Give a brief stock pitch for a client portfolio: an invented food company at Rs 4,000 crore market value, 28 times earnings, 22% return on equity, 15% growth and net cash. Pitch it and size it at 3% of Rs 5 crore.

A high-quality business at a full price: worth a 3% position, Rs 15 lakh, and not more, because the return depends on the multiple holding. Earnings of about Rs 143 crore compound at 15% with a 22% return on equity and no debt. If 28 times holds, the return is about 16% a year; if the multiple falls to 18, about 6%. At 3%, a 40% fall costs the client Rs 6 lakh, 1.2% of the portfolio, which the rest can absorb.

Four boxes, in order: what the business does, the three numbers that matter, the one risk that could break it, and how much to own. A good restaurant review names the dish, the price and the catch before the verdict. A client pitch that ends with a view but no size is unfinished, because the size is what turns an opinion into a decision the client can act on. Interviewers in private wealth listen for that last box more than for the story.

Derive what the headline figures imply. Earnings are Rs 4,000 crore divided by 28, about Rs 143 crore; at a 22% return on equity the book is about Rs 649 crore, so the market pays 6.2 times book. Growing 15% while earning 22% on equity means retaining about 68% of profit, paying out 32%, a dividend yield near 1.1%. That is a business funding its own growth, which is what the return on equityProfit divided by shareholders funds; how many rupees of profit each rupee the owners left in the business earns in a year. is telling you.

In the price. At 28 times, the market already expects years of 15% growth. If growth holds but the multiple eases to 22, the return falls to about 11% a year; at 18 it falls to about 6%, close to a bank deposit, for an equity risk. The business risks sit underneath: distribution through small grocers can be disrupted, and input costs such as edible oil squeeze margins. Say plainly that a good company and a good investment are different claims.

Size to the damage the client can take, not to conviction. Rs 15 lakh is 3% of Rs 5 crore; if the stock fell 40%, a normal bad year for a richly valued mid-sized company, the client loses Rs 6 lakh, 1.2% of the portfolio. A lower multiple, say 20 times on the same growth, would justify a larger weight because less can go wrong in the price. A client already holding other consumer companies would get less, because the risks overlap.