Benefits of a concentrated portfolio

In investments, as in life, selective focus and a disciplined approach is the key to success. At any given point of time, there are thousands of companies actively traded on the market and even if only a small percentage of these shares qualified as “good buys”, you would still have a bewildering array of scrips to choose from. 

Warren Buffet is a proponent of the “concentrated portfolio” theory. He believes that a portfolio should not have more than 10 to 12 scrips. He says “I cannot understand why an investor elects to put money into a business that is his 20th favorite rather than simply adding that money to his top choices — the businesses he understands best and present the least risk, along with the greatest profit potential.”

John Maynard Keynes, the celebrated economist, echoed these sentiments when he observed “As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.”

Let us list out the advantages and disadvantages of a ‘concentrated portfolio’.

The advantages:

(i) Better research:

When you are forced to put a meaningful sum of money in one share, you are forced to do better research as to the prospects of that share. In a diversified portfolio with several scrips, where the amount invested in each scrip is small, you are lulled into a false sense of security that even if your decision to invest in that scrip was wrong, the consequences will not be that bad. It is better that you take an informed call than that you blindly put in money.

(ii) Focus on performance of each share:

When you have only ten shares to look after, you know exactly what each share is doing. You have your eye on what your average cost is, what the present price is and where it seems to be headed. It is easier to decide whether to hold, accumulate or dump that share.

(iii) Better returns:

If your research was proper, the results of your investment would yield better returns. In a too-diversified portfolio, even you had your share of winners, the returns would get diluted because your holdings in the winners would be small.

Disadvantages:

(i) Risk concentration:

The greatest criticism against concentrated portfolios is that it maximizes risk. E.g. suppose you have invested heavily in Enron. One company’s downfall can wipe out a large portion of your portfolio.

(ii) Too dependent on choosing the “right” share:

If you had to choose between Reliance and L&T or between Maruti Udyog and Tata Motors, what if you picked the wrong one?

Conclusion: The truth is in between. Obviously one cannot put all of one’s eggs in one basket. Diversification is important. But how much? A selection of 10 – 15 scrips can provide the balance between concentration and diversification without compromising returns.

Number of Stocks in Long Term Portfolio

There are two questions that will always haunt any long term investor. One is about what is a right asset allocation, and second is how many stocks one needs in a long term portfolio. I do not think there is any boiler plate type of answer to these questions. I believe while it is absolutely necessary to have an optimum asset allocation and multiple number of stocks, the actual percentage allocation or number of stocks will depend upon individuals risk profile, willing to learn, willing to spend time reading about companies, etc. In addition, these two aspects cannot be generalized and it cannot be a static numbers. These have to be dynamic and should change with the investing time period. Having said that following is my thought process for my long term portfolio.

In my case, I am looking to companies that pay dividends and have potential to grow over a period of time. It is my belief that as companies grow their earnings, they will grow their dividends (this addresses my cash flow or income objective). In addition, it will also be accompanied by capital appreciation (this addresses my objective of wealth accumulation). The question is how many companies should I include in my portfolio?

My vision is that I should have approximately 25 to 30 companies that occupy up to 75% of my investing portfolio. I view this as a core portfolio. The companies that I plan on including in this are the ones that are somehow associated with India’s growth story or ones that sell into Indian market.

• The rationale of using 25 to 30 companies is that I want to limit my dividend exposure to any single company to maximum of 5%. In one my earlier post, I have discussed the process of risk management and asset allocation.
• I do not expect 100% success rate in my company selection. Keep with this, I expect that 15 to 18 companies will perform as per my initial expectation and will continue to provide growing dividends over time. I also expect that they will continue to increase their value.
• The remaining 12 to 15 may or may not perform, and hence I will have to continue to make changes such as adding to existing ones, removing, and adding newer ones.

Furthermore, I tend to think that it would be nearly impossible for me to keep track and closely follow more than 30 companies. This is what my present thought process is. I will see how it works out and will adapt if necessary. One the benefit of long term investing is that you do not need to keep following the market daily or monthly; the companies that you select are not going to vanish or crash in such short period of time.

