August 2012

August – 2012 was an eventful month in the middle of worsening economic data. We saw a change of guard in the Finance Minister of India who is now making an attempt in bits and pieces towards revival of sentiment. In the middle of all this the CAG report on coal allocation rocked the country. The entire monsoon session of parliament was a wash out as a result of this. The opposition has been very vocal and adamant in demanding the resignation of the PM because of which we are almost on the verge of de-allocation of all the coal blocks allotted during the UPA regime. This is sending shivers down the entire banking sector as this might lead to even higher NPA’s for them. Markets have rallied for the first 25 days of the month on the back of constant FII flows with most of the gains getting reversed in the last 5 days of the month.

Our focus on quality businesses have once proven to be beneficial for most of our investors. We were able to outperform the index by more than 4% for the month of August. Out of the 29 companies in our Portfolio Management Services (PMS) portfolios, only one company reported de-growth in revenue. 12 out of 29 companies reported more than 20% growth in profit which is significant considering the challenging times the economy is facing. On an aggregate basis we have significantly outperformed the broader market in both revenue and profit growth. We have not changed any holdings in the month of August – 2012.