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22 July, 2009
India
Fairwealth Special Report
We conducted a research on the past performance of MidCap Index, Small Cap Index and
BSE Sensex, since 2005. Base on this data and performance of selected stocks
th th
between 4 June 2009, and 13 July 2009 we have selected a group of 13 stocks that
are likely to outperform Indices in a short term.
This study is based on shares that have shown maximum correction and have a stable to
Email: sovid.gupta@fairwealth.in
positive outlook from our perspective.
BSE Small
Apr'05-July'09 52%
Cap
We can see that between 2005 to January 2008, all indices had almost equal return,
however while BSE Sensex dropped by only 25% from January 2008 to July 2009,
BSE Mid Cap and BSE Small cap are down by 47% and 57% respectively.
2. Budget: While the budget might be viewed differently by different people, and
was relatively dull according to us majorly due to huge expectations. What is
important is that largest group of Investors have been buying in huge quantities,
as they find India as the safest haven for next five years.
Based on this fact we remain bullish on Indian Equities, until FII’s are putting
money in Indian Equities.
After budget rally which saw Sensex, Midcap and Smallcap rising between 27-50
percent in matter of 1 month months. Post that rally, there was a large correction in all
indices led by BSE small cap.
Based on our study we expect Mid caps and Small caps to outperform BSE Sensex over next 2 months. We have selected
shares which have shown maximum corrected and have potential to give decent returns in short to medium terms.
We expect following share to re test their highs made in January and hence recommended to book partial profits at those
levels.
All these companies are safe to invest from (long term) Valuations point of view as well.
Co_Name Close Close %age Market CMP (22nd First Target Second
Price Price drop Capitalization July 2009) Target
(4th (13th
June July
2009) 2009)
1 Balaji Telefilms 74.1 41.0 -44.7 192 45 55 67
2 Alok Inds 28.1 15.9 -43.6 1065 19.50 25 28
3 Rajesh Exports 54.9 32.5 -40.8 1945 39.3 45 54
4 Gati 68.0 40.3 -40.7 613 47 54 66
5 Ballarpur Inds 28.5 17.0 -40.4 1863 19.25 25 28
6 SpiceJet 25.9 16.4 -36.8 981 18.45 24 26
7 PVR 135.3 87.8 -35.1 437 102 130 160
8 Gitanjali Gems 142.5 92.7 -35.0 1883 98 120 140
9 Man Inds. 57.4 37.9 -33.9 650 44 55 60
10 ICSA (India) 207.2 142.2 -31.4 1740 170 210 250
11 Rel. Comm. 342.2 237.1 -30.7 104914 263 310 350
12 Everest Kanto 229.2 158.9 -30.7 1212 185 202 230
13 CESC 356.1 264.0 -25.9 2625.61 284 340 380
Note: We already have coverage on PVR, Alok Industries and ICSA under Fundamental research with a buy.
Note: To be updated
This publication has been prepared solely for information purpose and does not constitute a solicitation to any person to buy or sell a security. While
the information contained therein has been obtained from sources believed to be reliable; investors are advised to satisfy themselves before making
any investments. Fairwealth Securities Pvt Ltd does not bear any responsibility for the authentication of the information contained in
the reports and consequently, is not liable for any decisions taken based on the same. Further, Fairwealth Research Reports only provide information
updates and analysis. All opinion for buying and selling are available to investors when they are registered clients of Fairwealth Investment Advisory
Services. As a matter of practice, Fairwealth refrains from publishing any individual names with its reports. As per SEBI requirements it is stated that,
Fairwealth Sec Pvt Ltd., and/or individuals thereof may have positions in securities referred herein and may make purchases or sale while this report is
in circulation.