MULTIBAGGER SMALL / MID CAPS

&
LONG TERM INVESTING
DATE – 10TH JULY 2019

Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
Dear Member,

There is lot of hopelessness along with fear towards small and mid caps in 2019.
The reason is the carnage in stock prices of many well-known companies. Retail
investors have taken the back foot and lost their faith and conviction towards
investing in small and mid caps due to existing pain in their portfolios.

Despite that we are quite excited about opportunities emerging in small and
mid cap space. You may argue that most of small and mid caps have wiped out
your hard earned gains over last couple of years. In fact those who invested in
small caps over last 2 years are sitting on significantly higher losses and may be
thinking to stay away from them.

However, we beg to differ. We firmly believe that these are the opportune times to invest in broader
markets instead of large caps. During bear phase in broader markets, negative sentiments around
small and mid caps have brought down excellent businesses down to historically low valuations. The
fall in stock prices of many small and mid caps by more than 50% from their peaks has not happened
for the first time. This has happened in past and companies with good business fundamentals have
always bounced back strongly. When overall market sentiments are negative like we are witnessing
now, quality businesses also face the heat. As bad stocks go down, good stocks go down with them
too. But good companies make a stronger come back with earning revival once economy cycle starts
its upturn.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
We understand that it is really frustrating to see the Sensex and Nifty at all time highs while the BSE
Small Cap and Mid Cap indices hovering at lower levels with more no. of small and mid caps hitting new
52-week lows. Since Jan 2018, Nifty and Sensex delivered positive returns of 10% and 8% respectively,
BSE small cap index slumped 31%, while BSE mid cap index dropped 20%.

Though these numbers tell us

what the overall index lost,
individual small and mid cap
stocks were touching 52-
week lows every other day
and individual damage to
most of the stocks in this
category was to the tune of
50-60%, some even more
than that. Though it was a
combination of issues that
affected the broader markets,
we can largely peg this
mayhem to 6 major reasons
as illustrated.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
1. SEBI Mutual Fund Re-Categorisation: Nearly everyone can agree that mid and small caps were
rallying uncharacteristically and the prices were being built up without actual fundamental backing for
most of FY18. However, SEBI’s new rules for mutual funds acted like the trigger point for the bubble to
burst. In October 2017, SEBI mandated mutual funds to group their equity schemes under large, mid
and small caps based on market cap of the stocks the scheme has invested in. For instance, a large cap
scheme should have minimum 80% investment in large caps and a mid cap fund should have at least
65% of its assets in mid caps. This also required managers of large and mid cap funds to stick mainly to
the top 250 stocks in the market. This forced active funds to trim their portfolio weights in such stocks.

2. Long Term Capital Gain: In Union Budget 2018-19, Finance Minister Arun Jaitley's announcement to
tax LTCG stunned both markets and investors. The Finance Minister proposed to tax LTCG exceeding Rs
1 Lakh at the rate of 10% without allowing the benefit of any indexation. Imposition of Long term
capital gains tax while keeping STT intact has resulted in double taxation, this has impacted the overall
participation in Indian capital markets, by domestic as well as foreign investors.

3. Corporate Governance Concerns: Adding to the woes of mid and small cap stocks were corporate
governance issues coming up in individual stocks. These problems were contained not only to stocks
like PC Jewellers, Infibeam and Vakrangee but also to darlings of stock markets like Infosys, ICICI Bank,
Yes Bank, DHFL among others. However, mid cap and small cap category of stocks were the worst hit,
with investors pulling no stops while selling off their holdings in these stocks. Bad governance in a few
stocks definitely destroyed the value of majority of stocks in this category.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
4. Additional Surveillance Measures (ASM): SEBI introduced ASM in a bid to safeguard investors from
excessive volatility in individual stocks. Under ASM, stock exchanges released a list of 109 stocks on
31st May’18 on which additional trading curbs were imposed. Liquidity in stocks which were put under
ASM plunged drastically along with the decline in share prices. Stocks under ASM are subject to 100%
upfront margins and 5% circuit limits, these curbs prompted traders to sell their holdings in these
stocks due to immediate margin requirement triggering crash in stock prices.

