My Best Pick 2019

Talking stock

As poll fever heightens, Outlook Business presents an eclectic mix of investment ideas

Which government delivered the most for investors? That’s a pertinent question to ask as we head towards the 2019 Lok Sabha Elections. The five-year return for the Nifty 500 Index, from June 2014 to March 2019, till date is 12.42%. Considering that the market had rallied 20% between February 2014 and May 2014, in anticipation of a BJP-led government, that number looks better by an additional 4% annually. As opposed to this, the Manmohan Singh-led UPA government, berated for its non-performance, especially in the second term, returned 6.48% (June 2009-Jan 2014) and 28.57% (June 2004-May 2009).

While numbers bear out that the market fared better under UPA-I than under the Modi-government, it is fallacious to presume that indices are guided by government policies, at least in the medium-term. Global sentiment and allocation play a fairly significant role; the high return during UPA-I was led by large foreign flows and global tailwind. 

We have no clue whether UPA or NDA will come to power, or which way the global winds will blow over the next year or so. But we do know that, every time, irrespective of which party ruled and which way the macro swung, there were many individual stocks that delivered eye-popping return.

Clearly, for those investing in equities, what really matters, is compelling ideas to bet on. And that has been our attempt for the past six years — Outlook Business’ My Best Pick edition is a collection of stellar investment ideas identified by seasoned analysts and investors.

Like every year, this year’s edition also offers an eclectic mix of investment ideas across sectors such as financials, real estate, consumer discretionary and commodities. While there are some obvious large-cap names, there are more than a handful of small and mid-cap stocks.

As we get closer to voting day, there is an interesting divergence. Foreign institutional investors who were net sellers in 2018 have bought equities worth Rs.274 billion in March 2019. Local mutual funds, who were net buyers, have sold stock worth Rs.135 billion in the same month. Whether it is redemption pressure closer to the end of the financial year or a defensive move against an expected rise in volatility, the reason will be clear soon.