A portfolio-booster, but tread with care

With the Bombay Stock Exchange’s benchmark index, or Sensex, remaining flat for the last six months, many stock market investors, even first-time investors, are being advised that mid-cap and small-cap stocks could be a better bet. And with good reason.

While the Sensex and CNX Nifty have given returns of 1.55 per cent and 2.34 per cent, respectively, small- and mid-cap indices have risen 6.28 and 17.61 per cent, respectively. Over a one-year period, the numbers are quite stunning. The Sensex and Nifty rose 60.69 and 56 per cent, but mid- and small-cap indices delivered 104 and 129.50 per cent, respectively.

However, according to experts, while the experienced investor can look at such stocks or mutual fund schemes, first-timers should stay away. In fact, even an experienced investor should not go overboard. “Depending on your risk profile and investment goals, the allocation (to such funds) should be 10-30 per cent of your portfolio,” said Radhika Gupta, co-founder, Forefront Capital.

First-time investors who are yet to build a corpus can find themselves in trouble because these are high-beta stocks. In a falling market, mid-cap stocks or schemes will fall much faster and erode an investment’s value. Conversely, mid- and small-cap indices outperform the benchmark indices in a rising market. So, the mid-cap index could rise much sharper.

Therefore, investors need to exercise caution when looking to invest in this space. If you are not confident, take the mutual fund route. This is because most mid-cap schemes invest some part of the corpus in large-cap stocks, leading to some balance in the scheme. As per Value Research, schemes that invest less than 40 per cent of their assets in large-cap stocks are classified as mid-cap schemes.

Rajat Jain, chief investment officer (equities), Principal Mutual Fund, said: “In a rising market, if you buy one mid-cap multi-bagger, the returns could be much more than a mid-cap fund. But a fund has the potential to guard against any downside because of the presence of many other stocks that act as a hedge.”

Direct stock investors, though, need to hold these stocks for a longer period of time because it will help them to get better returns. Ajay Argal, co-head (equity), Birla Sun Life Mutual Fund, said: “A sufficiently long holding period, say three-five years, will help average out and book good gains.”

Before going for a scheme or stock, look at the performance for at least two years and, preferably, annual returns. A two-month return may be attractive, but there is no reason that the same trend will continue.

As for a mid-cap scheme, look at stocks and their respective market caps, say experts. The reason: A large number of mid-cap funds play safe by investing in large-caps — not a bad strategy if the market is going through troubled times.

But if the fund manager continues to play safe, even in a rising market, the scheme is not following its theme. Returns, as a result, will be capped. It’s better to go for a good diversified scheme in such circumstances. Also, if a mid-cap scheme has less than 20-25 stocks, it is betting too heavily on few stocks. It means too much of concentration and high risk.

Balance risk and returns in portfolio

The economy is slowly getting back to its preslowdown growth path. This is evident in factors like the strong Index of Industrial Production (IIP) numbers, positive consumer sentiments, job market cheer and signals from the government as well as the Reserve Bank of India (RBI). The cheer is slowly getting back in the financial and investment sectors. The stock markets and all linked investment instruments have yielded high returns over the last one year.

A good rally in the markets has helped in rebuilding the confidence of investors in the markets. However, investors should not look at investing only in stocks or equity-based instruments. They should look at various investment instruments to suit their needs and allocate funds accordingly.

Here are some of the instruments to consider for a portfolio:

Tax-saving options:
According to income tax laws, every individual can get a rebate in income tax by investing in certain instruments . For example, provident funds, NSCs, infrastructure funds etc. Since income tax drains a significant portion of an individual's hard-earned income, one should look at investing in various tax-saving instruments . Since the current financial year has just started , investors should look at planning their investments across various classes of instruments.

Insurance

A general thumb rule of insurance is an investor should have an insurance/life cover of at least five to eight times his annual income. Life insurance is available in term and endowment plans. One should strike a balance between the term and endowment plans to optimise investment and risk cover. Insurance schemes taken at a younger age come with smaller premiums and therefore , it is advisable to go for it during the early stages of life. Health insurance is another area which one should consider for himself and family.

