But had it not been for Covid, it would have still performed well given that it’s been a consistent cashflow generator and has delivered ROCEs in excess of 30%. Dr Lal Pathlabsĭr Lal Pathlabs too has been witnessing a rise in testing diagnostic volumes around COVID-19. Pharma stocks have been underperformers since the past few years and the with a number of tailwinds on their side currently, things seem to be rosy especially for this stock. Now, with the rise in Covid-19 cases and need for medical support, demand for drugs has skyrocketed and boosted sales of players like Dr Reddy’s who has been a consistent performer by delivering stable net profit growth at 14% CAGR over the last 10 years. Yet, it continues to trade at attractive valuations with a PE under 15x, making it an attractive value-buy. The company has delivered ROEs of 14% consistently over the last 10 years with operating margins of over 15% over this period. L&T is a big beneficiary of the various infrastructure proposals announced in the recent Budget and the company has not only had a great execution history but has also exhibited financial strength and created value over the years. Soon, NRIs can pay bills of their families in India using Bharat Bill Payment System: RBI 1. As Warren Buffett rightly says, “When we own portions of outstanding businesses with outstanding managements, our favourite holding period is forever.” You should let your profits ride and not cut them short unless in need of liquidity. The key to being a successful investor is being patient.
The power of compounding can also play out if stocks are held for the longer term. Fundamentally strong, risky, cyclical – all themes have played out one time or other in the past year but the fears of a second wave are now real and with interest rates already at rock bottom, investors should look for stocks which are more resilient and can withstand difficult times if things start moving from bad to worse.Ī basket approach with a diversified mix of sound-quality stocks can help absorb the short-term losses and provide sound risk-adjusted returns. However, markets made money for all those who were invested pre-pandemic. Despite a pandemic, the upward trend in momentum has been a relief to some and a surprise to many given the problems at the bottom of the pyramid. The year 2020-21 has not been short of a whirlwind but the stock markets soared over 80% from the lows of March 2020 to the end of FY21.