Multibagger Pharma Stocks: 5 Stocks Gained Over 200-800 Percent In 2021

[ad_1]

Read More/Less


5 Stocks Gained Over 200-800 Percent In 2021

Pharma Company Year To Date Returns (2021)
ANG Lifesciences 823.61%
Kwality Pharmaceuticals 764.75%
Looks Health Services 435.27%)
Hikal Ltd 294.13%
Raaj Medisafe India 281.88%

Kwality Pharmaceuticals

Kwality Pharmaceuticals

The company Kwality Pharmaceuticals was founded in 1983. The current share price is 510.2. It now has a market capitalization of Rs 529.39 crore. Kwality Pharmaceuticals Ltd. is a prominent manufacturer and supplier of pharmaceutical formulations such as Liquid Orals, Powder for Oral Suspension, Tablets, Capsules, Sterile Powder for Injections, small volume injectables, Ointments, External Preparations, ORS, and many other products.

So far in 2021, the share price of Kwality Pharmaceuticals has increased by an incredible 764%. The one-year return of the stock is 829%.

ANG Lifesciences

ANG Lifesciences

In the year 2006, ANG Lifesciences India Ltd. was established. The current share price is Rs665. It currently has a market capitalization of Rs 344.69 crore. The company reported gross sales of Rs. 1268.31 crores and total income of Rs.1272.51 crores in the most recent quarter.

Over a three-year period, the stock returned 983.06 percent, compared to 65.04 percent for the S&P BSE Healthcare index. The company spent Rs 1.66 crore on investing operations, up 114.66 percent year on year. Stock returned 983.06 percent over three years, compared to 43.89 percent for the Nifty Smallcap 100.

The share price of ANG Lifesciences has risen by an astonishing 823 percent so far in 2021. The stock had a one-year return of 1,285.42% percent.

Looks Health Services

Looks Health Services

Looks Health Services Ltd., founded in 2011, is a Small Cap business in the Hospitals & Allied Services sector with a market capitalization of Rs 12.59 crore.

The stock returned 2.13 percent over three years, compared to 43.89 percent for the Nifty Smallcap 100. Over a three-year period, the stock returned 2.13 percent, compared to 65.04 percent for the S&P BSE Healthcare index. Looks Health Services stock price has soared by an incredible 435percent so far in 2021. The stock returned 414 percent over the course of a year.

Hikal Ltd

Hikal Ltd

Hikal Ltd., founded in 1988, is a Small Cap business in the Pharmaceuticals sector with a market capitalization of Rs 8,144.01 crore.

Annual sales growth of 14.19 percent surpassed the company’s three-year CAGR of 9.78 percent. The stock returned 233.08 percent over three years, compared to 52.49 percent for the Nifty Midcap 100. In the fiscal year ended March 31, 2021, the company spent 2.1 percent of its operational revenues on interest charges and 9.55 percent on labour costs. Over a three-year period, the stock achieved a 233.08 percent return, compared to 37.17 percent for Nifty Pharma.

So far in 2021, the stock price of Hikal has risen by an astonishing 294 percent. Over the course of a year, the stock returned 309 percent..

Raaj Medisafe India

Raaj Medisafe India

In the fiscal year ended March 31, 2021, the company generated a return on equity of 214.49 percent, surpassing its five-year average of 9.56 percent. In the fiscal year ended March 31, 2021, the company spent 2.34 percent of its operating revenues on interest charges and 7.68 percent on staff costs. Raaj Medisafe India Ltd., founded in 1985, is a Small Cap company in the Miscellaneous category with a market capitalization of Rs 19.23 crore.

So far in 2021, the stock price of Raaj Medisafe India has risen by an astonishing 281 percent. Over the course of a year, the stock returne195 percent..

Disclaimer

Disclaimer

Please do consult a professional advisor before you invest in equities. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in the article.



[ad_2]

CLICK HERE TO APPLY

6 Best Cryptocurrency Savings Account in 2021; Deposit Crypto and Earn Interest Upto 8 Percent

[ad_1]

Read More/Less


Blockfi

The BlockFi Interest Account is the ideal overall place to earn interest on Bitcoin, Ethereum, and stablecoins. BlockFi, a fully regulated and licenced bank-like supplier of cryptocurrency savings accounts, loans, and exchange services, was formed in 2017 and has financial licences to operate in 48 U.S. states.

