ‘phygital’ approach, 3.5 times is significantly higher than the peers’ median of
combining its physical presence with digital channels, 2.2 times. While one could argue that the bank justifies
enabling it to expand its reach in metro cities without its premium valuation due to its more stable operations,
incurring significant capital expenditure. Its growth and its valuation is still higher than that of top-tier
success are a testament to its strategic planning and commercial banks.
effective execution. By Shubham Dilawari

Return on assets: Peer comparison

AU’s margins appear quite stable
4% z FY19 z FY20 z FY21 z FY22 z FY23

-1

-2
AU SFB Equitas SFB Ujjivan SFB Utkarsh SFB Suryoday SFB

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 ANALYST’S DIARY

Satellite view
The fastest-growing industries of the past five years in terms of profit after tax.
Our list compiled 757 companies with a minimum market cap of `500 crore,
spreading across the top 20 industry groups.

z 5-year profit Technology
after tax (% pa) services
z 5-year revenue 12.3 9.5
growth (% pa)
19.8
Capital
12.4 51.3
Data as of trailing goods
12 months ending 20.3 9.3
Dec 2023
Real estate 12.5
development
Food & staples Diversified
4.4
retailing -1.5
20.7 19.5
127.8
Textiles, apparel & accessories
Power producers
& utilities 14.7
12.6 Food, beverage
11.0
& tobacco
20.7 10.6
49.6

Retailing
18.6
`
21.6 Banking & NBFCs
Transportation & logistics

Commercial &
industrial services 13.2
12.3 37.6
21.9 13.9 20.3
14.2
Insurance
32.5
Investment and Oil & gas and
12.4 financial services services
19.5 Hotels, restaurants 8.8
& leisure
19.2 Health care equipment 18.6
& services
5.1
11.0 Pharmaceuticals
Automobiles &
ancillaries 13.5 & research
Basic 9.7
8.0 9.6 materials

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WORDS WORTH WISDOM

/(9:/4(90>(3( Chairman of Marico

“Hindustan Lever
is after us”
Marico’s triumph over HUL through the
eyes of its founder and his friend

M
arico, an FMCG giant, dominates the
coconut oil segment with its ‘Parachute’
brand. But did you know that in the 1990s,
the company was at war with Hindustan
Unilever (HUL) for market dominance?
Marico’s founder, Harsh Mariwala, and his friend
Professor Ram Charan have captured the company’s
journey, including this rivalry, in their book, ‘Harsh
Realities.’ In one of the chapters, the duo delve deep into
the challenges posed by HUL and how they overcame
them. We share the entire event in a nutshell.

HUL’s entry
After demerging from Bombay Oil Company, Marico
had established itself as a leader in the
coconut oil segment by 1993. Meanwhile,
HUL, the Indian subsidiary of Unilever,
went on an acquisition spree under its
then Chairman, Keki Dadiseth, to solidify
its position as an FMCG giant. It acquired brands like
Kwality, Dollops and International Best Foods.
Professor Ram Charan writes, “Along with
mergers of some of the group businesses, he knew he
could strengthen Lever’s position by acquiring
promising companies.”
HUL’s eyes were now on the hair oil segment. It
acquired TOMCO (Tata Oil Marketing Company) to
access Nihar Coconut Oil, which held a 7 per cent
market share. HUL wanted to strengthen its position
Illustration: ANAND

in this segment.

The first move from HUL

To be the first preference on the shelves of retailers,
HUL offered discounts of 35 per cent compared
to Marico’s 10 per cent. Furthermore, HUL
spent twice as much on advertising despite
operating on a smaller scale.
Ram Charan notes, “This amounted to a

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Well-oiled growth! 9,763
z Revenue z Profit after tax 7,315
5,733
In ` cr
2,661
1,007
648 1,302
1,021
283 573
106 232
70
36
12
2

FY91 FY95 FY00 FY05 FY10 FY15 FY20 FY23

full-blown assault on Marico.” It even made Marico’s Marico was more nimble than HUL, which had
Vice President of Marketing exclaim, “Hindustan layers of management in its hierarchy.
Lever is after us, all guns blazing.” The brand war intensified as both companies
upped their advertisement expenses. Marico
HUL’s offer to acquire Marico and the response completely changed its package to make it shinier
The war between HUL and Marico was not cooling and added a tamper-free cap. The brand was linked
down. The leaders at Marico believed that to tradition and religion to create a sentimental
HUL might make an acquisition offer. value, resulting in Marico’s market share reaching
Ram Charan says, “Large companies 52 per cent. While Nihar also gained market share, it
can offer incredible financial payouts. was from smaller players.
Because for them, what they give you does Ram Charan says, “Harsh astutely turned around
not materially affect their earnings per share. the Nihar and Hindustan Lever threat to augment
Hindustan Unilever was a thirty times larger competitive advantage for Parachute and Marico.”
predator, with humongous hunger and deep pockets. Although Nihar’s market share touched 15 per
Very deep pockets.” cent, it couldn’t catch up to Marico. HUL couldn’t
HUL did come knocking as per their expectations. keep up with this strong fightback from Marico and
Dadiseth made a direct offer to Mariwala, saying, eventually stopped investing in Nihar, leading to a
“The consideration will ensure that you and the next decline in its market share.
generations will be well cared for… You know that
we’re in the coconut oil market. We’re very serious Marico stands tall
about this. We have a far superior and deep After more than six years of brand war, HUL
penetrating distribution network…I’m giving you an had given up. It wanted to sell this division,
opportunity to sell out.”. and first in the queue was Marico. In
However, Mariwala refused to sell, and the February 2006, Marico acquired Nihar
conversation ended with a threat from the HUL Oil for `216 crore, taking its market share
Chairman that if he didn’t sell, “Marico will be to 60 per cent.
history” and “you will live to regret it.” This marked the end of the war. Marico emerged as
the undisputed segment leader and allowed Harsh
Competition intensifies Mariwala to take a breather. He says, “It was a
Mariwala and his team were initially taken aback by quantum leap for Marico. Internally, it brought a
the competitive offer, but their confidence in strong feel-good factor that we were good enough to
their abilities helped them to become more succeed against a powerful company.”
aggressive. Ram Charan writes, “A huge Although Marico did come out on top, it went
advantage for Harsh was his in-depth through a challenging period and had to reinvent itself
knowledge of branded coconut oil: consumer on all fronts to stay on top despite being a market
insights, sourcing expertise, a well-established leader. On the other hand, HUL realised that splurging
distribution and marketing set-up, and the cash at a segment would not result in leadership. The
significant cost optimisation achieved across the entire saga highlighted the importance of the strategic
value chain.” Besides, Mariwala also realised that approach to brand building.

March 2024 Wealth Insight 45

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 VIS-A-VIS

Pharmaceutical pioneers
Putting two market leaders face-to-face
Cipla Dr Reddy’s Laboratories
As India’s second-largest pharmaceutical company by Unlike Cipla, this third-largest Indian
market cap, Cipla has six brands among the top 25 in pharmaceutical company by market cap generated
the Indian pharmaceutical market. The company most of its revenue from North America (45 per cent)
specialises in respiratory drugs, where it has cornered in the 12 months ending December 2023. India and
a 23 per cent market share (as of FY23). Moreover, it emerging markets each accounted for 18 per cent
ranks second in India’s chronic therapeutics market. of its revenue during the same period. Moreover,
In the 12 months ending December 2023, 43 per cent 60 per cent of its retail-facing products and
and 28 per cent of its revenue came from India and 58 per cent of institutional products in North
North America, respectively. America occupy the top three ranks.

)LQDQFLDOV (All numbers in ` cr)

Revenue Operating profit Net profit Net worth Total debt Cash from operations Market cap
25,350 5,040 3,708 25,095 674 3,792 1,14,653
27,213 6,210 5,228 25,497 965 7,212 1,02,785

3ULFHFKDUW 3(UDWLR
300 60
225 45
150 30
75 15
0 Rebased to 100 0
Feb 2019 Feb 2024 Feb 2019 Feb 2024

30.9 19.7 4.4 3.8 0.6 0.7 0.03 0.04

Price to earnings Price to book Dividend yield (%) Debt to equity

29.2 )LYH\HDUDQQXDOLVHGJURZWK SD

22.8 22.6 23.2 36.5
18.6 19.9 32.0
14.3 16.0
20.5
14.7
8.5 11.6

Net profit Operating profit ROE (%) ROCE (%)

margin (%) margin (%) Revenue Operating profit EPS
Price data as of February 08, 2024. P&L data and ratios as of 12 months ending December 2023. Balance sheet items as of September 2023.

Over the last two decades, India has dominated the global pharma market, becoming the largest manufac-
turer of generic medicines and vaccines globally. The Indian pharmaceutical industry currently stands at
$65 billion and is expected to reach $130 billion by 2030, growing annually by about 10 per cent, according to
an Indian Brand Equity Foundation report. While low-cost product portfolios have been the key growth
drivers in the past, the research-oriented biotech segment is expected to drive growth in future.

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 COVER STORY

Imitation
investing
A guide to stealing ideas from experts

By Udhayaprakash, Hemkesh Khattar,

Mithilesh Bhaumik and Nipun Arora

I
n a 1675 letter, Isaac Newton, who peeked into the regularly publish interviews with market experts.
mathematical laws governing the motion of But, does it work? The market is notorious for not
celestial bodies, wrote, “If I have seen further, it adhering to the laws of nature. Even Albert Einstein,
is by standing on the shoulders of giants”. who figured out how space and time work, could not
The urge to seek the guidance of experts, those who predict the markets and lost most of his Nobel Prize
have done it before, is embedded in the very essence money in the 1929 Wall Street Crash.
of what makes us human. Most choices we make are In this issue, we explore the age-old question: Can
influenced by those we consider our idols. mimicking the investments of fund managers give
So, it shouldn’t be surprising that this inherent you an edge? We explore instances where this
human tendency to follow the footsteps of the greats investment strategy has worked and failed.
is present in investing. Most investors closely track But first, let’s dive into why investors choose to
the buys and sells of fund managers. We, too, follow fund managers.

