dissecting the hope rally

Monthly StrategyDISSECTING THE HOPE RALLY

April 10, 2014

DISSECTING THE HOPE RALLY

In the end, that's what this election is about. Do we participate in a politics of cynicism or a politics of hope? – Barak Obama

Destimoney Research

Indian market shrugged global cues as the pre-election hope rally keeps the sentiments buoyant…

World Indices (% chg) were marred by negative cues in March 2014

DAX

ASX 200

NIKKIE 225

KOSPI

DOW

INDIAN NIFTY

� In U.S, Federal Reserve removed the 6.5%

unemployment rate threshold it has been gauging

since 2012 as a measure of improvement in the

economy. It Indicated that it and would rather monitor

a range of parameters for further policy action.

� In Japan, the govt increased the sales tax to 8% from

5% which will be reviewed again in Dec to further

increase it to 10%. Japan's public debt-to-GDP ratio is

well over 200%.

� IMF has downgraded its outlook on developing

2 April 10, 2014

Source: Bloomberg

-4% 0% 4% 7% 11%

FTSE 100

HANG SENG

NASDAQ

SHANGHAI COMPOSITE

TOPIX

CAC 40

� IMF has downgraded its outlook on developing

European countries, Australia and Russia.

Meanwhile, Moody’s has downgraded Ukraine to a

‘default imminent’ Caa3 rating. S&P downgraded

Brazil’s credit rating to BBB-, its lowest investment

grade rating.

…while historical evidence do not suggest coordination between election results and market movement

Historically a decisive mandate is well cheered by the market, although playing solely on the election outcome is a risky proposition

17%

34%

A major hope rally was built in post the series of corruption charges against the incumbent govt. Fractured mandate was not enough to cheer the market

A multi party coalition with outside support was not enough to cheer the market post elections

Part of the rally factors in the improved fiscal situation. A change in guard is largely anticipated, a clear mandate will lift the sentiments in the medium term.

3 April 10, 2014

-17%

0%

17%

1996 1999 2004 2009 2014

3 month pre-election 3 month post-election

Realignment of coalition among regional parties behind NDA led a hope rally. Crash of IT boom may have fizzled the post-election rally in 1999.

Pre-election rally coincided with first leg of global easing as central banks globally resorted to variations of quantitative easing. A stable govt may have been priced in as well.

� While we share the election outcome related optimism of the market, we are wary of a fractured mandate. Even

in case of a decisive government, the execution time lag for a new govt to take the economy back to growth path

is a possibility. Surplus capacities in sectors like cement, steel or higher than normal inventory in real estate would

require sizeable domestic or overseas demand, which in itself would take time to unwind.

� Meanwhile the market has rallied on election hopes coupled with reduction in the near term possibility of rate

hike in the U.S. The India VIX volatility index is up at 28.9 against 14.2 on 28 Feb 2014, with sharp rise in volatility.

We remain watchful of the market movement and recommend a balanced exposure to cyclical and defensive

stocks, as reflected in our model portfolios.

� On the inflation front, food inflation continued its downward spiral for the consecutive third month. Going

forward monsoon will remain a key determinant of the direction of food inflation. The timing and magnitude of

If electoral outcome fail to provide a stable government, the downside risks to growth could accentuate

4 April 10, 2014

forward monsoon will remain a key determinant of the direction of food inflation. The timing and magnitude of

revisions in administered prices, particularly electricity and coal, will also affect the trajectory of inflation in 2014-

15. However, excluding food and fuel segment, retail inflation has been sticky at around 8%. The course of the

CPI inflation will hinge on the strength of disinflationary impulses from policy actions, extent of the negative

output gap and movements in food prices.

� As part of a policy change the govt has removed the “guaranteed buyback” clause from the New Urea Investment

Policy. Also it has introduced a provision of hiking the fixed cost component in urea production. This increase, up

to `350 per tonne, would push up the subsidy burden on the Government by `9.8 bn.

� After a gap of 11 years, RBI awarded banking license to two new players IDFC Ltd and Bandhan Financial Services.

RBI has further stated that it will follow an ‘on tap’ policy implying that more and more licenses will be given to

private players. RBI is also keen on issuing differentiated license instead of full license to interested players going

forward.

Hope rally has been largely concentrated to capital goods while cyclicals like metals and auto are yet to join in

-20% 0% 20% 40% 60%

1999

2004

2009

2014


Auto

-20% 0% 20% 40% 60%

1999

2004

2009

2014


Capital Goods

-20% 0% 20% 40% 60%

1999

2004

2009

2014


IT

5 April 10, 2014

Source: Bloomberg

-20% 0% 20% 40% 60%

1999

2004

2009

2014


FMCG

-20% 0% 20% 40% 60%

1999

2004

2009

2014


Metals

-20% 0% 20% 40% 60%

1999

2004

2009

2014


Healthcare

There are selective pockets in auto and engineering space where run-up is possible

Universe of stocks in auto and engineering space having market capitalization over `̀̀̀1 bn

-50%

0%

50%

100%

150%

6 April 10, 2014

Source: Destimoney Research

-50%

Air Conditioners Auto Ancillary Auto OEM Bearings Castings/Forgings Compressors / Pumps Diesel Engines Electric Equipment Engineering

� In the Auto OEM space only 5 of the 16 companies have recorded over 15% gain in the pre-election rally.