They usually have the best rates for stablecoins, which are cryptocurrencies whose value is directly linked to the value of a fiat currency such as the US dollar. USD Coin (USDC), GUSD, and PAX, for example, are all stablecoins that can earn 7.5 percent. Tether (USDT) has the potential to earn up to 7.5 percent.

Nexo

Nexo

Nexo’s high yield interest accounts pay out up to 12% APY on 17 different cryptocurrencies on a daily basis. Only members of Nexo’s loyalty program, which is based on holding their native coin, NEXO token, get the best rates.

Cryptocurrencies such as Bitcoin, Ethereum, and Ripple have rates ranging from 4% to 8%. Stablecoins like USDT, USDC, and DAI, as well as cash deposits in USD, GBP, and EUR, earn between 10% and 12%.

Celsius Network

Celsius Network

Celsius Network is not only the most transparent but also the most profitable crypto lending platform in the world. It was launched in 2017 by serial entrepreneur Alex Mashinsky (one of the VOIP’s inventors), and it already has over $200 million in funding and 40,000 active wallets.

Celsius Network offers some of the finest cryptocurrency interest rates and accepts a variety of prominent cryptocurrencies and stablecoins, including Bitcoin, Ethereum, USDC, PAX, and others. Furthermore, it pays weekly interest, with the option of earning more when paid in Celsius’ native cryptocurrency CEL.

YouHodler

YouHodler

With offices in Cyprus and Switzerland, YouHodler is a European bank-like crypto asset management platform. The company offers a crypto savings account with a high compound interest rate of up to 12%, as well as crypto-fiat loans with loan-to-value ratios of up to 90%.

There are a total of 25 cryptocurrencies and stablecoins to earn interest on, with BTC paying 4.8 percent, ETH 5.5 percent, LINK 6.2 percent, and stablecoins paying about 12 percent. There are no lock-up periods with YouHodler, and investors can withdraw or sell their assets at any moment.

Binance Earn

Binance Earn

Binance Earn is Binance’s one-stop crypto interest solution. Binance Earn provides a comprehensive set of staking and savings solutions for earning passive income from your crypto assets without having to trade.

There are over 60 cryptocurrencies and stablecoins to select from, with set or variable terms for earning interest.

Regular savings products, staking, and DeFi solutions are available to users, each with its own set of risks, terms, and rewards. Savings with flexible or set terms, Locked Staking, DeFi-Staking, ETH 2.0 Staking, Liquid Swap, Launchpool, and the BNB yield aggregator Vault are some of these options. While the various features can be intimidating at first, if you’re ready to learn how to use them, Binance’s savings and staking solutions could potentially generate a passive income.

Coinloan

Coinloan

Coinloan is a legal and regulated cryptocurrency lending and borrowing marketplace established in Europe. The company began operations in 2016 and is regulated by the Estonian Financial Supervision Authority, indicating that it holds a European Financial Licence.

Cryptocurrency interest is calculated daily on your deposit and credited to your wallet on the first of each month. Coinloan interest account rates vary, but can reach 12 percent per year. CoinLoan keeps cryptoassets in offline, cold, multi-signature wallets with the digital asset trust custodian BitGo, which is insured by Lloyd’s for $100 million.

6 Best Crypto Savings Account In 2021

6 Best Crypto Savings Account In 2021

Rank Company Stablecoins Bitcoin Ethereum
1 BlockFi 8.6% 6% 5.25%
2 Celsius Network 10.5% 4.74% 5.5%
3 YouHodler 12% 4.8% 4.5%
4 Binance 12.4% 7.40%
5 CoinLoan 10.3% 5.2% 5.2%



[ad_2]

CLICK HERE TO APPLY

6 Best Moat Company Stocks In India

[ad_1]

Read More/Less


Asian Paints

Asian Paints has a strong financial track record, which indicates that the company has an impenetrable moat. A broad moat allows a corporation to withstand competition challenges and remain a market leader. Asian Paints Ltd has established two impenetrable moats over the years: high brand equity and a strong distribution network.

To date, both of these moats – high brand equity and a strong distribution network – have been the company’s main growth drivers. Asian Paints goods are extensively available since no merchant can do without them.

Dmart

Dmart

DMart is a wonderful company whose moat is its supply-chain management – how they manage their inventories, pay their suppliers on time, negotiate the best pricing, ensure product quality, pass on savings to customers when possible, and so on. In the retail industry, they have enviable stability in debtor days, inventory turnover, and other return percentages.

