Tag Archive : Mutual Funds

10 Most Favourite Stocks of Mutual Funds

10 Most Favourite Stocks of Mutual Funds

Stocks with Highest Allocation in Equity Mutual Funds

Introduction

In this article, we are going to see the 10 most favourite stocks of mutual funds considering data as on August 2019. These 10 stocks are having highest allocation in equity mutual funds.

10 Most Favourite Stocks of Mutual Funds

  • As far as the equity oriented mutual funds are concerned (funds having equity allocation), the total AUM as on August 2019 is around Rs.10.31 Lakh Crore.
  • This AUM of Rs.10.31 Lakh Crore is contributed by :
    1. Pure Equity Funds
    2. Hybrid Oriented Funds (with Equity allocation)
    3. Index Funds
    4. Index ETFs
    5. Sectoral Funds
  • It means the above all type of funds have made investments in stocks worth of Rs.10.31 Lakh Crore in stocks.
  • Indian Mutual Fund industry’s Average Assets Under Management (AAUM) stood at Rs.25.64 Lakh Crore in August 2019. So we can see, around 40% of the total AUM of the entire mutual fund industry is contributed from investments in stocks.
Total AUM of Equity Mutual Funds
Total AUM of Equity Mutual Funds

Which are the top 10 stocks contributing to this 10.31 lakh Crore AUM?

Not surprisingly, out of these 10 stocks, 6 stocks belongs to banking and financial services sector (3 corporate banks, 2 retail banks and 1 housing finance company). Out of the rest 4 stocks, one company each from IT, construction and Engineering, FMCG and diversified conglomerate.

  10 Most Favourite Stocks of Mutual Funds
10 Most Favourite Stocks of Mutual Funds

1. HDFC Bank

  • HDFC Bank is the stock having highest allocation in total mutual funds portfolios with equity allocation.
  • Around Rs.71,142.1 Cr is invested in HDFC bank by all mutual funds. So, if we consider the total AUM of Rs.10.31 Lakh Crore, HDFC bank alone is holding almost 6.9% of total equity AUM of all the mutual funds. It shows the confidence all the mutual fund houses is having for HDFC Bank.
  • HDFC Bank is a Retail-oriented bank. It has given the profit growth of almost 20-25% y-o-y since last 10 years, having a great consistency in profit growth numbers. For the same reason, HDFC Bank has been enjoying a premium valuation in the market.

2. ICICI Bank

  • ICICI Bank is the second highest stock in terms of allocation by mutual funds in their portfolios.
  • Mutual funds have made a investment of around Rs.59,465.4 Cr in ICICI Bank out of total Rs.10.31 Lakh Cr equity investment. Thus, ICICI Bank is holding 5.7% share in total equity mutual fund AUM.
  • ICICI bank is a corporate bank. The NPA pressure of corporate banks from last 2-3 years is now fading down slowly. The profits of corporate banks are going to be promising in coming quarters. And with the improved earnings, Earnings per share of corporate banks and overall Sensex and Nifty Indices can go up in future. Thus, with these improved EPS numbers, price-to-earnings ratio can be rationalized in course of time.

3. Infosys Ltd.

  • Infosys is the only one IT stock in 10 most favourite stocks held by mutual funds.
  • It might be because of the higher percentage of promoter holdings (72.05%) in case of TCS. The free float market capitalization of TCS is very small. As a result, there is very little scope for the domestic institutional investors (DIIs) like mutual funds to buy the stock (TCS) and include it in their portfolios.
  • On the other hand, in case of Infosys, promoter holding is only 13.15%. So there is very good scope for mutual funds to buy the healthy growth delivering IT stocks like Infosys. The total investment in Infosys is almost Rs.44,960 Cr with 4.3% allocation in total equity oriented funds AUM.

