The wild fluctuation in stock prices has left investors unnerved. But a section of experts strongly believe that India is in a sweet spot relative to other economies.

Better placed among EMs India is relatively better placed among the emerging economies and should benefit from the various initiatives the Centre has taken over the past eighteen months, said Sohini Andani, Fund Manager, SBI Mutual Fund, at the Bullet-proof Investing -2016 seminar organised by the Tamilnadu Investors Association here on Saturday.

But, with the markets trending down, experts advice caution when it comes to stock picking.

So, what are the factors that investors need to keep in mind while investing in equities?

Chokkalingam, CIO, Equinomics Research, felt that as an investor one needs to understand and evaluate the management and their execution capability. While most of us focus on the recent financials and profitability, Balakrishnan, an independent analyst, stresses on the need to look at the long-term trend in financial performance. He urged investors to look beyond just revenue and profit and focus on balance sheet metrics, such as return ratios (return on capital employed).

Analyse pros & cons “There is a story behind every business and it is important to understand that,” insists Harrish Zaveri, Fund Manager, DSP BlackRock Mutual Fund. Even as the market has had its reservations about the airline sector he listed the factors that were in favour of the sector, such as negative working capital (airline companies collect full fare from customers in advance) and falling crude prices.

But investing is not a one-time exercise, agree experts. Investors need to be nimble footed and review portfolios regularly, urges Rajeev Thakkar, CIO, PPFAS Mutual Fund. Stocks which were once market darlings lost favour; the moats and disruptions have changed the way businesses are run and investor perceptions.

“Though the space is capital intensive, companies such as InterGlobe Aviation, which owns Indigo, have managed to put capital to efficient use by adopting the asset light-lease model” he explained.

“Coca Cola, which was Warren Buffet’s favourite in the late ’80s is no longer one,” he observed.

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