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

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

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

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

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

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

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

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

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

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

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

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

Happy Investing! 13 13 13