Prime Strategies: Is it time for profit booking?

These are the worst of times for businesses. But the equity markets think otherwise.  Dancing to a tune that only the stock market hears, the Nifty has clocked many firsts in the last few months :

  • The Nifty’s official price earnings ratio (P/E) has reached an all-time high at 32 times.
  • The April 2020 bounce saw the highest calendar month returns in a decade.
  • The rolling 3-month returns in last three months are the highest over the decade.

This, when the GDP growth is a at a decadal low,  industrial production has slumped and corporate earnings are in a slump with little visibility. Should you rejoice at this divergence or view this with caution?  

profit booking

 Book profits

With a 49% return from the March 23 low, the Nifty is at lofty levels, accompanied by a  sharp rally in mid and small-cap stocks.

We think the V-shaped recovery witnessed in the market post the fall in March 2020 is unlikely to be justified  by a similar recovery in corporate earnings nor in the macro scenario in the next year or two. Market valuations currently are steeper than in previous bull market peaks like 2008.

While earnings visibility is low and valuations are high, there’s also a high degree of  complacency in the market that the rally will continue, as signaled by the behavior of the India VIX and rising  retail participation in cash market with a flurry of new demat account openings.

For these reasons, we think it is good to take some money off the table.

Let us explain the above reasons in detail.

Uncomfortable valuations

While the Nifty’s official PE based on standalone earnings of the underlying companies is at a record high, how does the PE look based on consolidated forward earnings? Well, consensus estimates of analysts place the Nifty 50’s consolidated earnings at a flat (compared with FY20), Rs 543 for FY-21. That takes it to a forward P/E ratio of 20.7 times Nifty’s current level of 11,372.

We do know that the Nifty’s consolidated quarterly earnings for June-20 has crashed by half over a year ago and is likely to continue a declining path for at least the next 2 quarters. Hence, by hoping for   flat earnings for the Nifty by the fiscal year-end, the markets are stretching it a bit in  in our view.

If we stay clear of the standalone/consolidated controversy and calculate the Nifty PE by taking  the total market cap of the Nifty companies and dividing it by the  trailing consolidated 12-month profits, the PE still is at a pricey  32 times.

 Even if analyst estimates of a 25% bounce back in earnings for FY-22 are met,  valuations would not correct much.  To this extent, the lofty valuations offer little comfort.  

Not similar to 2008

Nifty valuations seldom reach 30 plus levels in the early stages of a bull market. 

So how do we know if the market has not already made a bottom in March 2020? What if we are in a new bull phase already? Well, valuations trends from the previous corrections tell us that Nifty valuations seldom reach 30 plus levels in the early stages of a bull market.

Let’s take stock of the Nifty’s trailing consolidated P/E during the previous market peak and correction thereafter in 2008-09 (using MCap divided by trailing 12-month consolidated profits).

  • The consolidated trailing P/E of the top 50 companies around the peak of January 2008 stood at 24.7 times.
  • By June 2008, when the market was six months into correction, the Nifty50 companies’ P/E was at 14 times and  went on to touch even lower levels from there.
  •  The consolidated trailing PE stood at just 10.7 times in the March 2009 lows!

Interestingly, at the recent low on March 23, 2020 (which didn’t last very long)  the consolidated P/E did touch 15 times. But the falling earnings after that, combined with rising stock prices  has made  the Nifty 50 get very expensive very quickly. By June 2020, the P/E had bounced to 26 times and is now at 32 times in August 2020.

Contrast this with 2009: by August 2009, when the market was recovering from its March 2009 lows, the Nifty consolidated trailing P/E was still at 18 times!

The point that we are trying to make is simple:

  • The recent rebound has boosted the Nifty PE too far and too fast
  • Much of the dent to corporate profits from the Covid impact is ahead of us and the earnings fall this time around may be much higher and longer lasting than in 2008-09
  • While there was a clear road to earnings recovery by 2009-10, the present story is vastly different, clouded by the Covid -19 impact on incomes and job prospects.
  • Barring a few sectors like chemicals, pharma or FMCG, the earnings forecasts for most sectors for India are up in the air. Lower funds for the govt. to spend, lower surplus for companies to invest  and less money in the hands of consumers adds up to a hazy earnings outlook

Why the rally then?

Markets appear to be making the best of the situation. Let us explain with a couple of points:


Given that the direction of global liquidity is notoriously difficult to predict and that retail investors joining this rally are mostly chasing quick returns, it’s hard to say when the music will stop, popping this bubble.  

