Lynch's guide to Indian Stocks

Can we have Peter Lynch's sort of growth companies in India?

Peter lynch the legendary investor is often renowned for picking up stocks which had great scalable model, most preferably retailers like WMT, NKE, Service Corporation and etc. This was in the time when there were dearth of VC and PE's; the companies directly approached the stock markets and expanded. Those who grew conservatively taking into conderation the managerial depth, proper cost control, strengthening margins and cautious growth wihout taking debt load did give multibaggers to him. Not all of them were multibaggers; some collapsed and some gave superlative returns.

As a lay investor, I was searching for some good stock pics in simple to understand industries. We have very few companies in retail like Pantaloon Retail, Shoppers Stop, Vishal Retail, Koutons. For me theie debt levels are really too high, and in the midst of the economic slowdown they are not managed to post positive same-store growth. In that case, where the organized retail is expected to grow double-digits for the next few years, this is giving negative signals.

Another advantage Mr. Lynch had was absence of financial instruments and so-called "structured deals" which hid the true accounts of the companies. I am not taking anything away from him. He is one of the best stock pickers history has ever known.

Next post...I will continue on this giving the facts of the returns made by the investor the company directly entering the primary markets vs. company funded initially by PE/VC and then going for primary markets.