DMart, unlike any other retailer, has a cluster-based expansion strategy. Before expanding to other locations, the Company is concentrating on extending their penetration in places where they currently have a presence. All of its franchises are lucrative as a result of its business plan. This is quite uncommon in retail establishments, with even Reliance Fresh having to close some of its locations due to diminishing revenues.

Fevicol - Pidilite

Fevicol – Pidilite

Consumer & bazaar and business to business are the two key segments in which the company operates. Adhesives, sealants, art and craft products, and building and paint chemicals are all part of the consumer and bazaar business. Nearly 80% of overall revenues come from a diverse range of items aimed at carpenters, painters, plumbers, homeowners, and students.

It’s no surprise that Buffett like the metric: many companies with high ROEs display the high-quality, moat-like business characteristics that he enjoys discovering.

The company’s brands are divided into three key areas. Fevicol, Fevicol Marine, Fevi Kwik, M-seal, and Fevicryl are among the company’s most well-known names. Even in rural places, these brands have a large distribution and market dominance. They’re high-volume, low-margin items.

In India, Pidilite is the largest adhesive manufacturer. The company began operations in 1959 with its most well-known adhesive brand, Fevicol, and has since built a presence in more than 80 countries throughout the world. Adhesives, sealants, pigments, industrial resins, construction and paint chemicals, and other products are presently produced by the company. It currently has over 500 goods in its portfolio.

Maruti Suzuki

Maruti Suzuki

Maruti has carved out a niche in the consumer auto market by regularly introducing new models that cater to practically every demographic.

In India, the corporation is involved in the passenger car segment of the automobile industry. Scale, innovation, distribution, and a low-cost structure are all used to achieve market domination in this industry (as the business is asset-heavy). In India, the firm is the market leader in the passenger segment, with exports to 95 countries. The business strategy is such that passenger car sales account for the majority of revenue (about 85% of total revenue), followed by spares, service, and component sales (around 11 percent ).

Although the company has a strong track record of financial performance and profitability, the industry is experiencing a significant slowdown. Because of the pandemic’s global scope, export growth will also slow in the future.

SBI

SBI

SBI has a network that it can leverage across all of its activities, including banking, insurance, and asset management.

India’s largest bank is the State Bank of India (SBI). The government-owned bank has a 23 percent asset market share and a 25 percent market share for total loans and deposits.

In terms of total assets, SBI is India’s largest bank. The opening of salary accounts for all government employees has been one of the company’s largest moats. This also helps them to cross-sell their items to their current clientele.

TCS

TCS

According to Mcap, Tata Consultancy Services has recently overtaken Accenture as the world’s largest IT firm. Tata Consultancy Services (TCS) is a Tata Group company. Information technology (IT) services and consultancy are the company’s specialties. They now have a presence in 46 countries. Because of significant switching costs, TCS has a tight economic moat. The organization is concentrating on developing and maintaining long-term customer connections that will result in repeat business. They benefit greatly from the switching expenses their clients may incur, in addition to its size being a considerable moat. They continue to profit from the first-mover advantage in the United States, with 95 percent of their new business coming from their existing customers.

Conclusion

Conclusion

Nothing beats investing in a firm with high-profit margins for value investors. A large moat, on the other hand, is not a financial metric or a ratio that can be easily calculated. Based on the self-study, the researcher must draw a conclusion (the four actions listed above). It’s also a good idea to keep an eye on the overall market scenario in addition to the company’s finances. Companies that operate within a moat must operate at a high-profit margin (margins). However, it is also necessary to examine the margins’ long-term viability. As a result, one-year margin figures are insufficient. We should seek for data that have remained consistent over the last 5-10 years and have a high average.

Disclaimer

Disclaimer

The stocks mentioned above are only examples of moat businesses; however, investors must conduct their own due diligence before investing in any equities. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in the article. Caution needs to be exercised as mutual funds are subject to risks associated with the stock markets.