Global liquidity gusher: Stock prices over the past decade have been driven more by global liquidity than fundamentals. In this context, continued stimulus measures by the US Fed and record low interest rates globally are offering an even bigger prop to stock valuations worldwide, post Covid. Liquidity flowing into Indian stocks by virtue of FPI flows and domestic retail investors punting on small and mid-caps have also helped. But given that the direction of global liquidity is notoriously difficult to predict and that retail investors joining this rally are mostly chasing quick returns, it’s hard to say when the music will stop, popping this bubble. 

Optimism about earnings revival: The market appears to be taking positive cues from the silver linings in the recent earnings numbers – signs of rural demand holding up, consumer staples normalizing and Nifty operating margins holding up. While the Nifty firms’ consolidated sales fell 25% Y-o-Y and earnings tumbled 51%, ex-banking and finance companies, operating profit margins expanded by over a percentage point to 15.7%, thanks to aggressive cost cutting measures.  The market appears to have given a thumbs-up for this with a continuing rally post June earnings.

Mid and small-caps are rebounding from a long correction: While the Nifty 50 may have barely corrected before this rally, mid and small caps did go through a prolonged correction. From early January 2018 to their March 2020 lows, the Nifty Midcap150 and the Nifty Smallcap 250 have seen a 45% and 61% fall respectively; sliding throughout the 2-year period. Remember there was just a full 1 year of rally and 3 years of steady fall.

 The recent rebound in mid and smallcaps can therefore be seen as a relief rally.

  • From the lows in March 2020, 50% or 250 of the Nifty 500 companies have rallied over 50%. This has a mix of large, mid, and small-cap stocks.
  • Taking this 250 as a universe, if we look at the market-cap makeup, 3 in 5 companies (60% of companies) were below the market cap of Rs 10,000 crore. In other words, the companies that rallied swiftly are from the mid and small-cap space.

The market has not  rewarded the mid and small-cap segment without reason. After a prolonged downturn, markets found these segments better valued, with better earnings prospects.  Companies in Nifty Midcap 150, for example, managed to contain their June quarter earnings fall to 13% (for 115 companies for which results were available).

But what you need to take note is that mid and small-cap earnings have remained lack lustre since their 2017 peak. So that meant that they were able to showcase results in June 2020 on a lower base compared with their large cap peers who did not have a low base advantage.

Even assuming that this is the beginning of a broad-based rally – with mid and small-caps leading the move, the question is – which sectors to add to your portfolio, to participate in it. Equity markets have demonstrated many times in the past that every new bull market  is driven by a new set of themes and ideas.

The infrastructure and real estate theme died post 2008. The next decade saw very few stocks in the cyclical space participate save for the upswing in realty, basic materials, metals, and telecom in 2017 alone.

With Covid 19 all set to either completely upend traditional consumption patterns, policy priorities and ways of doing business, it appears quite likely that many sectors leading the previous bull market may see consolidation or see valuation derating giving way to a new set of players. Unless your portfolio is already positioned to ride this change, booking profits in your older positions does make sense.  

Taking other cues for profit booking

If the earnings and valuation make a case for profit booking, there are also other behavioural cues from the market that are making us  cautious about this rally.

Bull markets are founded in scepticism and die on complacency. 

Fear gauge at a low: Bull markets are founded in scepticism and die on complacency. The India Vix (Volatility index) or fear gauge is a good indicator of the extent of fear or greed in the market. Today, the index is a study in complacency.   This index captures the degree of volatility that traders expect in the market over the next 30 days. The low volatility in India Vix (graph below) show market perception that volatility is not expected to pick up anytime soon.

To put it simply,  there is little fear in the market. And that is not a good thing in these times, especially if the sentiment is driven by retail.

Non-institutional volumes surge: According to a report by Motilal Oswal Securities, the average daily cash volumes in the exchanges for July’20 were at Rs 622 billion, double that of same month 2 years ago and 78% more than a year ago. Importantly, non-institutional participants accounted for 72% of such volumes – the highest since August 2009!  That essentially means a lot of your peers out there are furiously trading! But not smarter folks like  mutual funds or domestic institutions.

Domestic institutions selling: Mutual funds, which have been supporting the market for the last couple of years have been net sellers through July and August till date. While lower inflows from investors and redemption pressures could be one reason for this, profit taking or staying cautious could well be the other reason.

