Your own money manager

Pick any of these four books and you will be well on the road to becoming an investment expert

Today’s column is meant for the DIY folks. A number of young and not so young readers of this column had asked me for inputs to get started in investing. Earlier, we saw that investing in index mutual funds is a no brainer. But some of you may not want to outsource all the adventure that comes with investing. You may want to do the actual investing yourself instead of handing over your money to the “experts” — the professional money managers. You know what? This is actually not such a bad idea.

Today, I am going to recommend four books. Understand the contents of these four books and you will be way ahead of 90% of the crowd — and some of this crowd includes professional money managers.

Take your pick

The first recommendation is The Little Book that beats the Market by Joel Greenblatt. This is really a little book and in this book, the author — a successful hedge fund manager, teaches his schoolgoing son how to invest. It is delightfully simple and yet it doesn’t dumb down the reader. You can start your investing in education by reading this book.

The next book that I recommend is One up on Wall Street by the legendary, now retired fund manger — Peter Lynch. In this book, Peter shows how to use the insights that you have as a consumer of products and as an observer to trends to buy stocks that will make you money. You are seeing Maruti Suzuki cars all over the road? You know what stock to buy! You are impressed with the customer service of XYZ bank? Are you seeing a huge waiting list for buying a particular product? You know these companies are going to be hot investments. This book again offers lot of insights and shows that investing is primarily a common sense game that even school students can excel in. The next book on this list is The Intelligent Investor by Benjamin Graham. This is a book that inspired Warren Buffet to successfully launch his investment career. If it is good enough for Warren, surely it is good enough for us? Once again, you will find a lot of practical wisdom and insights that you can straight away put to use. 

The final book in this list is A random walk down Wall Street by Princeton academic Burton Malkiel. An investment classic that has seen several editions, this book is still evergreen and is full of wicked humour. But with all the jokes in it, it is a really serious book and is a must read if you prize critical thinking.

So, dear readers, hopefully you will be writing to me about the insights that you gained reading these books. Of course, you good people will also thank me for my recommendations. The writer is an alumnus of IIM Bangalore and the co-founder of Money Wizards.

Here are 10 investing thumb rules

http://money.cnn.com/tools/savingscalc/savingscalc.html

Here are 10 such rules: 

HOW FAST WILL YOUR MONEY GROW 

Rule of 72 (double) 

This tells you in how much time your money will double. Divide 72 by the interest rate at which you are compounding your money, and you will arrive at the number of years it will take to double in value 

If the interest rate is 9% then your money will double in 8 YRS (72/9=8) 

Rule of 114 (triple) 

Use this to estimate how long it will take to triple your money. It works the same way as the rule of 72. Divide 114 by interest rate to know in how many years 10,000 will become 30,000 

Rule of 144 (quadruple) 

Similarly, this tells you in how much time your investment will quadruple in value. For instance, if interest rate is 12%, 10,000 becomes 40,000 in 12 years 

These rules provide only a rough idea. The actual amount after compounding may vary 

HOW FAST WILL YOUR CORPUS ERODE 

This is a useful rule for predicting your future buying power. Divide 70 by current infl ation rate to know how fast the value of your investment will get reduced to half its present value. This is especially useful for retirement planning, as it affects the way you set up your monthly withdrawals. However, do remember that infl ation rate varies from time to time. 

Inflation rate of 7% will reduce the value of your money to half in 10 years 

Rule of 70 

This is a useful rule for predicting your future buying power. Divide 70 by current inflation rate to know how fast the value of your investment will get reduced to half its present value. This is especially useful for retirement planning, as it affects the way you set up your monthly withdrawals. However, do remember that infl ation rate varies from time to time 

Inflation rate of 7% will reduce the value of your money to half in 10 years. (70 / 7= 10 years) 

DO YOU CONSIDER YOURSELF WEALTHY? 