4. Reliance Industries Ltd.

  • Reliance Industries Ltd (RIL) is a diversified conglomerate company. Equity mutual funds are having a consistent allocation in RIL.
  • Since last 2-3 years, allocations in RIL have seen a decent growth with the current holding of Rs.40,312.3 Cr by equity oriented funds. This allocation in RIL contributes around 3.9% of total AUM.
  • Reliance Industries stock is trading at a PE 19.31, which is higher than its 3 years, 5 years, 10 years average PE ratio. With the improved earnings visibility from Reliance Jio and Reliance Retail, RIL is enjoying a premium valuation. Jio and Retail both the businesses are going at fast pace and both can come with IPOs in coming years.
  • So, due to the very high free float of RIL and higher earnings visibility in future by the stock, equity funds are buying RIL and trying to increase the allocation of the stock in their portfolios.

5. Larsen & Toubro Ltd.

  • L&T is a construction and engineering conglomerate player. Mutual funds are invested around Rs.33,281.3 Cr in L&T stock. While the % allocation of L&T is around 3.2% of entire equity AUM.
  • L&T is a very good stock in terms of corporate governance, consolidated businesses growth(Financial Services, IT). L&T is delivering a consistent growth in its profits over the years. And therefore, it can be a good bet for the investors to hold the stock for their long-term portfolios.
Detailed Stock Analysis by Invest Yadnya
Detailed Stock Analysis by Invest Yadnya

6. State Bank of India

  • SBI is the biggest bank of India not by market capitalization but from business point of view in term of credit/loans given in the market. The investment in SBI is around Rs.33,066.2 Cr by mutual funds with 3.2% allocation in the stock out of total equity exposure by mutual funds.
  • Just like ICICI bank, SBI is one of the corporate banks with high earnings visibility. With the decrease in the provisioning (kept aside for NPAs from operating profits earlier), the profitability of the bank is increasing and will improve even more in coming quarters. So we can say that SBI is coming out and relieving from NPA pressure slowly.
  • The current profitability of all corporate banks, which is around Rs.4,000 Cr will grow to almost Rs.80,000 Cr by FY2020-21. So we can clearly get the growth trend for the stock in future and this is the

7. HDFC Ltd.

  • HDFC Ltd. is focusing on the housing demand in ‘Affordable Housing’ segment. It has a great opportunity in housing finance after the merger of Gruh Finance and Bandhan Bank.
  • The company is having a consistent growth potential to deliver the profit growth in coming years. So, Domestic Institutional Investors like mutual funds are very positive about HDFC Ltd. The current holding in HDFC Ltd is around Rs.31,521.9 Cr, with almost 3% allocation in the total equity AUM of mutual funds.

8. Axis Bank

  • Axis Bank comes under the corporate bank segment. Equity oriented mutual funds have invested around Rs.30,326.5 Cr in Axis Bank. The stock is having 2.9% allocation in entire equity AUM of mutual funds.
  • Just like other corporate banks ICICI Bank and SBI Bank, the earnings visibility of Axis Bank is improving in near future due to the reduced NPA pressure. And in the revival phase of corporate banks, we believe Axis bank is running ahead of ICICI Bank and SBI Bank. So it is a very good opportunity for mutual fund houses.

9. ITC Ltd.

  • ITC Ltd is a FMCG conglomerate company. The current holding of ITC Ltd is almost Rs.28,105.7 Cr, with the % allocation of 2.7% by the mutual funds of equity orientation.
  • The major contributors are the Index funds and Index ETFs in this allocation of 2.7% for the stock. Because of high free float of the stock, it is mandatory for the Index funds and Index ETFs to have the allocation for ITC Ltd. Moreover, ITC Ltd is having a good weightage in the Sensex and Nifty indices which is beneficial for the stock to increase its holdings by the index funds.

10. Kotak Mahindra Bank

  • Kotak Mahindra Bank is the one of the best banks in retail banking. It is a well-managed bank, with a great vision for future growths.
  • Mutual funds have made a investment of around Rs.59,465.4 Cr in Kotak Mahindra Bank. Thus, the bank is holding 2.3% share in total AUM of equity-oriented mutual funds. And this allocation have seen a consistent growth by the mutual funds.
  • As we all know, the promoters are required to reduce their holding as per the RBI’s regulations. So in this scenario, DIIs like mutual funds are very positive to increase their holding in Kotak bank once the free float will be available in the market.
7 Biggest Money Mistakes Millennials Make

7 Biggest Money Mistakes Millennials Make

Financial Lessons for Millennials How to Avoid These Money Mistakes

Introduction

In this article, we are going to discuss the 7 biggest money mistakes millennials make (that you should not make). Here are key financial lessons for them how to avoid these money mistakes.

