Model Portfolio SAMVAT 2072 By AB Money

In a nutshell, we believe that, best is yet to come for Indian economy and India’s GDP is likely to grow at 7.5% and 7.8% in FY16E and FY17E respectively. Corporate earnings will reflect the same and Nifty’s earning is likely to grow at CAGR of 16% – 19% during FY15-FY18E period. On valuation front, Nifty is trading at P/E of 17.2x, 14.4x and 12.3x of FY16E, FY17E and FY18E earnings respectively. In short term, market will be driven by global factors, however, in medium to long term, we believe, Indian equity market is in midst of structural bull run and hence, the trajectory is likely to remain upwards.

Nifty has corrected ~15% from its peak, whereas some quality companies have corrected by 25-30%. Investors should use this auspicious occasion of Diwali to encash on this opportunity and build portfolio for SAMVAT 2072.

At the start of the year, we had recommended a basket of 15 stocks which have given an average return of ~42% as against lower / negative returns given by most benchmark indices.

For SAMVAT 2072, We recommend a portfolio of 15 quality businesses/ companies, which are mix of cyclicals (like auto, banking etc), new emerging sectors (like defense, media etc) and consumption with strong earnings growth momentum. We expect these stocks to deliver returns in the range of 20-25% over next 6-12 months.

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