A rule-of-thumb formula used by Thomas J Stanley & William D Danko in ‘The Millionaire Next Door’, a book that studies self-made American millionaires, can help determine if you are one 

(Age x pre-tax income) / 10 = net worth 

The logic behind the formula is that the older you are and the more money you make, the more net worth you should have. Dividing by 10 is a rule-of-thumb that fi ts American conditions. So if you are a 35-year-old living in the US with an annual income of $6,00,000 a year, your net worth should be $2.1 million [(35 X 6,00,000)/10 = 21,00,000] for you to be considered wealthy. If you are 20 years old and you make $3,00,000 a year, you would be wealthy if your net worth was greater than $6,00,000 

Indian context 

Indian financial experts argue that a divisor that’s closer to 20 would be more realistic in the Indian economy. According to them you should use a sliding scale linked to age. At age 40, someone earning 7.5 lakh a year should have a net worth of 15 lakh. For a 20-year-old, the divisor should be 25. Hence, a 20-year-old earning 3 lakh a year should have a net worth of 2.4 lakh 

THE OTHER RULES 

The 10, 5, 3 rule 

This is a neat little rule that states that you can expect returns of 10% from equities, 5% from bonds and 3% on liquid cash and cashlike accounts 

The emergency fund rule 

Put away at least 3-6 months’ worth of expenses in a liquid savings account to ensure it is available at short notice 

100 minus your age rule 

This rule is used for asset allocation. Subtract your age from 100 to fi nd how much of your portfolio should be allocated to equities 

Age 30 

Equity : 70% 

Debt : 30% 

Age 60 

Equity : 40% 

Debt : 60% 

Pay yourself first rule 

Right from your first salary, put away a little for your retirement. Experts say 10% of your income should go into this. It is important to increase the amount as your income rises over the years 

If every month you invest Rs 5,000 in a plan that grows 8.5% annually and increase your investment by 10% every year, after 30 years you will have Rs 2.5 crore 

4% withdrawal rule 

How much should you withdraw after retirement? Use the 4% rule to ensure that your corpus outlasts you. Here’s the calculation for a post-retirement monthly income of Rs 33,000 (Rs 4 lakh a year, or 4% of the corpus) which increases 7% every year to account for inflation 

If every month you withdraw Rs 33,000 you need a corpus of Rs 1 crore to sustain monthly withdrawals for the next 27 years if the corpus earns 7% and inflation is at 7% 

Financial planner: Hemant Beniwal, a Jaipur-based certified financial planner

Misselling of financial products is visible not just in India, but in other countries too.

Sharma suspected that his investments in Singapore were not going too far. “I used to continuously observe the high charges that these funds were charging me, and after accounting for those, my money wasn’t really appreciating the way I had originally expected,” he said. 

The Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned at School, by Andrew Hallam. The book is a story by and of author Hallam, who was a school teacher but became a millionaire years before his retirement by following simple investment rules. Not only did Sharma decided to gift the book to his son, saying, “I didn’t want him to commit the same financial mistakes I did,” he also read the book himself. The book sensitized him to the importance of costs in mutual funds. “That’s when I realised that the mutual fund investments I had made in Singapore were not just costly but had huge exit loads if I were to withdraw them at any time. All these penalties were close to 35% of what I had originally invested,” he said. Scared but intrigued, Sharma read more books on investing.

He zeroed in on Hemant Beniwal. “I was sure that I wanted a planner who would charge me. Someone who’s answerable to me. In Singapore, my financial advisers didn’t charge me, but look at the costly investments they got me into,” he said.
First principles
Beniwal said that although Sharma was well-read when they met, his approach needed some key tweaks to suit the Indian scenario.
For instance, low-cost index and exchange-traded funds may work abroad, but not necessarily in India. “As he had sold his Singapore house and reinvested the proceeds in non-resident external account deposits, he had a very high allocation to bank fixed deposits and little in equity funds,” Beniwal said.
Beniwal also realised that Sharma had not planned for his retirement adequately, back then. Faced with a goal of funding his son’s higher education and wedding, Beniwal made Sharma realize that it would be better to part-fund his son’s education and not entirely. “He told me that I could never get a loan against my retirement. That hit me hard. I realised it would be better for my son to take up a part-time job or scholarship, in addition to my help,” said Sharma, who wants to be financially independent and not depend on his son to take care of him and his wife in their old age.
Clearing up his insurance policies—even though he lost money in them—was for the better, Sharma and Beniwal realized.
Another change he made was that, from holding about eight credit cards in Singapore, Sharma doesn’t own any now. Also, his family is involved in financial planning and the portfolio steers away from gold and real estate.
At 49 today, Sharma, who heads the metals division of his company in India, sits 40% in equity and equity mutual funds and rest in fixed deposits. “It’s still not an ideal allocation, but it’s much better than before,” he said.