[ad_2]

CLICK HERE TO APPLY

4 Top Ranked Small Cap Mutual Funds From Crisil To Start An SIP

[ad_1]

Read More/Less


4 top ranked funds from the small cap space

Name of the fund Ranking 1-year returns 3-year returns
Kotak Small Cap Fund No 1 106.92% 27% (annualized)
Axis Smallcap Fund No 2 84.68% 27.82% (annualized)
Nippon India Smallcap Fund No 2 99.05% 21.03% (annualized)
Union Small Cap Fund No 2 84.30% 22.46% (annualized)

The ranks are assigned on a scale of 1 to 5, with CRISIL Fund Rank 1 indicating ‘very good performance’. In any peer group, the top 10 percentile of funds are ranked as CRISIL Fund Rank 1 and the next 20 percentile as CRISIL Fund Rank 2.

Should you invest in these small cap mutual fund through SIPs?

Should you invest in these small cap mutual fund through SIPs?

We believe that it is not the best time to invest in small caps, given the way they have run-up sharply. In fact, the markets as a whole are expensive. However, many would argue that it is through SIPs and to an extent the risk is hedged. However, the logic is I am buying at into an SIP with the NAV almost doubling in the last 1-year, if you look at the 1-year returns.

Having said that in the case you would still like to go with SIPs of small cap funds, we suggest that you look at small amounts. For example, if you desire to park in an SIP with a sum of Rs 10,000, you may want to do so with Rs 5,000 to begin with.

Stock markets remain expensive

Stock markets remain expensive

The markets are expensive at these levels and according to a report y broking firm Motilal Oswal, the Nifty is trading at significant premium of almost 15% to long-term averages. So, we would request investors to be a little cautious and avoid jumping onto the bandwagon. However, we have also to point out that investors at the moment do not have too many investment options with interest rates at all times lows on FDs and gold and real estate going nowhere.

Disclaimer

Disclaimer

The ranking from the mutual funds mentioned in this story are taken from CRISIL. Please do consult a professional advisor before you invest in mutual funds. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in the article. Caution needs to be exercised as mutual funds are subject to risks associated with the stock markets.



[ad_2]

CLICK HERE TO APPLY

5 Best Performing Focused Equity Mutual Fund Based On SIP Returns

[ad_1]

Read More/Less


IIFL Focused Equity Fund

The IIFL Focused Equity Fund Direct-Growth is an equity mutual fund scheme offered by IIFL Mutual Fund. The fund gets a 5-star rating from ValueResearch and a 4-star rating from Morningstar. After three years, a monthly sip of Rs 10,000 would generate Rs 6.18 lakh, with a profit of Rs 2.58 lakh. The 1-year returns for the IIFL Focused Equity Fund Direct-Growth are 67.78 percent. It has had an average yearly return of 18.63 percent since its inception. This fund is also ranked number 1 by the Crisil Rating agency. ICICI Bank Ltd., Infosys Ltd., HDFC Bank Ltd., Axis Bank Ltd., and Larsen & Toubro Ltd. are the fund’s top five holdings.

The scheme aims to provide participants with long-term capital growth through a portfolio of equities and equity-related assets.

SBI Focused Equity Fund

SBI Focused Equity Fund

The Emerging Businesses Fund’s investment objective would be to participate in the growth potential of various emerging companies that have export orientation/outsourcing opportunities or are globally competitive.

SBI Focused Equity Fund Direct Plan-Growth manages a total of 19,429 crores in assets (AUM).

The SBI Focused Equity Fund Direct Plan’s 1-year growth returns are 62.76 percent. It has returned an average of 17.68 percent per year since its inception. A monthly SIP of Rs 10,000 would create Rs 5.77 lakh after three years, with a profit of Rs 2.17 lakh. The fund is invested in Indian stocks to the tune of 81.91 percent, with 35.85 percent in large-cap companies, 27.54 percent in mid-cap stocks, and 7.14 percent in small-cap stocks.

There is an exit load of 1% if you leave within one year of your allotted date. Nil if you leave after one year from the date of allotment. The fund is ranked to number 2 by Crisil rating agency.

Principal Focused Multicap Fund Growth

Principal Focused Multicap Fund Growth

The Principal Focused Multicap Fund Direct-Growth has a market capitalization of 658 crores.

The 1-year returns for the Principal Focused Multicap Fund Direct-Growth are 62.56 percent. It has had an average yearly return of 16.20% since its inception. The Scheme intends to invest in stock and stock-related securities. There will be no more than 30 equities in the portfolio. Principal Focused Multicap Fund’s NAV for September 9, 2021 is 115.11. Value Research has given the fund 4-star rating.

