October 2012

After strong initiatives by the government, the market moved up significantly in September ‘12. In October ‘12 we saw consolidation in the market on account of discounting of corporate results which were a mixed bag. Most of the companies are struggling to deliver volume growth in a weakening economy. The market was spooked by RBI’s tough stand on interest rates which once again highlighted the fact that Inflation management is still the prime focus of RBI. We have already seen over the past several quarters that GDP growth is tapering down with very few companies being able to demonstrate growth in such a market environment. It doesn’t really come as a surprise that elevated interest rates are hurting most of the leveraged companies.

This is the ninth month in a row where we have not made any changes to the portfolio. We have continued our focus on high quality businesses and have been rewarded for this approach. All the three strategies have delivered an annualized return of more than 24% where the market has delivered just 3 to 7%. A recent ET brand survey has ranked most of the brands owned by our companies among the Top 100 most trusted brands of India.