Motilal Oswal 1st Wealth Creation Study (1996): A Historic Beginning

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Introduction:

The Motilal Oswal 1st Wealth Creation Study, published in 1996, marked a new era in structured investment research for Indian investors. It provided a systematic analysis of the Indian stock market from 1991 to 1996—a time when India was undergoing rapid economic liberalization.

This study introduced the idea of focusing on wealth creators, businesses that generate significant shareholder value over time, laying the foundation for future studies.

Key Highlights of the Motilal Oswal 1st Wealth Creation Study:

  1. Focus Area:
    • The study analyzed wealth creation from 1991 to 1996.
    • It introduced the concept of evaluating companies based on their ability to create wealth for shareholders.
  2. Top Wealth Creators:
    • Hindustan Lever (now Hindustan Unilever): Leveraged its brand dominance in consumer goods.
    • ITC: Emerged as a leader in the FMCG and tobacco sectors.
    • Infosys: A budding IT company that showcased early signs of exponential growth.
  3. Themes and Trends:
    • The rise of consumption-driven sectors due to increased disposable income.
    • Early growth of the Indian IT sector, which would later dominate wealth creation studies.

Lessons for Investors:

  1. The Power of Consumption:
    Investing in companies catering to basic needs and lifestyle upgrades yields consistent returns.
  2. Growth Over Cycles:
    Companies that can grow earnings sustainably outperform their peers over time.
  3. Early Movers in Emerging Sectors:
    Identifying potential in new sectors (e.g., IT in 1996) can lead to exponential returns.

Notable Companies and Sectors:

  • Hindustan Lever: Demonstrated the value of strong branding and consumer trust.

  • Infosys: An emerging IT leader that would define India’s software export growth.
  • Sector Focus: FMCG, IT, and financial services led the charge during this period.

Conclusion and Learnings:

The Motilal Oswal1st Wealth Creation Study emphasized:

  • The importance of investing in businesses with sustainable earnings growth.
  • Aligning investments with macro trends, like consumption-driven growth.
  • The power of patient investing and identifying early opportunities in emerging sectors.

Even today, the lessons from this study remain relevant as value investing and growth strategies continue to dominate.

Download the Full Study:

  • Access the complete Motilal Oswal 1st Wealth Creation Study PDF here.

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