Debt instruments

There are various classes of debt-based investment instruments available in the market. For example, deposit schemes (bank fixed deposits, post office deposits, company deposits), debt mutual funds etc. Debt-based instruments secure the principal amount invested in the scheme and most schemes guarantee returns as well. Inclusion of debt-based investment instruments provides stability to a portfolio and reduces the overall risk. However, the percentage of allocation towards equity and debt-based instruments should depend on the risk profile of the investor and a study of the prevailing market conditions.
Equity-based instruments

There are many schemes and investment instruments available in the market in this category. They are of two broad categories - direct investments in stocks or indirect investments through equity-based mutual funds. Investors who have time and an understanding of the markets should look at investing directly. Others should look at investing through mutual funds.

Mixed schemes

There are many mixed schemes available in the market that provides the flavours of more than one of the investment classes. For example, equity-linked insurance schemes, equity plus debt schemes etc. These schemes are a good way of balancing investments. One should understand the various terms and conditions well before investing in such schemes.

Commodities

Investments in commodities , especially gold, have picked up in recent times. A gold-based investment adds another dimension to the portfolio. It acts as a debt instrument and usually provides good returns during uncertain economic conditions . The prospects of investments in gold look good on the back of the ongoing economic uncertainty in the European markets.

SP Tulsian's sub Rs 50 stocks to power your portfolio

SP Tulsian of sptulsian.com is bullish on Tourism Finance, Ugar Sugar and Donear Industries. He advises investors to buy into these sub Rs 50 stocks.

Donear Industries

Donear Industries is into textile and they have a very strong brand Donear Suitings for which Yuvraj Singh is the brand ambassador. The company has set up a new textile plant in Surat with an investment outlay of about Rs 220 crore for which they have gone for a borrowing of about Rs 120 crore. Prior to that it was a debt-free company and it has been doing quite. It had given bonuses in last five-years with a very high promoter stake of 90%, which the stock exchanges has asked them to reduce to 75%.

But since the Surat project of Rs 220 crore, which had gone onstream just six-months back, the company have been providing depreciation on the written down value method while all the listed companies are providing depreciation on the straight-line method. This is was because of the policy having adopted for written down value method. The depreciation burden has been quite high and that has resulted into the net loss.

If the company would have opted to provide depreciation on the straight-line method, there would have been net profit. If you see their H1 performance, they had a topline of close to Rs 115 crore in which Surat project has not contributed much – with a net loss of about Rs 5.80 crore and in this Rs 5.80 crore the depreciation element was at about Rs 17.5 crore. So if I take the cash profit element, the company had posted a cash profit of about Rs 11 crore for six-months on a equity of close to about Rs 10.40 crore.

The share has a face value of Rs 2 and now this Surat project will start contributing to the topline as well as to the bottomline. Maybe, I don’t know what would the logic will be, it may prevail upon the management to opt for the change in the depreciation policy and if they opt to do that – there would be a reversal of depreciation, which can result in a huge write back of the depreciation which can improve the bottomline.

But even if you take on a fundamental basis with a market cap of the company at about Rs 165 crore, as I said the debt is only to the extent of Rs120 crore – this company with an enterprise value of Rs 300 crore is ruling at a very low valuation. Their brand itself has been estimated in the past at about close to Rs 130-140 crore.

There is good upside. We have been seeing renewed interest coming in the textile stocks. I think if someone can take a call on this stock with six months view, one can expect at least 60% return from hereon.

Tourism Finance:

Tourism Finance is promoted by – one can call it a semi public sector undertaking (PSU) with IFCI holding 32% and 25% held by State Bank of India (SBI), Life Insurance Company (LIC) and four other insurance companies.

The company is into providing finance to tourism related projects. It has been giving a consistent performance. In fact this has not been in the news. If you look at FY09, they had an EPS of about Rs 3.6 which is likely to be maintained for FY10 as well.