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 COVER STORY

The allure of expertise

The psychology behind why investors seek expert advice

G
oogle any toothpaste brand. You will be
bombarded with advertisements and imagery
claiming that nine out of 10 dentists have
recommended their toothpaste. Whether these
claims are valid or not is a different tale. However,
marketers know people are more likely to buy their
products if a dentist endorses them.
Why is that? In one simple word, the answer is trust.
We trust that a dentist who has spent years learning
about oral health would know better than most which
toothpaste is best for our teeth. In fact, modern
civilisation is built on our trust in those who have
dedicated their lives to mastering their respective fields.
We trust our doctors to cure us, we trust our teachers to
help us grow and we trust policymakers to drive the
economy forward.
Similarly, investors tend to trust fund managers who
have spent years studying the market to know which
stocks are the best. So, if nine out of 10 fund managers
are buying a stock, chances are they know something Illustration: ANAND
most don’t, and maybe you should also buy that stock.
But, as we have previously stated, the markets are a They know more
world of their own. Their laws are different and often More information leads to better investment decisions,
absurd. So, apart from society’s natural trust in its and fund managers will always have more information
experts, there exist subtler motivations for investors to than the average investor. Fund houses have access to
follow the lead of fund managers. doors a retail investor doesn’t. In addition, they have
dedicated teams working around the clock to gather
They are financial athletes information. To emulate how a fund manager picks
We have all run a race at some point in our life. Some of stocks is nearly impossible for a retail investor.
us might even have been stars of our school track team.
But, we are no Usain Bolt. They can influence the market
Investing is often a race. To reap the highest returns, We are not discussing market manipulation or any
one must spot promising companies before the market underhanded tactics. However, it’s undeniable that when
euphoria kicks in. But, fund managers are the Usain investment firms begin to show interest in a particular
Bolts of the market. Analysing the market and spotting stock, it captures the broader market’s attention.
winners is what they live for, and chances are they will Moreover, the significant levels of investment or
spot the next multibagger before you. divestment that these firms are capable of executing can
Take the example of Deepak Nitrite. Mutual funds impact a stock’s price.
started increasing their stake back in 2015 when the
company was just a sodium nitrite manufacturer. But, Even experts follow experts
the experts at the helm knew it had the potential to be Monish Pabrai, the famed Indian American investor
much more. Today, it produces a wide range of chemical and founder of Pabrai Investment Funds, has openly
intermediates. It has also grown an eye-popping 25 times advocated copying successful investing ideas. He even
since fund houses spotted it. conducted an exercise where he created a portfolio

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 based on the top picks of a few value-oriented fund
When copying works managers. The results? The portfolio gave 15.5 per cent
An equal-weighted portfolio of the 10 stocks would have more than annual returns in 18 years compared to the S&P 500’s
doubled your investment 4.8 per cent during the same period. A similar exercise,
5Y return (% pa) copying Warren Buffett’s Berkshire portfolio from
H.G. Infra 32.6 1976-2006, yielded same results. The portfolio beat the
benchmark in 27 out of 31 years!
Fine Organic 32.5

Poonawalla Fincorp 31.6 The numbers favour them

Even if one disregards the psychological aspects,
IFGL Refractories 27.2
historical data says following fund managers is
ICICI Securities 22.0 rewarding. We created an equal-weighted portfolio
constituting the top 10 stocks that witnessed the highest
Portfolio return 19.5
increase in mutual fund stake as of December 2018. The
Sensex 14.8 portfolio generated an annual return of 19 per cent in the
Aavas Financiers 13.1
next five years. To put that into perspective, Sensex gave
an annual return of 15 per cent in the same period.
Sandhar Tech 9.5 That’s an alpha of four percentage points!
Orient Electric 9.5 So, is the question we began with answered? Is
copying fund managers a sure-shot road to success? Not
-8.2 Khadim India quite. It is only one side of the coin. But before we
-12.9 Indostar Capital explore the other side, let’s delve into the stories of five
multibagger stocks, showcasing how investment firms
Data as of January 1, 2024
managed to identify their potential early on.

DEEPAK NITRITE

Turning on the nitro

I
n 2015, Deepak Nitrite was a rising Indian chemical 0.3 per cent in December 2015 to 10.1 in December 2016.
manufacturer. Its expertise in manufacturing sodium In 2019, Deepak Nitrite commenced production. Over
nitrite and nitrate helped it gain several prominent the years, it went on to become the largest phenol and
clients in the textile dyeing, agrochem and petrochem acetone producer in India. At the same time, supply
industries. Its robust nitrate business alone warranted chain disruptions in China opened up lucrative new
investment consideration. However, fund houses sensed opportunities for its existing product portfolio in textile
a larger opportunity on the horizon. dyeing, detergents, agrochemicals
The chemical manufacturer was about Dec 2015 Dec 2016 and colour additives. Between
to invest `1,700 crore to produce Mutual fund FY15-20, its revenue and profit after
phenol and acetone. 0.3 position (%) 10.1 tax grew 26 and 63 per cent annually,
There was immense domestic Dec 31, 2016 Feb 9, 2024 respectively. Its return on capital
demand for acetone and phenol. But employed and operating margin
India was mostly importing these doubled in the same period.
chemicals, with no major domestic Market If you stole from the playbook of
1,068 cap (` cr) 30,201
producer. This supply gap provided fund houses and invested in Deepak
an opportunity begging to be  Stock Rating  Nitrite in January 2017, your
conquered. So, hearing Deepak 17.8 P/E ratio 37.9 investment would have
Nitrite was up for the task, fund compounded 92 per cent annually
Initial Stock Rating as of FY16
houses increased their stake from for the next five years.

March 2024 Wealth Insight 49

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 COVER STORY
UNO MINDA

Honking for high returns

U
no Minda is a leading Indian auto component the autopart maker double its revenue and profit after
maker with a diverse product portfolio, including tax between FY14 and FY16. It also started focusing on
car switches, horns, automotive lighting, etc. innovation, spending around 3 to 4 per cent of its
But, its primary breadwinners are switches and lighting revenue on R&D.
parts, accounting for 27 and 23 per cent of the total Fund managers knew smart acquisitions, surging
revenue (TTM December 2023), respectively. earnings and robustness were the perfect success
Fund houses first took notice of Uno Minda for its recipe. They gradually increased their holdings in Uno
smart acquisitions between FY13 Minda, from 1 per cent in June 2016
Jun 2016 Jun 2017
and FY16. Notably, it acquired to 7.3 per cent in June 2017.
Mutual fund
Clarton Horns, a renowned 1.0 position (%) 7.3 Their convictions did not go
European horn manufacturer, in unrewarded. Between FY16 and
Jun 30, 2017 Feb 9, 2024
2013. This granted it access to FY21, Uno Minda’s revenue grew
lucrative OEM markets in Europe 20 per cent annually. Simultaneously,
and the US and made it the second- Market its profit after tax compounded
largest horn manufacturer in the 5,538 cap (` cr) 36,741 15 per cent annually.
world. During the same period, its  Stock Rating  Investors who spotted the uptick
two ailing subsidiaries, MJ Casting in mutual fund stakes and invested in
29.8 P/E ratio 47.5
and Minda Kyoraku, started July 2017, gained 53 per cent annually
Initial Stock Rating as of FY17
recovering. The turnaround helped in the next five years!

KAJARIA CERAMICS

A glossy success story

K
ajaria Ceramics is India’s largest ceramic 0.2 per cent to 6.4 per cent.
and vitrified tiles manufacturer in terms Their conviction was rewarded. Between FY10 and
of volume, with an annual capacity of FY14, Kajaria Ceramics almost doubled its capacity,
86.5 million square meters. focusing primarily on vitrified tiles. It even
The company caught the eye of top fund managers converted some of its ceramic tile capacity for
when it began manufacturing vitrified tiles. For the vitrified tile manufacturing. It also acquired new
uninitiated, vitrified tiles are lightweight, low- plants, entered into partnerships, improved product
porosity tiles popular for their ease of installation. availability and expanded its dealer network.
In addition to its focus on vitrified Its bet on vitrified tiles turned
Dec 2009 Dec 2010
tiles, improving financials also out to be a game-changer. From
drew the attention of fund houses. Mutual fund FY10 to FY15, its revenue soared
0.2 position (%) 6.4
Over 2010, its debt-to-equity ratio 24 per cent annually. Concurrently,
contracted from 2 to 1.4 times. The Dec 31, 2010 Feb 9, 2024 profit after tax compounded
recovering financials and growth 37 per cent annually.
prospects in vitrified tiles Market Those who invested in Kajaria
convinced fund houses to amp up 546 cap (` cr) 19,934 Ceramics in January 2011, based on
their stakes. Between December the rising fund house stakes, were
NA Stock Rating 
2009 and December 2010, fund rewarded handsomely. It grew
houses increased their stake from
9.9 P/E ratio 46.3 12 times in the next five years!

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SONATA SOFTWARE

Flying high on cloud nine

F
ounded in 1986, Sonata Software initially focused in services, banking, financial services and healthcare
on hardware and software licensing. It quickly sectors. But the most significant boost came when it
established a prestigious client base, including a entered a 30-year-long partnership with Microsoft as
partnership with IBM. Later on, it started developing its official cloud services provider.
original software for the travel and retail industry. These strategic decisions yielded impressive
It was, however, Sonata’s foray into cloud results. Between FY19 and FY23, revenue from cloud
computing that intrigued fund houses. They increased services grew 21 per cent annually. Notably, in FY19,
their stakes in the company from the cloud services segment
2 per cent in June 2017 to Jun 2017 Jun 2018 generated 80 per cent of its profit
4.9 per cent in June 2018, Mutual fund after tax despite accounting for just
anticipating incremental growth 2.0 position (%) 4.9 one-fourth of the topline. Its core
from cloud computing. Jun 30, 2018 Feb 9, 2024 hardware licensing business also
Sonata reciprocated this belief flourished in this period, growing its
and made several smart global revenue 30 per cent annually.
acquisitions in the cloud computing Market Investors who followed the cues
3,288 cap (` cr) 22,343
domain. It also partnered with from fund houses and invested in
major cloud services providers,  Stock Rating  Sonata Software in July 2018,
including Google, AWS, Salesforce, 13.9 P/E ratio 50.2 compounded their wealth by
etc. Its cloud computing clientele Initial Stock Rating as of FY18
34 per cent annually for the next
included several prominent names five years.

