1. Indian Equities – Best Investment Destination
National Conference of Rajkot Branch, WIRC, ICAI
By CA S.P. Tulsian
Rajkot
Sun, 30th Dec 2018 1 1 1 1

2. Contents Current Investment Avenues
Comparison of Returns of Different Asset Classes
How are the Indian Macros?
How is the Government supporting Growth?
How to build a Quality Portfolio
Key Monitorables for FY20
Sector Outlook 2 2 2

3. Current Investment Avenues
Real Estate
Bullion & Jewellery
Commodity
Debt
Equity
more of ‘Need-Based’
seen loosing sheen
low market depth due to improper delivery mechanism
less tax-efficient
only alternative

4. Comparison of Returns of Different Asset Classes over last 20 years
Based on historic returns too, equity becomes the natural investment choice

5. How are the Indian Macros?
Positive 5 5 5 5 5

6. How are the Indian Macros? (Cont’d.)
Global Positives
Soft Brent Crude prices
Trade War: US-China Reconciliation may be a Big Positive
Better Diplomatic Relations
Currency Stability 6 6 6 6 6

7. Government Initiatives
NCLT Resolution of Bank NPAs
Home for All by 2022, Electricity and Gas to All
Infrastructure Growth
Rural Focused Growth, with thrust on Agriculture
Guaranteed MSP, Crop Insurance etc.
Ayushman Bharat Health Scheme for Poor
Better Tax Administration
Policy Acceleration with Transparency
Investment Climate on a Revival Path
Ranking jumps 23 points in ‘Ease of Doing Business’ index to 77
Parallel Economy Curtailed to a great extent
thanks to GST and demonetisation
Fiscal Prudence: On-track to meet FY19 fiscal deficit guidance of 3.3% 7 7 7 7 7

8. Suggested equity allocation, in view of volatility over next 6 months
How to Build A Quality Portfolio
Exposure to Reality to be Only ‘Need Based’
Increase Allocation to Stocks
Prune your holdings to a maximum of 25 stocks
Have a Balanced Portfolio
Suggested equity allocation, in view of volatility over next 6 months
Definition
Mcap
(Rs. crore)
Large Cap
> 25,000
Mid Cap
6,000-25,000
Small Cap
2,500-6,000
Micro Cap
Upto 2,500 8 8 8 8 8

9. Portfolio Building: Dos and Don’ts
Foresee Events
Look for Portfolio Growth
Sector Rotation
Look for High Beta Stocks to outperform
Follow 3Ps - Project / Promoter / Prospects
Don’ts
Stop F&O
Avoid Chasing Momentum
Refrain from Leverage
No Regret on Executed and Completed Trades 9 9 9 9 9

10. Key Monitorables for FY20
Political Stability after General Elections
Crude Price Behaviour
Currency Movement
Tax Compliance
Current Account Behaviour
Earnings Growth Forecast
US-China Trade War
China Slow Down
PSU Autonomy
FII Inflow 10 10 10 10 10

11. Housing Finance Companies
Sectors with Positive View
Private Sector Banks
NBFC
(Pedigree)
Housing Finance Companies
Cement
Auto
Auto
Ancillaries IT
(Mid Cap)
Pharma
Retail
FMCG
Paint
Paper
Dyes & Pigments
Gas
Sector
Consumer Durables 11 11 11 11 11

12. Sectors with Negative View
Telecom
Reality IT
(Large Cap)
Infrastructure
Power Generation
Oil Exploration
Print Media
Suspicious Promoters
Debt Ridden Companies 12 12 12 12 12

13. Happy Investing! 13 13 13