The book value of this share at present is about Rs 37 and I think it is ruling at a price to book of 70% with a price of about Rs 26. We have seen all – whether it is small PSU banks or maybe financing or lending institutions to the power sector – have appreciated in the last six months by about 50-70%.

But I do not think that this has come into focus of analysts or maybe even investors. If somebody can take a call, I don’t think that there is any downside. The way we have seen a run up especially in stocks like LIC Housing and GIC Housing, this can also come on the radar.

IFCI holds a 32% stake and since IFCI is also regaining its health and again loaded with news, this could also be tagged along with the company or we may see a good restructuring or maybe even infusion of fresh funds to enlarge the level of activity.

If all those things can happen, I won’t be surprised if the company surpasses Rs 5 EPS for FY11. As I said, the book value is close to Rs 38 now which could rise to about Rs 42-43 by then. The stock has very good potential to appreciate by about 50-60% in the next six months.

Ugar Sugar:

Ugar Sugar has not participated in the run up for a simple reason that for September 2009, the company had posted a net loss. This has been scaring investors and keeping them away. The state with the most advantage in the sugar sector is Karnataka because there you have a recovery of 11.5-12% plus you are not seeing such a hue and cry for the sugarcane price as well.

All the mills, whether it is Ugar or Renuka Sugar are paying a price of about Rs 240-250 for a recovery of 11.5% which translates to an equivalent price with 10% recovery to about Rs 220.

Now this company has recently commissioned a new mill of 2,500 tonne in this season. The old mill at Ugar had a capacity of about 10,000 tcd. If you take any sugar mill in the country, I do not think that anyone will be able to exceed the production what they have done in the previous years because of the overall low production of sugar expected in the country.

However, this company is likely produce about 17 lakh bags of sugar for this season against 15.5 lakh in the previous year.

Apart from that they have 56 megawatt (MW) cogeneration capacity. Even the debt portion of the company is not very stiff. It is at about Rs 130-140 crore which has largely realized to finance the working capital. The December quarter results are likely to be quite good. The company should be able to post a profit after tax (PAT) of about Rs 36-40 crore on an equity of about Rs 11.25 crore, which is at present.

So once the results are out for the December quarter, we all know that even in the March quarter there will be more sweeteners because of the increase in prices and operation of the cogeneration plant. These two quarters can drastically change the view on the stock. I won’t be surprised if this stock reaches about Rs 35 maybe by April end in this year.

The Multibagger portfolio

I have following thought, if we keep the investment horizon of 3-4 years then real estate will be a definitly a multi-bagger. Though Prices have corrected sharply and evaluation is cheaper due to pessimistic outlook for heavy debt, high interest rates and overall slow economic growth projections etc. But i feel it will rebound due to reasons are as below:

1) Indian land on per capita basis is small as we are billions i.e double of USA population while our land area is half of USA. This example is to emphasise the point only, actual data may be slightly different.

2) Housing needs for mainly big cities will be always there as expansion rates of city is not fast. Since interest rates are going up so does rentals also. Sooner or later tenant will find buying home again a better option than continuously paying high rentals.

3) Our banks are safer unlike USA and Subprime game will not happen because in India Loans are given against individual not property baught contrary to US.

4) Since stock mkt is not enthusiastic so people who have cash will revert to real estate as safer heaven for investment though caustiously. For example what majority will do if they have say a cash lying in bank to the tune of 10-15 Lacs, Buy shares i dont think so majority will dare so.

5) Debt pressure will force builder to offer attractive prices for thenew home buyers.

So it looks like that real estate for housing sector players is very safe at the moment where downside is near zero while upside looks tempting.

Only place where i am not strong is how to evaluate the Real Estate companies. Typical example is low debt , land bank etc but still not convincing for a conservative investor like me. I mean even if some XYZ company reports that they a huge land bank but we never know whats the real value of th land i.e is it in prime location!

Any help from senior member will help here to zero in on for companies in real estate segment where goddess Laxmi is awaiting us.

