BSE Sensex

Showing posts with label BSE Sensex. Show all posts
Showing posts with label BSE Sensex. Show all posts

Monday 19 February 2018

Some Seminar Secret for Beat Sensex Market


I attend some Seminar relate Sensex-Market-Storm-Fund , i found some Secret for Beat Sensex with Greed-and-fear situation.


Some Secret for Beat Sensex 35 k


I know you all are very intelligent but some value thinkable thing are below : 

  1. It is not about buying high quality assets. It is about buying assets for less than they're worth.
  2. Multi are hundred baggers only in hindsight. Stop looking for them.
  3. The triggers really were about the industry or the overall economy turning around and not really stock specific
  4. You don't need complex math to value a company.
  5. Diversification as powerful a force as concentration if you know how to use it.
  6. Give each stock a performance deadline.
  7. Do what you have to do; don't worry about what the stock market is going to do.
what you think mail me Or comment 

Monday 29 January 2018

Why we think the mutual fund is a better option for?


we discuss in this para on mutual fund but first, In the current market, we see bull running towards 12500 for nifty with fast speed. Some technical expert told media “ some correction happen before reach target depend upon some factors”, 

Before target, market up-down on results and oil heating with dollar to relate IT sector,

Some company measures maruti, hdfc, indian housing, hcl etc, on our radar,

We make updates day-to-day for our clients, on technical basis,

Media major player predict for market going fast but we say its fear-n-greed situation for trader and investor,





Some safe zone stocks for our Good traders

Hcl tech
Cipla
Nalco
Tcs
Tata steel
Wipro
Coal india

With above refer para, some opportunity mutual funds try to invest when some correction happen in market, I have contract with major player for fund and use my money, but I don’t seen any progressive things,

Allow me to help you for giving suggestion for investing short-term and earn 30-40 % on investment,

I made trade with my knowledge, these things I want to spread,

Note: please send me query you have on prabhakar02@hotmail.com or call me 9664509906

Happy Trading

Sunday 28 January 2018

Share Trading tips for Short term period dt 28 jan


Share trading tips for Short term period dt 28 jan

Good morning trader,

Today I give you positive trend for :-

Godrej prop 

Entry for 912
Sl for 776
Tgt  1180


Kamat hotel

Entry 154
Sl 130
Tgt 198

Indian bull

Entry 1405 - achieved on 29 jan
Sl 1348
Tgt 1546

Note : please send me query you have on prabhakar02@hotmail.com or call me 9664509906

Happy Trading


Monday 21 August 2017

Infosys crack down from 1100 to 870


Infosys crack down from 1100 - 923 - 870 with sell behave in investor like short and long-term with scene SIKKA exist as a CEO. 😞

with last entry when I see 874 sold 44916 qty share b end of the day.

in Open interest change positive by 9%. it's going down by target 770.😁

We aware about Sikka exit from Infosys, this is bad news for the trader who plays trade on Magin or contract basis.

Market value down by 13% of the portfolio of my dearest friends, they had intelligent thought for Infosys gives range 970-1197.

Board member of Infosys impress Investor under governance of Sikka, 😧

Some analyst intervied on Market show, after appont CEO SIKKA some investor not happy with work style. Cause he is from US valley and his strategy work like US employee body.

About founder MURTHY, said by V Balkrishanan " He don’t arise any issue against Sikka and his work ability. Bust some media raise rumor help to crack market value of Infosys.

Investor waits and watched for investigators report who responsible, who answerable, why????

Market crash by 200 with Infosys plunged by 5%`

We suggest creates the new body of CEO and MD body for attracting more investor and market DII.

Good news for market Major players LIC gives BUY rating for investing.

I think some analysis give line for BUY in famous analyst website.

Some care of money or own investment we believe and depend on investment gurus connect some tv shows and analytic apps.

Within two days infosys crack down below 880, this is bad for short term investor.

As per my analysis its going below 770, why its fear between who enter to buy INFOSYS with Sikka entry as a CEO.

Its my opinion for Infosys wait for 800-780 , make Buy call after boom you will earn double.

