February 2014

It gives us great joy to celebrate four years of our first PMS strategy – India Equity. It has been a stellar performer with absolute low volatility. The fund has delivered more than 200% absolute return since inception and is one of the best in class performers across the globe. We have been able to achieve this by investing in quality businesses and with extremely low churn.

After the rally in January 2014 and the Sensex making a new high, we saw a meaningful correction in February. As we speak the market is all set for a pre-election rally. The focus is shifting back to domestic stories. As we are overweight on domestic and old economy stocks we are clearly benefitting from this shift. We expect significant re-rating of domestic business in run up to election. It’s been our observation that a lot of times some of the beaten down sectors and stocks make a significant move. We will stay away from short term moves in the market, however enticing they may seem, since as per mandate we will not compromise on quality of businesses we own and we would continue with our focus on high quality space.