7 Biggest Money Mistakes Millennials Make

Some Millennials are rich in personal finance knowledge and awareness, while many other millennials fall short of being wise with their money.

Let us see the biggest money mistakes Millennials make :

7 Biggest Money Mistakes Millennials Make
7 Biggest Money Mistakes Millennials Make

1. Failing to Start Investing Early

  • When it comes to investing, the earlier you start, the better corpus you can build. Research shows that Millennials are less likely to have general investment knowledge compared to older generations.
  • Millennials are more conservative type of investors despite having a longer timeline than their older Gen X and Baby Boomer counterparts. That is mostly due to the fact that they witnessed the largest market meltdown in decades during their formative years.
  • Early investing is one of the most important steps to reach financial freedom. Putting money into a growth vehicle can be one of the prudent ways to make a new income. All it takes is a little research.
  • There are different ways of investing hard-earned money, including :
    1. Mutual Funds
    2. Stocks
    3. Index Funds
    4. ETFs
    5. Real Estate Investments
  • If you’re clueless about how to invest, you can approach a financial advisor.

2. Spending at the Rate of Earnings

  • The most damaging money mistake millennials make is spending more than they have. This often goes hand-in-hand with not knowing how much you spend. At early career, living in the moment sounds a lot more appealing than planning for the future. But you’ll never reach financial freedom if you keep falling into the trap of ‘lifestyle inflation’ or increasing your spending as your earnings go up.
  • For example, Don’t upgrade to a bigger apartment just because you got a raise. Don’t plan for an expensive vacation just because you got a bonus. Instead, focus on the bigger picture and save that money or use it to pay off any existing debt.
  • With just some minor belt-tightening, you can grow your money and spend it on more important financial goals such as buying a house, early retirement, protecting your family etc.

3. Not Having Emergency Savings

  • An emergency fund is a safety net which will protect you in case of any financial emergencies such as a job loss, illness or injury.
  • Ideally, you should have enough in your savings which will provide around six-month cushion of living expenses. Any amount of emergency savings can go a long way.

4. Letting Credit Card Debt Pile up

  • The habit of swiping credit cards can be addictive and disrupt your financial calculations. Credit cards can be a great tool, if used responsibly.  The problem the millennials generation is facing is that most millennials use their credit cards for almost everything. For example, Clothes, shoes, coffee, groceries, vacations, entertainment. One should change this habit.
  • Because this “buy now, pay later” mentality can come at a cost. High interest rates and never-ending minimum payments can steal hard-earned money that should go towards short-term savings or investing for retirement. Use your credit card wisely depending on your cash flow management.
  • There are two important rules when it comes to using credit cards :
    1. Don’t rely on it to pay for life’s necessities
    2. Don’t overspend on things you don’t need
Personal Financial Planning Knowledge Bank by Invest Yadnya
Personal Financial Planning Knowledge Bank by Invest Yadnya

5. Not Having a Plan to Get out of Debt

  • Building debt has never been easier and that’s one of the biggest money mistakes one can make at any age. Swiping a credit card or financing big purchases like phones, TVs, furniture make falling into debt seem almost inevitable.
  • And once you’ve made the mistake of falling into a cycle of debt, it can be impossible to escape. Interest rates and penalty fees for late payments add to the total amount you owe. 
  • You should always have an action plan for handling your debt. Before you take on any debt, you should do the required calculation and do some planning ahead of time. This is the first step in building a budget.

6. Not Saving for Retirement

  • Waiting to long to begin saving for retirement is a huge mistake that will come back to haunt you in the future.
  • Another big thing millennials tends to skip out on is their retirement fund. The major two reasons retirement planning is ignored by individuals in their 20s is because they think they have enough time to start, and they’re not in their dream job.
  • So, you should start your retirement savings now and benefit from having time on your side to grow your investments.