A monthly SIP of Rs 10,000 would create Rs 5.75 lakh after three years, with a profit of Rs 2.15 lakh.

Nippon India Focused Equity Fund

Nippon India Focused Equity Fund

The Nippon India Focused Equity Fund Direct-Growth manages a total of 5,626 crores in assets (AUM). The 1-year returns on Nippon India Focused Equity Fund Direct-Growth are 71.02 percent. It has had an average yearly return of 19.29 percent since its inception.

The majority of the money in the fund is invested in the financial, services, energy, technology, and fast-moving consumer goods sectors. 91.16 percent of the fund’s holdings are in Indian stocks, with 56.1 percent in large cap stocks, 8% in mid cap stocks, and 10.51 percent in small cap stocks. In the preceding quarter, Fund Crisil’s ranking was changed from 5 to 4.

The fund invests in a portfolio of equities and equity-related securities with a market capitalization of up to 30 companies in order to produce long-term financial appreciation.

Axis Focused 25 Fund

Axis Focused 25 Fund

Axis Focused 25 Direct Plan-Growth manages a total of 19,736 crores in assets (AUM).

The last year’s Axis Focused 25 Direct Plan-Growth returns were 61.67 percent. It has had an average yearly return of 18.65% since its inception. The fund is invested in Indian stocks to the tune of 93.47 percent, with 71.38 percent in large cap companies and 13.56 percent in mid cap stocks.

The scheme aims to create long-term capital appreciation by investing in a concentrated portfolio of up to 25 businesses’ equity and equity-related securities, with a focus on companies in the top 200 by market capitalisation. The NAV of Axis Focused 25 Fund for Sep 09, 2021 is 51.83.

Axis Focused 25 Fund

Axis Focused 25 Fund

Axis Focused 25 Direct Plan-Growth manages a total of 19,736 crores in assets (AUM).

The last year’s Axis Focused 25 Direct Plan-Growth returns were 61.67 percent. It has had an average yearly return of 18.65% since its inception. The fund is invested in Indian stocks to the tune of 93.47 percent, with 71.38 percent in large-cap companies and 13.56 percent in mid-cap stocks.

The scheme aims to create long-term capital appreciation by investing in a concentrated portfolio of up to 25 businesses’ equity and equity-related securities, with a focus on companies in the top 200 by market capitalisation. The NAV of Axis Focused 25 Fund for Sep 09, 2021 is 51.83.

Benefits of Focused Mutual Funds

Benefits of Focused Mutual Funds

You could get higher returns on your assets if you invest in focused funds that invest in stocks with good fundamentals.

There is no such thing as a better investment if it does not protect you from the negative consequences of inflation. The quick rise in inflation might render earnings that appear outstanding on paper obsolete. Because the fund would invest its assets solely in high-quality stocks, it will most likely weather the storm and create an inflated-adjusted corpus.

Mutual funds are commonly promoted as a smart approach to diversify a portfolio of investments. This diversification allows an investor to take advantage of the equity risk premium while reducing volatility and risk.

Experienced investors will benefit from a focused mutual fund investment more than novice investors. The former has a high-risk appetite, which is important for concentrated funds. It’s also appropriate for people with a five- to seven-year time horizon.

5 Best Performing Focused Equity Mutual Fund Based On SIP Returns

5 Best Performing Focused Equity Mutual Fund Based On SIP Returns

Fund Name 3-Year Return
IIFL Focused Equity Fund 24.69%
SBI Focused Equity Fund 20.11%
Principal Focused Multicap Fund 19.56%
Nippon India Focused Equity Fund 16.41%
Axis Focused 25 Fund 16.95%

Disclaimer

Disclaimer

Investing in mutual funds poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only.



[ad_2]

CLICK HERE TO APPLY

2 Midcap Stocks To Buy As Recommended By Brokerage And Research Firms

[ad_1]

Read More/Less


Mold-Tek Packaging Ltd

Axis Securities has set a price target of Rs 585 on the stock, as against the current market price of Rs 498.

According to the brokerage the Pumps business is set to drive growth at the company. “The pumps business is an import-substitution opportunity for Mold-Tek Packaging and is likely to be a key growth trigger going forward. We expect this segment to significantly contribute to the company’s topline from FY23E onwards. Additionally, Mold-Tek Packaging is in the advanced talks with a couple of FMCG leaders (soap major and renowned Ayurvedic Product Company) for the pumps business which is expected to materialize into commercial orders in H2FY22,” the brokerage has said.