HAPPY INVESTING

Friday 3 February 2017

Todays Stock Market Summary Chart Of Friday February 3, 2017


Note : Any blog OR content suggestion you have , please mail me on prabhakara.dalvi@gmail.com

  • 12 April 2013. Infosys corrected by a remarkable 22%, wiping off Rs 357 billion in investor wealth. The reason: disappointing revenue guidance.
  • 17 October 2014. Tata Consultancy Services (TCS) corrected by 8.5% in a single session. The reason: disappointing revenue guidance.
  • In Trump's first month as president, Infosys and TCS corrected by 8% and 7% respectively. The reason: prospects of disappointing revenue guidance.

 Do you see a pattern?

The recent correction of IT majors, though substantial, is nothing new for the sector. Nor is the reason for the correction.

The world is speculating on a Trump crash. So naturally, every correction to Indian IT is branded as a fallout from the Trump crash.

But is this so-called Trump crash a reason to act on Indian IT stocks? Of course, the answer does not depend only on stock prices. Other factors are relevant.

So we put three key questions to our in-house IT sector expert. Incidentally, they're the same three questions we asked in 2013 and 2014.

Is the business model affected? The immigration bill seeks to double the minimum salary for IT hires to US$1,30,000 from the current US$60,000. It also seeks to make a master's degree compulsory, among other requirements. And of course, the cost of the visa would go up.

Now, unlike what Trump would like to believe, Indian IT firms are no longer just back-offices to the world. Higher-value contracts have been critical to companies for several years now. And changing the mix of employees to comply with the requirements does no permanent damage to their business model.

Can the risk be hedged? Companies would need to adopt various counter measures, like hiring more locals, getting more work done from India or other offshore locations, cutting down on low-margin clients, and stepping up automation.

None of this is impossible to execute. And if done with long-term interests in mind, the onetime effort may be well worth it. So perhaps what some now perceive as a negative development will actually be a boon for certain Indian IT players.

What's the actual impact on fundamentals? If passed into law, the bill would put pressure on Indian IT firm margins inFY18. The actual impact, however, may differ from company to company. Several of them have reduced their exposure to the US in recent years. And even the companies that would hit hardest likely have enough cash on their books to recover from the shock.

Indian IT companies will need to rise to Trump's challenges. But fortunately, most were already gearing up for this. Trump may have only accelerated their defence.

So as long as you aren't worried about the revenue guidance in the coming quarters, you need to do just one thing: Stay vigil on valuations.

And you never know, the Trump crash may be an opportunity to act on not just IT but lots of other safe stocks as well.

Chart of the Day  

Large Indian IT companies, on an average generate more than 50% of their revenues from the US clients. They have built a strong client base over the years in the US market. If the suggested changes for immigration get cleared, the cost component for the Indian IT companies will go up. The need to reduce their US exposure and move to other geographies is a given.

Will Trump Mania Impact IT Companies Revenues from US?

But we believe that it is unlikely that the companies will substantially bring down their focus on the US. Instead companies may look out for other means to reduce costs or protect margins.

If you have been with us for long, you know that we have played the gentleman's game of value investing...and we have a solid track record of success there.

But you pay a price for this gentlemanly approach to investing. You have to patiently wait for the bulls to come to you. And you have to let go of many fast, raging bulls.

 Substantial part of the of central government expenditures are undertaken by state and local governments. Most states in India like the Centre run budgets where expenditure is higher than revenue, leading to deficits.

As reported in today's Business Standard, the fiscal responsibility and budget management (FRBM) review committee believes India's debt to GDP ratio will be 60% in 2023. This comprises 40% for the Centre and the balance 20% for state governments. As per the current available data, the outstanding debt positions of the Centre and state governments show the combined liabilities at 69.5%.

So containing this burgeoning debt is certainly a tall task for the government.

Generally, when the country's growth is soaring, some portions of debt is reduced. But that is nit excatly the case for FY17-18. The economy may continue to see impact of demonetization for months to come. Thus the nominal GDP growth may actually be much lesser than the projected11.75%.

The Budget has laid down large allocations towards social welfare. But it is important for the government to realize that while public spending is necessary, it will be important to keep its borrowings in check. Even the RBI has warned the government about this. 

