Have you heard of region wise investing strategy?

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There are several schools of thought on investing. Ace investor Warren Buffet believes in investing in companies whose products you consume in daily life. In India these include companies like Colgate, HUL, Maruti, ITC, Nestle, Britannia, Tata Consumer, Bata, Sun Pharma, IOL Chem, IOC. Many times, when you leave your home for the office or to go out, your gaze falls on the factories of different companies. When you see the employees coming in and out of that factory, you might wonder what products that company manufactures, what its daily turnover is, and how much profit it makes each year. So, besides investing in companies that make products used in our daily lives, let’s understand that we can also invest in companies that we often come across.

After witnessing the performance of Paytm’s IPO in November 2021, the confidence and enthusiasm of investors who invest in the shares of brick-and-mortar companies, which are companies from the old times, have increased. Investing in old-time companies doesn’t mean that these companies are outdated or somehow lag behind other companies. These are companies whose businesses are traditional or companies whose presence we notice in our neighborhoods and surrounding areas. Whether it’s about the outlets of these companies, warehouses, or their manufacturing units, these companies are often visible.

When we buy shares of a company, the most basic meaning is that we are funding that company, or in simple words, we are putting money into that company’s business, making us a partner in that company. Even if our share is only 0.000001%, buying shares means buying a stake in the company.

And wise investors are those who carefully consider every rupee before investing. Just as they wouldn’t buy a utensil without thinking, why would they invest without understanding? When a company’s plants, outlets, warehouses, and so on are visible, it also instills confidence in investing.

Now, let’s say an investor resides in Delhi-NCR. He  may not have the same confidence in investing in companies with manufacturing plants or facilities in South India as he would in Delhi-NCR companies. This is because he can see the factories of these companies in Delhi-NCR, and get a feel for the businesses of these companies since their products are mostly sold in nearby markets. For example, companies like Murugappa Group, Manoj Vaibhav Gems, and LG Balakrishnan Group have plants or factories that may not be visible to investors living in Delhi-NCR.

So, which companies in Delhi-NCR have significant businesses, and most of their factories are in this region?

Some of these companies include Maruti Suzuki, Hero MotoCorp, JBM Auto, Minda Industries in the automotive sector, as well as Havells and HPL Electric in the electric product manufacturing sector, Uflex in the packaging sector, Dabur in the FMCG sector, and DLF in the real estate sector.

However, can investments be made in all these companies with manufacturing units or businesses in Delhi-NCR?

Arun Mantri, the founder of Mantri FinMart, believes that before investing in companies with factories or plants in Delhi-NCR, it is important to consider their fundamental factors. Additionally, it is crucial to assess the track record of the company and its management. Not only that, but one should also check whether the company is profitable or not. Another important aspect to consider is whether there is revenue visibility in these companies for the next 2-3 years. From a long-term investment perspective, companies like Dabur, Hero MotoCorp, Maruti, Havells, Minda Industries, and DLF are better options.

So, before investing in companies with plants or factories that are visible in our local areas, it is advisable to thoroughly evaluate their fundamentals. However, from an investment perspective, a portfolio can also be built based on the region.