For other capital good players the ratio is as follows,

� Auto-ancillary(23/41), air-conditioners(4/5), bearings(3/4), castings/forgings(6/8), compressors/ pumps

(2/5), diesel engines(3/4), electric equipments(11/18), and engineering(8/15).

During March Metals, Realty and Banking space led the rally

Indian NIFTY Performance in March 2014Sector Wise Performance During the Month

6,150

6,300

6,450

6,600

6,750

3-M

ar

5-M

ar

7-M

ar

9-M

ar

11-M

ar

13-M

ar

15-M

ar

17-M

ar

19-M

ar

21-M

ar

23-M

ar

25-M

ar

27-M

ar

29-M

ar

31-M

ar

BSE Oil & Gas Index

BSE Power Index

BSE Capital Goods Index

BSE Metal Index

BSE Bankex

BSE Realty Index

7 April 10, 2014

Source: Bloomberg, CSO

-15% 0% 15% 30%

BSE IT Index

BSE Healthcare Index

BSE Auto Index

BSE FMCG Index

BSE Cons. Durable Index

BSE Oil & Gas Index

Although public sector banks have fallen out of favour in the current pre-poll buying despite trading below book value

Banks and financial companies with market capitalization over `̀̀̀1bn

-20%

-10%

0%

10%

20%

30%

8 April 10, 2014

Bank - Public Bank - Private Finance - Housing Finance Term Lending

Source: Destimoney Research

� In the Public Sector Banks space only 4 of the 24 companies considered have recorded over 15% gain in

the pre-election rally. For other financial sector players the ratio is as follows,

� Private-Banks (23/41), housing-finance (2/8) and term lending finance (3/5).

FII inflows in March surpassed inflows during previous four months combined

FIIs injected `̀̀̀252 bn in March 2013 DIIs withdrew worth `̀̀̀38 bn in March 2013

-60

-30

0

30

60

3-M

ar

4-M

ar

5-M

ar

6-M

ar

7-M

ar

10-M

ar

11-M

ar

12-M

ar

13-M

ar

14-M

ar

18-M

ar

19-M

ar

20-M

ar

21-M

ar

24-M

ar

25-M

ar

26-M

ar

27-M

ar

28-M

ar

31-M

ar

` B

n

-9

-6

-3

0

3

3-M

ar

4-M

ar

5-M

ar

6-M

ar

7-M

ar

10-M

ar

11-M

ar

12-M

ar

13-M

ar

14-M

ar

18-M

ar

19-M

ar

20-M

ar

21-M

ar

24-M

ar

25-M

ar

26-M

ar

27-M

ar

` B

n

9 April 10, 2014

-130

0

130

260

390

Mar-

13

Apr-

13

May-

13

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

Feb-1

4

Mar-

14

` B

n

-60

-40

-20

0

20

Mar-

13

Apr-

13

May-

13

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

Feb-1

4

Mar-

14

` B

n

Source: Bloomberg, Destimoney Research

Apr-Mar FII inflows amount to `̀̀̀849 bn Apr-Mar DII withdrawals amount to `̀̀̀217 bn

Deficit figures have improved

EXIM gap fell to $8.13 bn as imports fell by 18% YoY while exports fell 0.28% YoY

10

20

30

40

50

$ B

n

10 April 10, 2014

Source: Bloomberg

� Oil imports during February, 2014 were valued at $13,696.8 million which was 3.1% lower than oil

imports valued at $14,134.3 million in February, 2013.

� Non-oil imports during January, 2014 were estimated at $20,122.3 million which was 24.5% lower than

non-oil imports of US $26,657.7 million in February, 2013.

� In a signal that pressure on the external sector is easing, India’s current account deficit narrowed to a four-

year low in the fiscal third quarter, aided by a decline in gold imports and revival of exports.

0

Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14

…and WPI and CPI have trended lower…

Food, Fuel, Core & WPI Inflation (%) YoY Trend

CPI has been on downward trend

-8

0

8

16

24

Jun-1

1

Aug-1

1

Oct

-11

Dec-

11

Feb-1

2

Apr-

12

Jun-1

2

Aug-1

2

Oct

-12

Dec-

12

Feb-1

3

Apr-

13

Jun-1

3

Aug-1

3

Oct

-13

Dec-

13

Feb-1

4

%

Food Fuel Core WPI Inflation

8%

9%

10%

11%

12%

Apr-

12

Jul-12

Oct

-12

Jan-1

3

Apr-

13

Jul-13

Oct

-13

Jan-1

4

11 April 10, 2014

Source: RBI, Bloomberg, CSO

� WPI Inflation fell to 4.68% in February 2014 against 5.05% in January 2014. Core inflation rose

marginally at 3.15% in Feb against 3.02% in Jan. Fuel inflation fell sharply at 8.75% in Feb against

10.03% in Jan 2014. Food inflation also came down at 8.12%. CPI inflation has come down to

8.77%, RBI is targeting to slowly glide the same to 8% by the end of current fiscal.

