Name: Prime Trends - Consumption
Brand: smallcase
SKU: PRIMNM_0003
Price: 40111 INR

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Nifty_SM100

Prime Trends - Consumption

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;

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;

Qualitative parameters:The qualitative parameters are set to judge sustainability of earnings and the company’s ability to participate in the growth of the sector. Quantitative parameters: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>

The portfolio is market-cap agnostic. We shortlist stocks that meet the above criteria and which pass our quantitative and qualitative filters. However, this list comprises a wied variety of stocks with some stocks having strong established business models, a few which are emerging, and those that are in growing but nascent businesses.&nbsp;Therefore, 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

The final screened stocks are then weighted according to the selected asset allocation algorithm

Prime Trends - Consumption

Prime Trends - Consumption

Overview

Stocks & Weights