PrimeInvestor - Articles and Reports

Entering a stock at peak valuation - 5 questions to ask
Stocks
N V Chandrachoodamani

Entering a stock at peak valuation? โ€“ 5 questions to ask

When markets make merry, many stocks have seemingly compelling stories even for entering at peak valuation. And the market is fine with stretched valuations to accommodate such stories. In other words, every market-favoured stock appears to scream – buy me at any price.

But when challenges emerge, the same market starts reacting so sharply that investors who bought into the story midway start making losses. Yes, there isnโ€™t a bigger disaster for stock market investors than earnings and PE multiples contracting together.

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Technical Outlook - Is the worst over for the Nifty 50?
Markets
B Krishnakumar

Technical outlook โ€“ Is the worst over for the Nifty 50?

The bearish view on the Nifty 50 index shared over the past couple of posts has played out, and the Nifty 50 index hit the target of 16,700-16,900 mentioned earlier. Now, after recording a low of 16,828 on March 20, the index has been on a recovery path. The key question, then, would be – is worst is over for the Nifty 50? As always, we will try to address this question using our favourite charting tools including the breadth indicators.

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Quarterly Review - changes to recommendations in Prime Funds and Prime ETFs
Mutual funds & ETFs
PrimeInvestor Research Team

Quarterly review โ€“ Changes to recommendations in Prime Funds and Prime ETFs

Prime Funds is our list of recommendations in equity, debt, and hybrid mutual funds that are worth investing in. Prime Funds narrows down your choices from the thousands of funds that there are, into a concise list of funds that span different styles. Prime Funds are selected based on performance, portfolios, and investment strategies.

In this quarterโ€™s review, we have made limited additions to our list of Prime Funds but have some updates to give on performance of the existing funds. We also suggest buckets that are worth entering now. So do read it!

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Should you invest in GoI floating rate savings bond?
Bonds & Deposits
Aarati Krishnan

Should you invest in GOI floating rate savings bonds?

Debt investors have been so starved of good returns lately, that any return above 7% now seems like a grand prize. This is why, after the government recently announced an interest rate of 7.7% per annum on National Savings Certificates (NSC) for the April-June 2023 quarter, there was much jubilation. Apart from warranting a fresh look at the NSC itself, this rate hike promises to significantly lift returns on a Central government-backed instrument – GOI Floating Rate Savings Bonds 2020 (GOI FRSB).

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Why banking is a fragile business
Stocks
R Balakrishnan

Why banking is a fragile business

The recent furore surrounding the failure of Silicon Valley Bank in the US has exposed that while banking is a favourite sector with stock market investors, the fragility of the banking business is far from well-understood. Banks are held up as the engines of economic growth. Whichever sector grows, the banking sector ultimately gains. Banks are also accorded a higher valuation than most sectors during bull phases. In good times, banks made up a 40% plus weight in our leading stock market indices.

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Prime stock: An averaging call on this fashion player
Stocks
N V Chandrachoodamani

Prime Stock: An averaging call on this fashion player

In February last year, we had issued a buy call on the stock of a premier fashion player housing a vast number of national brands. The steps this company had taken to expand its offering range, a return of focus on margins, and the consumption promise all propelled the call. the stock rallied handsomely as well, post our call.
However, owing to two factors, the stock has since given up nearly 40% from its high and is currently about 25% below our original call price.

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Prime stock alert: Shifting this auto stock from HOLD to BUY
Stocks
N V Chandrachoodamani

Prime Stock alert: Shifting this auto stock from HOLD to BUY

Indian markets have corrected about 10% (Nifty 50) from the last peak in December 2022. But many stocks have fallen much more than the bellwether index. This has provided an opportunity to revisit some of our recommended stocks โ€“ to either identify averaging opportunities or move them to a BUY from a HOLD.

Premium article available only to subscribers.

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Tax changes in mutual funds: How to manage your investments now
Mutual funds & ETFs
PrimeInvestor Research Team

Tax changes in mutual funds: How to manage your investments now

Changes in tax rules at the end of a financial year is not something that you routinely expect. And not when it is a sweeping change on taxation in your mutual fund! In this article, we are going to discuss the tax changes in mutual funds in 4 parts:
One, the changes effective April 1, 2023 and the categories impacted
The tax impact for you and what you can do to plan better
What should you do with your existing investments?
How should you plan your fresh investments?

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Low returns from debt funds? know how to manage this risk
Mutual funds & ETFs
Aarati Krishnan

Low returns from debt funds? Know how to manage this risk!

Low returns from debt funds? Know how to manage this risk!
After Silicon Valley Bank revealed large losses on its US bond portfolio that had eaten into its capital, thereโ€™s been a lot of social media outrage. Some folks are shocked that banks can make losses on a cast-iron investment such as US treasuries. Others seem to be appalled that Silicon Valley Bank is not alone and that many other global banks are in the same boat. This shows that investors at large have only a vague understanding of what rising interest rates do to bond portfolios.
You have also been bombarding us with questions on how interest rate risks can play out for debt funds, particularly target maturity, constant maturity and gilt funds. We try to address them here.

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Old vs New Tax regime: Tax Planning for 2023-24
Taxes
Pavithra Jaivant

Old vs New Tax regime: Tax Planning for 2023-24

If youโ€™re a salaried employee then youโ€™ve probably only recovered from the dilemma of old vs new tax regime and the process of collecting all the bills and proofs of investment to submit to your employer for the financial year that will end on March 31, 2023. So if youโ€™re wondering why we are telling you about tax planning for FY 24 when youโ€™ve only just emerged from under a small mountain of rent receipts and pharmacy bills – it is precisely to avoid the mad scramble that inevitably accompanies tax related deadlines that we advocate planning for taxes from right at the start of the financial year.
This gets even more important with several important changes proposed by Budget 2023 coming into force in FY 24.
In this article we will cover:
the key changes proposed by Budget 2023 that you should be aware of in your tax planning,
what you are giving up under the โ€˜New Tax regimeโ€™โ€™
re-examining the role of โ€˜tax-savingโ€™ investments in your portfolio and
the all-important question of old vs new tax regime

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How to pick stocks in 2023
Stocks
N V Chandrachoodamani

How to pick stocks in 2023

When we published our equity market outlook for 2023, we had mentioned where pockets of opportunity could be found. The correction the market is going through provides fertile grounds for stock picking. So here, we tell you how to pick stocks in 2023, in those pockets that we had noted. We do this using our Stock Screener.

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Debt funds for double indexation and high returns
Mutual funds & ETFs
Bhavana Acharya

Debt funds for double indexation and high returns

If there is one thing that has dominated the new fund offer space, and your collective interest, it is target maturity funds. Over the past year, the debt market has dealt with a swift rise in interest rates and we have issued multiple strategies to alert you on opportunities that presented themselves.

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