Portfolio - Deep Value Stocks

THEY are believed to carry hidden treasure on Dalal Street. While investors call them the low-lying unpolished gems of the stock market, brokers say there are big bucks to be made if you can identify these stocks early. No prizes for guessing this, we are talking about deep value stocks which can do wonders to one's portfolio when market re-assesses them.

According to analysts, a deep value stock can be defined as something which is low priced in relation to the margin of safety the stock provides, to limit losses when a mistake is made. Lets get some insight into how to identify these stocks, what should be your ideal portfolio allocation and reasons behind their low valuations in the market.

SLEEPING GIANTS

They are like any other stock traded on the exchange, but there is no hypothetical understanding of them. A section of traders on the Bombay Stock Exchange even call these stocks as 'sleeping giants'.

There are two ways in which you can identify a deep value stock.

First, what Benjamin Graham recommends for the defensive investors in his 1949 classic - that the stock price should not be more than 15 times its average earnings per share over the past three years and the overall PE of the portfolio should not be more than 13. Or

Second, the stock should be trading below its 10-year median PE. The other things to be kept in mind is to stick with companies that have a long history of consistent profit growth and steady dividend payouts and the fact that not every cheap stock would turn out to be a bargain. He believes that PSU banks like Oriental Bank of Commerce, which is trading at a PE of 5.6 with book value of Rs 240 for FY09, is a perfect example of a deep value stock. "In a growing economy like India, banks should do well as the GDP expands," he reasons.

These stocks generally remain neglected by the stock markets. The best (or you may call it worst) part is that people know it's a great story but still they don't want to touch it. If one saw the real estate boom in India five years back and bought into Unitech, his portfolio returns would have multiplied phenomenally.

As far as portfolio allocations are concerned, analysts feel that an investor could invest 80% in growth stocks and 20% in value stocks (after keeping some cash balance or investments in fixed income instruments). In case of a pure deep value investor, that typically 80% the investment of investible funds should be in these stocks and 20% of the funds should be kept aside for fixed income instruments or cash balance. "However, a hybrid investor should follow a strategy in between the two. The basic principle followed is the Pareto's principle - the 80/20 rule.

SOW TO REAP

Though opinions differ on an ideal investment horizon, most analysts agree that it should not be less than a year and which could extend up to three to five years to reap big dividends. The first thing an investor needs to do is to ask himself whether he is a speculator or an investor. "If he is a speculator, then there is no chance for him to stay in these stocks. If he is an investor, a time period of three to five years is what makes sense. However, if the stock does not give the required return even after holding for three years, there is something more than one 's own understanding about the stock. In such a scenario, you could sell the stock and move to something else. However, if there are compelling reasons, you could continue holding the stock.

On why these stocks have ridiculously low valuations the market sometimes tends to overlook an industry. And usually these stocks are not popular with brokers. Apart from that, analysts explain that there could be reasons such as high transaction impact costs (small caps can have transaction impact costs as high as 30-50% ) and fear of uncertain events or adverse macro environment conditions such as rise in oil and interest rates, government policies, etc. You must also understand that fear always resides in the near term. And that's why there is lower visibility of the future even though the broad picture remains intact in these cases.

UNPOLISHED GEMS

Here are some deep value stocks which experts feel have great potential

ONGC - The stock is in a sector which is very strategic in nature, has a history of good profitability and dividends and trading at ridiculous valuations.

MAHINDRA & MAHINDRA AND MARUTI - The industry is in a growth phase in India as opposed to a saturation phase in the western world - trading at a PE of around 10 for FY09

LIC HOUSING FINANCE - A company growing at 25-30% available at a PE of 7x for FY09 and EPS of Rs 55. Book value of the company in FY09 would be Rs 260 and ROE would be 20% (Assuming no dilution)

BIRLA CORPORATION AND INDIA CEMENTS - Trading at single digit price multiples for FY09. Overall infrastructure spending is close to $500bn in the 12th five year plan and that we are nowhere close to capacities that exist in China

HDIL - It is trading at a considerable discount. The infrastructure sector has strong revenue visibility, and growth opportunity in the target markets with possible value unlocking opportunity.