7. Forgoing Health Insurance (Not Being Proactive about Health)

  • Warren Buffett said, “You have only one mind and one body for the rest of your life. If you aren’t taking care of them when you’re young, it’s like leaving that car out in hailstorms and letting rust eat away at it.” Getting rid of all that rust is going to be very expensive.
  • The common mistake the millennial generation makes is to take health insurance for granted. It might be hard to balance your budget when you have to pay a monthly payment to a health insurer, but doing so can prevent major debt later down the road.
  • Being proactive about your health will help you live longer and prevent high health care costs in the future.

Summary

  • Millennials world rotates around spending money without considering the consequences. So, Millennials should never waste money in paying for an unnecessary streaming service, overpaying for brand-name electronics etc.
  • Your hard-earned money should work for you in course of time. By improving the awareness towards personal finance and imparting financial discipline, you can easily avoid these money mistakes.
Systematic Investment Plan – Accumulation of Assets

Biggest Advantage of SIP| Behaviour Finance Angle

Stay Invested, Don’t Panic

Introduction

Systematic Investment Plan or SIP is a wealth creation tool that allows investors to invest a predetermined amount on a regular basis in a mutual fund scheme. Lets discuss the biggest advantage of SIP through a behaviour finance perspective.

Biggest Advantage of SIP|Behaviour Finance Angle

Biggest Advantage of SIP
Biggest Advantage of SIP

Case Study of Dr.Anil – A Backgroud View

  • In this article, we are going to discuss a case and will try to explain the biggest advantage of SIP from a benaviour finance perspetive.
  • Dr.Anil, who is a heart-surgeon, is investing through SIPs since last 3 years. ANd after 3 years of SIP investments, he is quite disappointed with the performance of his SIPs.
  • As a first-time investor, he was not suggested to invest aggressively in Small cap and Mid cap funds. So, he has done his SIPs specifically in Balanced funds and Large cap funds. Although Dr.Anil’s financial goals were long-term goals realising in 10, 15, 20 years, he has chosen SIPs investments in typically Balanced and Large Cap funds being a first-time investor.
  • Thus, with the above investment scenario of Dr.Anil, he was very disappointed because of not getting the expected returns from his investments in last 3 years. Obviously, he was confused and thinking about discontinuing his all current SIPs.
  • After studying Dr.Anil case, we got to know that his main focus was merely on “Return on Investment”. And he has not at all considered the “Return on Net worth”.

What is Return on Net Worth?

  • Net worth is basically a measure of your personal finance health. Net worth number shows where you stand financially. It is defined as the total of your assets (everything you own) minus your liabilities (everything you owe).
  • While calculating Dr.Anil’s Net Worth, we have followed a predefined financial planning process. Post Tax income of Dr.Anil for last 2-3 years was about Rs.2-2.5 Lakh per month. And his monthly household expenses, lifestyle expenses etc contribute to his total monthly expenses of around Rs.60,000-Rs.70,000. Thus, inspite of having monthly surplus of Rs.1.3 Lakh since last 2-3 years, Dr.Anil had done total monthly SIPs of Rs.50,000 only. So, where did the remaining monthly surplus funds of almost Rs.80,000 gone? May be in short-term savings, lending to other, LIC policy and other random expenses etc.
  • The current value of his SIPs of Rs.50,000 over 3 years would be around Rs.18.5-19 Lakh, just because of fluctuating market sentiments and market valuations.
  • From the above case, we can understand that athough Dr.Anil was quite disappointed with his SIP performance over last 3 years, the biggest advantage he had enjoyed from his SIPs is – the Accumulation of Assets.
  • Creation of wealth is the primary and foremost step in order to grow or enhace that wealth. Where does this asset accumulation will be accounted in Dr.Anil’s portfolio?
  • Obviously, with the accumulated assets, his Net worth is going to increase hand-in-hand.
Personal Financial Planning By Invest Yadnya
Personal Financial Planning By Invest Yadnya

