Financial Advisory

23/04/2022

The three most important factors for selecting a stock.

1. Roce : any company who has above standard roce conveys that it knows how to use its capital well, it tells that the company has an efficient way of redeploying capital into business which accounts for managements capital allocation expertise. It basically indicates that it is using money very judisicously in further scaling up the business. It also says that there is a great runway ahead for the company to grow.

2. Net profit margins : this tells how a company is doing more value addition than the competition and has hedge over its competitors, it also explains that the company will not become debt ridden or go bust anytime soon. It will be quite suprising to know that very very few infact handle of all the companies can defend a net margin of greater than 15% . These companies are therefore having deep moats to defend their margins. Here consistency is a factor.

3. 5 year revenue growth. This tells the topline growth of the company. A decent and consistent increase in revenue growth tells the appetite of the management in increasing the sale numbers and their dedications to it. A lot many promoters lose appetite along the way because many get into comfort zone or just find it ok to not grapple with more challenges in growth. There has to be an inherent appetite for growth.

Now any company which has a great roce, a great consistent net margin as well as a great too line growth is pure gold. It all implies that the chances of losing money is close to zero and upside is predictable

If one runs a screener of roce > 25 ( non bfsi sector) , 5 year growth > 7% and a net margin > 15% you will end up with only about less than 100 companies. You will find all the winners there.

Nope there will not be adanis, or Ruchi or Paytm or any other hot stocks.

But companies very few have heard of like chambal fertilizers ( which well sounds very scary by the name itself ) but yeah! It works from my logic.

16/12/2021

01/11/2021

1. Stock markets worldwide are always coupled...that is the Foreign Institutional Investors ... called FIIs move money from one market to another market regularly...The Indian sensex or Nifty stocks move up or go down essentially by the constant money flow from these big guys from the US and other developed markets..like Europe or Singapore...to our Indian market..the sheer purchasing power of these FIIs break or make our market at any given time...ofcourse we have our Domestic Institutional Investors like MFs and LIC to balance this and we as local retail investors too play with our little money in the market..but we can't really move the Indices with our Purchases whatever may be the quantum of our purchase..

These FIIs are essentially Pension funds and Insurance funds apart from FPIs..

Please remember that their currency is USD and our currency is INR.....I will come to this later in the reply..

For the FIIs..the return on Investment on a more mature developed market like USA in Dollar terms on any given day over a riskier emerging market like India is more safer because the US markets are well regulated by SEC...like the Indian Equivalent SEBI...and has depth also..

Keeping this in mind..please go through my reply as below..

1. If the ECB tighten the money flow ..meaning increasing the interest rates...then Europe being much safer..the FIIs will dump Indian stocks and shift the money to a safe haven asset..On the contrary if they loosen the purse..meaning reduce the interest rates..then the same money instead being in Europe flows to emerging markets like India..Korea and stock indices rise..

2. US DJIA is considered as mother Market for whole of the world..if the US job data is good that means the economy is reviving..then FIIs will have confidence in investing across the world.

If the main mother market itself is in trouble..FIIs will lose confidence and to recover their losses in their portfolio..immediately sell assets in India ..this will in turn negatively impact our stocks..So we need to always pray that US Job data is good and also the US inflation should remain low..
If the inflation goes up..then the Federal Reserve..our RBI equivalent will tighten the money supply to control inflation which will lead to high Bond rates..presently at over 1.5% levels..which is very high in the recent past
Then as I said earlier..FIIs will leave India and go for a safer US treasury Bonds..

3. Tapering is related to US money markets..it affects the Stock sentiments.

All this one and half years..liquidity was enormous in the Banking system as all over the world...Federal Reserve....ECB...and Banks like RBI and other major Banks went for lower interest rates..to facilitate Investments and spur growth amongst consumers by providing cheap money...

If the cheap money program comes to end..which is called tapering..in financial world...then all the Dollar denominated assets like FII investment in India will look at more safer asset in US and shift...which will lead to flight of money from here to US..which will lead to fall in the Indices.

To summarize

It is very important to note US and Indian Stock market are coupled.

2. US Bond and Stock market are related and hence positive for one is negative for the other.

3. Negative US job and inflation data negatively affects US markets and thereby affects Indian market too.

Finally it is the FIIs who control our market on any given day..
If they sneeze ..we have to catch cold..

30/10/2021

http://tradeinniftyonly.blogspot.com/?m=1

All the views and contents mentioned in this blog are merely for educational purposes and are not recommendations or tips offered to any person(s) with respect to the purchase or sale of the stocks / futures. I do not accept any liability/loss accruing from the use of any content from this blog. All...

25/10/2021

Greeting from Axis Bank!

The Zomato Story.

TRADING OF LOSS - NEW PARADIGM

Company X accumulated losses of over Rs 4,600 Crore

Incurred Loss of Rs. 106.9 Crore in 2018
Loss of Rs. 1000 Crore in 2019
Loss of Rs. 2400 Crore in 2020
Loss of Rs. 800 Crore in 2021
Loss of Rs. 350 Crore in 3 Months Apr to June 2021

Aggregating Total Loss of Rs. 4600 Crore from 2018 to 2021 June

With these Losses continuing to mount high, they managed to stand on their feet from 2018 till Today. Strange that it is not a year-old Business nor having previous years of accumulated profits that can set-off their current and future Losses. Hence it is quite evident that Net Loss is funded by Capital and Debt. But why do the Investors keep pumping the fund in the Startup even when they see no Profit in 4 years.

