JOKA BULLS – MOCK STOCK COMPETITION

CASE
In the summer of 2022, Harshit Sharma was still reeling from the events of the day. He was promoted
to the head of the Asset Management division at Joka Mutual Fund. The earlier manager had tendered
his resignation following a disastrous quarter performance, losing 3% of the corpus over 3 months. The
division was under fire from the top management, and he had 3 days to re-balance the portfolio.

The previous manager had attributed the lacklustre performance to volatility in the supply-side shocks
which caused prices to drop. While it boosted consumer confidence in some sectors, the spread was
uneven and failed to cause cheer, especially in the real estate markets. The exit of foreign investors from
the emerging markets also caused sharped gains in some sectors to be wiped out. Quoting an
independent financial analyst, the manager had stated, “the pendulum had swung too far above the
fundamentals on hopes and expectations, and which are eventually getting corrected.” The new central
government has set a goal of achieving 8% GDP growth in the coming year which appears audacious
but achievable. However, muted export growth is an area of concern and unless India becomes more
competitive, it would be difficult to grow exports in a world that is slowing down overall. Railways will
have a key role to play in improving the competitiveness of the economy and hence rapid modernization
of the Indian Railways would be key. E-commerce and modern retail will improve the competitiveness
of the economy from a retail side, although it would have limited impact from the factors of production
perspective such as coal and energy. Even though IT and ITES are slowing down, it continues to be one
of the largest employers in India. The previous government also bore a very large subsidy bill, with the
food subsidy bill being one of the largest. It would be imperative to taper off the subsidies over a period
of time to support deeper structural reforms.

Harshit has been provided with a corpus of Rs. 5 Crore to invest in a portfolio of mid & large-cap
companies across sectors given below-

BFSI - HDFC Bank, IDFC First Bank, Punjab National Bank

FMCG - HUL, Zydus Wellness, P&G Hygiene & Healthcare
Auto - Mahindra & Mahindra, Apollo Tyres, Hero Motocorp
Pharma - Cipla, Glenmark, Abbott India
IT - Infosys, KPIT Technologies, Tata Elxsi

Investment Constraints:
1. Portfolio Evaluation - The portfolio may be back-tested for a period of 5 years till 31st March
2022.
2. The portfolio needs to contain at least 1 stock/company from each industry.
3. Investment corpus - Rs. 5 Crore
4. Not more than 50% of any stock/company can be sold in one round.

Submission Details:

• Teams need to provide returns (5Y CAGR) along with selected stocks & corresponding
weights during portfolio submission at the end of each round (30th June, 1st & 2nd July).

• Teams are required to submit their first portfolio basis understanding from the above case on
30th June, 2022 through the Unstop Portal.

• News shocks/Clues will be provided for both, round 2 & 3 (1st & 2nd July) and at the end of
each day on FinClub’s Instagram page
(https://instagram.com/finclub_iimc?igshid=YmMyMTA2M2Y=) and the teams are required
 to restructure their portfolios & submit the same (along with updated returns) through the
Unstop Portal.

• Top 5 teams at the end of round 3, will be invited to present their investment rationale.

Parameter Value (as of 31st Mar’22)

USD/INR 75.95

10Y Treasury Yield 6.843%

Nifty 50 17464

Bank Nifty 36373

Nifty IT 36317

Nifty Auto 10552

Nifty FMCG 36287

Nifty Pharma 13584

Nifty Metal 6423

Nifty Energy 25822

Nifty Infra 5018

Gold Prices 53225

Repo Rate 4%