One indicator of what MF managers think of valuations is their equity allocation in  dynamic asset allocation/balanced advantage funds. The equity allocations of such funds, – which take dynamic calls based on equity markets – have fallen from 65% in May 2020 to 55% in July 2020, suggesting that funds may be getting more cautious or hedging their equity positions based on  higher valuations. .

What to do

Much of this article has suggested that market has raced ahead of  fundamentals and there is not much sign of fundamentals catching up soon. But do remember JM Keynes’ words – markets can remain irrational longer than you can remain solvent.

In the present scenario, markets can remain lofty  until fundamentals catch up or do a U-turn to align with fundamentals. We do not pretend to know how the catch up will happen. It is for this reason that taking some money off the table is prudent – but exiting your equity exposures fully or even substantially is not.

For you, the simple ways to rebalance would be as follows:

  • Look at your own asset allocation. If your equity portion swelled from your original comfortable allocation decided in more normal markets, book profits and sweep some money into low-risk liquid/ultra-short options or even short-term bank deposits. These can be  redeployed when the opportunity arises.
  • If you have an exceedingly high equity allocation (over 75%) in a portfolio where your goal is less than 3 years away, book substantial profits to avoid being short changed at the nth hour by a correction  
  • If you hold mid and small-cap funds, simply rebalance them to your original allocation (say you had 20% 10 years ago, and it is now 25%) as a part of your overall equity rebalancing.
  • DO NOT try to stop SIPs and try and time them. That’s not the idea of SIPs.
  • If you hold mid and small-cap stocks, reduce your allocation to stocks based on valuations. Stocks that have sharply run up in the past 5 months and are stiff premiums to the Nifty must be your main choice for profit taking. Unless you are adept at stock picks, do not try to pick small-cap stocks based on recent  returns. You never know what stocks the next  rally will include, markets can be ruthless and throw the old favourites by the wayside.

(You can read our detailed write-up on rebalancing here: https://www.primeinvestor.in/how-to-rebalance-your-portfolio/)

If you are asking us when to redeploy the money, we don’t have an answer now as it is never easy to identify companies that survive this phase and make it to the next bull run. If we must throw darts, it is best done when  valuations favour it.

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31 thoughts on “Prime Strategies: Is it time for profit booking?”

  1. Sudhakar Kumaravel

    This is an excellent and a timely article.. I did take some money off the table from the equity but was wondering if i did the right thing.. my goal was to reduce the number of funds and also to reduce the risk of too much equity .. is the US market also heating up the same way and poised for a slide or is the earnings decent enough to keep those markets going.. Also, the interest rates are at all time lows in the foreign markets.. would one expect a stronger bounce back of the US economy especially with vaccine coming out round the corner..the reason I ask is to see if we should increase investment in N100 index..

    1. It is the money flow that is keeping the US market strong, yes. Earnings growth have defintiely slowed from 2-3 years ago. N100 should not account for more 15-20% of your portfolio as there is an additional risk – currency risk – with rupee strengthening a bit against dollar. Vidya

    1. Te best way to profit book with shares is set a P/E or P/B metric target and book profit or remove yoru capital when your stock breaches such target. Vidya

  2. I am investing for the long term, i.e, another 15-20 yrs at least. Bought Axis small cap fund & PPFAS funds in lumpsum in March, and so doing good now. Should I book profit or hold these funds?
    I believe holding would be better because those lows of the market dont come that often. I am also running the SIPs at it is & if market dips substantially, would again invest lumpsum.

    Thanks in advance for your valuable suggestion.

    1. Hello sir,

      We see you have raised this comment as a ticket. We we have responded to your question there.

      Thanks,
      Bhavana

  3. Hi

    Thanks for an excellent and timely article. My question is that for a goal which is 3 years away is it prudent to book profits or exit equity with funds in the green as of now ?

    Thanks

  4. Surendran Madhavan

    Excellent and timely analysis that gives addtional comfort to make some calls here 🙂
    If the portfolio is large cap and large midcap heavy, would it make sense to take some money off there assuming the rally there has run out of steam , while mid/small cap rally is continuing as we speak?
    Such a strategy defies convention though. Would like to hear your view please.

    1. Please reduce based on
      1. overall equity excesses
      2.Take out underperformers first
      3.Book profits in risky segments next.
      4. If none of those work, book profit in each fund to bring to your original allocation in those funds.