5. ILFS Default & Liquidity Crisis: NBFCs raise short-term loans of between three and six months
duration, using Commercial Papers (CPs). On the other hand, the businesses they lend to (home loans,
commercial purpose loans, vehicle loans etc.) are long-term ones. This is referred to as asset-liability
mismatch. To maintain their funding, NBFCs must keep issuing CPs at regular intervals and roll over
earlier loans. However since the IL&FS crisis erupted, banks have been averse to lending to the NBFC
sector, which has put them in a tight spot. Amidst all this, there were series of downgrades of NBFCs by
credit rating agencies which further dented market sentiments.

6. Companies with Pledged Shares: The fear around companies with high pledged holding began after
promoter of Essel Group failed to bring fresh shares as collateral to make up for the slump in prices of
the group stocks. Later, the shares of ADAG companies, Suzlon, Jain Irrigation, Cox & Kings witnessed
heavy selling as some lenders dumped their stock in open market due to unbearable debt and default
on payments. Institutions wish to stay away from companies where the promoter has huge borrowings
against the shares as there is fear that these companies are in a vulnerable position. Banking & financial
stocks like Yes Bank and DHFL continue to hit new lows on fears of default and contagion risks.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
To ease NFBC liquidity crisis and get economy growth back on
track, Government is in process of taking all possible
corrective measures. In Budget 2019, Finance Minister
Nirmala Sitharaman announced that the government will
provide a one-time six months partial credit guarantee to
public sector banks to buy high-rated pooled assets worth Rs 1
lakh crore from NBFCs. This will provide the much-needed
liquidity to NBFCs, they can thus liquidate their portfolio and
meet their liabilities in a timely manner.

Moreover, below are the few announcements made in the budget which certainly qualify as steps in
the right direction.
 Recapitalisation of banks to the tune of INR 70,000 crores
 The Credit Guarantee Enhancement Corporation to be set up in FY20
 The action plan put in place to deepen the market for long-term bonds
 2% interest subvention for all GST registered MSMEs

Moreover, the focused impetus for sustainable job creation via targeted investment in infrastructure
will have a ripple effect on secondary and tertiary employment. Overall, It was an uneventful but
visionary budget marked with a long-term 10-year plan while retaining focus on immediate priorities.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
Small Cap Index never delivered negative returns for 2 consecutive years in past 16 years
If you analyse BSE Small Cap Index YoY returns, you will
realise that small cap index not only recovered but also
delivered astonishing returns in short span of time once
tide turns favourable. In last 16 years, small cap index
delivered significantly higher returns in single year every
four years. In past, we experienced fierce rally in small
caps in years like 2007, 2009, 2014 and 2017.

Coming back to the current situation, the small cap index

is down by 31% from its peak made in January 2018. The
liquidity crisis in NBFCs, the DHFL and IL&FS defaults,
series of rating downgrades by rating agencies, lenders
dumping stocks of debt laden companies have taken the
steam out of small caps. Fear and misinformation has
shattered investor’s confidence and hence quality
businesses are back to cheap valuations.
We strongly believe that this is a great time to buy good quality small and mid size companies that have
been beaten down. No one is talking about small caps these days and that’s the strong reason why we
should invest in this segment. It’s wise to be greedy when there is fear surrounding small and mid caps.
This is not the first time small caps have fallen out of favour and then gone on to recover smartly.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
The Bulls, The Bears & The Farm

A bull market is when everything in the economy is great, people are finding jobs, gross domestic
product (GDP) is growing, and stocks are rising. Things are just plain rosy! Picking stocks during a bull
market is easier because everything is going up. Bull markets cannot last forever though, and
sometimes they can lead to dangerous situations if stocks become overvalued. If a person is optimistic
and believes that stocks will go up, he or she is called a "bull" and is said to have a "bullish outlook”

A bear market is when the economy is bad, recession is looming and stock prices are falling. Bear
markets make it tough for investors to pick profitable stocks. One solution to this is to make money
when stocks are falling using a technique called short selling. Another strategy is to wait on the
sidelines until you feel that the bear market is nearing its end, only starting to buy in anticipation of a
bull market. If a person is pessimistic, believing that stocks are going to drop, he or she is called a
"bear" and said to have a "bearish outlook".

The Other Animals on the Farm - Chickens and Pigs

Chickens are afraid to lose anything. Their fear overrides their need to make profits and so they turn
only to money-market securities or get out of the markets entirely. While it's true that you should
never invest in something over which you lose sleep, you are also guaranteed never to see any return if
you avoid the market completely and never take any risk.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
Pigs are high-risk investors looking for the one big score in a short period of time. Pigs buy on hot tips
and invest in companies without doing their due diligence. They get impatient, greedy, and emotional
about their investments, and they are drawn to high-risk securities without putting in the proper time
or money to learn about these investment vehicles. Professional traders love the pigs, as it's often from
their losses that the bulls and bears reap their profits.

