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Attractive Discounts as Growth is RESET!!!!


These are the times when you have a very good chance to build a blossoming portfolio especially after the recent correction because the stocks with great earning prospects are trading at the cheaper valuations at the moment, and those stocks which have participated in the previous rally can still be considered once again and moreover even some of the small caps and the mid caps can be bought keeping in mind the medium to long term prospective.

The sensex was trading at 20.22 times two months ago and is currently trading at 18.38 times its price to earnings (P/E) ratio based upon 12 months earnings. On one hand the markets have become more attractive after the correction of late and some of the stocks are available at very reasonable valuations since their 52 – highs which were earlier over valued especially the Tech and the Pharma companies. Certain shares of promising companies like Crompton Greaves, Bata and L&T Finance have dipped up to 30%. These stocks are worth giving a second glance like Maruti Suzuli, HDFC Bank, Idea, HCL, Just Dial, Lupin, Crompton Greaves, L&T Finance, Ashok Leyland, Wockhardt Pharma, Colgate Palmolive ICICI Bank.

Based upon the old or the new datas the growth is headed for picking up the pace if certain factors fall in place the economy is stable and resilient and inflation under control so the growth is on the verge of sprouting. India is sticking with its fiscal discipline, the currency overvalued but still stable, India is developing resistance to any external shocks, the dip in the prices gives ample space for the rate cuts, so far so good the interest rates drift towards the lower side and the investments are picking up motion. The minor bottleneck bug is like some matters related to the tax issues beating the sentiments of the investor, bad loans are a major hurdle for lowering the lending rates and thereby affecting the investment revival, a major push is mandatory to get the stalled projects get going at the ground level efforts, the governments needs to come forward to give the push than the various industries will follow as such the revivals, high growth and exports fell short of expectations of late.  

The FIIs trim their exposure in the Indian markets of late to look elsewhere for the greener pastures as the money pumped in to the equities of Canada, Japan, South Korea, Taiwan and Brazil to the tune of $30billion since past one month, that is just trimming the overweight positions because the lure of doing business in India is diluted for the time being as some other markets are doing well for the time being. Although the stock markets have reset and fallen well below their long term averages and a sharp rebound is totally ruled out at the moment, and the investors will be on their toes for the most part of the FY 2015 as the challenges to revive the economy rolls out, but still the causes of concern are the inflation and the interest rates, so also the US interest rates and finally the corporate earnings.

The revival of the Foreign Investment Implementation Agency (FIIA) will get a new leash of life which will guide the foreign investors and keep a tab on those sectors which possess the end-use operational conditions because the investments in the sectors of financial services, pharmaceuticals, infra and retail are all subject to the operational guidelines.
The recent story is merely an indication of the reset of the growth trajectory expectations as well as the reallocation of the global portfolio basket by the foreign investors and any further expectation of a sharp rebound by the market will boomerang. So just plan your investments and wait for favorable tide soon.