      It is best not to sit in judgement over which will run steam and which will not as markets can remain irrational for long.
      Vidya

  5. Sriram Ramachandran

    Sir, I have few clarifications.
    1. Nifty is now composed of stocks with high valuation and the index composition has changed with what it was in 2008. Hence just asking if it would be appropriate to compare valuations against 2008?

    2. If portfolio is 100% in equities (agree it might not be classical asset allocation but since only equities can beat inflation from long term view point) and composed of few large cap stocks, many mid cap stocks and PSU stocks mostly (midcap PE is high because of weak earnings) and some midcap stocks have run 50-70% from March lows but still in loss because this was purchased in 2018 correction, whether to book losses in such midcap stocks? At stock level, I feel they have potential to go up, clean management and market leader in respective category (For eg., EVEREST INDUSTRIES, NBCC). What will be your advise?

    3. Agree that VIX is at lower levels and indicates complacency as well as many demat accounts opened recently reminding of RPOWER in 2008. But since many are expecting markets to fall and there is general disbelief in street about why markets are rising, whether this will be contrarian indicator indicating more rally in the market?

    1. Sriram Ramachandran

      My earlier comment is still showing awaiting moderation. Can you please do the needful?

      1. Sir, we reply to blog comments when we can. You can always raise a ticket if you have specific questions 🙂 We have now responded to the other comment. thanks, Vidya

    2. 1. We took the top 50 stocks then, which is the right way to look at it. Stocks are not born with high valuations. They become high. Whether it is justified is the question.
      2. We didn’t recommend book profits based on 3-month run up. We have said it has made markets and stocks expensive. So that is not the point to look at individual stocks/funds. We have suggested that you look at your original allocation in equity and if it is has swelled, it means equity is inflated and needs to be prune. If allocation is 100% equity, then you should go by your return expectation vs actual return. If your actual return has exceeded your original expectation (if it was indeed sound and prudent expectation), that is another way to book profits. There is a theory called Value average plan that you can google, where investments are increased or decreased based on real vs expected returns.
      3. If there is ‘general disbelief in street about why markets are rising, you don’t expect 72% retail participation in cash markets 🙂 There is no general disbelief….there is a huge gush of money (mainly FPI) on which retail is also thriing and when that music stops, there will be danger.As we said, markets may remain irrational for very long. We have no intention to time that as we really don’t know 🙂

      thanks Vidya

  6. Thanks for the article. For equity MF investment ( for long term) should I assume it is the job of fund manager to book profit in current situation, so I don’t have to do anything?

    1. A fund manager will book and redeploy. To that extent, you need not sell a fund because it is overvalued. THat is what we mean when we say a fund manager will be booking profits. But when your equity portion of investments swell, you need rebalancing. That is what you are doing here. All that we are doing now is to sound you off to check if your portfolio needs rebalancing. thanks, Vidya

  7. I wish to have a 60-40 equity debt allocation. I am currently underinvested in equity( approx 40%) and holding 60 percent of my portfolio in PPF, arbitrage and short term debt funds. At the beginning of the year I was only 30 percent in equity and hence bought aggressively in march/april during the fall. Does it make sense for me to book profits now or should I continue buying to reach 60% equity allocation via STP’s? The market feels overpriced as your article clearly highlights.

    1. If your portfolio is still below your desired equity but individual funds have seen over 30% return (roughly the avg returns of equity funds) since you invested – simply reduce expsure to the funds that ran up the most and redeploy them with longer STPs of 12-18 months – all this provided the sums are large in several lakhs. Else, it;s ok. thanks, Vidya

  8. Hello,
    Thanks for the article.
    One question: If equity allocation at this point of time is still below the desired level then what is the way forward? Whether to wait for substantial correction ,look for nifty PE level and then invest or keep investing in current market until desired level of asset allocation is reached?