Shopping list for 2017: Shares to stock up for the New Year

After the demonetisation chaos, the government is expected to be proactive in terms of policy actions ­ both in and outside the Budget. The Indian economy is expected to be back on the recovery path from the second half of 2017 as the liquidity crunch wanes and the pent-up demand comes back to the fore. 

Most market participants say Indian equities will perform well in 2017, and the Nifty, which gave negative returns in the past two consecutive years, has the potential to scale new lifetime highs. Here are some of the best picks for the next year from leading brokerages --Compiled by Rajesh Mascarenhas 

IIFL 

Maruti Suzuki Target Rs 6,100 

We are bullish on Maruti Suzuki on account of strong volume growth despite demonetisation. Significant waiting period, enhanced capacities along with new product launches will ensure continued volume outperformance. Low dealer inventory will lead to higher wholesales vs. retails sales. At our target price, the stock is trading at 22xFY18E. 

City Union Bank Target Rs 156 

We believe Citi Union Bank is an outperformer in terms of capitalisation, asset quality and returns (ROA). This is driven by its niche business model (working-capital lending), healthier margins, superior non-interest income and lower cost ratio that resulted in healthier ROA compared to its peers. We are expecting the PAT to grow at 20% CAGR over FY16-18E while ROA and ROE to be at 1.5% and 18%, respectively . The stock is currently trading at 2x PB FY18E. 

Navneet Education Target Rs 135 

Navneet Education is one of the most profitable education companyies in India. Supported by aboveaverage monsoon, we expect a recovery in sales from the contribution of Maharashtra business. The stationery business is expected to improve due to focus on export business. Considering the high ROE and strong growth going forward, we expect strong earnings growth in FY18. At our target price, the stock is trading at 18xFY18E. 

CESC Target Rs 750 

We are positive on CESC due to sector beating earnings growth of >25% CAGR till FY19E on the back of commencement of Chandarpur IPP PPA (600MW) and stable Kolkata utility business. Lower fuel costs and efficient energy sourcing from Haldia plant will improve margins. The stock is currently priced at 5.5x FY17E EV EBITDA. Any monetisation of non-core retail business will lead to further triggers for the stock. ONGC Target Rs 230 We are bullish on ONGC as rampup in production from the redevelopment projects in Mumbai High (North & South) will help in volume pick.Benign crude prices will ensure minimal or zero underrecoveries. We believe that the net realisations will rise in FY18 leading to decent outperfor mance going forward. 

 

Centrum Broking 

Deccan Cement Target Rs 1,290 

DCL has 50 years of limestone reserves, 18MW of CPPs (~70-75% captive) and easy access to fly-ash and coal. Its manpower and capital costs are one of the lowest in the industry . Its well-diversified sales across entire south and Maharashtra region helped DCL generate higher EBITDAMT and a steadier EBITDA margin compared to its peers. Its return ratios are currently among the best in the industry and are sustainable on its continued strong OCFFCF. DCL has used its strong FCF to de-lever its balance sheet. 

Fiem Industries Target Rs 1,475 

Over the years, FIEM has reported robust top-line growth and best-inclass margins. Further, the company has not only gained traction with existing clients but has also been adding new clients and products. Extensive R&D set-up has enabled FIEM to offer superior design and development capabilities to its customers. FIEM is the first company in India to have an NABL accreditation for photometry lab to test automotive lamps. 

IFGL Refractory Target Rs 220 

There is a strong opportunity for IFGL to gain steady market share globally with its strong FCF generation and low leverage with consistent payouts. It has well-funded asset base providing large incremental growth opportunity at very little capex. 

Techno Electric Target Rs 445 

Our inference of average RoE of 35% and RoCE of 86% in the EPC business. The company's debtequity is among the lowest in the industry . Its strong niche in substation EPC works and ability to compete with large MNCs has helped the company win contracts and deliver on profitability and growth. 

