Visit us at www.sharekhan.

com

November 17, 2014

Wealth Creator Portfolio

Objective: To build a balanced and actively managed portfolio of quality companies that will help create meaningful
wealth for investors in the multi-year rally expected in the Indian equity market.
In addition to some bottom-up picks, the portfolio contains stocks identified based on three key themes:
 Policy push: Stocks from sectors benefiting from improvement in the policy environment
 Early gainers: Beneficiaries of an economic recovery (stocks from auto, banking & financial, logistic sectors)
 Evergreen: Steady performers that provide stable and consistent returns

Portfolio performance review

In the initial three months (the portfolio was rolled out on August 21, 2014), the Wealth Creator portfolio has
comprehensively outperformed the benchmark indices by giving weighted average returns of 15% compared with the
returns of 6.3% in the Sensex, of 6.1% in the Nifty and of 9.3% in the CNX Mid-cap Index.
 Eight large-cap stocks in the portfolio have appreciated by 13% each, doubling the gains as compared with the 6% odd
upmove in the benchmark indices (Sensex and Nifty) in the same period.
 Similarly, our basket of mid-cap stocks has moved up by 18.7% as compared with a 9.3% upmove in the CNX Mid-cap
Index (which does not include Nifty companies).
Comparative returns
Particulars

Reco price

Current price

Gain/Loss (%)

21-Aug-14

17-Nov-14

CMP-Reco price

Wealth Creator (weighted average returns)

Sensex
Nifty
CNX Mid-cap

15.0%
26360

28025

6.3%

7890

8375

6.1%

11180

12225

9.3%

Auto stocks lead the list of gainers within the portfolio; Selan and TAMO underperform
 Ashok Leyland and Gabriel India were added to the portfolio as a play on the revival of the commercial vehicle (CV)
cycle (a surge in CV volume expected in FY2016) and the theme has played out well.
 Selan Exploration Technologies (Selan) and Tata Motors (TAMO) have underperformed due to reasons like soft crude
oil prices in case of Selan and weakness in Europe (and in the Jaguar and Land Rover sales) in case of TAMO. However,
we believe that our long-term growth prognosis is intact.

For Private Circulation only

Regd Add: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East),
Mumbai 400042, Maharashtra. Tel: 022 - 61150000. Fax: 67481899; E-mail: publishing@sharekhan.com; Website: www.sharekhan.com; CIN:
U99999MH1995PLC087498. Sharekhan Ltd.: SEBI Regn. Nos. BSE- INB/INF011073351 ; CD-INE011073351; NSE INB/INF231073330 ; CD-INE231073330;
MCX Stock Exchange- INB/INF261073333 ; CD-INE261073330; DP-NSDL-IN-DP-NSDL-233-2003 ; CDSL-IN-DP-CDSL-271-2004 ; PMS-INP000000662 ; Mutual
Fund-ARN 20669 ; Commodity trading through Sharekhan Commodities Pvt. Ltd.: MCX-10080 ; (MCX/TCM/CORP/0425) ; NCDEX-00132 ; (NCDEX/TCM/
CORP/0142) ; NCDEX SPOT-NCDEXSPOT/116/CO/11/20626; For any complaints email at igc@sharekhan.com ; Disclaimer: Client should read the Risk
Disclosure Document issued by SEBI & relevant exchanges and Dos & Donts by MCX & NCDEX and the T & C on www.sharekhan.com before investing.

Wealth Creator Portfolio

Update on Wealth Creator portfolio

Sr No

Scrip

Reco
price
21-Aug-14

Current
price
17-Nov-14

% (up/down)
CMP/
Reco price

Target
price
Jun-17

Potential
upside
From
Reco price

Large-caps (64% weightage; 8% each)

1

ICICI Bank

1544

1675

8.5%

3850

129.9%

Larsen & Toubro

1532

1615

5.4%

3800

135.3%

Ashok Leyland

37

55

48.7%

90

63.6%

Cummins

State Bank of India

Sun Pharmaceuticals

Tata Consultancy Services

683

845

23.7%

1708

102.1%

2468

2860

15.9%

5800

102.8%

858

875

2.0%

1550

77.1%

2432

2615

7.5%

5100

95.0%

358

330

-7.8%

850

157.6%

Tata Motors DVR

Average returns (64% weightage)

13.0%

Mid-caps (36% weightage; 4.5% each)

9

PTC India Financials

10

Finolex Cables

44

54

22.7%

105

94.4%

203

252

24.1%

650

157.9%

11

Gateway Distripark

259

320

23.6%

745

132.8%

12

IRB Infra

259

264

1.9%

680

157.6%

13

Network 18 Media

48

55

14.6%

150

172.7%

14

Gabriel India

57

92

61.4%

155

68.5%

15

Selan Exploration

543

450

-17.1%

1680

273.3%

16

Dhanuka Agri

436

515

18.1%

1140

121.4%

Average returns (36% weightage)