Mold-Tek Packaging Ltd: First company to introduce QR Code IML containers in India

Mold-Tek Packaging Ltd: First company to introduce QR Code IML containers in India

According to Axis Securities, the management expects the pumps division to grow at 15% QoQ. “Mold-Tek Packaging is the first company to introduce QR Code IML containers in India, thus enjoying a first mover’s advantage in the industry and keeping its edge over the competition. However, as this innovative packaging solution was first introduced in Europe, there are handful players globally having such capabilities. The company is in talks with an MNC lube player who is testing the product in the market,” Axis Securities has said.

Mold-Tek Packaging: Valuation

Mold-Tek Packaging: Valuation

According to Axis Securities, growth at the company is expected to be driven by the new opportunities such as pumps used in hand sanitisers, the ramp-up of production at its Paints capacities at Vizag and Mysuru as well as new facilities at Sultanpur and Kanpur.

“Furthermore, with an improved product mix in favour of higher-margin IML and value-added products, we expect EBITDA/Kg to remain healthy supported by strict cost control measures despite raw material price volatility. We retain a BUY with a target price of Rs 585 per share and continue to value the stock at a target multiple of 20x basis FY24E EPS,” the brokerage has said.

Buy Can Fin Homes stock, says Edelweiss Wealth

Buy Can Fin Homes stock, says Edelweiss Wealth

Edelweiss Wealth is bullish on the stock of Can Fin Homes and has set a price target of Rs 694 on the stock, as against the current market price of Rs 624.

“Given the composition and asset quality of its book, we believe Can Fin Homes should trade at a premium compared to its peers. Management expects growth to return from Q2FY22 while NIMs/ spreads should increase with loans getting repriced at higher yields,” the brokerage has said,

According to Edelweiss Wealth, going forward management expects NIMs/spreads to increase as most of the repricing is now being done at higher rates while cost of funds remain low.

“The company is sitting on excess provisions as these provisions are earmarked to be used for the company’s restructuring 2.0, which is expected to be less than 2%. Thus credits costs should continue in the current range, sans a third covid wave,” the brokerage has said.

Disclaimer

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article.



[ad_2]

CLICK HERE TO APPLY

4 Mutual Fund Schemes With The Best 5-Year Returns, Should You Start SIPs?

[ad_1]

Read More/Less


Best 5-year returns, open ended schemes, annualized

Name of the fund 5-year returns, annualized
Tata Digital India Fund 33.38%
ICICI Prudential Technology Fund 33.25%
Aditya Birla Sunlife Digital India 30.99%
SBI Technology Opportunities fund 28.44%

According to the data that we pulled out, top of the charts is the Tata Digital India Fund based on Morningstar data for annualized 5-year returns, followed by ICICI Prudential Technology Fund, Aditya Birla Sunlife Digital India and SBI Technology Opportunities Fund. Interestingly, these are all tech funds, which have performed well, thanks to the stupendous rally in IT stocks.

Should you start SIPs in these funds based on past performance?

Should you start SIPs in these funds based on past performance?

We are not in favour of starting SIPs in funds with large sums every month. This is simply because the markets have run-up sharply and they are at a significant premium to long term averages. The Sensex is at 21% premium to long-term averages, thus making it expensive.

According to A Motilal Oswal report the Nifty 12-month forward P/E of 21.8x is at a premium of 21% v/s its long term averages of 18.0 times. This means the markets are at least 21% over and above its long term averages.

Having said that smaller amount of SIPs would be the ideal way and a gradual increment if the markets fall is a better way to go about investing. For example, let us assume that you have savings of Rs 20,000 each month, which you would like to park in SIPs. We suggest that just put small amounts of Rs 5,000 or Rs 10,000 and if the markets drop, you can increase.

Always difficult to predict the ideal mutual fund scheme

Always difficult to predict the ideal mutual fund scheme

Every investor wants the highest possible returns and it’s difficult to pick the ideal one. At times you may have to rely on ratings of the mutual funds by noted rating agencies. However, in practice there are unlikely to be a mutual fund that keeps offering the best returns year on year. There were times when HDFC Mutual Fund schemes were the most sort after. These days you have schemes from names like Mirae Asset Management and Axis Mutual Fund that are ranking well in the equity mutual fund space. Things change fast in the equity markets and a fund manager does not always get it right. A laggard of today, might just be a sterling performer tomorrow.