What Type of Investor Will You Be?

There are plenty of different investment styles and strategies out there. Even though the bulls and
bears are constantly at odds, they can both make money with the changing cycles in the market. Even
the chickens see some returns, though not a lot. The one loser in this picture is the pig. Make sure you
don't get into the market before you are ready. Be a long term discipline investor and continue to invest
systematically during bull as well as bear phase of market cycle and never invest in anything you do not
understand.

Many retail investors started investing in small and mid cap stocks during bull phase of broader market
(2014 – 2017) and getting worried now about their investments looking at losses they are bearing due
to carnage in stock prices during ongoing bear phase (2018 – 2019). Those who believe they made a
mistake by investing in small and mid caps and think to exit booking losses due to fear of further
loosing hard earned money, do think about this old stock market saying: "Bulls make money, bears
make money, but pigs just get slaughtered!"

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
The correction has given investors an opportunity to sieve through and find good quality stocks which
are backed by strong balance-sheet and robust cash flow. The broad underperformance of the small
and mid-caps seems to be overdone and interesting bottom-up opportunities are now available in this
space across sectors. Earnings revival could also set the ball rolling in terms of re-rating these
categories of stocks.

The Indian stock market has offered great opportunities in small and mid cap space right now. Invest in
the best small and mid caps available at dirt-cheap now, and sit tight on them for the long-term. Do not
let the negative sentiment overwhelm you to sell the stocks of good companies at lower levels. Focus
on the fundamentals, and buy the stocks where quality meets value. If a company's fundamentals and
rationale to buy are intact, it simply makes sense to buy the stock or hold on to it if you have already
bought. In such a situation, fall in stock prices only adds to the margin of safety. You could buy more
and maximise your potential return while minimising risk.

Let us share some valuable insights to make you understand why we believe buying the right set of
small and mid caps now can be a massive wealth creating opportunity in the long run. In next slides, we
have covered long term monthly charts of some of our own small and mid cap stocks recommendations
(released under Hidden Gems and Value Picks) over last 9 years which at one point of time were down
by 50% to 60% from their peak but turned out to be multibagger stocks in longer run delivering 5x to
60x returns. Hence the final advise, do not stop investing in small caps looking at these turbulent times,
its time to do the opposite, this phase has happened before and small and mid caps have always
bounced back. Good sentiments as well as bad sentiments do not last forever.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
1 CAMLIN FINE SCIENCES HIDDEN GEM – 27 MAR 2011

Camlin Fine Sciences delivered

returns of 1127% in 16 months
turning 12-Bagger, stock price rallied
from 10.50* (Feb’14) to 128.80
(Jun’15). Became 18-Bagger stock
from lows of 7.08 of 2011

Stock made high of Stock witnessed correction of

15.23* in Nov 2011 76% in 10 months. Stock price
fell from all time high of 154.70
(Jan’18) to lows of 36.70 (Oct’18)

Made low of 7.08* in Mar 2013, stock

* Indicates stock split adjusted price price fell by 54% from high of Nov 2011

Above is the monthly chart of Camlin Fine Sciences which we recommended as Hidden Gem on 27
Mar’11 at 6.05*. The stock made life time high of 155 in Jan 2018 and later crashed to lows of 36.70. At
current price of around 60, it is still a 10-Bagger for investors who bought it during lows of 2011 or 2013
but those who invested later during 2015 – 2017 period are bearing losses as of now.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
2 KOVAI MEDICAL CENTER & HOSPITAL HIDDEN GEM – 27 OCT 2011

Kovai Medical delivered returns

of 407% in 12 months, stock
price rallied from 136.85
(Feb’14) to 694 (Feb’15). Turned
5-Bagger stock in 12 months, 8-
Bagger from lows of 2012

Stock made high KMCH witnessed correction

of 176 on 2010
Made low of 89.50 on Jun
2012, stock price fell by
49% from high of 2010
of 56% over last 18 months.
Stock price fell from all time
high of 1480 (Jan 2018) to
recent lows of 650. Still a 8-
Bagger stock for those who
invested in 2012