� Going forward, inflation may moderate in the context of relatively stable crude oil and range-bound global

commodity prices next year. On the other hand, food inflation will depend on the onset and spatial and

temporal distribution of the south-west monsoon.

-62.8%

-24.5%-18.8% -16.5% -15.9%

-10.4% -9.2% -9.0% -6.8% -6.2%-1.4%

0.3% 0.8%

-22.7%

-0.6%

1.4%

-8.2% -5.7% -1.1%

2.8% 5.3% 0.3% 0.7% 0.0%

-2.6% -0.5%

-90%

-60%

-30%

0%

30%

Argentine Peso

S.A. Rand Turkish Lira Russian Ruble

Chilean Peso

Colombian Peso

Indian Rupee

Brazilian Real

Malaysian Ringit

Thai Bhat Mexican Peso

Chinese Renmibi

S.Korea Won

Since Jan 2013 YTD

This resulted in Rupee appreciation in March

Currency Depreciation Across Emerging Economies

12 April 10, 2014

Source: Bloomberg

270

290

310

330

Mar-

14

Feb-1

4

Jan-1

4

Dec-

13

Nov-

13

Oct

-13

Sep-1

3

Aug-1

3

Jul-13

Jun-1

3

May-

13

Apr-

13

Mar-

13

Feb-1

3

Jan-1

3

Dec-

12

Nov-

12

Oct

-12

Sep-1

2

Aug-1

2

Jul-12

Jun-1

2

May-

12

Apr-

12

Mar-

12

Feb-1

2

Jan-1

2

Dec-

11

Nov-

11

Oct

-11

Sep-1

1

Aug-1

1

Jul-11

Jun-1

1

May-

11

Apr-

11

Mar-

11

Feb-1

1

Jan-1

1

Dec-

10

Nov-

10

Oct

-10

Sep-1

0

Aug-1

0

Jul-10

Jun-1

0

May-

10

In $

bn

RBI guided to use the reserves to manage currency volatility once further QE tapering sets in

Source: RBI

RBI maintained status quo and is watching the sustainability of further reduction in inflation…

Key rate movement over the years

0

3

6

9

12

Jan-1

1

Feb-1

1

Mar-

11

Apr-

11

May-

11

Jun-1

1

Jul-11

Aug-1

1

Sep-1

1

Oct

-11

Nov-

11

Dec-

11

Jan-1

2

Feb-1

2

Mar-

12

Apr-

12

May-

12

Jun-1

2

Jul-12

Aug-1

2

Sep-1

2

Oct

-12

Nov-

12

Dec-

12

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-

13

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

Feb-1

4

Mar-

14

%

REPO REVERSE REPO CRR MSF

13 April 10, 2014

Source: RBI

� In its first bi-monthly policy review on Apr 1, RBI governor kept the key rates unchanged in line with the

market expectation. Repo, Reverse Repo and MSF rate stand at 8%, 7% and 9% respectively. Bank Rate

remains at 9%, and the CRR has also been kept unchanged at 4% of net demand and time liability (NDTL).

� RBI has also decided to increase the liquidity provided under 7-day and 14-day term repos from 0.5% of NDTL

of the banking system to 0.75%, and decrease the liquidity provided under overnight repos under the LAF

from 0.5% of bank-wise NDTL to 0.25% with immediate effect.

� Elsewhere, RBI gave in principle nod to IDFC Ltd and Bandhan Financial Services, a microfinance institution to

set up banks. RBI last month had sought clearance from the Election Commission of India to issue the licenses

as the model code of conduct is in order.

Call money rates close to repo rates

Aiming to Improve the Transmission of Monetary Policy

-2,550

-1,700

-850

0

850

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-

13

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

Feb-1

4

Mar-

14

`Bn

LAF Term Repo MSF Standing liquidity facility availed from RBI

14 April 10, 2014

Source: RBI, Bloomberg

� RBI is largely successful in bringing call money rate close to the repo rate with the exception of volatility introduced

by extreme changes in government balances in tax payments and bank actions at the year end.

6

8

10

12

Jan-1

3

Jan-1

3

Feb-1

3

Feb-1

3

Mar-

13

Apr-

13

Apr-

13

May-

13

Jun-1

3

Jun-1

3

Jul-13

Jul-13

Aug-1

3

Sep-1

3

Sep-1

3

Oct

-13

Nov-

13

Nov-

13

Dec-

13

Dec-

13

Jan-1

4

Feb-1

4

Feb-1

4

Mar-

14

Apr-

14

%

CP-12M CD-12M MSF Gsec10Y Call Money Repo

IIP Growth (%) Trend (2004-05 base)

Industrial output continue to remain disappointing

-3.2%

0.0%

3.2%

6.4%

9.6%

Jul-12

Aug-1

2

Sep-1

2

Oct

-12

Nov-

12

Dec-

12

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-

13

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

15 April 10, 2014

Source: CSO

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Aug

Sep

Oct

Nov

Dec

Jan

� Manufacturing sector, which contributes almost 75.5% of the overall IIP index, de-grew by 0.67% in

January 2014 against a de-growth of 1.2% in December 2013.

