Highlights for the year
Even as I write this, the world is facing the brunt of the social distancing, lockdown,
and economic disruption. The outbreak of Covid-19 has brought the world to an unthinkable
crossroad. These unprecedented times are not just changing the way we live our lives
right now but also the future. I am hoping for your and your family’s safety right
now and in the times to come.
FY 20 has certainly been an interesting year for the Financial Markets world over.
In spite of the challenges faced by our industry in the year, Shah Investor’s Home
Limited. posted Operational Revenue of Rs. 26.63 Cr with PAT of 1.93 Cr resulting
in the EPS of Rs. 1.13 / Share. With dividend distribution of 25% in the year, the
Net worth stands at Rs. 71.61 Cr with book value of Rs. 41.95 / Share.
Starting from the General Elections, Cabinet Formations, Slowing Economy to Corona
virus Pandemic towards the end of the financial year, India witnessed it all. Indian
Benchmark indices, Sensex and Nifty slumped around 24% and 26% respectively during
the year posting their worst fall in the decade after the 2008-09 crisis when the
falls were around 38% and 36% respectively. The major chunk of events such as Massive
Corporate Tax Rate Cuts, Union Budget, The Controversy between RBI and Government,
RBI’s 185 bps rate cut in total, Ayodhya Verdict, Abolition of Article 370, US-China
Trade Deals and Trade-War and COVID19 Pandemic towards the end of FY20 tweaked and
triggered the markets. The extreme volatility and sluggish economic growth resulted
in sentiments to largely remain cautious for the entire year. However, the benchmark
indices enjoyed a record-breaking run till January 2020 due to outsized gains in
the blue-chip counters. But February and March 2020 changed everything to make the
matters worst and valuations corrected drastically. Broader markets continued to
underperform. 45 out of 50 Nifty stocks fell in FY20 driven by the worst sell-off
in more than a decade after the COVID19 Outbreak resulting economic lockdowns. During
the last 3 months of FY20, the benchmark index Nifty50 fell 29% on account of the
biggest quarterly sell-off witnessed since 1992. All the sectoral indices ended
FY20 in red. 9 of 13 sectoral indices lost over a quarter of their market cap in
the last 12 months.
Most analysts have cut the GDP Forecasts for FY2020-21 to 2.5% from 4.5% earlier
due to the consequent Lockdowns that happened to contain the COVID19 Outbreak across
the country. Indian Rupee continued to weaken against dollar over the year and hit
all-time low of ? 76.27 in March-2020.
SIHL’s Unique Offering to Investors – Systematic Investment Strategy (SIS) continued
to generate the returns that largely outperformed the markets and the best of the
Mutual Funds during the year. We posted a 40% growth of new accounts added to the
SIS product in the year.
Going forward, FY21 is beginning on a sober note as valuations have corrected to
an extent similar to October 2008 levels, giving an opportunity to stock market
participants invest cheaper, and gain higher as India moves towards becoming Self-Reliant
with “Atmanirbhar Bharat”. Compliance regulations are getting tighter, leaving lesser
and lesser leeway to the full-service brokers like us to provide unique products
compared to the discount brokers. We anticipated this and have already started productizing
our offerings rather than just being brokerage and demat services income streams.
Our transition to the brand new in-house back office system (Vision) is yielding
great results in terms of streamlined processes and more insightful account views.
We are more readily able to respond to the rapidly and constantly changing compliance
regime as a result of this transition. Excellent support and enthusiastic acceptance
of the new initiatives by our staff & associates allows us to keep updating
our products & services. We are deeply thankful to them and our clients for
their continued trust in our services.
Regards, UPENDRA T. SHAH
Chairman & Managing Director