Above is the monthly chart of KMCH since Jan 2010. Kovai Medical stock price made a high of Rs. 176 in
Feb 2010 and low of Rs. 89.50 in 2012 when overall market sentiments were negatives. Later in 2014,
stock rallied more than 400% in matter of 12 months. Kovai Medical price fell by 56% from high of 1480
in Jan’18, a 8-Bagger stock even after severe fall in price for those who invested in the company in 2012.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
3 ROTO PUMPS HIDDEN GEM – 05 AUG 2012
Roto Pumps became 10-Bagger
stock delivering returns of
966% in 16 months, stock price
rallied from 16.40* (Sept’13) to
high of 174.90 in Jan’15.

Roto Pumps made high

of 27.37* in May 2010

Stock price of Roto Pumps fell

by 67% in 14 months from all
Stock made low of 11* in time high of 174.90 (Jan 2015)
Dec 2011, stock price fell to lows of 40.50.
* Indicates stock split adjusted price by 60% from high of 2010

Let us look at monthly chart of Roto Pumps since Jan 2010, stock which turned 10-Bagger in matter of
16 months. Roto Pumps which witnessed correction of 60% in stock price in 2011 from high of 2010,
rallied by more than 900% later in 2014. At current levels, Roto Pumps is a 13-Bagger stock for investors
who bought it at lows of 2011.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
4 ACRYSIL HIDDEN GEM – 25 NOV 2012
Acrysil turned 6-Bagger in 12
months delivering returns of
588%, stock price rallied
from 23* (Oct’13) to 143
(Sep’14). Delivered 1127%
returns from lows of 2012

Stock made high of

22.26* in Jan 2010

Made low of 11.65* in Dec 2012, stock

price fell by 48% from high of Jan 2010
* Indicates bonus issue / stock split adjusted price

Above is the monthly chart of Acrysil from Jan 2010. Acrysil stock price fell by 48% over 2 years from its
peak of 2010. With improvement in fundamentals and start of bull cycle, stock delivered 588% returns
within one year. It is still a 9-Bagger stock for investors who bought it in 2012 or 2013 and a 4-Bagger for
those who invested at high in Jan 2010 and later experienced negative returns for nearly 4 years.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
5 TCPL PACKAGING HIDDEN GEM – 31 JAN 2013
TCPL Packaging delivered returns
of 1100% in 2 years, stock price
rallied from 65 (Mar’14) to 780
(Jun’16). Delivered returns of
2158% from lows of Dec 2011.

Stock made high of

61.50 in Nov 2010 TCPL is down by 60% from
its all time high. Stock price
fell from high of 780 (Aug
2016) to recent lows of 310.

Made low of 34.55 in Dec 2011, stock

price corrected by 44% in 13 months

Above is the monthly chart of TCPL Packaging since Jan 2010. In 2014 with start of bull cycle in broader
market, stock delivered 1100% returns in 2 years, turning 12-Bagger stock from initial high of Nov 2010
and 22-Bagger from lows of 2011. TCPL Packaging is down by 60% from its all time high but it is still a 5-
Bagger stock for investors who bought it at highs of 2010 and still holding it.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
6 RANE BRAKE LINING HIDDEN GEM – 31 MAY 2014

Rane Brake Lining turned 5-Bagger

in 12 months delivering returns of
433%, stock price moved from
262.25 (Sep’15) to 1399 (Sep’16).
Became 16-Bagger stock from
lows of Apr 2013

Stock made high of

168 in Nov 2010
Stock made low of 87.35 in
Apr 2013, stock price fell
by 48% from high of 2010
Stock witnessed fall of 67%
from its all time high price
during 2 years. Stock price
fell from high of 1450 (Jun
2017) to recent lows of 505.

Rane Brake Lining is our Hidden Gem stock recommended on 31 May 2014. During recent melt down in
broader markets, stock witnessed price correction of 67% over last 2 years. Even when stock is down
from all time high of 1450 hitting recent lows of 505, it is a 4-Bagger stock from highs of Nov 2010.
Those who invested at high of Nov’10 were sitting on losses in the same stock for more than 3 years.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
7 VISAKA INDUSTRIES HIDDEN GEM – 05 JUL 2015

Stock rallied from 88 (Feb’16) to

838.60 (Jan’18) in 2 years delivering
returns of 853%. Visaka became 9
bagger stock in 2 years and almost a
15-Bagger from lows of Dec 2011.