    1. Sir, By desired level do you mean your original or planned allocation? Please do not deviate from your desired allocation at any time – only if it swells or like we have stated in the report – when your desired level is very high (over 75% equity), should you reduce or not go for it now. Otherwise continue with current allocation. We usually give calls on when to add or accumulate like we did before the March lows. https://www.primeinvestor.in/prime-strategy-at-what-nifty-levels-should-you-be-investing/ (not applicable now). Also, read the rebalancing article link in the end. It will tell you how to handle this. thanks, Vidya

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  5. The Research Analyst has not served as director, officer or employee in the subject company, AMC or insurance company of the mutual fund or insurance policy that is the subject of this report, or company whose bonds, NCDs, fixed deposits or other savings products that is the subject of this report.
  6. The Research Analyst or their relatives do not have any known direct or indirect material conflict of interest including long/short positions in the subject company.
  7. The Research Analyst may hold investments in the stocks, mutual fund schemes, bonds, fixed deposits, insurance policies, or other products that are the subject of the recommendations provided as part of the Research Services. The Research Analyst certifies that they will not act in a manner contrary to their views on these securities except in the event of significant news or event or change in personal financial circumstances and without formal approval from the directors of PrimeInvestor Financial Research Pvt. Ltd. or the compliance officer.
  8. There are no actual or potential conflicts of interest arising from any connection to or association with any issuer of products/ securities, including any material information or facts that might compromise its objectivity or independence in the carrying on of the Research Services. Such conflict of interest shall be disclosed to the client as and when they arise.
  9. The RA or its directors or its employee or its associates have not managed or co-managed the public offering of any company. The RA or its directors or its employee or its associates have not received any compensation for investment banking or merchant banking of brokerage services from the subject company. The RA or its directors or its employee or its associates have not received any compensation for products or services other than above from the subject company. The RA or its directors or its employee or its associates have not received any compensation or other benefits from the Subject Company or 3rd party in connection with the research report/ recommendation.
  10. The subject company of its research recommendations was not a client of the RA or its directors or its employee or its associates during twelve months preceding the date of recommendation services provided.
  11. The RA or its directors or its employee or its associates has not served as an officer, director or employee of the subject company. Research Analysts has not been engaged in market making activity of the subject company.

PrimeInvestor Financial Research Pvt. Ltd., its Associates, the Research Analysts or their relatives holds ownership of 1% or more, in respect of the said issuer company(ies)? – NO

8. Termination of service and refund of fees:

The RA may terminate or suspend rendering of Research Services to the client in the following circumstances:

  1. On account of suspension/cancellation of registration of RA by SEBI. In case of suspension of certificate of registration of the RA for more than 60 (sixty) days or cancellation of the RA registration, RA shall refund the fees, on a pro rata basis for the period from the effective date of cancellation/ suspension to end of the client’s subscription period.
  2. The RA voluntarily chooses to terminate its Research Service. In the event of such termination of the Research Service, the RA shall refund the fees, on a pro rata basis for the period from the date of such termination of research service to end of the client’s subscription period.

9. Grievance redressal and dispute resolution:

Any grievance related to:

  1. nonreceipt of research report, or
  2. missing pages or inability to download the entire report, or
  3. any other deficiency in the research services provided by RA

shall be escalated promptly by the client to the person/employee designated by RA, in this behalf as under:

Name: Bhavana Acharya
Designation: Director & Compliance Officer, PrimeInvestor Financial Research Pvt Ltd
Email: [email protected]

The RA shall be responsible to resolve grievances within 7 (seven) business working days or such timelines as may be specified by SEBI under the RA Regulations.

RA shall redress grievances of the client in a timely and transparent manner. Any dispute between the RA and his client may be resolved through arbitration or through any other modes or mechanism as specified by SEBI from time to time.

If the client is not satisfied with the response of the RA, he/she can lodge his/her grievances with SEBI at scores.sebi.gov.in. Alternatively, the client may also write to any of the offices of SEBI. For any queries, feedback or assistance, please contact SEBI Office on Toll Free Helpline at 1800 22 7575 / 1800 266 7575

Details on grievances are available on the Website as follows: https://primeinvestor.in/ra-grievance/

10. Additional clauses:

Scope of the Research Service: The Research Services will be limited to providing independent research recommendation and shall not be involved in any advisory or portfolio allocation services. The Research Services are not meant to be tailor-made or customized solutions that specifically apply to each client based on his/her risk profile.

The RA never guarantees the returns on the recommendation provided. Investor shall take note that investment/trading in stocks/Index or other securities is always subject to market risk. Past performance is never a guarantee of same future results. The RA shall not be responsible for any loss to the Investors.

This service is not directed for access or use by anyone in a country, especially the USA, Canada or the European Union countries, where such use or access is unlawful or which may subject PrimeInvestor Financial Research Pvt Ltd or its affiliates to any registration or licensing requirement.