� Capital goods output de-grew by 4.23% YoY in January 2014 as compared to de-growth of 2.45% in

December 2013.

� Non-durables rose by 4.43% in January 2014 against 2.51% growth in December 2013.

� Consumer durables continued its downtrend, declining 8.34% in January 2014 following the 16.1% de-

growth in December 2013, registering fall in fourteenth straight month.

Domestic Passenger Vehicle Sales (Units)

On the auto demand side, excise duty reduction did not boost sales in March, YOY growth remained weak except for Honda and Ford Motors

Company Mar-14 Mar-13 %Chg YOY FY14 FY13 %Chg YOY

Maruti Suzuki 102,269 107,890 -5.2% 1,054,499 1,051,006 0.3%

Hyundai Motors 35,003 33,858 3.4% 373,700 383,611 -2.6%

Mahindra & Mahindra 23,433 25,847 -9.3% 229,155 279,270 -17.9%

Honda Cars India 18,426 10,044 83.5% 134,299 73,483 82.8%

Tata Motors 12,640 12,347 2.4% 138,495 222,112 -37.6%

Toyota Kirloskar 8,206 19,452 -57.8% 131,606 167,944 -21.6%

Ford Motors 6,356 5,271 20.6% 84,469 81,999 3.0%

GM India 6,356 9,066 -29.9% 80,199 88,465 -9.3%

16 April 10, 2014

� In FY14, most of the major passenger vehicle companies posted drop in YOY sales owing to slowdown in

country. Honda Cars remained exception with its launches like Amaze and new City. Consumer demand

towards Mini SUV cars remained buoyant, hurting sedan sales in similar price bands.

Source: Company, Destimoney Research

� Commercial Vehicles sales continued to post lower sales due to lower economic activity in the country.

Commercial Vehicle Sales (Units)

CV sales continued to fall , while three wheelers sales also lower YOY except for Mahindra & Mahindra


Tata Motors 33,356 56,813 -41.3% 378,244 537,143 -29.6%

Mahindra & Mahindra 18,752 18,547 1.1% 185,748 186,135 -0.2%

Ashok Leyland 10,286 14,020 -26.6% 89,342 114,611 -22.0%

17 April 10, 2014

Source: Company


Bajaj Auto 33,739 34,194 -1.3% 447,674 480,057 -6.7%

Mahindra & Mahindra 6,305 4,831 30.5% 62,614 65,510 -4.4%

TVS Motors 5,076 5,076 0.0% 86,273 54,266 59.0%

Three Wheeler Vehicle Sales (Units)

� M&M posted good growth in three wheeler sales.

Two Wheeler Sales (Units)

Source: Company^ includes exports sales

Two wheeler sales showed good growth in March


Hero MotoCorp 524,028 468,283 11.9% 6,245,895 6,073,581 2.8%

HMSI 392,148 252,773 55.1% 3,772,960 2,751,196 37.1%

Bajaj Auto ^ 270,591 267,037 1.3% 3,422,416 3,757,105 -8.9%

TVS Motors 47,766 143,239 -66.7% 1,999,319 1,983,427 0.8%

Yamaha India 46,052 35,782 28.7% 657,971 488,847 34.6%

Mahindra 2W 19,591 18,953 3.4% 215,902 123,457 74.9%

18 April 10, 2014

� Two wheeler sales witnessed improvement as inventory build up was seen with dealers, eyeing high

demand on the occasion of Gudhi Padwa (on March 31).

Business Climate Index

Eurozone indicators continue to improve…

Industrial Confidence (YoY %) Services Confidence (YoY %)

-1.8

-1.2

-0.6

0.0

0.6

Mar-

12

Jun-1

2

Sep-1

2

Dec-

12

Mar-

13

Jun-1

3

Sep-1

3

Dec-

13

Mar-

14

%

-20.0

-15.0

-10.0

-5.0

0.0

Mar-

12

Jun-1

2

Sep-1

2

Dec-

12

Mar-

13

Jun-1

3

Sep-1

3

Dec-

13

Mar-

14

%

-18.0

-12.0

-6.0

0.0

6.0

Mar-

12

Jun-1

2

Sep-1

2

Dec-

12

Mar-

13

Jun-1

3

Sep-1

3

Dec-

13

Mar-

14

%

19 April 10, 2014

Source: Bloomberg

ISM PMI – Manufacturing Trend

…and signs of recovery in U.S. is helping to keep sentiment buoyant

ISM PMI – Non Manufacturing Trend

48

51

53

56

58

Sep-1

1

Dec-

11

Mar-

12

Jun-1

2

Sep-1

2

Dec-

12

Mar-

13

Jun-1

3

Sep-1

3

Dec-

13

Mar-

14

%

51

53

55

57

59

Sep-1

1

Dec-

11

Mar-

12

Jun-1

2

Sep-1

2

Dec-

12

Mar-

13

Jun-1

3

Sep-1

3

Dec-

13

Mar-

14

%

20 April 10, 2014

Source: Bloomberg

ISM – New Orders Index Net Employment Addition – Monthly (‘000)

