DAY 2 pre-analysis

At the starting of day 2, we calculated our total earnings from day 1 which came out to be
62117.4 with a total return of 0.62. After that, we checked what we had done wrong on the first
day and decided to do some changes in our portfolio with an objective to be short term oriented
and focus on generating profit quickly. We made changes in our portfolio with an assumption to
focus on stocks on beta with a value of more than 1 considering an approach of high-risk high
reward.

Day 2 Analysis

1. ITC: To start with we took an easy call and decided to sell some ITC stocks as we
received the highest loss on our portfolio in terms of ITC stock with a return of -3.08%.
So, we sold 100 shares of ITC so that we can invest the amount generated on other
prospects which seemed more optimistic. Now we have only 117 shares of ITC from the
previous value of 217 shares. Also, there is a decline in Quarterly Net Profit with falling
Profit Margin (YoY).

2. HERO MOTOCORP: Similarly, we wanted to generate some more amount to diversify

our portfolio so we sold 100 shares of hero MotoCorp. The thing was the share price of
hero MotoCorp was very high and a significant weight was allocated to it which was
also a reason to liquidate some stock from hero MotoCorp. Other reasons for selling:
2.1. Inefficient use of assets to generate profits - ROA declining in the last 2
years
2.2. Inefficient use of shareholder funds - ROE declining in the last 2 years

3. NESTLE: Before starting day 1 we showed huge confidence in Nestle and anticipated a
huge profit because of our analysis and neglected its high price (highest among the
portfolio) and we even allocated the weight of approx 35% to it. Declining Net Cash
Flow: Companies not able to generate net cash, this is another reason for selling all the
shares of Nestle. After all these threats nestle failed to produce decent enough returns
so we decided to sell all the stocks of it. As its price was high we were provided with a
large amount on its liquidation.

4. TATA STEEL: We decide to give a shot to tata steel and decided to go big on it and
decide to use the extra amount from liquidation and profits generated to be invested in
tata steel. We now have an approx. weight of 40 % in our portfolio for tata steel. The
reasons for giving the highest weight to Tata Steel are:
4.1. Book Value per share is improving for the last 2 years
4.2. Strong Momentum: Price above short, medium- and long-term moving averages
4.3. High volume, high gain
4.4. RSI indicating price strength
5. DR. REDDY: We saw that we have only one company from the pharma sector so we
decided to invest more in it because of the recent news on the COVID vaccine
breakthrough. Other reasons for investing in this company are:
5.1. New 52 week high
5.2. The company with low debt
5.3. Book value per share improving for the last 2 years
5.4. Strong Momentum: Price above short, medium- and long-term moving averages
5.5. Improving net cash flow for the last 2 years

6. CIPLA: Cipla did not generate good returns in our portfolio but according to our research
it showed great prospects in the near future so we decide to give it a shot and bought
more stocks of it. The reasons for buying more stocks in this company are:
6.1. Near 52 week high
6.2. Return on equity improving since last 2 years
6.3. Book value per share is improving for the last 2 years
6.4. Stocks with upcoming results which are seeing positive shifts in share price

7. RELIANCE and INFOSYS: We took a huge risk as in the 2nd round we decided to
balance it out by buying more stocks in companies like reliance and Infosys which are
now to stable and secure in the long run to balance our portfolio and divide the risk.
Reasons for investing in Reliance are:
1. Promoters are increasing shareholding
2. Company is reducing debt
3. The stock gained more than 20% in one month

Reasons for investing in Infosys are:

1. Improving cash flow from operation for the last 2 years
2. The stock gained more than 20% in one month