The Research Service, including recommendations, research reports, updates, and other information will be accessible through the RA’s website https://primeinvestor.in only. Such recommendations and updates will not be provided over phone calls.

Fees: Our current fee structure, the term and duration of our subscription for our Research Service, can be viewed on our website: https://primeinvestor.in/prime-pricing. Eligibility for any discounts is ascertained at the time the client subscribes. Any such discount and its tenure shall be at the discretion of the RA.

Subscription and access to content services fall under the purview of Goods and Services Tax (GST) as per the current indirect taxation policy, Government of India. Unless otherwise indicated, prices stated on our website are exclusive of applicable GST, any applicable value added tax (VAT) or other sales taxes. We are a business-to-consumer (B2C) service provider and we do not commit to provide any input tax credit on GST charged on subscription to our Research Service.

We may change the Subscription Fees and charges then in effect, or add new fees or charges which will take effect at the end of the client’s subscription period, by giving notice in advance and an opportunity to cancel renewal of the subscription.

Subscription Access & Renewal: Subscription to the Website commences immediately on the realisation of payment of the Subscription Fees. Subscriptions are set to be renewed automatically at the end of the subscription period.

Unless the client notifies us before the end of his/her subscription period, or the client cancels the auto-renewal mandate within the period specified by law, that the client does not wish to renew his/her subscription, the client’s subscription will renew for the period defined by the client’s subscription plan. We will charge the subscription using the same payment method that you previously used.

Although the client may notify to us his/her intention to his/her subscription, such notice will only take effect at the end of his/her then current subscription period, and he/she will not receive a refund other than as set out under Clause 8 in these Terms.

The client may notify us of his/her wish to cancel his/her subscription by sending an email to [email protected]. The client must provide at least 5 business days advance notice for this to be implemented.

Refunds: There can be no cancellation and refund of subscription fee paid once the subscription is active, other than as stated in Clause 8 of these Terms. If the client is entitled to a refund as specified under Clause 8 of these Terms, the RA will credit that refund to the card or other payment method used by the client to submit payment, unless it has expired - in which case the RA will contact the client to proceed with the refund. If we do issue a refund or credit due to circumstances outside the obligations specified under Clause 8, we are under no obligation to issue the same or a similar refund in the future.

General disclaimers: The recommendations made herein in the Research Services are expression of views and/or opinions and should not be deemed or construed to be advice for the purpose of purchase or sale of any security, nor a solicitation or offering on any investment/ trading opportunity on behalf of the company, AMC, insurance company, or issuer of security referred to herein.

The content and research reports generated by the RA does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities.

The information/ opinion/ views mentioned in research reports or by the RA are not meant to serve as a professional guide to the client or recipients of this Report. The research report, recommendation, or any other content published by the RA do not assure or guarantee any minimum or fixed returns to the client or recipients of the reports/ recommendations/ content.

Use of this information is at the client’s own risk. The client must make his/ her own investment decisions based on his/her specific investment objective and financial position and using such independent advisors as he/she believes necessary. The services rendered by the RA are on a best-effort basis. All information in the content or research report of the RA is provided on an as is basis. Information is believed to be reliable but the RA does not warrant its completeness or accuracy and expressly disclaim all warranties and conditions of any kind, whether express or implied.

While due care has been taken to ensure that the disclosures, information, and opinions given are fair and reasonable, PrimeInvestor Financial Research Pvt Ltd and/or none of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information/ opinions/ views contained in the research report and recommendations that form part of the Research Service, and/or mails, social media or notifications issued by PrimeInvestor Financial Research Pvt Ltd or any other agency appointed/authorised by PrimeInvestor Financial Research Pvt Ltd. Returns and performance figures mentioned in the research report represent past performance and should not be constituted to be future returns or guaranteed returns.

Any agreements, transactions or other arrangements made between the client and any third party named on (or linked to from) the Website are at your own responsibility and entered into at your own risk. Any information that you receive via the Website, whether or not it is classified as “real time”, may have stopped being current by the time it reaches you. Market price information may be rounded up/down and therefore may not be entirely accurate.

The purpose of these disclosures is to provide essential information about the Research Services in a manner to assist and enable the prospective client/client in making an informed decision for engaging in Research Services before onboarding.

History, present business and background: PrimeInvestor Financial Research Private Limited is registered with SEBI as Research Analyst with registration no. INH200008653. The Research Analyst got its registration on August 19, 2021 and is engaged in offering research and recommendation services.