45

51

56

62

67

Sep-1

1

Dec-

11

Mar-

12

Jun-1

2

Sep-1

2

Dec-

12

Mar-

13

Jun-1

3

Sep-1

3

Dec-

13

Mar-

14

%

0

100

200

300

400

Sep-1

1

Dec-

11

Mar-

12

Jun-1

2

Sep-1

2

Dec-

12

Mar-

13

Jun-1

3

Sep-1

3

Dec-

13

%

NIFTY Historical P/E Multiple (x)

We remain cautious in the short-term

TTM 12M Monthly Performance

8

13

18

23

28

Mar-

09

Sep-0

9

Mar-

10

Sep-1

0

Mar-

11

Sep-1

1

Mar-

12

Sep-1

2

Mar-

13

Sep-1

3

Mar-

14

-14%

-7%

0%

7%

14%

Apr-

13

May-

13

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct

-13

Nov-

13

Dec-

13

Jan-1

4

Feb-1

4

Mar-

14

NIFTY Jr Nifty INDEX Midcap Index Smallcap Index

21 April 10, 2014

Source: Bloomberg

� The market has rallied on election hopes coupled

with reduction in possibility of rate hike in the

U.S. The India VIX volatility index is up at 28.9

against 14.2 on 28 Feb 2014, with sharp rise in

volatility. We remain watchful of the market

movement and recommend a balanced exposure

to cyclical and defensive stocks as could be seen

in our model portfolios.10

15

20

25

30

Jan-14 Jan-14 Mar-14 Apr-14

Volatility Index (VIX)

Model Portfolio Update

22 April 10, 2014

Model Portfolio Update

All the three portfolios continue to outperform NIFTY and average mutual fund performance

Model Portfolios Performance Summary

44.2%

0%

17%

34%

51%

68%

3M 6M 1Y 2Y 3Y Incpt

Moderate Nifty

54.3%

0%

17%

34%

51%

68%


Aggressive Nifty

44.7%

0%

17%

34%

51%

68%


Conservative Nifty

Absolute Performance

23 April 10, 2014

� Ahead of the benchmark NIFTY Index and average mutual funds. Also, all the three model portfolios are inthe top quartile of mutual fund performance.

