We are standing on the 2016 financial year end and with one day remaining it pretty much looks we will close this year in red. We do follow very closely Nifty500 stocks and this index is trading below -9.30% compare to last year.

By average there are very few stocks that outperform index, the best chance to find them is in the list of quality stocks. Once we filter these 500 stocks from our quality grading, we get only 106 stocks that qualify as investment grade stocks. That means roughly one in the five stocks are worth investing from that index. Out of 106 stocks 60 stocks had outperformed market returns last year.

Let me share with you some interesting facts from our analysis, the average return of those 106 stocks for the last financial year is -3.49%. Reliance Industries, Bharti Airtel, Tata steel and Suzlon Energy are not part of these 106 stocks. Below are the few names to share with you.

Amar Raja Battery Alembic Pharma Bajaj Auto Bajaj Finance
Divi’s Lab Eicher Motors Godrej Consumer Products Gujarat state petronet
Havells India Hero Motocorp IGL Infosys
Jagran Prakashan Nerolac Marico Mphasis
Shree Cement Yes Bank Zensar Technology Eclerx


When we started the 2016 financial year, our universe of stocks were looking very expensive to buy. Even today if we compare with our estimate intrinsic values for 2017 they are trading 15% expensive by average.

The top five stocks that had given highest returns in the last year are as follows.

Vakrangee Ltd
Bajaj Finance
Tata Elxsi
La Opala
Zensar Technology


By average any single day, not more than 15% of stocks were trading at discount to our estimate intrinsic value and overall 46 stocks had traded below our estimate intrinsic value last financial year. The top 4 stocks that are trading today at discounts are as follows:

Alembic Pharma Coal India TCS Marksans Pharma


We only invest in the stocks whose intrinsic value is ticking up every year and is available to us at steep discount. If we don’t find any, we prefer to stay in cash.

Aziz Dodhiya is the chief investment officer for the Valueoperations funds which operates in the Indian market as an FPI (Foreign Portfolio Investor). We do not offer any personal advice to buy or sell any stocks and the views that are shared by Aziz might not incline to your personal investment strategy and this is the reason we advise you to take professional advice before going ahead with our views.