Interim Update - April 2026

Dear Investors,

Hope you are keeping well.

The past phase has been one of endurance—marked by volatility, and tested conviction, for both the country and equity investors. Yet, as is often the case in markets, the toughest of the phases tend to precede the sharpest turnarounds.

We now appear to be at such an inflection point.

The recent ceasefire between the USA and Iran has acted as a catalyst for a decisive shift in sentiment. Markets have responded swiftly, and importantly, with conviction.

Valuations—particularly in the broader markets—had been compressed to levels that defied underlying business fundamentals. What we are witnessing now appears to be the early stages of a normalisation, in such phases, quality reveals itself unequivocally.

Since the 1st of April, the Nifty has recovered 7.4%, while the Nifty Smallcap index (which we often use as a proxy for the broader market, representing companies with approximately ₹10,000 crore in market capitalisation) has risen 8.38%. In comparison, we are pleased to report that PDF has surged 13.18% in the same period—delivering an upside alpha of 4.8% in under a week. Our portfolio has also exhibited a beta of 1.57 versus the Nifty Smallcap and 1.78 versus the Nifty50 (Implying a 1.57 , 1.78 , point recovery in the portfolio for every 1 point gain in the Indices.), which is a positive indicator of the quality of companies owned.

[The improved performance will be captured in April's monthly report provided next month, the present report captures data till the 31st of march which marked the recent market bottom.]

What is perhaps even more striking is the speed of this recovery. The 13.18% for PDF and roughly 8% for the broader Indices has unfolded in just 5 market sessions over 8 days (Good Friday, Saturday & Sunday being market holidays). This provides a key takeaway on attempting to time entry and exit especially during volatile market conditions, that these may come at a very high price of missing precisely such sharp recoveries—the very periods that can meaningfully alter long-term returns.

While macro economic cycles can certainly be studied to adjust one's asset allocation, micro-timing in equities remains a risky & perilous pursuit.

We continue to believe that the market is poised for further recovery, having undergone a meaningful correction both in terms of price and time over the past two years. While we remain measured in our outlook, we are certainly optimistic and pray for continued geopolitical stability and peace.

We would also like to take this moment and place our sincere appreciation to all our investors, a 100% of whom have continued to remain invested through this volatility, displaying commendable resilience, patience and trust in us and the markets.

We continue to track our portfolio's Alpha and Beta vigilantly, keeping a look-out for out-sized return opportunities while maintaining optimal risk management.

As always good equity investing is ultimately investing in and co-owning well run companies, with strong competitive moats, purchased at reasonable valuations, and letting time in the market compound returns.

Kind regards,

Team Prosperity Wealth.

P.S A link to our recent FY26 investor letter in case you missed the same: https://www.pwm-india.com/post/prosperity-discovery-fund-fy26-update