In the meanwhile, after opening the day on a flat note, the Indian share markets have continued to trade on a weak note and are trading marginally below the dotted line. Sectoral indices are trading on a mixed note with stocks in the pharma sector and realty sector witnessing maximum buying interest. Auto stocks are trading in the red. 

At the time of writing, the BSE Sensex was trading down 68 points (down 0.2%) and the NSE Nifty was trading down 24 points (down 0.3%). BSE Mid Cap index was trading up by 0.6%, while the BSE Small Cap index was trading up by 0.8%.


 Investing mantra  


"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a fly epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497". - Warren Buffett

Thursday 2 February 2017

Todays Stock Market Summary Chart of the Day Thursday February 2, 2017


Note : Any blog OR content suggestion you have , please mail me on prabhakara.dalvi@gmail.com

The markets reacted strongly with a near 500-point gain for the Sensex yesterday. But how should smart investors react to this budget? The dust settles and we take a closer look at it, one conclusion is unavoidable: Despite all of the speculation, hype, and hoopla in the days leading up to the budget, there's nothing really earth-shattering about it. It's just business as usual on most counts.

Yet, the kind of attention this exercise gets here in India, especially in stock market circles, it is only to be expected that the markets react strongly.

But from personal experience, I can tell you this: For many on D Street, it has become an outright excuse for speculation. The surrounding hoopla makes it difficult for investors to see through it. And easy to believe that they must 'do' something in response to it.

It is at times like these that it is most important to rise above the noise. Make no mistake, it is an important exercise and does affect some businesses more than others. But these differences in most cases are marginal and incremental. And seldom of the 'make or break' variety.

All put together, the annual budget exercise is very much a part of the 'normal' business landscape of companies. The multitude of tweaks made in it either help or harm the cause of a given company ever so slightly. But then again, that's true for all the continuous developments, both global and domestic, throughout the rest of the year.

Its collective approach to stock picking, its devotion to large safety margins in the purchase prices, and its dynamic debt component (fixed deposits/bonds) renders most developments that the economy throws at the business world, government budgets included, trivial.

MCM strategy as a sort of 'Chinese Wall' between the rough and tumble of the business world and our subscribers' returns. It ensures that over the longer term, our returns remain not just protected, but well ahead of the general market's returns.

Chart of the Day  

The Union Budget for 2017-18 was presented by finance minister, Mr Arun Jaitley yesterday. 

The markets seem to give a thumbs up to the budget, the Sensex closed up 486 points for the day. Does the budget play a crucial role for a serious long term investor? What role if any do the valuations play in prospective returns. We looked at the price to earnings ratio of the Sensex on the budget day as a proxy for valuations and noted the following 3 year compounded annual return going forward.

Budget or Not - It is the Valuation That Counts  -       

We found that the market returns are agnostic to the budget in the long run. What mattered more was the valuations at that point in time. Cheap valuations are a big driver of future returns.

Be it the Union Budget, GST or a great monsoon, you always got to ask the all-important question: Everything said and done, am I paying too much for the stock in relation to its intrinsic value?

For even though the budget may be path breaking and the economy may have some great years ahead of it, when you pay too much, even a good stock can quickly turn into a bad investment.

 After opening the day on a flattish note, the Indian stock markets fell below the dotted line. At the time of writing the BSE-Sensex was trading lower by about 42 points (down 0.2%), while the NSE Nifty was trading lower by 15 points (down 0.2%). Sectoral indices are trading on a mixed note with stocks in the metal sector and auto sector witnessing maximum selling pressure.     

                    Today's Investing Mantra         


"Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down" - Warren Buffett

Tuesday 24 January 2017

Todays Stock Market Summury - Chart of the Day 24 Jan 2017


Note : Any blog OR content suggestion you have , please mail me on prabhakara.dalvi@gmail.com

So exporting our way to prosperity is out of the question. As per the latest trade data, exports are flat (i.e. up 0.75% YoY) in the first nine months of FY17. This, after a steep fall over the last two years. 

So what about domestic investments. Unfortunately, today's chart does not present a happy picture. For 'Make in India' to succeed, speedy clearances are a must. In fact, this was one of Modi's main election promises. 

It was widely believed, if stalled projects could be cleared, India's GDP growth would get a boost. We will never know because they are still stalled! 