Disclaimer

Disclaimer

The returns from the mutual funds mentioned in this story are taken from Morningstar. Please do consult a professional advisor before you invest in mutual funds. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in the article. Caution needs to be exercised as mutual funds are subject to risks associated with the stock markets.



[ad_2]

CLICK HERE TO APPLY

3 things to look at before you invest in NCDs

[ad_1]

Read More/Less


Of late, several NCD (non-convertible debenture) issues have been coming in the market. The current low interest rates on bank fixed deposits add to the appeal of these NCDs (or bonds) – both in the new issues as well as those trading in the secondary market.

If you are looking to invest in NCDs to better your debt returns, here are a few points to note.

Return metrics

The fixed coupon or interest rate, calculated on the face value of the bond is what an investor receives periodically (say, quarterly, half-yearly or annually) in the form of interest income. This is the ‘return’ most investors usually focus on. If you invest in an NCD in the primary issue and stay invested until maturity, then the periodic coupon or interest indicates your investment return.

Alternatively, if you buy an NCD in the secondary market and stay invested until maturity, then you must focus on the YTM (yield to maturity) rather than the coupon rate as the correct indicator of your return. The YTM takes into account not just the periodic coupons but also the price at which the bond is bought and redeemed to arrive at the total return. Let’s take an example. Secondary market data from HDFC Securities shows that AAA-rated Tata Capital Financial Services bonds (series – 890TCFSL23 – Individual) priced at ₹1,123 per bond, with a residual maturity of 2.07 years offer a coupon of 8.90 per cent and YTM of 6.79 per cent. A YTM lower than the coupon implies that a bond is trading at a premium. That is, the current market price of the bond is greater than its face value. The latter is what will be paid to you on maturity. In the prevailing low interest rate environment, an 8.9 per cent coupon bond commanding premium pricing is hardly surprising.

Then, there are NCDs that come with a call or put option. Callable bonds give the issuer the right to call back the bond before its maturity by paying back the principal. Putable bonds give the investor an option to exit before maturity and receive the principal. In case of NCDs with a call option, the appropriate return metric to look at is YTC (yield to call) and not YTM. The YTC is the return that an investor gets if the bond is held until the call date. Only very few retail NCDs come with such an option.

Exit or not

While NCDs get listed on the stock exchanges and provide the possibility of an exit option, not many can be bought and sold as easily as shares. This is due to the lack of adequate trading volumes for many NCDs in the retail segment. In such a case, one must be prepared to stay invested until maturity.

Once an NCD lists on the exchanges, it may trade at a price different from its issue price. Over time, the value of the bond will fluctuate in response to factors such as interest rate changes and ratings upgrades or downgrades. So, if you sell a bond before maturity, your final investment return will be impacted by the difference between the selling price versus the purchase price of the bond. This could result in a capital gain or loss for you. Today, with interest rates expected to rise, albeit not immediately, the existing lower-coupon bonds carry the risk of depreciating in value over time resulting in a possible capital loss when sold.

Taxation

The coupon or interest received from NCDs is taxed at your income tax slab rate. Short-term capital gains are taxed at your slab rate and long-term gains at a flat 20 per cent rate with indexation benefit. Capital gains on sale of NCDs that have been held for more than a year in case of listed NCDs and more than three years in case of unlisted ones are treated as long-term in nature.

NCDs in the retail segment quote at their dirty price. That is, the quoted market price is inclusive of the accrued interest on them.

According to Nimish Shah, CIO, Waterfield Advisors, when an NCD is sold, the differential between the sale price and the purchase price is segregated into two parts – capital gains and accrued interest – for taxation purposes. Let’s say, you buy a bond with a coupon of 8 per cent per annum (paid semi-annually) at a face value of ₹100 in January. Suppose this bond is trading at price of ₹110 on March 31. Since the first coupon payment is due in June, the accrued interest by March-end is ₹2. The difference between the sale and purchase price of the bond of ₹10 will be split into two parts – ₹2 accrued interest and ₹8 capital gains and taxed as such – when the bond is sold in March.

 

[ad_2]

CLICK HERE TO APPLY

1 349 350 351 352 353 16,278