SBI - The stock is trading at single digit multiple for FY10E. Apart from holding largest land bank holdings, it has an x-factor too - human resource valuation

General Portfolio Policy

This is one of the MOST important thing that you need to iron out if you want to put some structure around your investment philosophy. At the minimum, some thought needs to be given to each of the element given below:

1. Asset Allocation: How much to put in stocks and how much in cash/debt funds?
2. Diversification: How many stocks should you own?
3. Buy Rule: What is the trigger for buying a stock?
4. Bet Size: Once you found a good stock (any which way you care to define good), how much do you allocate for it? Do you want to put equal money on different stocks or do you want to bet heavily on stocks that you really like?
5. Sell Rule: What is the trigger for selling a stock? How much to sell?
6. Avg. Down or Ignore or Cut loss: Do you want to average down on a falling stock or do you want to cut your loss? For either what is the threshold for action? Or would you prefer to completely ignore it and do nothing?
7. Default Strategy: What is your default strategy when no opportunities are available?

This is one area where I have experienced a broad range of thoughts and is very dynamic. Whenever I get a stable portfolio policy (which means that for at least one week there has been no tweaking of any parameter), I recorded it along with a version number. Right now I am on the 17th version!!!!

In my opinion it is well worth spending time to develop a portfolio policy thatworks for YOU. It should be something that you are comfortable with and something that goes with your character.

This might sound like a lot of work and it is - but the payoff is well worth it.