FINE ORGANIC INDUSTRIES

More than fine growth

F
ine Organics is India’s largest oleochemical- Between June 2018 and September 2018, mutual fund
based additives manufacturer. It boasts a diverse holdings in Fine Organics rose from 6.4 per cent to
portfolio comprising 470 specialty additives, 14.5 per cent.
with applications in several industries such as However, fund managers had to live through a
plastics, packaging, rubber & coatings, etc. temporary phase of muted performance. From FY19 to
In 2018, fund houses were particularly impressed by FY21, edible oil prices surged due to the pandemic,
the company’s innovations. For example, Fine impacting the chemical manufacturer’s financials.
Organic is among the few global players to But it didn’t take long to bounce back once the
manufacture green additives. The manufacturing pandemic receded. Between FY21 and FY23, it tripled
process of these eco-friendly its topline. Also, its net margin
Jun 2018 Sep 2018
additives is highly complex, doubled and profit after tax grew
requiring vegetable oils instead of Mutual fund five times in the same period.
6.4 position (%) 14.5
petrochemicals. In addition, green Investors tracking the stake of
additive products have Sep 30, 2018 Feb 9, 2024 mutual funds in Fine Organics
characteristically long and spotted the optimism of fund
expensive approval processes. Fund Market managers. Those who copied the
houses believed these entry barriers 3,242 cap (` cr) 13,491 fund houses and invested in October
provided Fine Organics with a 2018, compounded their investment
Unrated Stock Rating 
strong moat and started investing in by 35 per cent annually for the next
the chemical manufacturer.
22.9 P/E ratio 30.2 five years.

March 2024 Wealth Insight 51

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 COVER STORY

The limits of expertise

Why blindly copying financial experts is unwise

I
n 1915, while writing down the final pieces of his
general theory of relativity, Albert Einstein was in a
pickle. His equations were screaming that the
universe is not static. It is either expanding or
contracting. But a static universe was the belief of the
age. So, he decided to add a constant, called the
cosmological constant, to bend his equation to adhere to
the scientific consensus. Ten years later, Edwin Hubble,
a renowned astronomer, discovered that our universe is
expanding. Reacting to this discovery, Einstien called
the cosmological constant his “greatest mistake”.
Our experts, even once-in-a-generation geniuses
like Albert Einstein, are capable of blunders (though
Einstein was later somewhat vindicated. But that’s a
different story!). Experts, regardless of the field, base
their decision-making on the information available.
Their expertise equips them to interpret the data
accurately and make sound decisions. Our financial
experts, for example, look into a plethora of data
points, such as historical performance, valuations,
Illustration: ANAND
business outlook, etc., to arrive at a decision.
But here’s the conundrum. The world is ever- When copying doesn’t work
changing. New discoveries can add new variables to an Your portfolio would have bombed!
equation, and new technological advancement can
5Y return (% pa)
suddenly make a company’s business model obsolete.
Now, consider how volatile the markets are and how KEI Industries 32.1
often the data points change. Suddenly, a fund Sensex 12.8
manager’s decision doesn’t seem so infallible anymore.
Let’s redo our previous exercise to explore how Mold-Tek Packaging 12.3
changing data points can flip a good decision on its PNC Infratech 10.5
head. To recap, we created a portfolio based on the top
Portfolio returns 0.2
10 stocks that witnessed the highest hikes in mutual
fund stakes as of December 2018. The portfolio beat the -7.6 Aditya Birla Fashion
benchmark by a wide margin over the next five years.
-8.2 Power Mech Projects
Now, if we tweak the date to December 2015 from
December 2018, the results change completely. -18.5 Titagarh Railsystems
Our new portfolio gave a measly annual return of
-20.1 Sanghvi Movers
0.4 per cent in the next five years. In contrast, the
Sensex in the same period grew 13 per cent annually. -23.8 Indian Terrain Fashions
So, in a nutshell, the limits of expertise themselves
-27.4 Navkar Corp
are an argument against blindly copying what fund
managers are doing. However, apart from this, there -29.5 UFO Moviez
are a few other additional concerns to aping the Data as of January 1, 2021
financial experts.

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Time lags
Fund houses do not disclose their portfolio daily.
Rather, their holdings are updated for the public eye Institutional investors are prone to the
every month. So, you can never be sure when the same behavioural biases that plague
fund manager is buying or selling a stock. There are retail investors. They might not
bound to be delays between the fund manager’s call
to action and yours. And this slight time lag can, at
succumb to it as often but are equally
times, transform into sizeable losses. susceptible to it.
For example, several fund houses raised their
stake in Noida Toll Bridge between December 2008
and June 2009. If you had bought the stock on There is no denying that fund managers are
January 27, 2009, you would have gained around experts of the market. But they are still humans
8.3 per cent annually for the next five years. and are prone to the same behavioural biases as an
However, if you invested on July 01, 2009, you average investor. They, too, can often get blinded
would have lost 4 per cent every year! by their biases, ignoring glaring red flags.
A case in point would be Zee Entertainment. In
You can’t afford a grand mistake the past few years, the company has struggled with
Investing, for retail investors, is a personal journey. corporate governance issues and financial
Everyone’s destination is different. Some of us are instability. Yet, between December 2022 and
investing to buy a car, some for a house and some December 2023, mutual funds increased their stake
for retirement. A financial setback for us means in the company from 12.2 per cent to 32.5 per cent.
years of frugality turning inconsequential. We We all know what happened next. It shed nearly
cannot take the same risks as a fund manager. one-fourth of its market cap in January 2024!
Hence, we cannot have the same risk appetite as a So, now that we have seen the yin and yang of
fund manager while picking stocks. our original question, let’s recap where we stand.
Borrowing popular investment ideas can indeed be
Experts also have biases rewarding. However, simply copying the buys and
Parag Parikh, the founder of PPFAS Mutual Fund, sells of a fund manager is not wise. So, is there a
wrote in his book titled ‘Value Investing and way forward? Yes. But it might not be the answer
Behavioural Finance’ that “They (institutional you are looking for.
investors) are as prone to behavioural biases as any But before we finally put an end to the question,
other layman and secondly, due to their let’s look at some stock picks that fund managers
organisational compulsions which lay more stress on got wrong. It may shed some light on common
short-term performance rather than long-term one”. behavioural biases fund managers are privy to.

One of the bad apples

Mutual funds have increased their stake in Zee Entertainment in each of the last nine quarters
40 % Mutual fund position Share price: Zee Entertainment `400

32 320

24 240

16 160

8 80

0 0
Mar ’21 Jun ’21 Sep ’21 Dec ’21 Mar ’22 Jun ’22 Sep ’22 Dec ’22 Mar ’23 Jun ’23 Sep ’23 Dec ’23
Share price data as of February 9, 2024. Mutual fund position as of quarter end.

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 COVER STORY
PUNJ LLOYD

A debt-fuelled demolition
I
n the early 2000s, Punj Lloyd was a promising Between FY06 and FY10, its net debt grew nearly
engineering, procurement, and construction sevenfold to `4,455 crore!
company with a global presence. In FY06, it went on The debt-fueled expansion weakened the balance
a massive expansion drive, exploring various projects sheet. Project delays and cost overruns added to its
in the Middle East and North Africa (MENA) region. In woes. As a result, it incurred a loss of `108 crore in
2007, it bagged its highest-ever order of `12,000 crore FY10. In addition, the MENA region, accounting for
from an oil company in Libya. nearly 67 per cent of the order book, experienced
The massive order wins and rapid growth sparked political instability in 2010. Consequently, it incurred
interest from fund houses. They were convinced that significant losses in FY11 as well.
they had spotted the next Larsen & Punj Llyod surely gave
Jun 2006 Jun 2007
Toubro. Between June 2006 and institutional investors sleepless
June 2007, they increased their stake Mutual fund nights. It became one of the biggest
3.9 position (%) 16.2
from 3.9 per cent to 16.2 per cent. wealth destroyers of the last decade.
At the time, the infrastructure Jun 30, 2007 Dec 31, 2018 If you had invested in Punj Lloyd in
segment was amid a once-in-a- July 2007, based on mutual fund
lifetime bull run. Several infra stocks Market holdings, you would have lost
were touching their all-time highs. 6,712 cap (` cr) 141 81 per cent of your investments in the
However, this bullish fervour turned next five years. It is now part of
NA Stock Rating Unrated
many blind, and Punj Lloyd’s D-street folklore of companies that
burgeoning debt went unnoticed.
29.2 P/E ratio – shined too bright and burnt out fast.

NOIDA TOLL BRIDGE

Toll on investor

I
n 1997, the state-run Infrastructure Leasing & in revenue. Also, its net profit margin zoomed from
Financial Services founded the Noida Toll Bridge 7 per cent to 42 per cent.
Company. Its primary purpose was to develop, However, fund houses did not consider that Delhi
construct and maintain the Delhi-Noida direct flyway Metro would emerge as a significant competitive
(DND flyway). At the time, Noida was reinventing threat. On November 13, 2009, trouble struck as Delhi
itself as a global working hub, and the need for Metro commenced operations between Central Delhi
connectivity was immense. From June 2008 to June and Noida. Consequently, the company’s topline
2009, mutual fund holdings in Noida Toll Bridge grew started contracting. The final blow was dealt in
from 0.5 per cent to 11.8 per cent. October 2016, when the Allahabad
Fund managers were optimistic that Jun 2008 Jun 2009 High Court waived off DND toll
daily traffic between Noida and Mutual fund charges. As a result, its profit after
0.5 position (%) 11.8
Delhi would soar, pumping up the tax plummeted by 98 per cent YoY in
earnings of this PSU. Jun 30, 2009 Feb 9, 2024 the fiscal year 2017, marking a
For a while, fund managers were devastating turn of events.
convinced that they had hit a Had you copied fund houses and
Market
jackpot. Between FY06-09, average 762 cap (` cr) 197 invested in Noida Toll Bridge in
daily traffic surged 18 per cent July 2009, your investment would
NA Stock Rating Unrated
annually. Consequently, Noida Toll have shrunk by 3 per cent annually
Bridge witnessed a significant surge 22.9 P/E ratio – for the next five years.

