Our last year’s Diwali picks have done well, with some of our ideas, such as L&T (+58%), IDFC First (+48%), Lemon Tree (+38%) generating superior returns compared to Nifty’s gain of 10%

The Raipur plant will manufacture only value-added products (VAP), which will drive up the overall margin profile for the company. Additionally, these plants will
be manufacturing products, marking the first production of its kind in both India and the world.

While Nifty-50 is at a new high and is creating a lot of buzz, the fact remains that on a two-year basis, it stands nearly flat (just up 4% from Oct’21 high); whereas its aggregate FY22/FY23 earnings are up ~38%/10% and that for MOFSL Universe are up 39%/10% over the same period.

We expect the strong momentum to continue in FY23-25, led by: a) a further improvement in ARR and occupancy due to favorable demand-supply dynamics; b) higher income from management contracts; and c) unlocking value by launching the reimagined and new brands.

CANF, in our view, is a franchise which has proven its astute underwriting, strong risk management, and inclination to deliver industry-leading loan growth in the mortgage sector at least (if not more) over the last decade

India stands out like an oasis in the desert, where rest of world is facing multiple challenges. Domestic flows too have remained strong and now FIIs have turned buyers. Nifty now trades at a 1 year forward P/E of 20x, which seems fair, in our view.

Indian Hotel’s (IH’s) new and re-imagined businesses Ama Stays, Qmin, Chambers, and Management contracts are expected to scale up rapidly on the lower base and high growth runway. These businesses are margin accretive with higher margin flowthrough, thereby driving up the RoCE. The new business is expected to contribute ~26% to the company’s operating profits by FY25.

The Financial sector, coming out of Covid despair, is likely to dominate Wealth Creation in the foreseeable future

Home First Finance (HomeFirst), in our view, is among the few high-quality and transparent franchises in the listed Affordable Housing Finance (AHFC) sector. Particularly, the company has demonstrated consistent execution on its guided metrics, across AUM growth, margins/spreads, asset quality, and credit costs.

We remain positive on GRASIM’s entry into the Paints business, and believe its brand equity as well as its ability to leverage the distribution network of Birla White will help it achieve a reasonable scale in this business