Purpose of this presentation is not to.. Give gyaan on stock markets. Change your investment decisions and behavior Not to teach Investment wisdom – I myself don’t have any. The purpose of this presentation is just to.. Throw some light on WHAT is happening in INDIA and HOW it is affecting the markets….according to me

We mostly invest like that.. When you see life insurance getting confused with investments – term policy versus endowment.. Investments only in PF and FD Excess money is wasted in bank fixed deposits and post office schemes The paranoia around real estate as an investment Equity investments branded as Risky SIP in MFs not understanding the nature of the fund and the scheme Handing over money to a portfolio investor

Who is taking the benefit of the Indian Stock markets.. Foreign investors Indian retail investors are absent We have been conditioned to fear the markets We often make mistakes when… …without discipline, we tend to invest recklessly by becoming greedy and not studying the fundamentals.

But now things are changing over past 18 months…

Reforms happening in almost every area.. Power Gas pricing Telecom Land reforms Retail Telecom bandwidth allocation Banking interest rates Food …. We need to understand these reforms and their implications which will shape the GDP of tomorrow

Retail participation is going to grow exponentially..

Reforms…Insurance space

Reforms..medical devices

Some examples of stock movement over last 2-4 months Stock namePercentag e Reason Atul Auto91%Financials, Auto segment Aurobindo44.67%Strong pharma player Amara Raja Batteries 22.6%Strong financials PTC India Finance47%Zero NPA, good vertical Havells India31.15%Good financials TVS Motors39%Good products JK Lakshmi Cement43.8%Strong brand Bharat Electronics48.25%Defense Bharat Forge22%Defense Gati27%Logistics Axis Bank25%Good financials HPCL30%Oil pricing benefit Texmaco Rail10%Railways

Some examples of cause and effect Trend ( Cause..)VerticalEffect on..Comp -any stock Reason for selection Qty % in portfoli o More and more consumers shopping online E- Commerce GatiStrong logistics player 1% - 2% Increased focus on defense spending Military equipment BEL, BEML Very strong expertise 1% - 2% Decrease in Interest ratesBankingSBILargest bank1% - 2% Decrease in Interest ratesHousing FinGruh, repco Provide loans for small homes 1% - 2% Decrease in cost of crudeOilHPCLGood co.1% - 2% Decrease in cost of crudeTyresCeatStrong player1% - 2% Reduction in petrol pricesAutoTVSLeader in 2 wheelers 1% - 2% New ports, roads, bridges, highwaysCement, Infra, JK Cement, Shree Cement Strong presence 1%-2%

Where to Invest Investors choose verticals and not stocks Choice of a vertical depends upon how well it will do in the coming days….. …as felt by the market. Some examples: - Bank interest rates – ex Housing Finance Companies - Inflation – ex Auto, Farm -Crude pricing – ex Rubber, Oil companies - Govt. spending and reforms – ex Defense, Power, Gas, Railways, Insurance - Prices of raw materials – ex Rubber - New promising verticals – ex E-Commerce - New Infrastructure projects – ex Cement, Sanitary-ware, Electricals - Uniform GST – Commercial fleet manufacturers - Dollar rate – IT stocks - FDI in Insurance – Max India

Invest for long term – 2 to 5 years Restrict a stock allocation to 1% to 2% of total planned portfolio size Never buy on hearsay Use Moneycontrol app for news, analysis, trends and overall understanding Be patient Don’t churn portfolio regularly. Make changes if needed once per quarter Buy on the days when the markets are down Never buy more than 30% quantity of intended stock at any given time Don’t venture into F&O and day /weekly trading

A useful tip…Follow the funds to be safe See where top funds are investing Refer for very thorough analysis of stocks and mutual fundswww.valueresearchonline.com If you would like to be a passive investor then go for mutual funds Top MFs are providing 20% plus returns 5 years annualized Some MFs have returned 100%+ returns over last one year Ex : Most top midcap and small cap funds

Stock selection Is done based on the following parameters: - Bright prospects of the vertical - Strong reputation in market – no 1, 2 player - Good products and monopoly - Strong governance, leadership and management - Financials – Profitability, revenue growth - Mutual fund holding - Volume of trade / liquidity - Stock movement over last 12 months

To summarize…Why invest in the markets GDP movement Reforms process will be faster Infra improvement FDI Govt. spending

Which sectors/companies I avoid or have limited exposure Infrastructure Real estate Airlines High debt laden PSUs Commodities Pharma – only top 2/3 companies Company whose name I have not heard or business model that I do not understand or am not comfortable about.

Finally Don’t take tips from brokers Good magazine to read – Dalal Street Journal Best app – moneycontrol Good website to read – Do not fall in the trap of a fast moving stock whose name you have not heard Buy quality always Stock value takes time to move. So please be patient. Markets need to fall to rise so do not loose your sleep when they fall. Never cross 1%-2% of your total portfolio investment in one stock. Take as many stocks as you wish. Always buy small qty to start with Don’t sell if you don’t need to sell

Demo on..how to select a stock

Thank You