Visaka Industries made high

of 192.90 in May 2010
Visaka Ind witnessed
correction of 61%
since Jan 2018.
Stock price fell from
Stock made low of 57.20 in all time high of
Dec 2011, stock price fell by 838.60 to recent
70% from peak of 2010 lows of 328.

Above is the monthly chart of Visaka Industries since Jan 2010. Between Feb’16 to Jan’18, stock turned
9-Bagger delivering 853% returns in 2 years. Since then stock price has corrected by 61% making recent
lows of 328 but is still a 5-Bagger stock for investors who invested in the same company 7 to 8 years
back during 2011 – 2012 and a 2 to 3-Bagger for those who invested in 2015 - 2016.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
8 STYLAM INDUSTRIES HIDDEN GEM – 08 MAY 2016

Stylam Industries rallied from 39.30

(Sept 14) to 855 (July 17) delivering
returns of 2076% within 3 years. In
July 2017, it turned 21-Bagger stock
from Sept 2014 lows and 64-Bagger
stock from lows of Nov 2011

Stylam Industries made

high of 45.75 in July 2010

Stock price fell by 71% in 16 months from high

of July 2010, made low of 13.35 in Nov 2011

Stylam Industries has delivered maximum returns of 6304% in last 9 years. A mind boggling mega 64-
Bagger stock which moved from lows of 13.35 (Nov 2011) to high of 855 (July 2017). We recommended
Stylam Industries as Hidden Gem on 08 May 2016 and advised to book full profits around 800 levels
considering expensive valuations of the company.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
1 AUROBINDO PHARMA VALUE PICK – 27 JAN 2013
Aurobindo Pharma delivered
returns of 1189% in 2.5 years,
stock price rallied from 69.17*
(Aug’13) to 891.50 (Dec’15)
becoming 13-Bagger stock

Stock made high of

137.69* in Jan 2011

Made low of 41.52* in Dec’11, stock price

corrected by 70% from Jan’18 high in 12 months
* Indicates bonus issue adjusted price

Aurobindo Pharma, a well known company from pharma sector, was recommended as our Value Pick
stock on 27 Jan 2013. Stock which made low of 41.52* witnessing fall of 70% from its peak of Jan 2011
later delivered 1200% returns in matter of 2.5 years. Aurobindo Pharma is still a 15-Bagger stock for
investors who invested in the company during lows of 2011.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
2 MINDTREE VALUE PICK – 23 MAR 2014

Mindtree delivered returns of

308% within 2 years, stock
price rallied from 195*
(Jun’13) to high of 795*
(Apr’15). Turned 11-Bagger
from lows of 2011

Mindtree made
high of 186.22*
in Jan 2010
Made low of 399 on Nov 2016, stock
price fell by 50% from high of 2015

Stock price tested low of 71.71* in Sept

2011, corrected by 61% in 21 months
* Indicates bonus issue adjusted price

Let us look at monthly chart of our another Value Pick stock – Mindtree recommended on 23 Mar 2014.
Mindtree also witnessed severe correction of 61% from its peak of Jan 2010 and tested patience of
investors for nearly 4 years. Those who stay invested and sit patiently on the stock were rewarded over
next 2 years as stock rallied from 195* to 795* delivering more than 300% returns.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
3 HERITAGE FOODS VALUE PICK – 03 JAN 2016

Heritage Foods delivered

returns of 525% in 30 months,
stock price rallied from
141.34* in May’15 to 884 in
Oct’17. Turned 28-Bagger
stock from lows of Jun’12

Stock made high of Stock price witnessed

64.62* in Sept 2010 correction of 56% from
its high of Oct’17 over
last 2 years

Made low of 30.96* in Jun’12, stock

fell by 52% from high of 2010
* Indicates bonus issue / stock split adjusted price

Above is the monthly chart of Heritage Food of last 9 years. During bear phase of 2011 – 2012, stock
price fell by 52% from its peak price of 2010. However, the same company delivered 525% during bull
phase in matter of 30 months. Stock made all time high of 884 in Oct 2017 turning mega 28-Bagger
stock from lows of Jun 2012.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
4 CAN FIN HOMES VALUE PICK – 29 FEB 2016