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JYOTI STRUCTURES

Global dreams turn financial nightmares

I
n the early 2000s, the government embarked on an In the pursuit of international success, it took on
ambitious mission to link rural and semi-urban concerning amounts of debt to build electrical towers
areas to the electrical grid, sparking a surge in in the US. Its debt-to-equity ratio jumped from
demand for electrical towers. Jyoti Structures seized 0.8 times in FY11 to a mind-boggling 7.2 times in FY15.
the opportunity, positioning itself as one of the primary Although its international business was bringing in
beneficiaries of this infrastructure boom. Institutional revenue, it was incurring losses. The shift in focus
investors were also chasing the infra wave and Jyoti towards overseas operations left the domestic
Structure was a prime candidate. business hanging, with its volumes falling by
Between June 2005 and December 2006, mutual funds 42 per cent between FY11 and FY14.
significantly bolstered their stake in Investors who heeded the
Jun 2005 Dec 2006
Jyoti Structures, increasing it from recommendations of fund houses and
7.1 per cent to 14.3 per cent. During Mutual fund invested in Jyoti Structures in
7.1 position (%) 14.3
the period spanning FY05 to FY10, the January 2007 faced significant losses,
company showcased remarkable Dec 29, 2006 Feb 9, 2024 witnessing a 21 per cent annual
performance, with annual revenue erosion in their investments over the
growth averaging 38 per cent and Market
subsequent five years.
profit after tax soaring by an 1,012 cap (` cr) 2,172 Jyoti Structures’ tale serves as a
impressive 40 per cent annually. cautionary reminder of the perils of
NA Stock Rating 
However, its dream of going unchecked expansion and
global became its Achilles’ heel. 39.2 P/E ratio 158.2 overreliance on debt.

KHADIM INDIA

Stepping into losses

K
hadim India is an Indian footwear retailer profitability soon started to decline as it accumulated
with a strong presence in East and South India. debt to fund expansion. Interest costs surged and it
It sells its products through retail, distribution, witnessed a massive spike in its raw material costs in
and e-commerce channels. They contribute around 2019. As a result, it incurred a loss in FY20.
70, 27 and 3 per cent, respectively, to the revenue The onset of the COVID-19 pandemic exacerbated
(as of Q3 FY24). Khadim India’s woes. GST hike from 5 per cent to
Fund houses were initially enticed by its vast 12 per cent further compounded challenges,
distribution network, encompassing 829 exclusive stores triggering a slowdown in the retailer’s sub-`1,000
across 23 states. In addition, it had a segment. Additionally, Khadim
diverse product portfolio, catering to Sep 2017 Dec 2017 India’s belated entry into the
both premium and mass markets. Mutual fund e-commerce sphere allowed
0.0 position (%) 13.0
Following its stock market debut in competitors to gain market share.
November 2017, it quickly became a Dec 31, 2017 Feb 9, 2024 Between FY19 and FY23, both
favorite among fund houses, with revenue and profit after tax
mutual fund holdings reaching Market
witnessed a 5 per cent annual decline.
13 per cent by December 2017. 1,214 cap (` cr) 706 If you had invested in the
Its performance in the initial years company in January 2018, you
Unrated Stock Rating 
post listing was decent. It displayed would have lost 19 per cent annually
healthy topline growth. However, the 31.9 P/E ratio 56.3 in the next five years.

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 COVER STORY
ABAN OFFSHORE

Sinking fortunes
I
n 2009, Aban Offshore stood as one of the premier company to 15.6 per cent in December 2009 from
offshore oil drilling service providers globally, 6.3 per cent in December 2008.
securing a position within the top 10. For those Fund houses initially were convinced they had made
unfamiliar with the industry, these service providers the right call. In FY08, Aban Offshore doubled its
possess and lease drilling rigs utilised for the revenue and operating profit YoY. However, the 2008
exploration and extraction of underwater oil and Global Financial Crisis led to a massive dip in crude oil
natural gas resources. Aban Offshore boasted prices. In addition, several of Aban’s clients were forced
ownership of four deep-water and 15 shallow-water to revise their project timelines and cut down on
drilling rigs, which were leased out expenses. Furthermore, its balance
Dec 2008 Dec 2009
to various domestic and international sheet was debt-heavy. In FY08, its
firms spanning nine countries. Mutual fund debt-to-equity ratio was 16 times!
6.3 position (%) 15.6
It achieved remarkable growth in Subsequent years saw rising
the mid-2000s on the back of growing Dec 31, 2009 Feb 9, 2024 interest and depreciation costs
demand and technological denting its profitability. In FY16, it
advancements in drilling for oil and Market became a loss-making company.
energy. Its clientele included 5,581 cap (` cr) 473 If you had invested in January
prominent names like Reliance and 2010, your investment would have
NA Stock Rating Unrated
ONGC, which impressed fund houses. declined by 61 per cent annually in
They increased their stake in the
31.2 P/E ratio – the next five years.

A possible solution
How to copy from experts the right way

B
enjamin Graham is often considered the father of But the trick is what you learn. Blindly copying experts
value investing. His focus on fundamental analysis would mean you are copying their mistakes. What you
and margin of safety inspired a generation of value need to learn is the essence of their expertise: their
investors. However, many would argue that his purely investment philosophy.
quantitative-driven approach might be ill-suited for History’s most revered value investors, including
value investors. Warren Buffett, perhaps Graham’s most Warren Buffett and Benjamin Graham themselves, have
illustrious pupil, also recognised this limitation. not been strangers to failure. But, the monumental
But does this mean investors should dismiss wealth they have amassed is a testament to the fact that
Benjamin Graham’s teachings? Absolutely their investment philosophy works.
not. True disciples do not discard the Simply put, copy the philosophy, not the
wisdom of experts due to their mistakes. portfolio. Investigate how a fund manager assesses
Rather, they learn and refine their companies, rather than just looking
look at which
teachings. Warren Buffett exemplifiess this companies they choose to invest
by taking Graham’s foundational lessons ons in. Discover what
wh cues they follow
and expanding upon them. to spot their nex
next big investment.
And there lies the answer to our original
ginal We aim to help you in this journey
question. Learning from the experts can n through our various
var interviews
indeed lead you to riches in the market.. with market experts.
exp

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 STOCK ADVISOR

Value Research
Monkey/Goat Advisor
Even when stocks go down sharply, there is a difference between
being invested in good ones vs just following the herd
there was a big difference. The monkeys were a
nuisance. They were noisy, troublesome and dangerous,
and they stole food all the time, so the villagers
eventually abandoned them in the forest. The goats,
however, weren’t so bad. Even though they cost a lot of
money, they were easy to keep. They just grazed on
grass and gave milk. When they grew older, the villagers
by
slaughtered them for meat. All in all, buying goats was
Dhirendra not the bad deal that it looked like in the beginning. In
Kumar the long run, it worked out to be a good purchase.
The moral of this story for equity investors is quite
clear. When the stock market is in a bull run, all kinds of

S
tocks that you own are going to go down sharply at stocks are available at ever-higher prices. However, there
some point. All of them are large cap, mid cap and are high-priced goats in the markets and there are high-
small cap. Any sector, any industry, any business. priced monkeys. Back when I originally wrote about this,
It’s not just normal but inevitable – as inevitable as there was a huge crowd of all kinds of monkeys in the
someone falling ill or having an accident. It could be a markets. There were infrastructure monkeys, real estate
market crash, some sectoral thing or even a generalised monkeys, giant monkeys, small monkeys, there were
economic downturn. even entire business groups made up of monkeys. Many
The question is, what happens afterwards? Some of these monkeys were disguised as goats. It’s the same
16 years ago, when the stock markets were racing to a now, except that the sectors have changed, and there’s the
new high practically every day, I wrote an article about notable addition of digital monkeys this time.
the stock markets with a story about monkeys and goats. Anyway, digital monkeys notwithstanding, my point
Here’s how it went. is that equity investors need always to ensure the
One day, a man appeared in a village and offered to essential quality of the companies they invest in,
buy all the monkeys the villagers could supply for regardless of how the markets are priced. Goats – stocks
`1,000 each. The villagers caught all the monkeys around of companies with solid fundamentals – may not seem as
and sold them. Soon, another man appeared and offered glamorous or promise astronomical short-term returns.
`2,000 for each monkey. However, there weren’t any more Still, they offer stability and the potential for steady
monkeys around, so the villagers couldn’t sell the man growth over the long term.
anything. But, they figured that, for some reason, the However, for the individual equity investor or
demand for monkeys was going up, so they looked for the the beginner, the next question is how to identify the
first man and bought back all the monkeys for `3,000 each
(which was the least the man was willing to take).
Unfortunately, this stratagem was a failure, and the
Many investors obsess over picking the
buyer never reappeared.
Nearby, there was another village where the same
top stock but often just chase past
story was repeated, except here, it was about goats. winners. They focus on finding ‘goats’
Here, too, the final buyer never appeared, and the and not on avoiding the ‘monkeys.’
villagers had to keep the goats themselves. However,

