{LONGTERMINVESTORS} Consumer Discretionary Services Index

Friends,

I'm constructing a Consumer Discretionary Services Index, which will capture the market cap performance of a basket of stocks within the space, belonging to segments such as Multiplexes, QSR/Food Delivery, Travel & Leisure, Cable/DTH/Internet Providers, Theme Parks, Beauty & Wellness Services, Fitness Services and Gaming & Entertainment.

As opposed to pure-play FMCG/consumer products, Consumer Discretionary Services reflect spending which is largely discretionary in nature. Services businesses typically command higher valuations than product businesses. I believe Consumer Discretionary Services will corner a growing share of the consumer wallet, going ahead. The objective is to establish investor appetite for this basket of stocks, as captured by the performance of the Index.

Sectors such as banking and education are excluded, since these are essential services, so to speak, and not discretionary.

Stocks I'm including in the Index are: 

PVR, Inox Leisure, Jubilant Foodworks, Westlife Development, Thomas Cook, Cox & Kings, Mahindra Holidays, Dish TV, Hathway Cable, Wonderla Holidays, Kaya, Talwalkars and Delta Corp. These 13 stocks cover the gamut of discretionary services. Stocks have been selected on the basis of management capabilities, business model, financial track record and balance sheet. All were profit making in FY16, except Thomas Cook and Hathway Cable. However, merely by their inclusion, I am not recommending any of these stocks.

Index will be based on the free-float methodology, and computed for the last 2 years, since Kaya and Wonderla were not listed before that.

I don't believe I've missed out any major consumer discretionary services stocks, but I welcome suggestions. I am aware that Wonderla and Kaya are small companies currently in terms of revenues. To that extent, they will have very small representation in, and limited influence on, the Index. However, they are being included, since they belong to growing segments.

Regards,

Nitin A. Khandkar

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