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Contra Bets

Contra Bets - This Basket will Yield Capital Appreciation and Dividends

When the third richest person in the world- Mr Warren Buffett has made money on this philosophy ‘Be Greedy When Others are Fearful’, we should pay heed to it. Investors have been fearful in taking exposure in automobile, pharmaceutical and PSU sector and their stock prices have corrected brutally. Most of these stocks are trading below their ten year average price/earnings multiple. We have constructed this portfolio as the valuations are cheap and the stocks are offering good dividend yield.

Why Should you Invest in this Portfolio...

Financials have broadly Underperformed Nifty Since Beginning of Pandemic. It’s Time for their Come-Back!

Nifty Bank index has underperformed Nifty by 25% since beginning of the pandemic till April 2022. This is set to reverse going ahead as bank’s are seeing improvement in asset quality, pick-up in credit growth & bigger banks are adequately provisioned and well capitalized to ride this wave of economic recovery.

Source: ACE Equity

Auto’s & Auto Ancillary Comprising 50% of Manufacturing Gross-Domestic Product of our Country has Underperformed Nifty

Chip shortages & rural slowdown has led to auto stock prices getting impacted with the Nifty auto index having underperformed by 15% since beginning of pandemic. Gradual shift to electric vehicles (EVs) has opened a plethora of opportunities for auto players and they can significantly benefit from this megatrend going ahead. With India being an exporter to the world, auto companies stock can see a swift recovery going ahead.

Source: ACE Equity

Nifty PSU Index- Good Dividend Yield + Limited Downside + Privatization Theme to Help PSU Stocks

Nifty PSU Index is quoting at a price/earnings ratio of 6.3 times, price/book of 1.5 times and a dividend yield of 6.6% as of April 2022. This makes investing in stocks of this index extremely lucrative! Given the government focus on privatization, this theme can perform well in the longer run.

Particulars Valuation Ratios of Nifty PSE Index (in %)
Price/Earnings 6.3
Price/Book 1.5
Dividend Yield 6.6
Source: ACE Equity

Stocks Exited from this Basket

Stocks Exited Gains/Losses (in %)
Balkrishna Industries 242
Divis Laboratories 202
SAIL Ltd 190
Ajanta Pharma 135
Bharti Airtel 102
Cipla 90
Pfizer Ltd 62
Oil India 49
Gabriel Ltd 41
Glenmark Pharma 35
Aurobindo Pharma 13
Coal India -18
Scrip name Scrip Allocation

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Incorporated in 2004, Prudent Broking Services Pvt. Ltd is a Stock Broking and Depository Participant service provider. Company is a member with Bombay Stock Exchange(BSE), National Stock Exchange(NSE), Metropolitan Stock Exchange (MSEI), Multi Commodity Exchange of India Ltd. (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) & Central Depository Services(India) Limited(CDSL).

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