Importance of Financial Planning Approach

  • From the above case, in short, Dr.Anil has forgot to accumulation of wealth properly through financial planning process. Thus, the remaining Rs.80,000 of monthly surplus funds of Dr.Anil remained unaccounted because of not including them into his SIPs as per his financial goals.
  • Out of this missed total corpus of Rs.28.8 Lakh (Rs.80,000*12*3) over 3 years, he is having short-term FDs, LIC policy of Rs.6-7 Lakh. Still a large portion of this corpus (almost Rs.21 Lakh) remained unaccounted.
  • Thus, we can say it was an opportunity loss for Dr.Anil. If he would have followed proper financial planning process for his financial goals, then this extra unaccounted surplus would have been invested through SIPs.
  • Thus, accumulating wealth and tracking of his financial goals would be easier. It would have been definitely help him to accumulate the wealth/assets over the horizon of 3 years. In turn it would result in early fulfillment of his required corpus for his goals or investing this surplus funds more aggressively by executing strategic approach.

Biggest Advantage of SIP through a Behaviour Finance Angle

  • One’s routine behaviour is driven – mostly by the habit. As far as personal finance is concerned, Savings and investments also fit right into the framework of pattern of behaviour.
  • The value of investing through systematic investment plans (SIPs) is as much about psychology as about the arithmetic of investing. The conventional, numbers-driven logic for SIPs is the main thing that encourages investors to start investing. It’s the habit-inducing nature of SIPs that keeps them investing. 
  • If we put this in the context of exactly why SIPs are the superior form of investing in mutual funds, we will come to an inevitable conclusion. It’s the psychological factor that is the real driver for the investing returns and success. 
  • The biggest problem in investing is not where to invest but to keep investing through thick and thin. People invest at irregular intervals and then stop investing when equity markets fall. 
  • SIPs do the job because investing becomes a habit. It gets ingrained in your behaviour patterns, it happens automatically every month and you don’t have to overcome any inertia to invest every month. 
4 things to note for mutual fund investors in volatile markets

Volatile Markets : 4 Things To Note For Mutual Fund Investors

Mutual Fund Investors Should Not Do These 4 Things in Current Volatile Markets Scenario

Introduction

Indian stock market is currently going through a correction phase. In this article, we will discuss the 4 things to note for mutual fund investors in current volatile markets in order to generate higher returns.

Volatile Markets : 4 Things To Note For Mutual Fund Investors

Lets discuss the which are those 4 things to note for mutual fund investors in current volatile markets.

4 Things To Note For Mutual Fund Investors in Volatile Markets
Volatile Markets : 4 Things To Note For Mutual Fund Investors

1.Do Not Focus Too Much on Current Market Scenario

  • Indian stock market has entered a correction since last couple of weeks due to lack of measures in the budget 2019 to stimulate the economy. Also, taxation on the super rich has adversely affected the foreign investments and soured the market mood.
  • The Indian equity markets is going through a slow down due to both internal and external factors. Following are some of the factors/reasons behind the slowdown.
    1. Internal factors : NBFC crisis, Slowdown in auto sales, consumption and manufacturing
    2. External factors : US China trade, Brexit, uncertainty in crude oil prices, overall slowdown in global economic activity
  • Thus, you should not take your investment decisions in this kind of current scenario in the stock market. You should always remind yourself one important thing that you are investing in the stocks to achieve your long-term financial goals.
  • So, you should not focus on or worry too much for the short-term volatility and sentiment in the current market scenario.
BSE Sensex Falling Trend  (from 15th July 2019 to 9th August 2019)
BSE Sensex Falling Trend (from 15th July 2019 to 9th August 2019)
Source : www.bseindia.com

2.Do Not Stop Your SIPs

  • SIP route helps you average your purchase price and helps you with better returns with relatively lower risks. This rule applies for all Equity SIPs.
  • When market sentiments start becoming a bit panic or unshielded, most of the investors start worrying about their regular investments SIPs and raising a question on continuing their SIP investments. But, stopping your SIPs would not be a smart move.
  • The investors who would continue with the SIP investments during the market slump would gain by buying more units of the same fund. It helps them to buy stocks at a discount. Hence those investors who stick to their SIP investments would gain significantly through a lower average price of holdings.
  • So, you should not stop your SIPs in current market scenario in order to get the advantage of stock purchases at the discount.

