| Summary of Contents
| SHAREKHAN TOP PICKS The roller-coaster ride continued for the market. After the surge in October, the sell-off in November 2011 took the Sensex all the way down to 4700 level and threatened to break the multi-month range of the benchmark index due to the deepening of the euro zone crisis and the rising macro concerns domestically. However, the global markets have rebounded sharply in response to the concerted effort to infuse liquidity by the leading central banks of the world. The Indian government's initiative to push forward some key reforms has improved sentiments. Consequently, the Sensex gained more than 1,100 points (or over 7%) in the last one week alone. Despite the last week's upsurge, the Sensex and Nifty ended with losses of 3.8% and 4.4% respectively since our last monthly revision in the Top Picks basket on November 5, 2011. The broader market lagged the benchmark indices and the CNX Mid-Cap Index depreciated by 7.3% during the same period. Given the multiple market capital mix of our portfolio and the unexpected slump in the power stocks like PTC India, the Top Picks basket also lost 6.2% during the month. However, the Top Picks basket continues to outperform all the key indices over all the time frames. In this month, we are removing only one stock, Godrej Consumer Products (which has been part of the portfolio for a long time and given handsome returns). Though we continue to like the company but its vulnerability to foreign exchange fluctuations is making us cautious in the near term. However, we are adding two new stocks, Bank of Baroda (BoB) and Bharat Electronics Ltd (BEL). With the monetary tightening cycle at its peak, and expectations of both a cut in the cash reserve ratio and moderation in inflation going ahead, we are adding BoB, which is our preferred pick among the public sector banks under our coverage. BEL is being added purely due to its compelling valuations. Moreover, BEL tends to show a robust pick-up in execution in the second half of a fiscal. | | "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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