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 Illustration: ANAND

goats from the monkeys. Well, that’s what we do here at portfolio right away!
Value Research. Our Value Research Stock Advisor z The complete investment thesis for all recommended
could actually be renamed Value Research Monkey/ stocks so that you understand why you are investing
Goat Advisor. z New recommendations as soon as they are released
Over the half-decade that this service has been z Continuous updates and analysis on all recommended
operating, I have lost count of the number of almost-good stocks straight from our dedicated analyst team
stocks that we have rejected. In our way of thinking, this z Tools and data to research and analyse any other stock
is very important. Far too many investors, when choosing Our system works because it emphasises fundamental
stocks to invest in, are obsessed with finding the absolute analysis and the pursuit of long-term value. Our strategy
top performer and sticking to it. Unfortunately, unless extends beyond mere enthusiasm for purchasing stocks;
you are a genius and lucky, this doesn’t happen. What it’s about comprehending the rationale behind each
happens is that such investors flit from idea to idea, selection or dismissal. Rooted in comprehensive research
generally chasing past performance and buying into and a reliable methodology, our guidance is not merely a
yesterday’s winners in an effort to spot the greatest response to prevailing market conditions but is informed
winner. Once in a while, it works out. In other words, by the enduring strength of business models and genuine
they are always looking for goats and paying no attention wealth-building opportunities.
to avoiding monkeys. As you can see from the above feature list, you, too,
At Value Research, we diligently sift through the can learn to tell the monkeys from the goats. We believe
market to separate the ‘monkeys’ from the ‘goats’. Our that an informed investor is a successful investor.
analytical approach, applied across both this magazine Therefore, we not only provide recommendations but also
and Value Research Stock Advisor premium service, is offer detailed analysis and updates on these picks. This
fundamentally based on a process of elimination. For any ensures that our members are not just blindly following
selection, we start by discarding stocks that carry any advice but are equipped to understand the reasoning
negative attributes. Regardless of their positive aspects, behind each investment decision.
certain red flags are absolute deal-breakers for us.
Our list of deal-breakers is inviolable and forms the
Value Research Stock Advisor is a premium service where
core of our decision-making process. Later in the process
you get promising stocks along with their full
or after investing, this provides great comfort. Even if an
analyses. We also actively track the underlying
investment thesis is wrong, there is no great disaster. One
companies for you and keep you posted on the major
can always sell a stock if it has some problems or some developments in them, including when to sell a stock.
better alternative comes along. The problem will be small Additionally, members get
and easily contained if it’s not a monkey. exclusive access to a range of tools
So, what exactly does Value Research Stock Advisor and data which they can use to
get you? You get: study any other stock.
z Access to all our stock picks You can subscribe to the service
z A set of starter stocks was selected from our at www.valueresearchstocks.com
recommendations. Use this set to start building your or scan the QR code.

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INTERVIEW

“Nobody
knows
anything
about
anything
beyond
a point”
Investing insights from
a veteran investor

ALOK BAHL Chief Investment Officer – Helios Mutual Fund

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F
resh off the heels of securing a mutual fund plus multi-year GDP growth rate makes India an
license, we interviewed Alok Bahl, Chief attractive market.
Investment Officer at Helios Mutual Fund. With The capex upcycle currently underway is in its
over 30 years of investing experience in his infancy and should have a long runway ahead. This
locker, we couldn’t let the opportunity pass by. upcycle is in no small part being led by a stable,
Bahl gives his take on the current market outlook, execution-oriented government that is seeing higher
what sectors he finds exciting and the long-term trends tax collections post-GST and the ongoing digitisation
he is optimistic about. He further delineates how retail of the economy.
investors should approach portfolio construction. The quality of India’s fiscal spending has improved a
So, sit back and enjoy the interview! lot over the years under the current government.
Domestic investors have emerged as a powerful force,
With all the commotion surrounding the central and this is not expected to change anytime soon.
bank decisions in India and abroad and the
upcoming general elections, how do you assess
the market’s outlook in the near term?
We feel the probability of a negative surprise from
the upcoming general elections is very low. The
results of the state elections held in November 2023
further reinforce our view. We expect the markets to
trade in a narrow range, with stock/sector rotation
being the main theme till the election results come
in. A better-than-expected mandate for the ruling
coalition may give a leg-up to the markets.
However, we are more realistic in our expectations
of rate cuts both in the US and India as we feel softer
inflation remains the key indicator of rate cuts in both Banking, defence, infrastructure, power/
these markets. We also believe that the bigger issue
energy, property, certain areas in
related to the global markets is the large quantum of
debt accumulated by central governments.
consumption and certain names levered
into the capex cycle reflect exciting
With the market reaching new highs over the investment themes for the longer term.
past year, can you find opportunities? Are there
specific sectors or industries that you find
attractively priced? Foreign investor positioning is also light, and as
Optically, markets look richly valued but there are the India investment case gets better recognised, we
many sectors/stocks, especially in the large-cap space, expect more foreign capital to gravitate towards the
which have not participated in the rally despite Indian market.
delivering strong growth. So, we feel there are still The risks to our base case scenario above are two-fold:
many investment opportunities in the markets. 1. Political instability (very low probability as
Banking, defence, infrastructure, power/energy, outlined above)
property, certain areas in consumption and certain 2. Growth and earnings slowdown (low probability
names levered into the capex cycle reflect exciting and in short cycles, if at all)
investment themes for the longer term.
How do you differentiate between short-term
What are some of the long-term trends that challenges and permanent weaknesses in
you and your team are betting on? What are a business?
the underlying risks? Short-term issues like lack of access to capital
India has been doing well in both earnings and because of a squeeze in liquidity or bearish market
growth, and we are optimistic that it will continue to environment, disruptions in supply chains (strong
do so. The forecasted economic outlook of a 7 per cent learning for most countries/companies during the

March 2024 Wealth Insight 61

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 INTERVIEW

Covid pandemic), attrition, change in regulations/tax

environment, sudden increase/decrease in raw
Advice to retail investors:
material prices etc. are challenges which most
companies grapple with on a day-to-day basis.
Q
Invest in companies you understand
Companies that successfully overcome these
Q
Invest with a three- to five-year horizon and
challenges emerge as strong value creators and review your portfolio periodically
wealth generators for investors. Q
Diversification is important
Permanent weaknesses that can cause companies
to shut down can happen if companies do not adapt to
the changing environment caused by technological framework is more important, and not all retail
changes or due to an irrevocable change/shift in investors have this skill set. Also, retail investors
consumer behaviour. lack the capacity to create a well-diversified risk-
adjusted portfolio that can weather market volatility.
What are retail investors’ three most important In such a situation, the best option for the retail
considerations when constructing a portfolio? investor is to go through the SIP route and invest in
Additionally, do you believe retail investors a good, diversified mutual fund scheme.
possess any advantages over institutional With the excellent work done by the regulators, SEBI
investors? and AMFI, in investor education and with digitalisation
Investing is a full-time profession and if retail providing the tools for easy access and tracking of
investors do not have the knowledge, resources or investments, there is a wide variety of investment
time to track direct investments in stocks, they options available for the retail investor now.
should use mutual funds as their preferred mode for For those who have the ability to navigate the
investments. The difference these days is no longer markets independently, my advice would be to:
information but knowledge. Q Invest in companies/businesses that are simple to

Wide access to social media, along with cheap data understand and analyse,
prices, have created an almost level playing field in Q Invest with a three- to five-year investment horizon

so far as access to information is concerned. How to but review these investments periodically, and
interpret this information and put it in a consistent Q Diversify because nobody knows anything about

anything beyond a point, and there are a large

number of companies that do well every year.

Reflecting on your investing journey, what would

you say was your most significant investing
mistake? What lessons did you learn from it?
Investment mistakes have been too many to
enumerate in my 30-plus years of investment
journey. The key is to learn from these mistakes
and try not to repeat the same mistakes again.
The markets are dynamic and constantly
Photos: MANOEJ PAATEEL

evolving, and that is what makes this space

so interesting.

Can you recall the first company you

invested in? How long did you hold the
investment, and what were the returns?
My first investment was in Infosys
Technologies and HDFC Bank shares, which I
had bought on the same day sometime in 1998.
I continue to hold these shares, and you can
very well guess the returns.

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 MAIN STREET

The rapid rise of female

entrepreneurs in India
Exploring the boom in women entrepreneurship
Development and Economic History [square brack-
ets are ours].

The rise of a celebrity from Jail Road Market

Nestled in the crowded Jail Road Market in New
Delhi is a tiny shop selling bedazzling kurtas and
By pants for women. However, the story of its owner is
Saurabh anything but ordinary. She is Jasmeen Kaur, the cre-
Mukherjea ator of the now famous phrase, “So beautiful, so ele-
gant, just looking like a wow!”
Social media ensured that ‘looking like a wow’

D
ata from the RBI shows that women in became viral and made Ms Kaur a celebrity, possibly
India’s urban areas have more money in helping her garner business. Ms Kaur signifies the rise
their accounts than men. Across all levels of of a new India, where polished English and high-profile
the education system, Indian women are degrees are no longer a prerequisite for success.
outnumbering and outperforming Indian men. Both Today, India has many successful female entrepre-
during our travels and through our number crunch- neurs like Ms Kaur. Around 500 kilometres from
ing, we can see that urban women are getting wealth- Mumbai, in the industrial town of Dewas in Madhya
ier, thanks to a trifecta of greater access to consumer Pradesh, a mother earns by selling papads on
markets and beyond (via the internet), easier access Meesho, an online marketplace. This helps her pay
to financing (courtesy financialisation and the India for daily expenses and her son’s tuition.
Stack) and a growing target market of aspirational
and affluent women. The result is that entrepreneur-
ship is spreading far faster amongst Indian women
than their male counterparts.
As we journey and delve into data, it’s
“A few years of high school catapulted a young evident: urban women in India are
woman from a life of drudgery and disrespect into a amassing wealth, fuelled by online
world of comfort and courtesy, or so it seemed to her. market access, easier financing and an
The young man, however, did not often see high expanding affluent female demographic.
school as having so positive an impact. The rather
Consequently, entrepreneurship is
dead-end clerical and sales positions opened to young
spreading far faster amongst Indian
women were not the road to success for the young
man. Machinists, electricians and other tradesmen women than their male counterparts.
could enter their craft with far less than a high
school diploma and little apparent loss. Thus, the
apparent private return for young women [of getting Such stories are now the norm in India. So much
educated] was actually higher than for young men, so that the latest RBI data on bank balances shows
even though the latter remained employed for a con- women in urban areas have more money in their
siderably longer fraction of their lives.” accounts than men.
—Nobel Laureate Claudia Goldin, The U-Shaped According to the Periodic Labour Force Survey
Female Labor Force Function in Economic (PLFS) data, women’s share in self-employment has

