Name: Prime Trends - Consumption Theme
Brand: smallcase
SKU: PRIMNM_0003
Price: 74007 INR

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Nifty 500 Index

Prime Trends - Consumption

Prime Trends - Consumption Theme

Bhavana Acharya

Capitalizing on the Indian spender’s premium aspirations

The universe comprises NSE-listed stocks that are reliant on consumer spending to grow. Within this large universe, the focus is on beneficiaries of rising discretionary consumption and not every consumer segment.&nbsp;

From the universe, stocks are filtered based on detailed bottom-up analysis to identify the ones that fit our investment thesis to create our watchlist.&nbsp;Qualitative analysis forms a significant part of our stock selection process as we aim to identify the companies best placed to grow. This is set against quantitative parameters to build the portfolio.&nbsp;

The key financial parameters we use for stock selection are:<ul><li>Net earnings growth over the past 5 years (adjusted for IND AS)</li><li>Gross margin trend over the past 5 years</li><li>RoCE averaged over the past 5 years (Evolving profitability &amp; RoCE profile for emerging businesses)</li><li>Debt to equity ratio</li><li>Valuations</li></ul>In addition to the above quantitative metrics, we apply qualitative filters based on stage of business growth, competition, target market, and others to identify those best-placed to grow.

The portfolio is market-cap agnostic.&nbsp;To balance risk and return, Prime Trends – Consumption is structured into three buckets based on the stage of business models:&nbsp;<ul><li>Bucket 1 – Comprises stocks with already established business models and market cap leaders in their categories currently.</li><li>Bucket 2 – Comprises stocks with emerging business models that have potential to grow bigger either in a niche category or through category expansions and acquisitions in the long term.</li><li>Bucket 3 – Comprises stocks with emerging businesses that are yet to establish visibility on their business model and growth. These could be high potential businesses, but their outcomes are not certain.&nbsp;</li></ul>

This smallcase has a quarterly rebalance schedule. Once every quarter, the research team reviews this smallcase and realign the weights with the selected asset allocation strategy for the next quarter

Prime Trends - Consumption Theme

Prime Trends - Consumption Theme

Overview

Stocks & Weights