Moderate Nifty Aggressive NiftyConservative Nifty

(Since Mar 31, 2011) Conservative Moderate Aggressive

Relative to NIFTY 28.2% 27.7% 37.9%

Relative to Top Quartile 12.0% 11.5% 21.7%

Relative to Av. MF 20.4% 19.9% 30.1%

Relative Performance

Conservative Portfolio

Sectoral AllocationNIFTY

Sector Company Model Portfolio Wt.Agri 6.2%

Bayer Cropscience Ltd 6.2%

Auto 4.5%

Bosch Ltd 4.5%

Capital Goods 21.1%

ABB India Ltd 5.1%

Larsen & Toubro Ltd 9.6%

Siemens Ltd 6.3%

Chemicals 10.7%

Asian Paints Ltd 4.9%

Pidilite Industries Ltd 5.8%

Financials 14.0%

HDFC 5.5%

HDFC Bank Ltd 8.5%

FMCG 21.3%

Auto7.8% Capital Goods

3.6%

Cement 2.6%

Chemicals1.1%

Construction0.8%

Diversified0.6%

Financials18.5%

FMCG9.7%

Metals & Mining8.5%

Oil & Gas15.8%

Pharma5.4%

Power3.9%

Technology19.0%

Telecom2.8%

24 April 10, 2014

Conservative Portfolio

FMCG 21.3%

GSK Consumer Healthcare 5.2%

Hindustan Unilever Ltd 7.7%

ITC Ltd 4.3%

Nestle India Ltd 4.1%

Hotels 6.3%

EIH Ltd 6.3%

Pharma 11.3%

Glaxosmithkline Pharmaceuticals 6.7%

Sanofi India Ltd 4.6%

Cash 4.6%

100.0%

Agri6.2%

Auto4.5%

Capital Goods21.1%

Chemicals10.7%Financials

14.0%

FMCG21.3%

Hotels6.3%

Pharma11.3%

Cash4.6%

Moderate Portfolio




Auto 7.1%

Ashok Leyland Ltd 7.1%

Capital Goods 14.8%

Kalpataru Power Transmission 5.4%

Larsen & Toubro Ltd 9.4%

Chemicals 18.1%



Education 3.1%

MT Educare Ltd 3.1%

Financials 18.2%

HDFC 6.7%

HDFC Bank Ltd 5.0%


3.6%

Cement 2.6%

Chemicals1.1%

Construction0.8%

Diversified0.6%

Financials18.5%

FMCG9.7%

Metals & Mining8.5%

Oil & Gas15.8%

Pharma5.4%

Power3.9%

Technology19.0%

Telecom2.8%

25 April 10, 2014

Moderate Portfolio

Agri2.9%

Auto7.1%

Capital Goods14.8%

Chemicals18.1%

Education3.1%

Financials18.2%

FMCG12.7%

Logistics4.8%

Pharma9.9%

Technology5.4%

Cash3.0%

IDFC Ltd 6.6%

FMCG 12.7%

ITC Ltd 5.0%


Logistics 4.8%

Gujarat Pipavav Port Ltd 4.8%

Pharma 9.9%

Glaxosmithkline Pharmaceuticals 6.4%

Merck Ltd 3.4%

Technology 5.4%

Just Dial Ltd 5.4%

Cash 3.0%

100.0%

Aggressive Portfolio




Auto 5.3%

Ashok Leyland Ltd 5.3%

Capital Goods 17.3%

Alstom India Ltd 7.6%

Siemens Ltd 9.7%

Chemicals 13.8%



Construction 6.5%

HCC 6.5%

Financials 21.4%

HDFC Bank Ltd 7.2%


3.6%

Cement 2.6%

Chemicals1.1%

Construction0.8%

Diversified0.6%

Financials18.5%

FMCG9.7%

Metals & Mining8.5%

Oil & Gas15.8%

Pharma5.4%

Power3.9%

Technology19.0%

Telecom2.8%

26 April 10, 2014

Aggressive Portfolio

Agri3.7%

Auto5.3%

Capital Goods17.3%

Chemicals13.8%

Construction6.5%

Financials21.4%

FMCG13.1%

Logistics4.4%

Technology6.6%

Cash7.9%

ICRA Ltd 6.2%

IDFC Ltd 8.0%

FMCG 13.1%

Colgate Palmolive (India) 3.1%

ITC Ltd 3.8%


Logistics 4.4%

Gujarat Pipavav Port Ltd 4.4%

Technology 6.6%

Just Dial Ltd 6.6%

Cash 7.9%

100.0%

Portfolio Changes Summary

Date Conservative Moderate Aggressive

5-Mar-14 Exited - Cipla Ltd

Increased - Glaxo Pharma to 7.8% of AUM

Exited - Mahindra & Mahindra Ltd

Increased - IDFC to 7.3% of AUM

8-Jan-14 Exited - NTPC

Increased -LT to 8% of AUM

Exited - NTPC

Increased -LT to 8%, IDFC to 6% of AUM

Increased - Siemens to 9% of AUM

1-Jan-14 Replacing Godrej Consumer Products Ltd with

Colgate Palmolive (India) Ltd

3-Dec-13 Exited - Bluedart

Added - EIH Ltd with 5% allocation

Added - Kalpataru Power with 5% allocation Exited - Pfizer Ltd

Added - HCC with 5% allocation

20-Nov-13 Reduced - Justdial to 7.5% and Pfizer to 6.4% of

AUM

Added - Alstom India with 8% allocation

14-Nov-13 Added - ABB Ltd with 4% allocation

Added - L&T with 4% allocation

Added - Ashok Leyland with 5% allocation Added -Siemens Ltd with 5% allocation

12-Nov-13 Exited - Cummins India Ltd

Added - Siemens with 5% allocation

Exited - Elgi Equipment Ltd

Added - L&T with 5% allocation

Exited - Glenmark Pharma

Added - Ashok Leyland with 4% allocation

9-Oct-13 Exited - Bluedart Express Ltd

Added - IDFC Ltd with 3% allocation

Exited - Bluedart Express Ltd

Added - IDFC Ltd with 5% allocation

27 April 10, 2014

Continued…

Added - IDFC Ltd with 3% allocation Added - IDFC Ltd with 5% allocation

7-Oct-13 Reduced - NTPC by 3% of AUM

Added - GPPL with 3% allocation

Exited - Jubilant Foodworks

Reduced - Bayer Cropscience to 5% of AUM

Added - GPPL, M&M with 3% allocation each

30-Sep-13 Exited - SBI

Added - MT Educare with 4% allocation

16-Aug-13 Increased - HDFC Bank to 8% Added - HDFC Bank with 5% allocation Increased - HDFC Bank to 8%