Portfolio - Rethink

Solo Companies:	Remarks
Financial Technologies	No competitor in commodity trading
Honeywell Automation	Best security solutions
Hindustan Dorr-Oliver	Unique business model
Mundra Port	Only listed port company
Niche Companies
Bartronics	Huge order book
Opto Circuits
GEI Industrial Systems	Best business model
MIC Electronics
Nitin Fire Protection
Moser Baer	Giant in solar space
Ion Exchange India	You need patience
Geodesic
Praj industries
Navin Flourine International
Petronet LNG
BF Utilities
Time Technoplast
Bilcare
eClerx
3M India
Manugraph India
Micro Inks
Velsuvius
Astra Microwave
Zicom Security
Compact Disc
Education:
Educomp Solutions	Growing on steroids
Core Projects and Technologies
Everonn Systems
3i Infotech
NIIT
Aptech
Electric Vehicles:
Tube Investments of India
Electrotherm	Largest electric vehicle manufacturer
Wind Energy:
Suzlon Energy
Indowind Energy
All-Rounders:
Larsen and Toubro	Best professionally managed company
Reliance Infra
Punj Lloyd	It may surprise us in 2010
BHEL	Government support
GMR Infra	Rumors of Congress scion stake
GVK Power and Infra
Lanco Infra	Huge political clout
Adani Enterprises
Siemens India
Aditya Birla Nuvo
Jai Prakash Associates	Safe all-rounder
PSU Power Companies:	Best stocks for conservative investors
Rural Electric Corporation
Power Trading Corporation
Power Finance Corporation
BHEL
NTPC
PowerGrid
NHPC	Invest in IPO
Power Utilities:	Huge potential for massive growth
Jyoti Structures
Kalpataru Power
KEC International
Voltamp Transformers
KEI Industries
Indotech Transformers
Usha Martin
Transformers and Rectifiers
Genus Power Infrastructure
Power:
Areva T&D	Nuclear heavyweight
Nyeveli Lignite Corporation	Stake sale. Will DMK allow?
Reliance Power	You need patience
Adani Power	Invest in IPO
NHPC	Invest in IPO
Tata Power
BGR Energy
Crompton Greeves
CESC
Jindal Steel and Power
Power Services:
ICSA	Safe business model
Kalyani Systel
Rating Agencies:	Must for conservative investors
ICRA
CRISIL
Infrastructure:
Alstom Projects	Wonderful stock
Nagarjuna Construction	Andhra Government backup
IVRCL Infra	Huge orderbook
Sanghvi Movers	Largest crane company in india
Simplex Infra
Sintex Industries
Patel Engineering
Unity Infra
HCC	Very good Q4 results
Gammon Infrastructure
IRB Infrastructure	Very good Q4 results
Madhucon
Elecon Engineering
Action Construction
Sadbhav Engineering
Maytas Infra	AP Government may save it
Consolidated Construction
McNally Bharat Engineering
JMC Projects India
C and C Constructions
Marg
Kirloskar Oil Engines
Atlas Copco
Ahluwalia Contracts India
Railways:	Railway budget time
Kalindee Rail Nirman	L&T has huge stake
Thermax
Titagarh Wagons
Stone India
Oil and Gas:
Reliance Industries
Cairn India
Shiv Vani Oil and Gas
SELAN Exploration Technologies
GAIL India	Only for conservative investors
Indraprastha Gas
Gujarat State Petronet
Dolphin Offshore
Aban offshore
HPCL
BPCL
IOC
ONGC
Garware offshore
Oil India	Invest in IPO
Everest Kanto Cylinder
Gujarat Gas
Kirloskar Pneumatic
Castrol India
PSU Banks:
State Bank of India	Giant in the making
Bank of India	Fast growing
Bank of Baroda	Superb Q4 results
Punjab National Bank
Karur Vysya Bank
Union Bank of India
Oriental Bank of Commerce
Corporation Bank
Andhra Bank	Wonderful Q4 results
Indian Bank
Allahabad Bank
Finance Powerhouses:
Reliance Capital	Planning for insurance IPO
HDFC
Indiabulls Financial Services
IFCI
IDFC
Bajaj Holdings and Investment
Private Banks:
ICICI Bank
Axis Bank	Best private sector bank
Yes Bank	Good growth
HDFC Bank
IndusInd Bank	Turnaround story
Federal Bank
Dena Bank
ING Vysya Bank
Kotak Mahindra Bank
Insurance:	Waiting for Reforms
Max New York Life Insurance
Reliance Life Insurance	IPO but bad Rpower memory
Finance Companies:
Shriram Transport Finance	Best managed company
SREI Inftastructure Finance
LIC Housing Finance
Broking and Financials:	Bad time but contra picks
Religare
Edelweiss Capital
Indiabulls Securities
Motilal Oswal
India Infoline
Agricultural Stocks
Rallis India	Best Agricultural stock
Lakshmi Energy and Foods
Jain Irrigation
United Phosphorus
KS Oils
Temptation Foods
Agrotech Foods
Karuturi Global
Ruchi Soya Industries