Can Fin Homes delivered returns of

420% in 2 years, stock price rallied
from 128.1* (Jun 15) to 666* (Jun
17). Can Fin Homes turned 42-Bagger
from lows of 2012 delivering returns
of 4134% in 5.5 years

Stock made high of

31.47* in Aug 2010 Stock price fell by 67% from
high of Jun’17 in 16 months

Made low of 15.73* in Jan 2012, stock

price fell by 50% from high of Aug’10
* Indicates stock split adjusted price

Can Fin Homes witnessed severe correction of 67% from its peak during last year. However, the same
stock created significant wealth for investors who invested in the company during beginning of this
decade. Even after severe correction in stock price over last 2 years, stock is a 12-Bagger for investors
who invested in the company at high of 2010 and a 20-Bagger who invested at lows of 2012.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
5 SONATA SOFTWARE VALUE PICK – 10 JUL 2016
Sonata Software delivered
returns of 196% in 12
months, stock price rallied
from 144.80 (Sep’17) to
428.60 (Sep’18).

Stock rallied from 37 (Jan’14) to 180

by Mar’15 delivering 386% returns
Stock made high
of 69 in Apr 2010
Sonata Software turned
25-Bagger stock in 6 years
delivered returns of 2444%
from lows of Aug 2012
Made low of 16.85 in Aug 2012,
corrected by 76% from high of 2010

Above is the monthly chart of Sonata Software since Jan 2010. The stock price fell by 76% in 2 years
from high of 69 made in April 2010. Investors who bought at highs of Apr 2010 were in losses for almost
5 years but those who held it tightly were rewarded handsomely over next 4 years. Sonata Software
made all time high of 428.40 in Sept 2018 turning 7-Bagger for those who entered at highs of 2010.

www.saralgyan.in Saral Gyan Capital Services

MULTIBAGGER SMALL / MID CAPS & LONG TERM INVESTING
BSE Small Cap Index went up by 69% in 2014 and during this year numerous small and mid cap stocks
turned multibagger delivering mind boggling returns. Scenario was similar in 2017 when BSE Small Cap
Index rallied by 58%, later broader market went into bear grip with significant sell off in many small and
mid caps due to expensive valuations and series of negatives developments as pointed out earlier.

Looking at long term charts of most of the companies with good businesses, you will realise that
investors who entered in market by investing in small and mid caps during last 2 to 3 years have pain in
their portfolio however those who invested in bad phase of market in 2011 - 2013 like that of today are
still holding plenty of multibaggers in their portfolio. That is why its important to invest in equities
keeping a real long term view. In fact, during turbulent times, we must increase investments / equity
allocation in small / mid size companies which have good business fundamentals with better earning
visibility and robust cash flows from their operations to get rewarded in big way in long run.

Considering current situation as one of the most opportune time to invest in small and mid caps, we
will release next issue of our Special Report - Potential 5-Bagger Stocks in 5 Years during this month and
share with our Hidden Gems, Value Picks and Wealth-Builder members. If you wish to receive the
same, you can opt for our annual services under ongoing Saral Gyan 9th Anniversary offer (closes on 31
July 2019). Click here to know more about the offer.

We released our 1st issue of Special Report on 26 July 2013 and most of the selected stocks turned out
to multibaggers in 2014 with start of bull run in broader markets. Click here to check out our special
report update - 5 Hidden Gems – Potential 5-Baggers within 5 Years released on 20 April 2014.

www.saralgyan.in Saral Gyan Capital Services

SARAL GYAN SUBSCRIPTION SERVICES
NUMBER OF SUGGESTED 1 YEAR
INVESTMENT MARKET CAP / SELECTION
RECOMMEND- ALLOCATION SUBSCRIPTION
SERVICE HORIZON INDEX CRITERIA
ATIONS * PLAN

Small / Micro Growth / Value Rs. 10,000

1 - 3 Yrs Cap (BSE Small 12 per year (Mkt Cap < Rs. 500 10% - 25% ($180)
Know More | Sample Cap) Crs) SUBSCRIBE!

Growth / Value Rs. 6,000

Mid Cap
1 - 3 Yrs 12 per year (Mkt Cap: Rs. 1,000 20% - 40% ($110)
Know More | Sample (BSE Mid Cap)
- 10,000 Crs) SUBSCRIBE!

Technical Analysis / Rs. 4,000

Mid Cap Not
3 Months 12 per year Recent ($75)
Know More | Sample (BSE - 500) Applicable
Developments SUBSCRIBE!