Apar Industries Target Rs 705 

Apar, with its dominant market share and diverse product mix of conductors, transformer oil and E-beam cables, will be the key beneficiary of the uptick in the T&D capex cycle. Cost efficiency, pricing discipline, near exhaustion of low margin export orders, efficiency in working capital cycle and FCF yield of 10% at FY18E makes it attractive. 

Kotak Securities 

NIIT Target Rs 103 

The initiatives taken by the new management have led to consistent improvement in revenue growth and earlier-than-expected benefits on margins over the past six quarters. We remain optimistic on the prospects of NIIT.NIIT has launched new programs in S&C business and added new clients in CLS, which should support future growth. 

Mirza International Target Rs 119 

Mirza intends to grow Redtape business by aggressive marketing and increasing focus on online business. It is also planning to foray in the affordable segment under a new brand, Bondstreet, in the domestic market. It intends to penetrate this segment by offering quality products at a competitive price to its competitors. MIL has a fully integrated model and has a track record of generating 20% plus RoCE and positive operating cash flows, based on robust margins and control over working capital. 

Mold Tek Packaging Target Rs 260 

Mold Tek Packaging is a leading manufacturer of high-quality rigid plastic packaging products nd a pioneer is Inject Mold Labelling (IML) for lubricants, paints and FMCG industry . Mold Tek Packaging stands to gains in the coming years from the increasing share of IML, The stock trades at 12.5x FY18E earnings, and on EVEBITDA, It trades at 7.5x FY18E. 

Natco Pharma Target Rs 750 

Strong R&D capabilities and focus on creating a niche product portfolio sets Natco apart from its peers. For the coming years we expect both US and domestic formula tions to further lead the growth and enable the company in posting 58% revenue CAGR and 87% PAT CAGR over FY15-18E. The stock we believe will continue to trade at higher multiples given the events lined up over the next 6-12 months. 

PNC Infra Target Rs 142 

PNC has track record of timely and before schedule completion of projects and received early completion bonus. It has robust current order book of Rs.62.2bn.This gives high revenue growth visibility for the next 2-3 years. It has consistently enjoyed margins of about 12-14%, which is good for road-construction company. 

Motilal Oswal Securities 

Tata Motors Target Rs 610 

JLR volumes and revenues expected to grow at CAGR 12.5% and 15%, respectively , over FY 17-19E, driven by new product launches.This coupled with mix improvement and full benefit of forex would drive realisations and revenues. JLR's EBITDA margins expected to improve sharply from Q2FY17 levels of 10.3% to 17% by FY19 driven by realisation of forex benefit, mix improvement, benefits of modular platform and operating leverage. 

ICICI Bank Target Rs 337 

Strong capitalisation (CET1 of 13%), significant improvement in granularity of the book (52% retail and SME), sharp improvement in liability profile (CASA ratio of 40%) is helping ICICI Bank to build a low risk business without much impact on core earnings.On asset quality , high proportion of incremental disbursement to A and above rated corporate and recognition of actual stress on balance sheet will reduce concerns over asset quality in FY17. 

Canfin Homes Target Rs 2,260 

Low cost funding from NCDCPpublic deposits is expected to increase to 60% by FY18E from 35% in FY16. This is expected to translate into expansion of spreads from 2.23% in FY16 to 2.9% in FY18E. It has set a target of achieving loan book of Rs 35,000 

crore by 2020 which translates to a 33% CAGR in loan book, which is much higher than the 20-22% growth expected for its peers. We estimate Canfin's loan book to compound at 28% CAGR over FY16-18E. 

Sterling Tools Target Rs 1,207 

The company has started work on the phaseI expansion for a new plant in Gujarat. Total capex for the project will be Rs 50 crore, likely to be commissioned by September 2017.Conducive macro factors like good monsoons, 7th pay commission roll out, passage of GST, increasing localisation by OEMs will propel the company on growth path, going forward. We expect earnings growth of 20% over FY16-18E. We value the company at 20 times FY 18E EPS with a target price Rs 1,207. 

APL Apollo Tubes Target Rs 1,248 

We expect the domestic ERW pipe market to grow at a CAGR of 9% over FY16-19E to 10 million tonnes by FY19E. The bulk of the growth will come from the construction and infra segments (airports, mall & prefabricated structures) using the structural pipes followed by demand from traditional applications. APL is planning to expand its capacity further to 2 mt by Q1FY18. We value the company at 15 times FY18E EPS of Rs 83.2. 