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 MAIN STREET

The percentage of women in self-employment has Within the ‘self-employed’ category, women’s share
shot up significantly in being an employer has risen sharply
Percentage distribution of workers in usual status (ps+ss) Percentage distribution of workers in usual status (ps+ss)
by status in employment by status in employment
In % z Male z Female z Total In % z Male z Female
65.3
44.1 44.3
51.9
57.3 37.5
52.3 52.2 53.6
31.7 27.8

21.0 27.0 15.9 18.8 20.2

27.0
23.4 22.8 24.3 23.2 20.9 23.2 21.8
8.2 9.3

Casual Own account Helper in Own account Helper in

Self Salaried/ Casual Self Salaried/
worker and household worker and household
employment regular labour employment regular labour
wage wage employer enterprise employer enterprise

2017-18 2022-23 2017-18 2022-23

Source: Marcellus Investment Managers, PLFS (annual report FY18 and FY23); period Source: Marcellus Investment Managers, PLFS (annual report FY18 and FY23); period
under consideration is July 2017-June 2018 & July 2022-June 2023, respectively; under consideration is July 2017-June 2018 & July 2022-June 2023, respectively;
data taken for rural + urban data taken for rural + urban

been steadily rising, especially in rural areas, where- account for each Indian via the Jan Dhan scheme.
as that for men has been falling. In 2022, India had three billion bank accounts, up
While the self-employed category is vast and nearly three times from 1.1 billion in 2015.
includes unpaid labour, if we go deeper and see the The introduction of low-cost and fast cellular inter-
stratification within the self-employed, the rise of net in 2016, courtesy of Jio, coupled with widespread
women entrepreneurs (rather than ‘woman unpaid’ smartphone penetration, meant that every Indian
labour) is evident. For women, the share of self-em- now had a social identity (Aadhaar), an economic
ployment by their own account and self-employment identity (Jan Dhan bank account) and a digital iden-
as an employer increased from 2017-18 (when PLFS tity. This trinity of Jan Dhan, Aadhaar and mobile
started) to 2022-23. Further, the share of women per- phones was soon dubbed ‘JAM’.
forming unpaid labour decreased. The same cannot Today, women have effectively leveraged JAM to
be said for men. generate income. How?
There are three distinct driving forces driving Q Indians can access the Unified Payments Interface

entrepreneurship among Indian women. Let’s discuss (UPI), facilitating instant bank-to-bank
each of them. transfers. UPI helps SMEs pay suppliers and get
paid instantaneously.
Greater access to the ‘market’ for women Q Aadhaar gives Indians valid proof of residence, eas-

In 2009, Mr Nandan Nilekani, then CEO at Infosys, ing the process of SMEs getting regulatory permits
left his corner office in Bengaluru to work with and licenses.
the Indian Government on UIDAI (Unique Q Smartphones and cheap broadband access help

Identification Authority of India) to envision and Indian SMEs reach customers via social media,
provide 1.21 billion Indians with a social securi- increasing their total addressable market multifold.
ty-like number (or Aadhaar).
Not only did Aadhaar succeed in this endeavour Greater access to ‘financing’ for women
(there are nearly 1.31 billion unique Aadhaar IDs The financialisation of the Indian economy trans-
today), but Mr Nilekani’s successful demonstration formed how Indians dealt with their money.
of the concept of social infrastructure opened doors According to National Payments Corporation of
for mass financialisation, i.e., the opening of a bank India’s (NPCI) data for December 2023, last year

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saw total transactions worth over $2 trillion hap-
pening via UPI (about 61 per cent of the estimated Women are better borrowers than men
GDP in FY24)! 3.0 % z Male z Female
According to World Bank data, the proportion of
2.6
women above 15 years of age holding any financial
account divided by the proportion of men above 2.2

15 years of age holding a financial account already 1.8

crossed the ratio of one in 2021, meaning more 1.4
women are in the financial system today (as a % of
1.0
total women) than men (as a % of total men).
FY19 FY20 FY21 FY22 FY23
As more women are included in the financial sys-
Source: Marcellus Investment Managers, CRIF Highmark, CRISIL MI&A
tem, they find it easier to access credit. Hence, busi-
ness expansion has become easier than before.
Furthermore, a study by MassChallenge and BCG Index) has been greater than 1 indicating that more
for multiple countries showed that startups founded girls than boys are getting enrolled in schools at all
by women got less funding but generated more reve- levels of education!... In fact, if we go one step further
nues than those founded by men. It implies that and look at the GPI for higher education (i.e., for the
women are better capital allocators than men. age group 18-23 years), not only is the GPI greater
than 1 across all social categories, but the improve-
ment has also been most rapid for Scheduled Castes
Women are better capital allocators on an average and Scheduled Tribes indicating that women in the
despite receiving less funding most disadvantaged sections of Indian society are
Funds invested Revenue generated powering ahead the fastest.”
Women today have more financial freedom
$662,000 because of this benefit of ‘access’ and knowledge of
$2.12 million what to do with it. It has enabled them to decide what
they wish to do.
India’s women entrepreneurs are best suited to
$935,000 $730,000
cater to female customers’ needs because they under-
Sources: Masschallenge; BCG analysis. Of the 350 companies included in the analysis, stand their pain points better than anyone else. Case
258 were founded by men, and 92 were founded or cofounded by women.
in point is the emergence of multi-billion dollar com-
panies like Nykaa (promoter: Falguni Nayar), Mama
Based on the debt default (gross non-performing Earth (promoter: Ghazal Alagh), and Sugar (promot-
assets or GNPA) data, women are better borrowers. er: Vineeta Singh), who have taken the beauty and
From a lender’s perspective, female entrepreneurs personal care market by storm. From a standing
are the perfect conduit through which a lender can start in 2012, Nykaa’s revenue share of the total beau-
lock into the flywheel of higher credit, resulting in ty and personal care online market was about
more significant investments, revenues and profits, 27 per cent in 2022.
and thus, greater payback of credit and lower delin- Historically, the most discriminated communities
quencies. resort to newer, more rewarding opportunities.
A community that faced discrimination in the West –
Growing addressable market of women, by thanks to antisemitism – is the Jews. The rise of the
women, for women Jews in America, where they dominate American
Women – as a category of buyers – are also burgeon- capitalism, is a testament to the fact that in a free
ing thanks to digitisation and greater access to mar- market economy, once a community has access to
kets. The greatest enabler is their increasing financing and the ‘market’, it will rise.
education levels.
As mentioned in our previous note on the subject, Saurabh Mukherjea is part of the Investments team at Marcellus
Investment Managers (www.marcellus.in). He is the author of
“Over the last four years, across all levels of the ‘Diamonds in the Dust: Consistent Compounding for
Indian educational system, the GPI (Gender Parity Extraordinary Wealth Creation’.

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 STRAIGHT TALK

Revisiting diversification:
The must-have tool for investors
Why diversifying your portfolio is more of a necessity than a choice
that fell short of market expectations.
The rout in the Chinese market was set off by
government action attempting to curtail the profits of
leading tech companies and socialise gains. It has
resulted in a collapse of property and equity markets.
Over $5 trillion of value was lost. But why should
By Indian investors care about the Chinese policies?
Anand Aren’t the Indian markets booming?
Tandon
What is diversification?
Imagine venturing into a casino, your pockets

I
n January 2024, Chua Soon Hock, CIO of the brimming with cash, determined to walk away richer.
$330 million fund Asia Genesis Asset Management Would you bet everything on a single spin of the
PTE Ltd, wrote a letter to his investors: “I am roulette wheel? Probably not. Just like in a casino,
writing to you with a heavy heart and utmost regret. financial markets come with inherent risks. Stock
Asia Genesis Macro Fund has had a significant and prices can plummet, bonds might default and even
unprecedented drawdown of -18.8 per cent in the first seemingly ‘safe’ assets like cash can lose purchasing
weeks of January. As such, I am making the painful power due to inflation. Diversification aims to mitigate
decision to close the fund and return your these risks, not by eliminating them but by spreading
investment”. He goes on to state, “I have reached the your investments across various asset classes,
stage whereby my confidence as a trader is lost… I minimising the impact of any single asset’s downfall.
have lost my knowledge, trading and psychological
edge.” Hock’s fund bet against the rising Japanese Correlation: The art of picking
markets and bought into the falling Chinese markets. compatible assets
Both bets went against him. But simply diversifying across different asset classes
Hock isn’t the only investor who has seen losses in isn’t enough. We need to consider how these asset
China. T. Rowe Price Group has seen its China returns correlate with each other. Correlation
holdings fall 80 per cent from the peak. Banxia measures the degree to which two assets move
Investment Management cut its position two weeks together. Assets with positively correlated returns
into January, stating that ‘it must lose an arm for tend to rise and fall in tandem, while negatively
survival’. The firm, founded by Li Bei, had turned correlated assets move in opposite directions. Ideally,
bullish from the third quarter, anticipating monetary we want to build a portfolio where assets have low or
and fiscal policies to support the market – policies negative correlations, as this minimises the risk of
widespread losses.
It’s important to remember that diversification
doesn’t eliminate risk. Unexpected events, like global
An undiversified portfolio, like a single
pandemics or economic meltdowns, can impact all
roulette bet, may make you rich a few asset classes simultaneously. This is where the
times, but more often than not, it will concept of ‘realised risk’ comes in. Realised risk is the
clean out your bank account. actual risk you experience in your portfolio, which
may differ from your initial calculations based on

