Diwali Picks 2016 By HDFC Securities

As we step into Samvat 2073, India is breaking out of its ‘soft’ ways, whether it is in geo-politics, economics or governance. This transformation will become increasingly visible in the next few years but we are happy to note that some changes have already taken root. Businesses will no longer live in cosy shelters created by policy, inheritance or lack of choice for consumers. Though we may have many miles to cover but we are certainly on the path where merit will be eventually acknowledged as a crucial component for success. Diligent and capable corporates in growth sectors are positioned for a multi-year breakout. Investors would do well to identify them early, across sectors and sizes.

Meanwhile, the world is in turmoil. From China to Europe and Brazil to the Middle East, every country is facing political, demographic and financial system issues while being under the climate of a macro slowdown. To deal with such a situation, central banks are printing large sums of money and distributing it to the public to stimulate economy, but the results are not encouraging. Instead, falling (and indeed negative) yields on bonds are creating unsustainable asset bubbles. Real and sustainable growth seems elusive almost everywhere, except perhaps in India today!

We are possibly the only large economy equipped with a vision and the necessary tools to improve sustainability in all aspects: demographics, consumption, infrastructure, human development, urbanisation, energy intensity, political evolution, governance and policy. Even with the backdrop of a volatile market, there is little doubt that foreign investors see India favourably. India will continue to attract foreign capital inflows, trading interest, political alignment and strategic friendship from diverse blocs of countries globally.

It is with this vision that we have handpicked investment ideas for you. Every one of these stocks is a good Indian blend of managerial capability, strategic intent and growth opportunities. This Diwali (the festival of lights), we have humbly put together investment ideas that you may be happy (and proud) to hold till the next one!