SANDIP SABHARWAL

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LATEST UPDATE JUNE 2021

The current month was a mixed one for the markets with the Large Cap Indices faltering off after the strong runup of May while the broader markets momentum continued. While Nifty was up just around 0.9% the Midcap Index rallied by around 4.5%. As I write now it is very clear that there will be an aggressive recovery worldwide over the next 12 months. However with recovery will also come the side affects of rising inflation as most commodities have rallied hugely over the last 6-9 months. However the story in India might be a bit different due to the second covid wave, high inflation and the impact on that on consumer demand.

The earnings growth estimates for next year if I take into account all broking houses projects varies between 32-40%. While one might argue that this should be possible because last year the first quarter was a washout, it does not take into account a possible increase in interest rates at some stage and the huge pressure that rising commodity prices as well as a return of normal costs can put on the profitability of companies. With an expected GDP bounce back of 12% an earning growth of 30-35% should be possible under normal circumstances, however the estimates have now got downgraded to more near 9%. In a scenario when input costs move up by 50-100% and the economy is just recovering this could become a challenge and that is what I will be monitoring. However a recovering economy will give huge investment opportunities at the right time. Many recovery plays have corrected post the start of the second wave in India. These will provide very good opportunities. Capex cycle recovery and infrastructure and green investments are a reality and companies in these segments will also give good opportunities. Many fancied sector stocks are currently expensive and as such can only be bought on corrections. Overall market valuations are not expensive if we believe that 35% earnings growth is for real. However if we trend towards 25% then markets look quite expensive.

We need to move forward with caution as well as optimism to capture opportunities as they come. Overall I do not expect huge returns from benchmark indices this year from the current levels

Our products across the board performed strongly

PRODUCT PERFORMANCES

This was an exceptional month for us in terms of our product performances where we did very well across the board. Our long term products built on their performances, Power Alpha Stocks saw strong profit bookings and Only for Traders saw its huge winning run continue. Our small cap Winners Plan has see huge multibagger returns across a number of our recommendations.

ONLY FOR TRADERS

Only For Traders continued its exceptional performance for this year. Profits on a 2 lot basis are now running at Rs 440000 which is huge in the current market conditions. Yes we might be less exciting where we avoid high volatility stocks but we are delivering returns with low downside protection.

The product had an average month with mild profits in June driven by our caution on the markets. In the last 7 months there have now been 5 one lakh plus profit months. We will get 3-5 very good months in a year 3-5 average months and 3-5 not very good months. The ROI of this product isrunning very high at this point of time

POWER ALPHA STOCKS

Power Alpha Stocks had another good month where we could do 3 profit bookings of a total of Rs 43000. The good thing about this product is that the money comes back after profit booking and after times of strong profit booking and at elevated market levels we have the cash to redeploy. Overall opportunities will be good for this product as market volatility plays out and gives us opportunities to take more aggressive positions. The high ROI of this product continue, overall profits were around Rs 430000 for Calendar 2020. Overall opportunities will be good for this product even in the future and we will see to capture them. At peak capital the ROI was 56% and at Average capital 72% in 2020. In the first half of 2021 peak capital deployed was Rs 6 Lakhs and profits booked were Rs 160000 plus.

TARGET BLUECHIP PORTFOLIO

The Target Bluechip Portfolio had a subdued month with flat returns while the markets rallied around 0.9%. We continue to maintain a good cash buffer which will hold us in good stead over the next two months if things move as I expect them to. Since inception returns are nearly 90% from the time the portfolio started off more than two years back a substantial outperformance. This is an ideal portfolio for low-risk investors. We have used the momentum of the markets to book profits and generate some cash which will be redeployed appropriately. The outperformance over the last two years has been near 100%.

TARGET MIDCAP PORTFOLIO

Target Midcap had an excellent month with returns of 5.5% for the month. Stock selection is working well. The returns for this year since beginning have now reached 37% and we have outperformed all competing products. Overall, the portfolio gave 44% returns for 2020 which is exceptional. Since inception returns from end of 2019 are now 98% much above the indices. This portfolio has huge potential with some stocks having the potential to be multibaggers over the next few years. This portfolio is all about a journey which will do good over 2-3 years. Average valuations of our portfolio is half the midcap index and that of most momentum midcap mutual funds and PMSes. This is an ideal portfolio for long term investors who are willing to take the risk of short term underperformance.

PLATINUM PLAN

The Platinum Plan is our oldest Long Term Portfolio plan and did exceptionally well during the month with returns of 5.34% . The YTD returns are now 37% and since inception returns are 419% with a CAGR of returns of over 25%. The portfolio has a good mix of largecaps and smaller midcaps which have good potential over the long run. The portfolio performance should pick up going forward. We used sharp upmoves in many stocks to book profits to redeploy later. This portfolio is a mix of Large Caps and Small Caps. This is an ideal medium risk portfolio.

WINNERS PLAN

Small and smaller sized midcaps started to outperform and this helped many of the holdings rally. The performance of our recommendations has been exceptional . Many of our recommendations have become multibaggers and we have booked profits in some of them. We generated many ideas over the last few months, some of which rallied, and some are still to perform in 2021. Many of the recommended stocks do have deep value however many PMS fund managers and other investors burnt by small cap investing might not come back fast. We need to adapt accordingly. However, given high operating leverage small caps will do well in 2021/22

POSITIONAL TRADING CALLS

This is the only product of ours which has seen some challenges with good months getting juxtaposed by months where we have got stuck in some positions thus reducing overall profitability. This month was profit making with 2 Lot profits of over Rs 20000. However a bad May has undone the good work of rest of the months of the year. Overall it has not been satisfactory in the near term.. We hope to come back strongly and match up the performance of the other products going forward.

For more details write to us at info@asksandipsabharwal.com . You can also call us up at 7303163931/022-66666931 or visit www.asksandipsabharwal.com