3.Do Not Change Your Original Investment Allocation

  • Most of the investors tend to change their investments in times of market volatility. 
  • The BSE Sensex is trading lower compared to the 1-year-ago and 3-months-ago levels, while it is flat compared to its level 6 months ago.
    • In the past one year, small cap and mid cap funds have offered negative returns of almost -16% and -12%, respectively.
    • Thus, many investors tend switch to large cap funds to be safer if mid cap and small cap funds are not showing the expected performance. But that is not a right move.
  • Keep on altering the original investment allocation would affect your investments and can hamper your long-term returns.
  • Don’t think about changing allocations, moving to safer schemes etc. The best thing to do is to do nothing, in such uncertain, volatile market conditions. So, Stick to your asset allocation.
Mutual Fund Reviews By Invest Yadnya

4. Don’t Be Too Excited

  • Many smart investors make strategic allocations in a falling market to maximize wealth. Such tactical allocations will definitely helps you to buy more in a sluggish market.
  • An aggressive investor is prepared to take higher risk in anticipation of higher returns. Many times, you tend to go overloaded in the sentiment of becoming too excited in falling markets.
  • However, you should allocate your surplus funds to make strategic investments only after thinking it through. Allocate only the part you do not need in a short term.
  • Don’t be too excited for profit booking by going overloaded in sluggish markets. The market may not move as per your expectation and you might incur losses in the process.
Mutual Fund

10 Most Favourite Large Cap Stocks of Mutual Funds

Top 10 Large Cap Stocks

Introduction

In this article, we are going to see the 10 Most Favourite Large Cap Stocks of Mutual Funds. Maximum numbers of mutual fund schemes have invested in them. An online poll
was conducted for choosing a stock in which the maximum numbers of mutual fund schemes have invested in them. Here, we are not talking about the amount invested in those large cap stocks but the number of mutual fund schemes, invested in them.

The options to choose from were HDFC Bank, ICICI Bank, Infosys, Reliance Industries, Axis Bank and such. Maximum people choose HDFC bank, as the stock in which maximum number of stocks would have invested in it. This would have been current if it were February 2018 right now, but its not. The statistics has changed completely in February 2019. The interesting that came out from the poll was, the large cap stocks which got the least votes was in fact the stock in which maximum mutual fund schemes have invested.

We listed of 10 Large Cap stocks which are held by maximum number of mutual fund schemes. Out of these 10, 5 stocks belonged to the banking sector. And out of this 5, 4 are private sector banks and just one is a PSU. And 1 company each from IT, infrastructure, auto, FMCG and diversified sectors (many business areas of 1 company).

10 Most Favourite Large Cap Stocks

10 Most Favourite Large Cap Stocks of Mutual Funds
10 Most Favourite Large Cap Stocks of Mutual Funds

1. ICICI Bank

  • ICICI Bank Limited is an Indian multinational banking and financial services company headquartered in Mumbai, Maharashtra. As of 2018, ICICI Bank is the second largest bank in India in terms of assets and market capitalisation. ICICI bank has a corporate lending oriented business.
  • This was would be a surprising stock for many people. 10 schemes have additionally added this stock to their portfolio.

2. HDFC Bank

  • An Indian banking and financial services company, HDFC Bank Limited has its headquarter in Mumbai, Maharashtra. HDFC Bank is India’s largest private sector lender by assets. It focuses more on retail banking.
  • There has been a fall in the number mutual fund schemes which have invested in this stock (YoY). The reason is the mutual funds are increasing allocations to corporate banks and HDFC is a retail bank.

3. SBI

  • The State Bank of India is an Indian multinational, public Sector banking and financial services statutory body. It is a government corporation statutory body having headquarter in Mumbai, Maharashtra.
  • This another corporate banks whose balance sheet now looks stable and the NPA’s are under control.