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historical data. For example, during the 2008 financial
crisis, even traditionally safe assets like government
bonds experienced losses, highlighting the limitations
of relying solely on past correlations.
Building a diversified portfolio may not prevent
falls, but it significantly reduces the impact and helps
you bounce back faster. The important thing to keep
in mind is that diversification, while reducing risk,
often reduces returns. Instead of putting all
investments into the best-performing asset class, it
requires the investor to invest in asset classes that
may well be underperforming or even losing money at
the current time (after all, they have low correlation
or even negative correlation).
Position sizing is another factor to consider. To be
effective, a diversified portfolio cannot be heavily
weighted into one asset class alone. If it is, it may not
offer enough risk mitigation, which will impact its
Illustration: ANAND
ability to come back into the game if it suffers a
serious fall. You don’t want to be Chua Soon Hock! Policy risks come in many shades – just a few weeks
It is important to remember that an undiversified back, the Indian stock market had turned nervous,
portfolio is equivalent to a single bet on a roulette anticipating a sell-off triggered by SEBI regulations
table – it may make you rich, but only a few times! demanding greater information on overseas investors
In most other cases, it will clean out the bank account. coming into the Indian markets through P-notes. This
fear was rapidly dispelled. However, not all
Government policies are inscrutable interventions may end in the same way.
Let us circle back to the Chinese story we started with.
On most parameters, the markets in China are Uncorrelated assets
oversold. Assuming companies’ current earnings were Investors in India tend to have a pronounced ‘home
to be sustained, the payback for an investor would be market’ bias. They are rarely diversified across
only a few years. However, this ignores the effect of countries, and even within India, diversification is
government policy. The Chinese government policy usually restricted to equity and real estate.
changes triggered the fall, and now that the Importantly, investing in multiple mutual funds –
government wants to stem it, markets are unconvinced. many with similar underlying portfolios – is often
In this case, investors have to take a view on the construed as diversification. At times like this, one
thinking of the government decision-makers and their must look hard to see what factors could adversely
willingness to act. Both are unpredictable. And for affect markets.
those who took an optimistic view, it turned out sour – For example, energy prices are reasonably steady
in the time frame relevant to them. despite a cut in oil production, increased piracy in the
The Indian market’s recent performance stands in Middle-Eastern trade routes and sustained oil
contrast – for now. Government policy is benign, demand. OPEC members have announced plans to
indeed positive for markets. The performance of state- scale back investment in production facilities; global
owned companies has improved, driven by cleaner strategic reserves are low and planned refinery shut-
bank balance sheets and strong order books in downs in key markets loom. Is it possible that this
railways and defence sectors. However, there is a flip year could be one where oil prices could shoot up?
side to this. Many of these companies are trading at Would that adversely affect the Indian market?
valuations that imply an unrealistic perpetual growth No one can know for sure, but it may be prudent to
rate close to the current elevated rate. Stock prices are model such changes and take a hard look at portfolios.
supported by low float and low institutional interest. When everyone is euphoric, it’s time to
This should be a reason to exercise caution. be circumspect.

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 EVERYDAY ECONOMICS

Economic stability over populism

Understanding the interim budget and what more needs to be done
announced free food grains for more than 80 crore
Indians for the next five years in his 2023 poll cam-
paigns across five states. The BJP also promised gen-
erous hikes in minimum support prices at which the
government buys wheat. Voters handed victories to
the BJP in the three states of the Hindi belt vital for
By national politics. Meanwhile, the Opposition alliance,
the INDIA, has suffered debilitating shocks.
Puja
Mehra How this interim budget was different
The Finance Minister focused on reading details of

F
inance Minister Nirmala Sitharaman left all schemes introduced in the last 10 years. Also, she
existing direct and indirect tax rates untouched stuck with her growth strategy of increasing budget
in the interim budget. Technically, interim outlay on capital expenditure, which, for FY25, she
budgets merely highlight the expenditure needed to increased by 11.1 per cent to `11,11,111 crore.
keep the government functioning until a full budget It is commendable that she didn’t compromise on
can be presented. Before its term ends, the Lok Sabha the capex outlay even after committing to reduce the
votes to approve the expenditure. fiscal deficit (roughly what the government must bor-
But most governments flout this convention. In row to pay for expenditures its revenue won’t) to
the 2014 interim budget, the then Finance Minister 5.8 per cent of GDP (gross domestic product), below
P Chidambaram announced the One Rank One Pension the FY24 target of 5.9 per cent. She also stayed commit-
(OROP) for the armed forces, making a token outlay of ted to the fiscal deficit target of 4.5 per cent of GDP by
`1,000 crore. Today, the burden of pensions on the defence FY26, a commitment she first made in the budget
budget has left insufficient money for investments. speech for FY23 after the pandemic forced her to take
it up to above 9 per cent of GDP.
How Sitharaman’s predecessors fared Did the interim budget do the job that was required
In 2019, Sitharaman’s predecessor, Piyush Goyal, of it? Politically, yes. The economy needs more. But
announced annual cash payments of `6,000 per farmer the GVA (gross value added) of agriculture will grow
family under a new flagship PM-Kisan scheme. He 1.8 per cent in FY24, slower than 4 per cent in the pre-
also made annual incomes of up to `5 lakh tax-free, vious year, according to the government’s estimates.
raising the income tax threshold to roughly three Nearly 46 per cent of India’s working population
times the per capita income. In one stroke, he let go of toils on farms. This means almost half the working
1.3 crore taxpayers; 63 per cent of the individuals who population is experiencing less than 2 per cent GVA
filed returns that year paid no income tax. Hardly any growth. This likely forced the prime minister to
country in the world is so generous about the mini-
mum threshold for tax-applicable incomes.
Goyal’s 2019 interim budget attempted to change the
country’s political mood after the BJP lost the 2018 state The figure that must be targeted for
assembly polls. It also needed to respond to the cash pay- targeting economic growth is not just
ment schemes for farmers that the states of Telangana the central government’s capex
and Odisha had rolled out. There was political pressure spending. It is the total cumulative
on Goyal to match up or risk losing farmer votes.
capex spending by the Centre, states
However, this year’s interim budget was rather
and public sector companies.
low-key. There was no political compulsion this time,
as Prime Minister Narendra Modi had already

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 Illustration: ANAND

promise free food to 40 per cent of the population for good budget-making. FY25 will be the fourth succes-
the next five years. sive year in which more than half the budget’s total
Doesn’t this call for a review of the growth strategy, spending growth will go for higher capex. As a result,
the budget’s capex and welfare spending? If an assess- the Centre’s capex will be twice (3.4 per cent of GDP)
ment shows that changes are required, they should what it was in FY14 (1.7 per cent of GDP).
have been implemented immediately. Why, then, is this capex increase not stimulating
This requires two types of evaluations: One, are private investments? The figure that must be targeted
capex outlays ensuring growth for the bulk of the pop- for targeting economic growth is not just the central
ulation? The welfare spending is mainly on government’s capex spending. It is the total cumula-
MGNREGA wages that are too low to provide econom- tive capex spending by the Centre, states and public
ic well-being and free wheat and rice that guarantee sector companies.
calories, not nutrition. Two: Is this welfare spending Government data compiled by Motilal Oswal in its
an optimum response to low rural economic growth? note dated February 5, 2024, shows that capex (as
The low growth levels in rural India are delaying a measured by Internal and Extra Budgetary Resources)
sustainable pick-up in consumption spending, without by central public sector enterprises (CPSEs) was
which high GDP growth cannot be sustained. 2.8 per cent of GDP in FY14. It had dropped to
Businesses will not set up new factories if most of the 1.4 per cent of GDP by FY23. It will be 1 per cent of
population doesn’t have enough money for consump- GDP in FY24 (revised estimate). The interim budget
tion. Research published by ICRIER economists led by shows that it is estimated to fall to 0.9 per cent of GDP
Dr Ashok Gulati has found that real farm wage growth in FY25 (budget estimate) – the lowest level in the last
decreased by 3.3 per cent per annum from FY15 to 20 years that the data is available for. At its peak,
FY19. Non-farm wages in rural India decreased by CPSEs’ capex was 3.3 per cent of GDP in FY09.
3 per cent per annum over the same period. As a result, despite the budget’s capex, the total
From FY20 to FY24, these rates became negative. public sector capex (including by states) is at the
The government, however, maintains that increas- same level it was in 2014; it was 5.8 per cent of GDP
ing the budget’s capital expenditure will help create in FY14 and 5.7 per cent of GDP in FY23, as per the
infrastructure, stimulate private sector investments latest available data.
and create new incomes. The government’s GDP esti- Perhaps the full budget in July will fill in the gaps.
mates show that private investments have remained
Puja Mehra is a Delhi-based journalist and the author of
tepid for the last 10 years. Why? ‘The Lost Decade (2008-18): How the India Growth Story Devolved
Sure, prioritising capex over other expenditures is into Growth Without a Story’

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 STOCK SCREEN

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ired of spending hours sifting through the quality businesses and sound investments. These
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Successful stock picking is a rather tricky affair. A word of caution
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A common mistake investors make, particularly a list of stocks to invest in, subscribe to Value
beginners, is failing to distinguish between high- Research Stock Advisor.