If the Business was running on Loss

Q) Were the Employees not paid ??
Answer is No, They were paid handsomely

Q) Were the Customers forced to Pay the high amount ?
Answer is No, they were instead given Meals at high discount

Q) Might the Founders and Top Brass were taking less Perks ?
Answer is No,

Founder Basic Salary was Rs. 3.50 Crore
Co-Founder -Gross Remuneration was Rs. 3.70 Crore
CTO 1.50 Crore
CFO 3.26 Crore

Q) Any Income Tax
A: Since the Company was running at a loss, there is no Income Tax payable

So who was bearing the brunt of Heavy Loss ??
The Answer is the Investor of X Company having stakes in the company.

It is obvious that the Loss of 4670 crore is funded by External Investor

So isn't it the Existing Founders and Investor of X Company at Loss?
How does this External Existing Investor gain if the Company is running Loss ??

Now here is the trick.
There is a Trading of Loss.
What If I tell You that Loss can be sold at a Profit??
Yes that is possible.

Founders and Investors were holding around 50% Stake who pumped funds into this startup have already had their funds eaten up by the losses. Yet in the books they held Numbers of Share and % of Stake.

VALUATION-

21/10/2021

AI or EV based

Tata elxsi
Happiest minds
Cyient
Sona BLW
Tata power
Tata motors
Remember always to buy on dips and not follow my advises and do your own analysis

21/10/2021

🔹 *Electric Vehicle Producing Companies:*

Part - 1 Lithium-ion Battery Manufacturers in India: Part – 2
Electric Vehicle Charging Stations in India: Part – 3
Companies Involved in R & D of Electric Vehicle: Part – 4
Raw Material Extracting Companies: Part – 5

*Electric Vehicle Producing Companies In India*

1) Mahindra
2) Tata Motors
3) Ashok Leyland
4) Maruti
5) Hero MotoCorp
6) OK Play India Ltd
7) JBM Auto
8) Goldstone Infratech
9) Olectra GreenTech

Lithium-ion Battery Manufacturers in India: Part – 2
1) BHEL and ISRO
2) Exide Industries
3) Amara Raja Batteries
4) HBL Power Systems
5) High Energy Batteries
6) JSW Energy

Electric Car Charging Station Manufacturers part 3
1) Ola and Indian Oil
2) NTPC
3) Tata Power

Companies Involved in R & D of Electric Vehicle: Part – 4

1) BHEL and ISRO
2) L&T
3) High Energy Batteries:

Raw Material Extracting Companies: Part – 5
1) Hindustan Copper
2) MOIL
3) Graphite India
4) Hindalco
5) Vedanta
6) National Aluminium Company Limited (NALCO)
7) Rain Industries
8) Himadri Speciality Chemical
9) Tata Chemicals

19/10/2021

List of companies with more than 50% Market Share:

1) Maruti Suzuki (passenger cars)
2) APL Apollo (structural & pre galvanized tubes)
3) CDSL (investors accounts)
4) Interglobe Aviation (air traffic passengers)
5) GMM Pfaudler (glass lined equipment)
6) Asian Paints (decorative paints)
7) Colgate (oral care)
8) Symphony (coolers)
9) PGHH (female care & vaporub)
10) La Opala Rg (opalware)
11) HLE Glasscoat (filtration & drying equipment)
12) Delta Corp (online poker games)
13) Bajaj Auto (3W segment)
14) Vinati Organics (IBB)
15) OCCL (insoluble sulphur)
16) LMW (textile machinery)
17) Bajaj Consumer (almond hair oil)
18) Indiamart Intermesh (online B2B Classified space)
19) Vst Tillers (power tillers)
20) Sanghvi Movers (overall domestic crane hiring market)
21) Emami (antiseptic & male grooming)

List of companies with more than 60% Market Share:

1) Concor (domestic container cargo transport)
2) Exide (lead batteries)
3) Naukri (Indian job market space)
4) Praj (ethanol plant installing)
5) ACE (mobile & tower cranes)
6) Pidilite (adhesives)
7) Jamna Auto (leaf spring)
8) CAMS (RTA within mutual fund industry)
9) Time Technoplast (polymer based industrial packaging)

List of companies with more than 70% Market Share:

1) ITC (cigs)
2) Honda Siel (portable power generators)
3) Hindustan Zinc (primary zinc)
4) Asahi India Glass (automotive glass)
5) NRB Bearings (needle roller bearing)
6) Suprajit (2w cables)
7)Greaves Cotton (3w diesel engine)

List of companies with more than 80% Market Share:

1) Wabco (medium & heavy vehicles braking system)
2) MCX (commodity trading)
3) Coal India (coal production in India)
4) Eicher Motors (250 cc bikes category)

List of companies with more than 90% Market Share:

1) IEX (power trading)
2) Zydus Wellness (sugar free product)

List of companies with 100% Market Share:

1) IRCTC (rail network)
2) HAL

07/09/2021

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06/09/2021

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06/09/2021

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