31-Jul-13 Exited- BHEL

Reduced - HUL, GSK Consumer, HDFC, Nestle, ITC

by 1% each

Added - HDFC Bank with 5% allocation

Exited - L&T, Procter & Gamble Hygiene and

Healthcare

Increased - NTPC to 10% of AUM

Exited - L&T, Sobha Developers, PNB

Reduced - Pidilite to 10%, Nestle to 9%, ITC to

5% of AUM

Increased - Pfizer to 10% of AUM

Added - HDFC Bank with 5% allocation

23-Jul-13 Increased- Just Dial Ltd to 7% of AUM

19-Jul-13 Exited - Mahindra & Mahindra, Trent Ltd

Added - Cummins India Ltd with 5% allocation

Exited - Mahindra & Mahindra

Added - Just Dial Ltd with 3% allocation

Exited - Mahindra & Mahindra, Wipro Ltd

Added - Just Dial Ltd with 3.5% allocation


25-Jun-13 Exiting Marico as stoploss got triggered

7-Jun-13 Replaced - Hindustan Unilever by Nestle India Replaced - Hindustan Unilever by Nestle India

31-May-13 Added - GCPL with 4% allocation

10-May-13 Reduced -Bluedart by 2% of AUM Reduced -Bluedart by 2% of AUM Reduced -Bluedart by 2% of AUM

14-Mar-13 Exited- HDFC Bank Exited - Titan Industries

8-Mar-13 Added -Glenmark Pharma(5% )

1-Mar-13 Replaced - Dabur India by Titan Industries

12-Feb-13 Exited - Jyothy Labs, Speciality Restaurants

Increased - HDFC to 7.5%,Asian Paints to 10%

Exited - Jyothy Labs, Merck, Speciality Restaurants

6-Feb-13 Exited- Crisil Exited- Crisil

31-Jan-13 Exited -Power Grid Corporation, State Bank of

India, Tata Power

Added -Asian Paints (5%),HDFC Bank (5%)

Exited - Pfizer, TCS

Reduced - Bayer Cropscience to 3% of AUM

Increased - Asian Paints to 8%,Pidilite Industries

to 8% of AUM

Exited -Tube Investments of India

Added - Pidilite Industries (10%)

23-Jan-13 Exited -Infosys

Added - Hindustan Unilever (8%)

Increased- Hindustan Unilever to 8% of AUM Increased- Hindustan Unilever to 8% of AUM


28 April 10, 2014

Added - Hindustan Unilever (8%)

11-Jan-13 Exited - Gail India ,Merck

Reduced - ITC to 5% of AUM

Added - Pidilite Industries , Glaxosmithkline

Pharmaceuticals, Bosch with 5% each

Reduced - ITC to 5%

Increased - Glaxosmithkline Pharmaceuticals to 6%

Added - Pidilite Industries (4%), Elgi Equipments

(4%)

Reduced- ITC to 5% of AUM

Added - Pidilite Industries (5%), Jubilant

Foodworks (5%)

30-Aug-12 Reduced - Bluedart to 4%, M&M to 3% Reduced- Bluedart to 4%, M&M to 3%, Jyothy

Labs to 4%

Exited -Tube Investments, Gillette India, IFCI

Added - Asian Paints(5%), Specialty Restaurant

(5%),Procter & Gamble Hygiene and Healthcare

(4%)

Added -Specialty Restaurant (5%) and Marico (4%)

Reduced - Bluedart to 4%, M&M to 3%,Jyothy

Labs to 5%, Tube Investments to 2.5%,Sobha

Developers to 2%

Exited - Gillette India, IFCI

Increased -Asian Paints to 5%

30-Apr-12 Replaced - Colgate Pamolive by Gillette India Replaced - Britannia Industries by Dabur India,

Colgate Pamolive by Gillette, Jain Irrigation by

Asian Paints

Continued…



31-Jan-12 Exited Jain Irrigation DVR

30-Nov-11 Added - Colgate Pamolive (5%)

Exited - Asian Paints

Added - Colgate Palmolive (5%)

25-Nov-11 Exited -Maruti, Pantaloon Retail Exited -Pantaloon Retail

16-Nov-11 Exited - Ajanta Pharma

15-Nov-11 Increased - M&M to 6% Increased - M&M to 6% Increased - M&M to 6%

1-Nov-11 Added - Bayer Crop Science (5%) Added - Bayer Crop Science (5%), Pfizer (5%) Added - Bayer Crop Science (5%), Pfizer (7%)

1-Nov-11 Exited -DLF, HDFC Bank,ICRA Exited- BHEL, Sobha Developers, PNB, Reilance

Industries

Exited -Crompton Greaves, Allahbad Bank, HDFC

Bank,Tamilnadu Newsprint

Increased - Britannia by 3%

31-Oct-11 Added - M&M (5%), Merck (5%) Added - M&M (5%), Merck (5%) Added - Merck (5%), Britannia Industries (3%)

Increased - M&M to 6%

Replaced - Grasim by Ajanta Pharma

Reduced - Hindustan Unilever to 3.7% of AUM

30-Sep-11 Replaced - GSK Consumer Healthcare by Asian

Paints

Replaced - Dabur India by Hindustan Unilever, Sun

Pharmaceuticals by Grasim

29 April 10, 2014

Paints Pharmaceuticals by Grasim

19-Sep-11 Exited - Maruti Suzuki Exited - Maruti Suzuki Exited - Maruti Suzuki

30-Aug-11 Replaced -Gillette India by GSK Consumer

Healthcare

Replaced - Apollo Hospital Enterprises by Sun

Pharma, P&G Hygine and Healthcare by Dabur

India

9-Aug-11 Exited - ICICI Bank, Kotak Mahindra Bank

Reduced- IFCI , PNB and SBI by 1% each

Introduced - HDFC (4%) and HUL (4%)

