BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Wealth creation is the process by which a company enhances the market value of the capital entrusted to it by its shareholders. It is a basic measure of success for any commercial venture. For listed companies, we define wealth created as the difference in market capitalisation over a period of last five years, duly adjusted for corporate events such as fresh equity issuance, mergers, demergers, share buybacks, etc.
The financial sector, coming out of Covid despair, is likely to dominate wealth creation in the foreseeable future.
There are only two types of companies – consistents and volatiles.
What are Consistents?
The sole basis of our definitions is the growth trend in profit after tax of companies and sectors. For a company to be deemed a consistent, it should meet the following three criteria –
Over a 15-year period, its annual PAT should not fall by over 10% more than thrice (twice if the period is 10 years);
No fall in PAT should be greater than 50%; and
The terminal year PAT should not be lower than the initial year PAT.
What are Volatiles?
All companies that are not Consistents are Volatiles.
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DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
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