Rs. 20,000
Across Market 12 - 18 Portfolio Long Term 60% - 70%
3 - 7 Yrs ($360)
Know More | Sample Caps Updates per year Wealth Creation 15 Stocks
SUBSCRIBE!

• Suggested allocation - This is the percentage of funds that you could allocate (out of your total equity portfolio) to each category of stocks.
Please note that these allocations are purely indicative.

Click here to know more about Saral Gyan 9th Anniversary Offer.
Looking for guidance on which service to opt for? Or have any other query? Please write to us, we will be delighted to assist you!

www.saralgyan.in Saral Gyan Capital Services

ABOUT SARAL GYAN CAPITAL SERVICES
Saral Gyan Capital Services is an independent equity research firm. We publish unbiased thoroughly researched reports that
enhance the visibility of innovative public companies in micro, small & mid cap space. Our reports, Hidden Gems & Value
Picks, are distributed to our subscribers through our website.

Hidden Gems & Value Picks are highly detailed reports that is written to be easily understood by the financial community. We
also circulate articles via free email & mobile subscription which works as a guide and provide insights to equity market.

We also offer 15% @ 90 Days, which works on buy to sell and gain strategy for short term profits. The stocks under 15% @
90 DAYS are selected on the basis of technical analysis done by our equity analysts.

Wealth-Builder is our offline portfolio management service which includes best of Hidden Gems, Value Picks & 15% @ 90
Days stocks. Our equity analysts will suggest you the best of Hidden Gems & Value Picks stocks which you can hold in your
portfolio with minimum churning. This also helps you avoid paying extra brokerage cost on your transactions.

Our research reports are written by a team of equity analysts who recognize investor’s desire to understand a business in a
way that supports an educated investment decision based on facts. Our reports contain meticulously researched facts on
companies, their fundamentals, and their industries, validating a company's prospects and enabling the reader to objectively
evaluate the company's value.

At Saral Gyan, research is taken as a creative work by team of professionals on systematic basis in order to increase the
wealth of knowledge. We believe that research is a necessity and forms the basic foundation upon which advice is made with
reference to particular stocks with recommendations on buy or sell or hold.

Saral Gyan Capital Services

Office: 159 B, Near Ganesh Square,
Sadar Cantt, Jabalpur
482001

www.saralgyan.in Saral Gyan Capital Services

DISCLAIMER
This document has been prepared by the equity analysts of Saral Gyan Capital Services for the use of recipient only and is not meant for public
distribution and has been furnished to you solely for informational purposes and should not be construed as an offer or a solicitation of an offer to
buy or sell any securities of the companies referred to herein.

The material herein is based on the information obtained from sources that Saral Gyan Capital Services believe to be reliable, but neither Saral
Gyan Capital Services nor any of their research analysts or affiliates represents or guarantees that the information contained herein is accurate or
complete and it must not be relied upon as such. Accordingly, no representation or warranty, express or implied, is made as to the accuracy,
completeness or fairness of the information and opinions contained in this document.

This document is prepared for assistance only and is not intended to be and must not alone be taken as the basis for any investment decision for
or against the companies referred to in this report. The user assumes the entire risk of any use made of this information.

The investment discussed or views expressed may not be suitable for all investors. Each recipient of this document should make such
investigations, as it deems necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this
document and consult its own advisors to determine the merits and risks of such an investment.

Opinions, estimates and projections in this report constitute the current judgment of the research analyst as on the date of the report and they do
not necessarily reflect the opinions of Saral Gyan Capital Services. The recipient of the document is cautioned that any forward-looking
statements are not predictions and are subject to change without notice. While Saral Gyan Capital Services would endeavor to update the
information herein on reasonable basis, Saral Gyan Capital Services has no obligation to update, modify or amend this report or to otherwise
notify a recipient thereof in the event that any opinion, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Prices
and availability of financial instruments are subject to change without notice.

Saral Gyan Capital Services, its affiliates, employees and their dependant family members may from time to time have long or short positions in,
act as principal in, and buy or sell, the securities or derivatives thereof or may have a vested interest in the covered companies referred to in this
document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from,
any company referred to in this document. Our sales people, traders, and other professionals may provide oral or written market commentary or
trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this
document. The recipient should take this into account before interpreting the document.

www.saralgyan.in Saral Gyan Capital Services