Geojit BNP Paribas 

Pidilite Industries Target Rs 770 

Pidilite Industries is a pioneer in consumer & speciality chemicals in India having a dominant position in the adhesive and sealants business in India with market share of 70%. Robust distribution network and continuous focus on developing new and innovative products will further aid in augmenting market share and strengthen its brand equity. As a result, Pidilite is a strong play on recovery in discretionary spending and thus, we recommend buy . 

Havells India Target Rs 388 

Havells is a leading player in electrical consumer goods with key verticals include switchgears, cables & wires, lighting fixtures and consumer appliances. Though the current liquidity crunch is expected to impact the company's consumer durables segment in H2FY17, but given the long-term benefit of shift from unorganised to organised segment, the future prospects are positive. 

HDFC Bank Target Rs 1,387 

HDFC Bank has a proven track record of higher than industry growth rate with best in-class asset quality and high profit margins in the past five years. We expect HDFC Bank to continue outpacing industry credit growth rate and factor 19% CAGR in advanc es over FY16-18E. Strong contribution from retail segment (50% of domestic loan book) adds strength to the loan growth outlook.Higher share of working capital and retail financing in total loan book reduces risk of any negative surprise on asset quality front. 

Crisil Target Rs 2,609 

Crisil, with a market share of around 60%, enjoys leadership position in rating business. It also provides research and risk & advisory services, which has reduced cyclicality in its revenue and profitability. Crisil has consistently outperformed the industry over the last 10 years and maintained strong RoE of 30%. Revival in global economy will support growth momentum in research business and measures from RBI to deepen the corporate bond market will give boost to the rating business. 

Escorts Target Rs 345 

Escorts, the third largest manufacturer of agricultural tractor is well-placed to benefit from demand recovery as a result of initiatives such as farm consolidation and farm machanisation, through recent product launches and strategic decisions to improve distribution channels. We believe, temporary slowdown in the rural demand is more than factored in at the current prices.

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Lending Application Process

• Create your account by duly filling in the forms adequately
• Fill in the lending amount, returns rate and other details in lender listing section
• Discuss and finalize terms with your borrower, confirm loan and get EMIs

Lender Eligibility Criteria

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• An Indian Resident
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Documentation

Lenders are required to submit following documents during registration stage.

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(any one of the last 3 months)

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Fees

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Instant credit! Now, redeem your liquid fund holdings in no time

Many investors shy away from investing in liquid or money market mutual funds thinking redemption may need advance planning. They cannot, for instance, place a redemption request on a non-working day or during weekends. Also, after placing a request, they may have to wait for 1-3 days for the money to reach their account. To overcome these hurdles and to make their products as competitive as banks', mutual funds now allow instant redemption. So far, two fund houses -Reliance and DSP BlackRock -offer this facility in two schemes, but others are expected to follow suit. 

Which schemes allow instant redemptions?

Currently, Reliance Money Manager Fund and DSP BlackRock Money Manager Fund allow instant redemptions. Both are ultra shortterm schemes, a category in which investors invest their surplus savings. With this system in place, investors can withdraw a portion of their liquid money any time.

How can an investor do an instant redemption from these funds?

An investor can place a redemption request through the website of the fund house. Reliance also allows investors to place a request through its mobile application.

Are there restrictions on withdrawals?

Investors can redeem up to 95% of the amount in their account, subject to a maximum of Rs 2 lakh per day.The minimum withdrawal amount is as low as Rs 500 in Reliance Money Manager and Rs 100 in DSP BlackRock Money Manager Fund.Once the redemption request is placed, money reaches the bank account instantaneously.

How do you invest in these schemes?

Investment in these schemes can be made through the websites of the fund houses or by submitting a physical application. These schemes do not have any entry or exit load. The minimum investment amount in DSP BlackRock Money Manager is Rs 1,000; for Reliance Money Manager Fund, it is Rs 500.

Why do investors prefer liquid ultra short-term funds over savings bank or current accounts?

