| Summary of Contents
| SHAREKHAN TOP PICKS After a rather subdued end of 2011, the market surprised pleasantly with a strong rally in January of the new year. The rebound in many battered-down mid-cap stocks was massive with the CNX Mid-Cap Index appreciating by close to 20% since the beginning of this year. Some of the mid-cap stocks in our Top Picks basket also gave fabulous returns with IL&FS Transportation Networks Ltd (ITNL) appreciating by over 40% and PTC India (despite its disappointing third quarter results) moving up by 26% over the same period. In spite of the massive outperformance by a couple of mid-cap stocks our Top Picks basket appreciated at a relatively lower rate of 10.6% as compared to the 14-15% appreciation in the benchmark indices in the same period. This was because the Top Picks basket has a higher proportion of defensive stocks. This month, we are making three changes to the basket including two churns within sectors. First, we are replacing ITC with Marico due to the latter's strong Q3FY2012 performance. Besides, ITC usually underperforms prior to the announcement of the Union Budget in anticipation of a hike in excise duty on tobacco products, its core business. Second, we are replacing ITNL by Pratibha Industries. Again the churn is driven by the robust Q3FY2012 results of Pratibha Industries along with its comparatively better valuations. The third change is the replacement of PTC India due to its disappointing results and the continued pressure on its business due to the outstanding dues from the state electricity boards. We are replacing PTC India with Eros International purely because of the latter's valuations and the expectations of good quarterly results from the company. | | Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the companies mentioned in the article. | |
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