As per CMIE data and reported in the Mint, the total number of stalled projects are still rising. Surprisingly, four out of the last five quarters with the highest stalling rate on record, have been during the Modi government's tenure. A fifth of stalled projects are held up because of lack of government clearances. 

A deeper look at the data shows that there are three primary culprits: lack of funds, lack of promoter interest, and lack of environmental clearances. 

Lack of environmental clearances is holding up 14.48% of all stalled projects. This is about two-thirds of all projects stalled due to lack of government clearances. 

A lack of funds is an easy problem to explain. Banks are loaded with bad loans and are not likely to provide more funds without all clearances in place. Equity financing is also very difficult because of a high risk aversion to such projects. There's not much the government can do about this. 

A lack of promoter interest is a fascinating subject. It could be a reflection of disillusionment with either the Indian economy's prospects or with the government... or both. 

Whatever the case may be, one thing is clear to us; corporates are in no mood to make big investment commitments. This was true even before demonetisation. Now the wait will get longer. 

Thus, we believe only patient investors who can wait for a revival in the investment cycle, will be the ones to benefit from any positive surprise on this front.

Now that US plans to pull out, the deal may not happen. Even if it does without US, it would lose much of its significance as US alone accounts for a giant share.

Anyway, that's good news for India. This is because TPP could pose a serious blow to India's trade ambitions, especially when it comes to exports.

India is among the top textile exporters. A lot of companies in the organized and unorganized sector get a lion's share of their revenues from supplying to member nations of TPP.

With Trump abandoning the TPP, Indian textile manufacturers will heave a huge sigh of relief. A textile stock Richa recommended in 2015 in Hidden Treasure, holds good upside potential for long-term investors. This niche player has created a name for itself and is the preferred supplier to top quality shirt manufacturers around the world. Its unparalleled quality controls enable it to stay well ahead of competition. However, the stock crossed its maximum buy price today. 

Here is the lesson that should be learned. We may never be able to predict geopolitical events like Trump's election or his policies. But by buying fundamentally strong stocks for the long-term when they are available cheap, you can put the odds of winning in the market, firmly in your favour.
 
After opening the day in the green, the Indian stock market indices moved further into positive territory. Auto and capital goods, stocks were leading the gains. 

At the time of writing, the BSE Sensex was trading higher by 222 points (up 0.82%) and the NSE Nifty was trading higher by 73 points (up 0.86%). The BSE Small Cap and BSE Mid Cap indices are trading higher by 0.6% and 0.7% respectively.

Is India ready for Make in India? 

The India story is India. Not the world. 

If we look at some basic data - say, the per capita consumption pattern across the world - India stands in the lowest cadre. 

Consider the following:
  • Autos - India: 18 cars per 1,000; US: 800 cars per 1,000
  • Footwear - India: 1.66 pair per annul; developed nations: 6-7 pairs p.a.
  • Broadband - India: 1.4% of the total population; US: 28% of the total population
  • Airports - India: 464; US: 15,079

The above data clearly shows India is an 'India story'. The opportunity to catch up to global counterparts across sectors is huge. 

However, it is important to note that make in India for India will only succeed if it is at competitive prices compared to the world. 

Tuesday 17 January 2017

Make Big Money in Cyclical Stocks in Intra, BTST, Client Mode, short Term


Cyclicals are the most misunderstood of all the types of stocks. It is here that the unwary stock picker is most easily parted from his money, and in stocks that he considers safe. - Peter Lynch 

Cyclical Stocks in Intra, BTST, Client Mode, short Term
Cyclical Stocks in Intra, BTST, Client Mode, short Term


But it's certainly prevalent in the stock market, isn't it? 

The excitement-to-fear rollercoaster ride is exactly what investors feel when they put their hard-earned money in cyclical stocks. 

As Peter Lynch rightly points out, they are the most misunderstood stocks in the market. Many of them are large caps, which are easy to confuse with bluechips. So unwary investors think cyclicals are fairly safe bluechip-like stocks. , But they aren't. 

Cyclicals, no matter how big or small, must be seen as a separate category. 

latest Hidden Treasure recommendation... Cyclicals are of two types.

The first type are companies directly related to the economy - i.e. any contraction or expansion in the economy affects them. Auto companies, capital goods, and banks fall under this category.