Disciplinary history: There are no pending material litigations or legal proceedings against the Research Analyst. As on date, no penalties / directions have been issued by SEBI under the SEBI Act or Regulations made thereunder against the Research Analyst relating to Research Analyst services.

Details of the RA's associates: No associates.

Usage of Website Content: This Website is controlled and operated by the RA. All material, including research reports, recommendations, portfolios, ratings, lists of financial products, illustrations, statements, opinions, views, photographs, products, images, artwork, designs, text, graphics, logos, button icons, images, audio and video clips and software (collectively, “Content”) are protected by copyrights, trademarks and other intellectual property rights that are owned and controlled by the RA or by other parties that have licensed their material to us.

Except where otherwise agreed in writing with the RA, material on the Website is solely for the client’s personal, non-commercial use. Except as provided below, the client must not copy, reproduce, republish, upload, post, transmit or distribute such material in any way, including by e-mail or other electronic means and whether directly or indirectly and the client must not assist any other person to do so.

Without the prior written consent of the RA, modification of the materials, use of the materials on any other web site or networked computer environment or use of the materials for any purpose other than personal, non-commercial use is a violation of the copyrights, trademarks and other proprietary rights, and is prohibited. Any use for which the client receives any remuneration, whether in money or otherwise, is a commercial use for the purposes of these Terms.

The client may occasionally distribute a copy of a research report, or a portion of the same, from the Website in non-electronic form to a few individuals without charge, provided the client includes all copyright and other proprietary rights notices in the same form in which the notices appear, original source attribution, and the phrase “Used with permission from PrimeInvestor Financial Research Pvt. Ltd.”

While the client may occasionally download and store research reports or information from the Website for his/her personal use, he/she may not otherwise provide others with access to the same. The foregoing does not apply to any sharing functionality we provide through the Website that expressly allows the client to share Content or links to Content with others. In addition, the client may not use Content he/she has downloaded for personal use to develop or operate an automated trading system or for data or text mining.

The client agrees not to rearrange or modify the Content available through the Website. The client agrees not to display, post, frame, or scrape the Content for use on another website, app, blog, product or service, except as otherwise expressly permitted by these Terms. You agree not to create any derivative work based on or containing the research products and Content. The framing or scraping of or in-line linking to the Services or any Content contained thereon and/or the use of webcrawler, spidering or other automated means to access, copy, index, process and/or store any Content made available on or through the Services other than as expressly authorized by us is prohibited.

The client further agrees to abide by exclusionary protocols (e.g., Robots.txt, Automated Content Access Protocol (ACAP), etc.) that may be used in connection with the Research Services. The client may not access parts of the Research Services to which he/she is not authorized, or attempt to circumvent any restrictions imposed on your use or access of the Services.

As a general rule, the client may not use the Content, including without limitation, any Content made available through one of our RSS Feeds, in any commercial product or service, without our express written consent.

The client may not create apps, extensions, or other products and services that use our Content without our permission. The client may not aggregate or otherwise use our Content in a manner that could reasonably serve as a substitute for a subscription to the Website.

The client may not access or view the Services with the use of any scripts, extensions, or programs that alter the way the Services are displayed, rendered, or transmitted to you without our written consent.

The client agrees not to use the Services for any unlawful purpose. We reserve the right to terminate or restrict the client's access to the Website if, in our opinion, the client's use of the Services may violate any laws, regulations or rulings, infringe upon another person's rights or violate these Terms.

Prohibited content: The Website includes comments sections, blogs and other interactive features that allow interaction among clients and between clients and the RA. We call the information posted by or contributed by users “Contributed Content.” In the course of availing of the Research Services or uploading any post or comment on the Website, the client shall not post any Contributed Content that (i) contains nude, semi-nude, sexually suggestive photos, (ii) tends or is likely to abuse, harass, threaten, impersonate or intimidate other users of the Website and/or Research Services, (iii) is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely to use or have access to the Website and/or Services, or (iv) otherwise violates, is prohibited or restricted by applicable law, rule or regulation, is offensive or illegal or violates the rights of, harms or threatens the safety of other users of the Website and/or Services (collectively “Prohibited Content”).

