Busting Popular Macroeconomic Myths In The Stock Market

Note: Asian Paints, Berger Paints, HDFC Bank, Kotak Bank, and Bajaj Finance are part of Marcellus Investment Managers’ portfolios. The authors of the note and their families hold these stocks via their investments in Marcellus Investment Managers’ portfolios.

Note On Table 2: Quality here means Marcellus’ Consistent Compounders Portfolio (CCP) and Kings of Capital Portfolio (KCP). **Note: (1) PBT margin and revenue growth data has been taken until Q3 FY22 (December 2021). (2) PBT Margins for all ‘Quality’ companies and Nifty was calculated separately. It was then averaged, and its YoY percentage change was calculated. This percentage change’s median was then calculated across high inflationary periods. (3) Revenues of all ‘Quality’ companies and Nifty was summed up to arrive at one number whose YoY change was then calculated. These changes’ median was calculated across all high inflation periods (when inflation was above 6%). (4) Share price percentage changes YoY were calculated separately for all ‘Quality’ and Nifty stocks, averaged, and then their median across high inflation periods was calculated. *Note – share price returns were calculated until Jan. 31, 2022.

Note On Table 3: Decorative sales growth for Asian Paints, Berger, Indigo and Akzo reflects the standalone sales growth; Decorative sales growth for Kansai is based on broker estimates/management interviews.

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