Sand Timer

04th February 2023

Dear Fellow Investors,

Hope everyone is keeping healthy and happy.

The budget as presented by the honourable finance minister is a testimony to the government’s mindset. In yet another finely crafted budget, the actions outlined, strike a balance between the need for growth and fiscal consolidation.

The budget mentions the need to invest in and incubate future-centric industries, new-age technologies and data sciences for the first time.

On the infrastructure front, a mammoth 33% increase in capital expenditure without blowing out the budget math is commendable. This not only supports the infrastructure industry but also helps the overall economy in long term.

With rallies being held and political elections in many states this year, the government didn’t try to offer freebies and candies thinking short-term and deferring the problems in long run.

Though few can argue that the budget hasn’t been much helpful in catering to the plight of rising inflation or reducing the burden of taxes in any big way, we think otherwise.

Fueling growth engines and increasing the income status of individuals is a better way to fight global inflation, rather than cooling it off through artificial fiscal spending.

Thinking on a global level, lesser changes in taxes on a year-on-year basis are more welcoming than tricks and tweaks.

The government’s plan to extend the benefit of the concessional corporate tax rate of 15% till March 2024 for newly incorporated manufacturing companies is set to give India the much-needed competitive edge.

The above move combined with PLI incentives offered today can harbinger foreign flows to set up industries in different sectors.

There is visible tax buoyancy in the country today enabling the government to pursue its targeted CAPEX plans.

Structural reforms carried out in the country over the past several years are helping the country to regain a sustainable growth momentum despite the persisting global challenges.

The PLI schemes with outlays of $3.5 billion, are expected to incentivize private players, both domestic and foreign, to set up manufacturing facilities in an environment of improving demand conditions and business confidence.

The relatively stable financial system will facilitate the disbursement of credit towards investment programmes in the future.

Major private investments are likely in the energy revolution, emerging tech, healthcare, logistics, industrial parks, data centres etc. which augurs well for the EPC and construction business.

Coming next to the recent volatility in the stock market, specifically Adani group companies. Such ups and downs should be taken as learning and the price paid taken as tuition fee in the market.

We didn’t participate in the bizarre movements but many have asked for our opinion on the stocks.

On fundamental grounds, many group companies have moat business but have been over-priced for a long time now.

One should remember that fundamental knowledge combined with technical analysis paves way for the best returns in individual stock picking.

We reserve to give any views on future movements in the stock prices as it not only depends on the companies but also on the overall market sentiments.

What’s interesting to study in all this movement is that our markets overall, be they Large-Mid-Small, all have been pulled down.

India’s Market Capitalization to GDP, also known as Buffett Indicator, has become reasonable after this windfall correction.

Currently, the Buffett indicator of less than one, suggests that markets are no longer trading at a premium to the economy, meaning being reasonably priced can surprise on the upside.

Further, we believe any positive news relating to the end of the Ukraine-Russia issue will herald good news for the humanity and world at large, driving sentiments upward and boosting the global markets.

Happy Investing.!

Leaving everyone with a thought –

“If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.”

– Benjamin Graham

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With Respect,

Chandranshu & Priyaanshu

+91–9953726305 & +91–8800967088

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