Bottom-Up Stock-Specific Approach Highly Recommended

Bottom-Up Stock-Specific Approach Highly Recommended 

Nothing can get more exciting than equity markets in India awaiting announcement of the Union Budget. While the upcoming Budget will be the last full-fledged budget of the Modi government during the current term, I believe the Union budget to be presented on the first day of the next month will be nothing but a positive budget for the economy. There are talks amongst investors that the dividend distribution tax may be done away with in this budget, while the corporate honchos are keeping their fingers crossed on the rationalisation of corporate taxes. Some fear that the LTCG may be reintroduced or there may be some minor tweaks in the same to augment revenues for the government. 

One must understand the priorities of the current government to be able to correctly estimate the announcements in the budget. In my view, the priority for the current government is ‘Economic Growth’. Agriculture sector is a priority, so is employment generation. Even if Union Finance Minister Arun Jaitley prefers to support agriculture sector, which he will, it will indirectly boost the overall growth of the country as the agriculture sector has so far not contributed incrementally to India’s GDP growth over the last four years. The provisioning of funds for the agriculture sector in my view will be crucial in this budget. Apart from the quantum of fund, what I will be delighted to know is how the government is going to ensure fair prices for the agriculture produce of the farmers. Nothing can be more sweeter than the agriculture sector contributing positively and incrementally to India’s overall GDP growth. Expect some big bang announcements for the agriculture sector. 

This issue, we have a special feature covering CSR (Corporate Social Responsibility) activities of corporates extensively. Indeed, it is interesting to know how listed companies are contributing to the social and economic development of the society at large by their unique initiatives and perspectives. Know what is CSR and how corporates are spending their money on social causes. Learn everything about the most trending topic in our special issue. 

In our cover story, we have extensively discussed various steps that may be taken by the current government to improve the economic health of the country. Our expectations from Budget-2018 are explained in detail. We have come up with four recommendation which we believe will generate decent returns over a one year period for the investors. The markets, no doubt, will take direction from the Budget announcements. However, investors who stick to the bottom-up approach will find themselves safe and wealthy. My suggestion for investors with temperament for long term investing is that they can find opportunities in the cement industry. Cement is safe investment over the long run, as well as PSU banks. Investors will get a chance to rejig their portfolio in this budget and a lot will depend on the announcements and incentives given to specific sectors. However, cement companies and banks should not only form a part of your portfolio, but a higher allocation of 10 per cent to each sector is highly recommended. 

The markets are getting expensive, but many stocks are still not expensive. There are plenty of opportunities for those who are willing to dig deeper into financials and valuations of the companies. We are more than happy to assist our investors in this endeavour and I am sure we will come up with some exciting opportunities in 2018 when it comes to identifying quality stocks with good growth potential.

Stay Tuned, Stay Invested and Stay Wealthy !