Ultra short-term funds returned 8.65% in the past year, while liquid funds gave 7.69%. Compared to this, banks offer zero interest on current accounts and 4% on savings account; some private sector banks offer 6% on savings account.However, returns in mutual funds cannot be guaranteed.

Citi India sees Sensex at 30,000 mark by March 2017

Oct 17, 2016, At time when concerns over weakening health of the global economy are weighing on equity markets the world over, Citi India has projected BSE benchmark Sensex to hit the 30,000 mark by March 2017.

From Friday’s closing of 27,673, this would mean a 2,623 points, or 8.4 per cent, jump in five-and-a-half-months.

Abhinav Khanna, who heads equity research of Citi India, cited a number of factors which can lift the index to this level. One among them is earnings. Khanna expects September quarter earnings to be better than that of June quarter. Besides, the Citi group expert believes RBI may go in for another 25 basis points rate cut in December. That said, he expects the domestic market to witness high volatility over the next two months.

Here’s a list of four sectors that Citi is bullish on:

Cement: Khanna cites two reasons why he is bullish on the cement sector. He said most things are going in favour of the cement makers, and top four players now account for over 50 per cent of the total capacity. This has helped firm up prices. Besides quality of management in cement companies, their balance sheets and cash flows look promising now.

“Most companies, especially largecap ones, are net cash companies. They have been giving you the growth as well. It is not just about industry structure and pricing and quality of companies. It is about growth as well. One theme that I like is rural infrastructure. That is something which will further help cement companies log the next leg of growth,” Khanna said.

Financials: Citi group has preference for retail banks over corporate-heavy banks, given the chances of RBI maintaining its accommodative stance on interest rates. As is the case with most brokerages, Citi prefers private sector lenders, as it believes they are the ones which will gain market shares going ahead and bottoming out of asset quality concerns is what is expected to drive the rally.

He said even though valuations of private lenders are not cheap, as long as they continue to deliver on the earnings front, even if the multiples remain constant, earnings delivery will ensure that the stocks compound at 15 per cent to 120 per cent earnings CAGR over the next few years.

“Within the private sector, there could be changes in preference as investors may prefer retail heavy banks at some point. At some point when risk-taking increases, they may move on to the corporate-heavy private sector banks,” Khanna told

 

Pharma sector: Marketmen have mixed views on the pharmaceutical space. But Citi group believes the market will bet on only those sectors which will deliver on earnings front and pharma is one among them.

“There have been multiple issues including USFDA concerns and generic pricing in the US, but we feel Indian pharma companies have the right ingredients to do well there. There are a good number of companies in the pharma space in India which have got very long ANDA pipelines, which will contribute to revenues over the next few quarters and years,” Khanna said.

Energy: Khanna did not elaborate on the sector, but said he is quite positive on the energy sector. It has also done well so far this calendar, he said

Sensex likely to touch 30,000 level by next Holi; 14 stocks to add colour to your portfolio

Mar 25, 2016 : In the past one year, the only colour investors found on their portfolio was 'red', but things could change over the next 12 months as the Sensex looks on course to hit a new high, say experts who expect the market to deliver a minimum return of 10%-20%.

The S&P BSE Sensex is down by about 14 per cent since last Holi. But valuations have now come down to reasonable levels, although they are still not cheap. This will make India more attractive for foreign institutional investors (FIIs), who have already poured in over Rs 16,000 crore in Indian equity this calendar.

"The improved macroeconomic fundamentals and the government's ongoing measures and initiatives to revive the economy would continue to attract foreign investment. India has been seen as a bright spot by the foreign market players to park their funds," D K Aggarwal, Chairman and MD, SMC Investments and Advisors, told ETMarkets.com.

An increase in global liquidity, lower commodity prices, government's effort to boost consumption and a possible rate cut by the Reserve Bank of India (RBI) will provide enough push to the economy to attain a higher growth trajectory of 8 per cent and above.

"Cheaper valuation, improving consumer sentiments, strong operating margins and positive sentiments towards Indian economy would continue to keep India less vulnerable towards global conditions," Tushar Pendharkar, Equity Strategist at Right Horizons Financial Services told ETMarkets.com.