18.7%

Wealth Creator (weighted average returns)

15.0%

Sensex
Nifty
CNX Mid-cap

Sharekhan

26,360

28,025

6.3%

7,890

8,375

6.1%

11,180

12,225

9.3%

November 2014

Wealth Creator Portfolio

Revised Portfolio
Wealth Creator Portfolio
Sr No

Scrip

Weights
(%)

Reco Price
17-Nov-14

Target Price
Oct-17

Potential Upside
(%)

Large-caps (64% weightage)

1

ICICI Bank

8%

1675

3850

129.9%

Larsen & Toubro

8%

1615

3800

135.3%

Hero MotoCorp

8%

3030

6350

109.6%

Cummins India

8%

845

1708

102.1%

State Bank of India

8%

2860

5800

102.8%

Sun Pharmaceutical Ind.

8%

875

1650

88.6%

Tata Consultancy Services

8%

2615

5100

95.0%

Tata Motors DVR

8%

330

850

157.6%

Mid-caps (36% weightage; 4% each)

9

PTC India Financials

4%

54

144

166.7%

10

Finolex Cables

4%

252

650

157.9%

11

Gateway Distripark

4%

320

745

132.8%

12

IRB Infra

4%

264

680

157.6%

13

Network 18 Media

4%

55

150

172.7%

14

Gabriel India

4%

92

200

117.4%

15

Selan Exploration

4%

450

1340

197.8%

16

Triveni Turbine

4%

110

265

140.9%

17

Dhanuka Agri

4%

515

1260

144.7%

Portfolio revision
Changes in composition
 First, we introduce Triveni Turbines (price target: Rs265) in the folio (weightage 4%). The company has emerged
as an Indian multinational in a highly technology-driven capital goods space. Consequently, we reduce the weightage
of all the mid-cap stocks to 4% (from 4.5% earlier) to make room for this quality engineering company. The existing
clients can either add the stock or rejig their folios accordingly.
 Second, we believe that the run-up of close to 50% in Ashok Leyland factors in the positives in the short run and
the stock could provide better entry points later. Thus, for new investors, we advise taking exposure in Hero
MotoCorp instead of Ashok Leyland. The existing clients could hold on to Ashok Leyland.
Price target revisions
 PTC India Financial Services: Price target revised to Rs144 based on the price/book value multiple of 2x FY2020
rough estimate.
 Selan: Price target revised to Rs1,340; largely to account for the change in the assumption of the price of crude oil
from an average of $100/barrel earlier to $85/barrel now. However, we do not believe that crude oil prices could
remain soft on a multi-year basis in spite of the rising production of shale gas globally including a production rampup in the USA.
 We have fine-tuned the rest based on certain changes in the assumptions and rolled forward the price targets for
each by six months.

Sharekhan

November 2014

Disclaimer
This document has been prepared by Sharekhan Ltd.(SHAREKHAN) This Document is subject to changes without prior notice and is intended only for the person or entity to which it is addressed to and may contain confidential and/or
privileged material and is not for any type of circulation. Any review, retransmission, or any other use is prohibited. Kindly note that this document does not constitute an offer or solicitation for the purchase or sale of any financial
instrument or as an official confirmation of any transaction.
Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. SHAREKHAN will not treat recipients as customers by virtue of their receiving this report.
The information contained herein is from publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, SHAREKHAN, its subsidiaries and associated
companies, their directors and employees (SHAREKHAN and affiliates) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance, or other reasons that may prevent SHAREKHAN and
affiliates from doing so. We do not represent that information contained herein is accurate or complete and it should not be relied upon as such. This document is prepared for assistance only and is not intended to be and must not alone
betaken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent
evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment
discussed or views expressed may not be suitable for all investors. We do not undertake to advise you as to any change of our views. Affiliates of Sharekhan may have issued other reports that are inconsistent with and reach different
conclusion from the information presented in this report.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or
use would be contrary to law, regulation or which would subject SHAREKHAN and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all
jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
SHAREKHAN & affiliates may have used the information set forth herein before publication and may have positions in, may from time to time purchase or sell or may be materially interested in any of the securities mentioned or related
securities. SHAREKHAN may from time to time solicit from, or perform investment banking, or other services for, any company mentioned herein. Without limiting any of the foregoing, in no event shall SHAREKHAN, any of its affiliates
or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. Any comments or statements made herein are those of the analyst and do not necessarily reflect those
of SHAREKHAN.

Sharekhan

November 2014