4. Axis Bank

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  • Axis Bank is the third-largest of the private-sector banks in India offering a comprehensive suite of financial products. The bank has its head office in Mumbai, Maharashtra.
  • Axis bank too is a corporate bank. Axis bank has gone through some major transformation. Mr. Amitabh Chaudhary, former CEO of HDFC Life, has taken the charge as the CEO of Axis bank from 1st January 2019. He, as the new CEO, has made a lot of changes in the functioning and performance of the bank. This has been taken very positively by the DII’s and FII’s. The stocks of Axis bank have had a rally of almost 40% in the last 1 year. The reason is the same that the management has changed and a new perspective has been developed in Axis Bank.
  • The rise in the numbers of mutual fund schemes invested is the highest in Axis bank.

5. Infosys

  • Infosys Limited is an Indian multinational corporation that provides business consulting, information technology and outsourcing services. It has its headquarters in Bengaluru, Karnataka, India.
  • Last year was very good for the IT companies because of the rupee depreciation, their revenues in terms of rupee had been improved healthily. Last year there weren’t also any issues related to US economy.

6. ITC

  • ITC is an Indian cigarette company which is headquartered in Kolkata. Its five diversified businesses are Fast-Moving Consumer Goods, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology.
  • ITC is a super liquid stock, and which is why mutual funds might have invested in it, as if and when they face liquidity or redemption pressure, they can immediately sell this stock.

7. L&T

  • Larsen & Toubro Limited, commonly known as L&T, is one of the largest Indian multi-national firms and leading construction company in India headquartered in Mumbai, Maharashtra, India.
  • The results of L&T, of last 12 months, are very good. They have performed in both YoY as well as QoQ basis.
  • There are also news of L&T acquiring Mind Tree where they have already bought some stake in Mind Tree and have now given an open offer. There have been many developments in that hostile takeover attempted of Mind Tree by L&T.
  • But the increased investments are because of their core infrastructure business. L&T has a very strong project pipeline.

8. Kotak Mahindra Bank

  • Kotak Mahindra Bank is an Indian private sector bank headquartered in Mumbai, Maharashtra, India. In February 2003, Reserve Bank of India issued the licence to Kotak Mahindra Finance Ltd., the group’s flagship company, to carry on banking business.
  • Kotak Mahindra is another retail oriented bank, like HDFC bank. It is a very well managed bank.
  • There are no problems with NPA’s of the bank The only bank with the bank is the notice given by RBI to the bank to reduce the promoter holding.

9. Reliance Industries

  • An Indian conglomerate holding company, Reliance Industries Limited has headquarter in Mumbai, Maharashtra, India. Reliance Industries is the largest company in India as per market capitalization.
  • Reliance industries has a very diversified business portfolio. It owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. The company has very rich cash flow.

10. Maruti Suzuki

  • Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is a 56.21% owned subsidiary of the Japanese car and motorcycle manufacturer Suzuki Motor Corporation. Currently  it has a market share of around 51% of the Indian passenger car market.
  • Here, the number of mutual fund schemes have gone down. There is no problem with their business model. The reason behind this can be the slowdown in the auto industry. The last 4 years have been very good for the auto companies, but the next 6-8 quarters can continue to be sluggish.

summary

  1. Markets are expecting that the corporate banks are going to perform well this year, and that is why they have gotten higher allocation than the retail oriented banks.
  2. This year some issues can be seen building in the US economy. There are rumours of USA going for a recession. The 10-year G-sec yields have gone down from 3.18% to 2.48%. the US economy may not grow as per the expectations as there are signs of a slowdown. Thus, there are chances that the IT companies may not have a similar or better year again.
  3. Almost all of the above can looked at as a long term investment option.

Notes: –

  • The numbers that are used are approximate and have been rounded for presentation purposes.
  • We are not in any way saying that these are bad companies, or the stocks of these companies are bad.
  • We are also not suggesting anyone to immediately go and buy these stocks or invest in the stock markets.
  • Only an analysis has been presented here. No judgments or final statements are being made here.

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