"The market is expected to remain stable and witness over 20% growth in next 12 months. We are expecting the Sensex to touch the 30,000 level by the end of FY17," he said.

ETMarkets.com collated a list of 14 stock recommendations from various experts that investors can look at with a minimum investment horizon of 12 months:

Analyst: Vikas Gupta, CIO - ArthVeda Capital

Wipro: Wipro is a cash-rich company, has low leverage and has 13 per cent of the market cap in the form of cash balance. The stock is available at an attractive EBIT yield of 10 per cent, out of which 2.0 per cent is dividend yield. The company has a wide portfolio of IT services for a huge gamut of multinational clients, all of which translates into solid top-line and robust fundamentals.

NMDC: NMDC is also a cash-rich company with negligible debt, with 52 per cent of the market-cap comprising cash balance. The stock is available at attractive EBIT yield of 59 per cent of which 17 per cent is dividend yield. It has a monopoly position in iron ore.

With the Indian market and GDP growth set to escalate in the long term on the back of depressed capacity utilisations and repressed EBIT margins, iron demand for Indian infrastructure projects is bound to increase.

ICICI Bank: Generally, the Indian financials sector is burdened with high NPA. However, ICICI Bank stands apart as a gem. The stock remains available at attractive valuations (a) undervalued on market cap per branch basis at INR 30 Cr./branch vs. peers at INR 60-90 Cr./branch; b) P/B of 1.5x) and coupled with top-notch management strikes as a potential long-term play.

MphasiS: Strong profitability (operating margins in the high teens) and net cash position of the company, leads to robust quality for MphasiS. Potential gains from fast growing US and a weak INR should additionally bolster the company. The earnings yield (on EV basis) of 11 per cent further justifies a good entry point.

Zensar Technologies: Currently, the company is sitting on a strong deal pipeline of US$592mn, with major revenues coming from the US (75%), thus depreciating INR and strengthening US economy providing further tailwinds to the business.

It is a high-quality company with more than 20 per cent ROE. Zensar is a cash-rich position with healthy net cash. The stock is available at a very attractive 11.1 per cent EBIT yield.

Analyst: D K Aggarwal, Chairman and MD, SMC Investments and Advisors

Aarti Industries: The ongoing expansion projects will help the company to increase its exports share in existing as well as new products in the global market. This will be the key growth drivers in coming years.

The demerger of pharma and home and personal care businesses would benefit the shareholders to unlock its value across various segments of the company.

Torrent Power: The company is expected to gain from four of its gas-based power plants, which will get government subsidy on the use of re-gasified liquefied natural gas (RLNG) for six months from October to March.

TV Today Network: All the channels of the group are contributing to the revenue growth of the company. As per industry estimates, subscription revenue is expected to see a growth over a period of time and company is expected to get the benefit.

Atul Auto: The growth prospects of the company reflect healthy business movement for the long-term, as the company continues to launch new products and plans to enters more markets.

The existing plant capacity of the company would increase up to the capacity of 60,000 vehicles per annum in the frame of next two years, this means an increase of 12,000 vehicles capacity from its current capacity of 48,000 vehicles.

Moreover, the management has an expansion plan to open a unit near Ahmedabad for additional installed capacity of 60,000 vehicles per annum at an estimated Capex of INR 150 crore.

Analyst: Tushar Pendharkar, Equity Strategist at Right Horizons Financial Services.

UltraTech Cement: UltraTech could witness volume growth in the cement segment due to expected rise in demand from Infra and housing segment. The segment would also get the benefit of the low base of the last couple of years. Due to recent acquisitions, UltraTech is well poised for an economic uptick.

Larsen & Toubro: Higher budgetary allocation for roads, railways and other infrastructure activities could significantly boost the earnings of L&T. The company has sufficient order book; however, execution on time would decide the further movement in the stock

Maruti Suzuki: Continued new model launches and improving affordability of cars in Indian middle class could trigger sales volume performance.

Tata Motors: There is a significant surge in CV sales volume due to an uptick in core sectors and improvement in JLR numbers are expected to trigger financial performance of the company and stock could also witness re-rating.

Tata Power: 'Power for all' kind of projects and increased focus over rural electrification would remove hurdles for power companies and Tata Power is well positioned and relatively stronger in terms of fundamentals.