Nifty_SM100

The universe for EquiGrowth – HNI is carefully selected based on a blend of growth potential, market capitalization, and sector strength. The universe primarily focuses on small and mid-cap stocks, which are typically defined by the following criteria: Market Capitalization:<ul><li>Small-cap: Companies with a market cap between ₹1000 Cr to ₹20,000 Cr.</li><li>Mid-cap: Companies with a market cap between ₹20,000 Cr to ₹70,000 Cr.</li></ul>These companies are chosen due to their potential for high growth, but also their higher risk profile compared to large-cap stocks. Growth Indicators:<ul><li>YoY Quarterly Sales Growth &gt; 30%: The companies must demonstrate strong revenue growth over the past year, indicating a robust business model.</li></ul>

The research approach for EquiGrowth – HNI focuses on identifying high-growth small and mid-cap companies with the potential to deliver superior earnings. The process involves comprehensive fundamental analysis, market trend evaluation, and sector-specific research to select stocks with the highest growth potential. Here's a breakdown of the research process:1. Screening for High-Growth Companies:<ul><li>Revenue and Profitability Analysis: Focus on companies with strong YoY quarterly sales growth (&gt;30%) and a solid track record of profitability. Companies with improving margins, high return on equity (ROE), and consistent earnings growth are prioritized.</li><li>Growth Catalysts: Identify companies poised to benefit from industry trends, regulatory changes, or technological advancements. Research is conducted on both macroeconomic and microeconomic levels to determine growth drivers.</li></ul>2. Valuation Assessment:<ul><li>Price-to-Earnings (P/E) Ratio: A P/E ratio under 70 ensures stocks are not overly overvalued, providing room for further price appreciation. However, attention is also paid to relative valuations within the sector.</li><li>PEG Ratio: Focus on stocks with a PEG ratio below 1.5, indicating undervaluation relative to earnings growth potential.</li></ul>

The constituent screening for EquiGrowth – HNI focuses on identifying small and mid-cap stocks that exhibit strong growth potential, solid fundamentals, and favorable valuations. The key criteria for stock selection are:<ol><li>Revenue Growth: Companies must demonstrate YoY Quarterly Sales Growth &gt; 30%. This ensures the company is on a robust growth trajectory, signaling potential for significant expansion.</li><li>Previous Quarter Comparison: A YoY Quarterly Sales Preceding Quarter &lt; 18% ensures that the growth momentum is accelerating and not driven by one-off events, indicating sustainable performance.</li><li>Valuation Metrics: Stocks should have a P/E ratio &lt; 70, making sure the company is not excessively overvalued. This helps identify growth opportunities without paying a premium for growth.</li><li>Market Capitalization: Focus is on small-cap (₹1000 Cr to ₹20,000 Cr) and mid-cap (₹20,000 Cr to ₹70,000 Cr) stocks. These companies tend to have higher growth potential compared to large-cap stocks but also come with higher volatility.</li><li>Financial Strength: Preference is given to companies with strong balance sheets, low debt, and solid cash flow generation, ensuring they can sustain growth in a volatile market.</li><li>Growth Metrics: Companies with 20%+ revenue and profit CAGR are prioritized to ensure continued growth potential over the long term.</li></ol>

Depends upon the sentiments of the market. High weightage to companies showing more relative strength in the market.

This smallcase will be rebalanced on an as-needed basis

EquiGrowth - HNI Fundamental

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20-30 Stocks: Aggressive small & mid-cap growth strategy for HNIs. 

EquiGrowth - HNI Fundamental

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