2015 : the year of alpha... Model Portfolio Update -HDFC Securities

Please Share::

SUMMARY OF PORTFOLIO CHANGES
 EXIT : TCS, Maruti, Shree Cement, Grasim, Bharti
Infratel
 REDUCE : L&T, Powergrid
 BUY : Cholamandalam Finance, Tech Mahindra, Gulf Oil
Lubricants, Orient Cement, JSW Steel, Carborundum
Universal, SML Isuzu, Idea Cellular, MCX

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->

2015 : the year of alpha...
As the new year dawns, investors in Indian
stockmarkets recognise that the ‘Modi reset’ has
been the highlight of 2014, but is now a fait
accompli. It was driven by a surprisingly clear
poll verdict (the weak, left of centre commandand-control
dispensation was replaced with a
pragmatic, right-wing regime). Equally, luck has
played its part with falling crude prices helping
to contain the fisc, CAD and inflation. The ~31%
jump in the NIFTY over 2014 confirms that India’s
twin Achilles heels (poor governance and
external dependence on oil) are on the mend,
whether via fortuitous or crafted paths.
A further broad market reset is unlikely, ergo we
believe 2015 holds alpha opportunities for the
diligent investor.
 Stock markets are emotional creatures, but we feel
2015 is going to be a year of reality checks. It is unlikely
that a tide of events (and hence, emotions) of the
magnitude witnessed over 2014 will be repeated
easily. For the broader market, a further re-rating is
unlikely.
 Instead, this may well be a year that mirrors
incremental achievements (or stumbles) on the part of
individual corporates. It is these deltas that hold
utmost importance for us and it is here that rational
alpha can be generated.
 This is because, unlike an election outcome or the price
of crude, these incremental achievements can be
rationally explored and confidently predicted for
businesses. Earnings growth now matters more than
perception changes (which are unlikely to undergo
further resets). We feel that bottom-up, wellresearched
stock picking (backed by performance
delivery) can earn significant alpha over 2015.
 We will also be mindful of policy changes, especially as
expressed through the upcoming Union Budget and in
pragmatic and mature responses to the holdups in
Parliament.
 With almost 1,500 bps OPF in fifteen months the
HDFC sec Model Portfolio has performed well enough
to warrant a close look (see inside for details). We
have mostly benefited from the reset, but now see
scope to re-align the portfolio as 2015 kicks in.

LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010537