Sugar Stocks:
EID Parry	Cheap sugar stock
Shree Renuka Sugars
Bannari Amman Sugars
Balrampur Chini Mills
Bajaj Hindustan
Seeds:	Good growth opportunities
Advanta India
Monsanto
Bayer Cropscience
Kaveri Seeds
Fertilisers and Chemicals	Good hopes on this sector
Chambal Fertilisers	Favorite of mutual funds
Nagarjuna Fertilisers
Coromandel Fertilisers	Favorite of Mutual funds
GNFC
Rashtriya Chemicals
Tata Chemicals
Zuari Industries
Gujarat State Fertilisers
Gujarat FlouroChemicals	Unique business model
Deepak Fertilisers	Wonderful Q4 results
Himadri Chemicals
PSU Companies	Best stocks for conservative investors
BEL
BEML
Container Corporation
Dredging Corporation
Telecom:	VAS Companies will rule
Bharti Airtel
Reliance Communications
MTNL
Tulip Telecom	Good business lies ahead
OnMobile
Tanla Solutions
Tata Communications
Idea Cellular
Geodesic
Media:	Over Hype but less returns
Sun TV
UTV Software
HT Media
Jagran Prakashan
Deccan Chronicle
Zee Entertainment
Zee News
TV Today
TV18
Network 18
Cement:
ACC
Shree Cement
Panyam Cement
India Cements
Grasim
Ultratech Cement
Kesoram Cement
Madras Cements
Steel:
SAIL
Jindal Steel and Power
JSW Steel
Tata Steel
Bhushan Steel
Mining and Metals	Will give good returns over long term
NMDC
Gujarat NRE Coke
Hindustan Zinc
Sesa Goa
Sterlite
NALCO	Sure disinvestment candidate
Hindalco
NavBharat Ventures
GMDC
Rain Commodities
Goa Carbon
Pipes:	Strange sector. All are good stocks
Welspun Gujarat
PSL Limited
Maharashtra Seamless
Jindal SAW
Real Estate:	Will rule once again in 2010-11
DLF
Unitech
HDIL
Sobha Developers
Mahindra Lifespaces
Indiabulls Realestate
Retail:	Long term potential. No doubt.
Pantaloon Retail
Titan Industries
Trent
Vishal Retail
Jewellary:
Gitanjali Gems
Rajesh Exports
Shipping and Ports:
Mundra Port	Must have stock in a growth portfolio
Bharti Shipyard	Best stock for long term value investors
ABG Shipyard
Mercator Lines
Shipping Corporation of India
GE Shipping
SEAMEC	Wonderful Q4 results
Logistics:
Transport Corporation TCIL
Gateway Distriparks
Arshiya International
Blue-Dart
GATI
Auto:
Hero Honda	Best auto stock but valuations
Mahindra and Mahindra
Maruti Suzuki India
Tata Motors
SKF India
Punjab Tractors
Exide Industries
BL Kashyap
Bharat Forge
Bosch
Eicher Motors
Amararaja Batteries
MRF
Apollo Tyres
Amtek Auto
Ashok Leyland
IT Stocks
Mphasis	Best IT stock
Mind Tree
Tech Mahindra
Oracle Financial Services	MNC support
Infosys
Wipro
TCS
HCL Infosystems
Allied Digital Services
Infotech Enterprises
Cummins India
Rolta India
Pharma and Helath	MNCs are must for long term investors
Pfizer India
Novartis India
Sun Pharma
Glenmark Pharma	Closely watch this scrip
Fresenius Kabi Oncology	May be a de-listing candidate
Lupin
Glaxo Smithkline Pharma	Best for conservative investors
Cipla
Atrazeneca Pharma
Fortis Healthcare	Good growth but valuations...
Ranbaxy Laboratories	Best Contra stocks for long term
Cadila Healthcare
IPCA Laboratories
Aventis Pharma
Biocon	Only talk without result
CRAMS:
Divis Labs
Dishman Pharma
Nicholas piramal
Jubilant Organosys
FMCG:	Enter into them when stocks are falling
Asian Paints
Marico
Nestle
HUL
GSK Consumber Goods
Godrej Consumber Goods
Dabur India
Pidilite Industries
Colgate Palmolive
Tata Coffee
Britannia Industries
Jyothy Laboratories
Air Conditioners:
Voltas
Blue Star
Tea:
Tata Tea
McLeod Russel
Paper:
Ballarpur Industries
Orient Paper
Travel and Hospitality:
Indian Hotels	Best Contra stock for conservative investors
EIH Hotels
Country Club India
Hotel Leela
Taj GVK Hotels
Airways:	Glamorous sectors are worst for investment
Jet Airways
Kingfisher Airlines
Beverages:
United Breweries
United Spirits
Radico Khaitan
Champagne India
Shah Wallace
Penny Stocks:	At your own risk
IKF Technologies
Bisleri Gujarat
Textiles:	Famous sector in 90's but outdated now
Bombay Rayon Fashions	Best stock in worst sector
Alok Industries
Himatsingka Seide
Raymond
Bombay Dyeing
Arvind
Hanung Toys and Textiles
Ceramics:
Carborundum Universal
Entertainment:	Good days will come
Adlabs
PVR
Speculative History:
Core projects
Reliance Petroleum
Pyramid Saimira
Jai Corp
Maytas Infra
RNRL
JPL Securities
Teledata Informatics
Adlabs
RIIL
Akruti City