Banks

Personally, I feel that money lending is a good business as it gives a steady source of income (in the form of interest from borrowers). This is one of the reasons I am planning to include one of the banks into my portfolio. With inflation showing no signs of cooling, it is possible that the RBI would continue to tighten it's monetary policy, Banks would have to raise the interest rates and the amount of loans disbursed would fall. This would affect the Sales and Toplines adversely. Margins are also bound to be affected. One of the reports I was reading mentioned that the profits of banks can be impacted 5-20% over the coming 3-4 quarters. The report had listed the following banking institutions:

I am planning to wait for another 6-9 months for inflation to cool down and the RBI to ease the monetary policy. I'd also look at real estate sector around November for similar reasons . Meanwhile, I'll go look for some other yummy company to embellish my basket with ;)