We reserve the right to cease to provide the client with the Research Services or access to the Website, or terminate your subscription, with immediate effect and without notice and liability, for violating these Terms, applicable law, rules or regulations and reserves the right to remove Prohibited Content which is in violation of these Terms, or is otherwise abusive, illegal or disruptive. The determination of whether any content constitutes Prohibited Content, violates these Terms, or is otherwise abusive illegal or disruptive, is subject to the sole determination of the Firm.

Changes to Research Services: We are constantly endeavouring to improve the quality of Research Services provided to our clients. Due to this, the form and nature of the Research Services provided may change from time to time without any prior notice to the client. We reserve the right to introduce and initiate new features, functionalities, components to the Website and/or Research Services and/or change, alter, modify, or discontinue existing ones without any prior notice to the client.

Warranty and liability disclaimer: The Website, Research Services, and all the materials and services, included on or otherwise made available to the client through this Website is provided by the RA on an “as is” and “as available” basis without any representation or warranties, express or implied except otherwise specified in writing. Without prejudice to the foregoing paragraph, the RA does not warrant that:

  • This Website and/or Research Services will be constantly available, or available at all;
  • The information on this Website or provided through the Research Services is complete, true, accurate or not misleading; or
  • The quality of any products, services, information, or other material that you obtain through the Website or Services will meet your expectations.

The RA, to the fullest extent permitted by law, disclaims all warranties, whether express or implied, including the warranty of merchantability, fitness for particular purpose and non-infringement. The RA makes no warranties about the accuracy, reliability, completeness, or timeliness of the Website, Research Services, Content, Contributed Content, Services, software, text, graphics and links.

The RA does not warrant that this Website, Research Services, information, content, materials, or any other material included on or otherwise made available to you through this Website, their servers, or electronic communication sent by the RA are free of viruses or other harmful components.

Nothing on this Website constitutes, or is meant to constitute, advice of any kind.

Indemnification: The client:

  1. Represents, warrants and covenants that no materials of any kind provided by him/her will:
    1. Violate, plagiarise, or infringe upon the rights of any third party, including copyright, trademark, privacy or other personal or proprietary rights; or
    2. Contain libellous, Prohibited Content or other unlawful material;
  2. Hereby agree to indemnify, defend and hold harmless the RA and all of the RA’s officers, directors, owners, agents, customers/clients, information providers, affiliates, licensors and licensees (collectively, the “Indemnified Parties”) from and against any and all liability and costs, including, without limitation, reasonable advocate’s fees, incurred by the Indemnified Parties in connection with any claim arising out of any breach by the client of these Terms or the foregoing representations, warranties and covenants. The client shall cooperate as fully as reasonably required in the defence of any such claim. The RA reserves the right, at its own expense, to assume the exclusive defence and control of any matter subject to indemnification by the client.

Applicable law: This Website, including the Content and Contributed Content and information contained herein, and the provision of Research Services shall be governed by the Securities and Exchange Board of India, laws of the Republic of India and the courts of Chennai, India which shall retain exclusive jurisdiction to entertain any proceedings in relation to any disputes arising out of the same. As such, the laws of India shall govern any transaction completed using this Website.

Information gathered and tracked: Information submitted or collected on the Website or pursuant to the use of the Services is stored in a database. Specifically, we store the username, name, e-mail address, contact number, as submitted or collected on our Website or through the provision of the Research Services. We may use such information to send out occasional promotional materials, including alerts on new Services available, or other promotional and marketing material relating to our clients and customers.

In accordance with the Information Technology Act 2000, the name and the details of the Grievance Officer at PrimeInvestor is provided below:

Mr. Srikanth Meenakshi
PrimeInvestor Financial Research Pvt. Ltd., Registered office: 659, 4th Avenue, D-Sector, Anna Nagar Western Extension, Chennai 600 101.
Email: [email protected]

11. Mandatory notice:

Clients shall be requested to go through Do’s and Don’ts while dealing with RA as specified in SEBI master circular no. SEBI/HO/MIRSD-POD-1/P/CIR/2024/49 dated May 21, 2024 or as may be specified by SEBI from time to time.

12. Optional Centralised Fee Collection Mechanism:

SEBI has operationalized a centralized fee collection mechanism for IA and RA. Under this mechanism, clients shall pay fees to IAs/RAs through a designated platform/portal administered by a recognized Administration and Supervision body. This is an optional mechanism for the registered entities. At this time, PrimeInvestor has opted out of this fee collection mechanism. Therefore, all subscription payments for the Research Services will be through the modes as specified in Clause 5 of these Terms.

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