Author: CP

Time to remind all the investors not to get caught with the frenzy of rising stock markets and I really hope they have some eggs in SIP to drink their cup of tea after retirment sip by sip ;-). Discpline is a must.

Read my earlier post on SIP Investments. The markets were at peak in March-06 and hence the returns mentioned in that report were quite exuberent and its not worth expecting so much though if you get it, you can have a blast.

For quarter ending June-30th, the sensex was at 10,300, reasonable level. Here is the performance of my favorite funds, (check out they all now have ValuResearch ratings of 5, except Top-200).

• HDFC Equity Fund Growth
• HDFC Top 200 Fund growth
• HDFC Long term Advantage Fund Growth
• HDFC tax Saver Fund Growth

Lets look at the difference in SIP returns(all compounded) since inception when the sensex was at 12,000 and whe it was at 10,000.

HDFC Equity Fund 41.04% 34.15%
HDFC Top-200 35.44 % 31.78%
HDFC LongTerm Advantage 63.45% 52.91%
HDFC Tax Saver 50.07% 44.75%

Equity and Top 200 have history of 10+ years while the other two have 5+ years.

Questions, comments and critics are welcome. Happy investing.

Indian media reports that Warburg Pincus has picked up 9% stake in Amtek Auto. Its not just that. One of Indian Mutual Funds, HDFC has been buying Amtek Auto since April-2006. We are not sure when Warburg Pincus started buying into this stock but we know they own 9% stake in the company. Warburg is the same Venture capital firm which invested $300 million in Bharti-Airtel and made a cool $1.5Billion 🙂

HDFC currently holds around 8-9% stake in Amtek Auto under various funds from Equity to MIP to balanced. With Sensex being at 11,000, I would advise to BUY just 30% of your capacity around Rs290 levels in Amtek Auto and then add on to it.

Disclosure: I am doing the same thing as I am writing here 🙂

Trusted international rating agency, Fitch upgraded India’s rating minutes ago to Investment grade. Citing improvement in public finances and terrific growth in the Indian economy in Q1-2006 are direct results of Indian governments policies.

India’s rating now stands at BBB- with a stable outlook. This should bring back the foreign institutional investors back to dalal street 🙂

It was 24th of July, 1991 when then Finance minister, Dr.Manmohan Singh opened the gates of liberalisation. Financial Express has an excellent coverage here.

I contradict the views expressed by Mr S P Tulsian statign that Reliance Petroleum is a good buy. Please note that Mr Tulsian holds Reliance Petroleum and has probably bought them at levels of Rs85 and thus recommending it to small investors. Please don’t fall prey and avoid this.

Some facts about Reliance Petroleum

1.Reliance’s Petroleum unit is in deep shit. They are unable to supply oil at the same cost as PSUs do. Their Petrol Pump franchisees are complaining and thus reliancei s paying out of pocket to maintain the goodwill.
2.Reliance Petroleum doesn’t even have a refinery so where is the question of stock outperformign or moving up ?
3.Reliance Petroleum will be subsequently merged into RIL(Just liek old man Dhirubhai did in 1990. Their was Reliance Petroleum too, which got merged into RIlL. Those Reliance Petro shareholders got lesser returns compared to benchmark SENSEX).

So kindly avoid this scrip. If Mr Tulsian was wise, he would have justified the earnings potential of Reliance Petroleumbut he hasn’t so it means he has vested interests.

Moneycontrol analysts predict the opportunities arising of drugs off the US patent regime. Even though the BSE Healthcare has underperformed compared to sensex, these analysts are bullish on the Indian pharma industry and calls it a darkhorse.

Dr Reddy’s and Ranbaxy are well geared to take advantage of an off patent regime that has started recently. Cipla is growing through tie-ups with global pharma companies.

In the outsourcing segment we like Nicholas Piramal, Jubilant Organosys, Shasun Chemicals, and Cadila Healthcare. We are also looking at some niche stories like Marksans Pharma and Hikal Chemicals.

We like Dr Reddy’s in the short-term and Ranbaxy and GSK Pharma for the long-term as they are good value buys.