Increased - NTPC by 2.5% of AUM

Exited - ICICI Bank, Kotak Mahindra Bank

Reduced - Allahabad Bank by 2%, PNB by 3%

Introduced -HDFC Bank (4%) and ITC (6%)

Increased- P&G Hygiene by 1% of AUM

29-Jul-11 Replaced- Tata Power by Gillette India Replaced- Lupin byApollo Hospital Enterprises, EIH

by P&G Hygine and Healthcare

20-Jul-11 Reduced-DLF by 2% of AUM Reduced - Sobha Developers by 2% of AUM Reduced - Crompton Greaves by 2% and L&T by

2% of AUM

30-Jun-11 Replaced - Dabur by Tata Power Replaced - Pfizer by Lupin, Aditya Birla Nuvo by EIH

Continued…



27-Jun-11 Reduced- Maruti Suzuki to 2% of AUM Added - PNB 4% of AUM

Reduced -Maruti Suzuki to 2% of AUM

Exited - Suprajit Engineering

Increased - SBI 7%, NTPC 6% of AUM

Reduced - Maruti Suzuki to 2%, M&M to 2% of

AUM

Exited - GEI Industrial Systems

Added - PNB 7% of AUM

16-Jun-11 Replaced - Britannia Industries by Dabur Replaced - Godrej Consumer Products by Pfizer

31-May-11 Added - Tube Investments of India 3.2% of AUM

Replaced - Exide by Britannia Industries

Added - Tube Investments of India 4.3% of AUM

Replaced- Lupin by Aditya Birla Nuvo,Colgate

Palmolive Godrej Consumer Products

19-May-11 Exited - Dr Reddy's Lab

18-May-11 Exited - ONGC

5-May-11 Replaced - Deepak Fertilizers by Lupin

29-Apr-11 Reduced - Blue Dart to 4.5% of AUM Reduced - Blue Dart to 4.5% of AUM

Replaced - Biocon by ONGC, Onmobile by Suprajit

Engineering

Reduced - Bluedart to 4.5% of AUM

Replaced - Elder Pharma by Jain Irrigation,

Onmobile by GEI Industrial, Godrej Industries by

Dr. Reddy' lab, Opto Circuits by Deepak Fertilisers,

30 April 10, 2014

Gitanjali Gems by Colgate Palmolive

31-Mar-11 Portfolio Incorporated Portfolio Incorporated Portfolio Incorporated

Destimoney Securities Private Limited6th Floor, "A" Wing, Tech-Web Centre, New Link Road, Oshiwara, Near Behram Baug, Jogeshwari (West), Mumbai - 400102

Disclaimer:In the preparation of the material contained in this document, Destimoney* has used information that is publicly available, as also data developed in-house. Some of thematerial used in the document may have been obtained from members/persons other than Destimoney and which may have been made available to Destimoney.

31 April 10, 2014

material used in the document may have been obtained from members/persons other than Destimoney and which may have been made available to Destimoney.Information gathered & material used in this document is believed to be from reliable sources. Destimoney has not independently verified all the information and opinionsgiven in this material. Accordingly, no representation or warranty, express or implied, is made as to the accuracy, authenticity, completeness or fairness of the informationand opinions contained in this material. For data reference to any third party in this material no such party will assume any liability for the same.Destimoney does not in any way through this material solicit or offer for purchase or sale of any financial services, commodities, products dealt in this material. Destimoneyand any of its officers, directors, personnel and employees, shall not be liable for any loss or damage of any nature, including but not limited todirect, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shallbe fully responsible, and/or liable for any decision taken on the basis of this material. All recipients of this material before dealing and/or transacting in any of the productsadvised, opined or referred to in this material shall make their own investigation, seek appropriate professional advice and make their own independent decision. Thisinformation is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law orregulation or which would subject Destimoney or its affiliates to any registration requirement within such jurisdiction or country. This information does not constitute anoffer to sell or a solicitation of an offer to buy any financial products to any person in any jurisdiction where it is unlawful to make such an offer or solicitation. No part ofthis material may be duplicated in whole or in part in any form and / or redistributed without the prior written consent of Destimoney. This material is strictly confidential tothe recipient and should not be reproduced or disseminated to anyone else.Names such as Teji Mandi, Maal Lav, Maal Le or similar others for market calls and products are merely names coined internally and are not universally defined, and shallnot be construed to be indicative of past or potential performance. Recipients of research reports shall always independently verify reliability and suitability of the reportsand opinions before investing.*"Destimoney" means any company using the name “Destimoney” as part of its name.

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