Key terms
4HYRL[JHW company has been able to utilise as revenue growth, operating cash :[VJR9H[PUN
Stands for market capitalisation. investors’ money. flow growth, Piotroski F-score, etc. Value Research Stock Rating
Obtained by multiplying the stock 8\HSP[`:JVYL The score is based on absolute combines the three scores (quality,
price by the total number of shares. It assesses the quality of a company ranges and is driven by current growth and valuation) based on
Shows a company’s market value quantitatively, capturing two crucial performance and historical assigned weights to arrive at a holistic
or size. aspects, i.e., business efficiency and consistency of growth. Per share data stock rating. We have created a five-
balance sheet quality. It considers is considered for each parameter to star rating system. The higher the
7YPJL[VLHYUPUNZ7,
various metrics, such as return on calculate growth. The score is out of stock rating, the better.
The ratio of the stock price and
equity, return on capital employed, 10, and the higher the score, the
earnings per share (EPS). It shows in :[VJR:[`SL
debt-to-equity ratio, etc. The score is higher the historical growth.
multiples how much investors are Derived from a combination of the
willing to pay for a share in a based on the relative ranking of all =HS\H[PVU:JVYL stock’s valuation – growth or value –
company’s earnings. Note that a high- parameters after assigning certain It gauges if a stock is reasonably and its market capitalisation – large,
growth stock often will have a high weights to each. Both current values priced. This quantitative rating mid and
P/E ratio, while a value stock will have and historical values drive the ratings. considers the stock’s current and small. For Growth Value
a relatively lower P/E ratio. The score is out of 10. The higher the historical valuation parameters based example, here
Large
score, the higher the quality. on metrics such as P/E ratio, free is the stock
9L[\YUVULX\P[`96,
.YV^[O:JVYL cash flow yield, dividend yield, etc. style of a Mid
Measured by taking profit after tax as
It evaluates a business’s historical The score is out of 10. The higher the large-cap
a percentage of the net worth of the Small
growth and scale, using metrics such score, the more attractively priced it is. growth stock.
company. Indicates how efficiently the

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5-star rated stocks
No. of
Reasons to invest The filters companies 149
that cleared
High-quality companies Companies with a 5-star the filters
Moderate to high growth Stock Rating
Reasonable valuations

Company Stock Quality Growth Valuation 5Y avg. Market cap Share 52-week
Industry style Stock Rating Score Score Score ROE (%) P/E (` cr) price (`) high/low (`)

HDFC Bank
Banking  9 8 7 16.8 18.2 10,76,400 1,417 1,758-1,364

ITC
Tobacco Products  10 6 5 25.5 24.9 5,10,708 409 500-370

Bajaj Finance
Hire Purchase  10 10 5 19.4 30.2 4,15,631 6,713 8,192-5,486

Maruti Suzuki
Cars & Multi Utility Vehicles  9 7 5 11.7 29.7 3,61,052 11,483 11,613-8,130

Kotak Mahindra Bank

Banking  10 9 6 13.5 19.7 3,44,204 1,731 2,064-1,644

Coal India
Coal & Lignite  10 7 7 53.7 9.7 2,84,287 461 488-208

Nestle India
Dairy products  10 7 6 87.4 80.8 2,42,389 2,513 2,769-1,788

IndusInd Bank
Banking  7 8 6 12.2 13.3 1,15,389 1,484 1,695-990

Eicher Motors
Two & Three Wheelers  10 7 4 19.1 27.8 1,06,799 3,903 4,200-2,836

NMDC
Minerals  10 6 5 24.0 11.2 72,181 246 252-104

PI Industries
Pesticides  10 8 5 18.0 34.9 55,596 3,668 4,011-2,869

Muthoot Finance
Misc. Fin.services  9 5 7 24.5 13.1 54,436 1,355 1,537-911

Petronet LNG
Natural Gas Utilities  10 6 7 24.6 12.1 42,413 283 296-192

AU Small Finance Bank

Banking  8 9 6 17.5 25.2 40,006 599 813-548

Federal Bank
Banking  7 8 7 11.6 10.3 39,681 163 166-121

Gujarat Gas
Natural Gas Utilities  10 7 5 29.2 34.4 37,944 551 620-397

Bandhan Bank
Banking  9 8 8 13.6 11.0 32,831 204 272-182

March 2024 Wealth Insight 71

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 STOCK SCREEN
Company Stock Quality Growth Valuation 5Y avg. Market cap Share 52-week
Industry style Stock Rating Score Score Score ROE (%) P/E (` cr) price (`) high/low (`)

Coromandel International
Other Fertilisers  10 5 6 26.8 18.8 32,512 1,103 1,272-842

Indraprastha Gas
Natural Gas Utilities  10 7 7 21.9 15.8 30,797 440 516-376

Narayana Hrudayalaya
Health Services  9 8 4 15.0 35.8 27,606 1,351 1,445-721

Bayer CropScience
Pesticides  9 8 5 22.0 34.2 27,488 6,116 6,166-3,920

Sun TV Network
Media & Entertainment  10 6 7 23.6 12.9 24,427 620 735-394

Castrol India
Lubricants & Grease  10 6 5 54.5 24.3 21,029 213 214-107

Gujarat State Petronet

Natural Gas Utilities  10 8 7 38.9 13.4 20,946 371 407-255

Emami
Household & Personal Products  10 6 5 25.6 28.8 20,732 475 589-341

PNB Housing Finance

Housing Finance  9 5 6 11.1 14.4 19,404 747 914-383

Amara Raja Energy

Storage Batteries  10 7 6 15.1 19.3 15,655 855 916-546

Manappuram Finance
Misc. Fin.services  10 9 8 22.4 7.6 15,515 183 193-101

Chambal Fert. and Chem.

Nitrogenous Fertiliser  8 7 7 28.5 12.0 15,214 366 403-248

Mahanagar Gas
Natural Gas Utilities  10 7 7 22.4 11.6 15,015 1,521 1,554-865

Godfrey Phillips India

Tobacco Products  10 8 6 17.0 17.1 13,945 2,681 2,720-1,620

Tanla Platforms
Software  9 7 5 19.8 24.9 13,390 996 1,318-493

Fine Organic Industries

Organic Chemicals  9 7 5 31.7 29.8 13,301 4,339 5,165-4,040

Great Eastern Shipping

Oil & Gas Transportation  7 8 8 10.3 5.4 13,206 925 1,044-532

Gujarat Mineral Dev. Corp.

Coal & Lignite  9 6 6 8.1 15.1 12,990 408 506-123

Akzo Nobel India

Paints & Varnishes
 10 7 5 20.6 30.9 12,774 2,809 3,058-2,123

Zensar Technologies
Software
 10 7 5 14.8 19.8 12,071 533 644-259

Aavas Financiers
Housing Finance
 9 8 6 13.1 24.0 11,414 1,442 2,011-1,336

Stock Rating and price data as of February 19, 2024. For the full list, scan the QR code.

72 Wealth Insight March 2024

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Want more? Here you go
Other screens available on the Value Research website
P/E P/E

High quality small caps JK Paper 5.7 Mold-Tek Technologies 21.1

Small-cap stocks rated high H.G. Infra Engineering 11.8 Swaraj Engines 21.1
on Quality Score LG Balkrishnan & Bros 14.3 eClerx Services 22.1
Can Fin Homes 15.1 Aavas Financiers 24.0
Fiem Industries 20.6 La Opala RG 30.1

High growth large caps Bajaj Finance 30.2 HDFC Bank 18.2
These are large caps with a Cholamandalam Inv. and Fin. 29.6 Indian Hotels 66.0
Growth Score of at least eight Kotak Mahindra Bank 19.7 Siemens 78.5
Axis Bank 24.4 Titan 95.0
Dr Reddy’s Labs 20.5 Tube Investments 54.5

Top value mid caps Muthoot Finance 7.2 Chambal Fert. and Chem. 12.0
This filter spills out attractively priced Manappuram Finance 7.6 Petronet LNG 12.1
mid caps with reasonable quality LIC Housing Finance 7.7 Sun TV Network 12.9
Bandhan Bank 11.0 Gujarat State Petronet 13.5
Mahanagar Gas 11.6 Indraprastha Gas 15.8

Reasonably priced Kama Hotels (India) 2.4 Karur Vysysa Bank 9.9

growth stocks Ramky Infrastructure 3.3 Jindal Saw 11.0

A filter for high growth stocks trading at Huhtamaki India 6.3 LT Foods 11.7
reasonable valuations International Conveyors 9.5 Motilal Oswal Financial Services 13.9
Suryoday Small Bank 9.5 Jindal Steel & Power 14.2

Attractive Bluechips Angel One 25.8

High growth large caps with strong Hindustan Aeronautics 32.9
fundamentals and reasonable valuations SRF 47.1

For all the screens and to customise them

as per your requirements, visit
z Stock Rating z Value Guru screens z Easy peer comparison

www.valueresearchonline.com/stocks-screener/

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 WORDSWORTH NOW

Nirmala Sitharaman
Finance Minister, India

On concerns for the Indian economy:

The challenges and worries are more
external… wars abroad, uncertainty in the Red
Sea, marine lines getting affected, supply chain
disruptions. I think in the last three to four
years, uncertainties have become the rule of
the game. We have to live with them.
Business Today, February 3, 2024

Satya Nadella
Sam Altman CEO, Microsoft
CEO, OpenAI
On India becoming a
On productivity improvement using AI: developed nation:
I always think it’s worth remembering that At the end of the day,
we’re on this long, continuous curve. what’s the difference
Right now, we have AI systems that can between being a
do tasks. They certainly can’t do jobs, but developed country
they can do tasks, and there’s productivity and a developing
gain there. Eventually, they will be able to country? It is
do more things that we think of like a job just the rate of growth
today, and we will, of course, find new over long periods
jobs and better jobs. of time.
Unconfuse me with Bill Gates podcast, Economic Times,
January 11, 2024 February 12, 2024

Dilip Shangvi
Founder and Managing Director, Sun Pharmaceuticals
On improvements to be made for India’s future:
Today, Indian pharma’s regulatory landscape is one
of the most complex ecosystems when it comes to
R&D. The existing regulatory landscape involves
multiple agencies, often leading to lengthy approval
timelines. Simplifying processes like these is crucial
not only for speeding up the journey from lab to
market and fostering sustainable growth but also for
nurturing innovation.
Business Today, February 18, 2024

74 Wealth Insight March 2024

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