The second type of cyclical is a business where pricing, earnings, and cash flows are dependent on the demand-supply of their products or raw materials. Metals, sugar, and chemicals fall under this category.

So why should these stocks give investors the goosebumps? It is almost impossible to accurately predict the cycles for either of the two types.

So, while a low PE ratio would be attractive for most stocks, it is not always true for cyclicals. When a cyclical stock's PE ratio is very low, it's usually at the end of a favourable period. This is because of the disproportionate expansion in the earnings in the upturn of the cycle.

This is often a signal of cycle reversal. And once the cycle reverses, the stock falls quickly and the PE ratio adjusts higher.

This is why Peter Lynch said the worst time to buy a cyclical stock was when the past financial performance was at its best. In another words, when the trailing PE ratio of a cyclical stock is low, it usually means the stock is nearing the end of the cycle. 

This is where investors get on the wrong ride. They think they are buying a cheap stock. Then the cycle turns and the price falls. They're stuck on a train going down fast, and it could be years before the cycle turns up again. 

So how do some investors (including Peter Lynch) make big money on these stocks? 

There are two methods. Pick the one you are more comfortable with. 

The more common of the two is the timing method. Basically, you try to pick the bottom of the cycle and ride the stock all the way up to the top of the cycle. 

This is very difficult to do. Even if you are successful, you will have to endure a rollercoaster ride on the way up. That's because the markets are wary of any sign of a change in the cycle. 

Remember, everyone wants to sell at the top. So these stocks tend to react more to negative economic news than the rest of the market. This makes them extremely volatile even on the way up. 

The second method is less popular but more effective. Here's what you should do...

Pick an industry that's coming out of a major capex binge, so that more capacity won't likely be added at a fast pace.



Avoid industries where competition from new entrants is heating up.

Identify the best companies in the industry using fundamental analysis.

Find stocks that cater to a large set of clients to avoid client concentration risk.

Narrow down the ones with the healthiest balance sheets and cost-conscious managements.

Eliminate those with debt to equity higher than 1.

Don't pay more than 1.5 times book value.

Invest for the long term (3-5 years) to let the cycle play out.

This is not an exhaustive list. But it is more than enough to place you head and shoulders above most investors. 

Investing Mantra
"A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a whole lot about the person doing the predicting." - Warren Buffett


Note : Any blog OR content suggestion you have , please mail me on prabhakara.dalvi@gmail.com

Thursday 10 March 2016

Market reverse trading update. 10 march.. My view


Today I catch some new thing for business purposes.  BSE finalize one formula for reverse trade for who want save from loss in derivatives transaction.  I clear that we stand against fraud trading with experimental techno,  it's take time but effective in future.

This session of NSE trading for Glenmark pharmacy with 62 qty.

Thanks

Tuesday 28 April 2015

Investors Should Not Fear The May Effect in Stock Market


It's a cruel summer in the markets. The "May effect", an annual phenomenon investors have come to dread, appears to be taking shape again. Consider this. The market went on a correction course on 13 April and the Sensex shed 1,368 points over the next five days. The Sensex fell by another 270 points on 22 April and hit a low of 27,400, before bouncing back with a modest gain of 214 points. The Nifty also recovered from a low of 8,300 on 22 April. However, the pull-back was short-lived and both the Sensex and Nifty lost 155 points and 31 points respectively on 23 April. 

May and October can be tough for stock investors (see chart). In fact, the May weakness is a global phenomenon which has given birth to the market adage, "Sell in May and go away." 

Though called the May effect, the correction doesn't happen exactly according to the calendar month always. For example in 2011, the major sell-off started on 21 April and lasted till 25 May (see table). It did not happen at all in 2014 thanks to the election results— a business-friendly government was elected with a clear majority. Instead of the normal correction, the honeymoon took the market to new all-time highs. Now that the market's honeymoon with the government is over, what is going to happen in 2015? The general expectation among experts is that the May effect will be clearly visible this year because several other negative factors are at work too. 

Investors Should Not Fear The May Effect in Stock Market
First is the weak set of corporate numbers. "Though it is too early to comment on the overall results, there are some disappointments. While Reliance IndustriesBSE -1.09 % reported good numbers, IT majors like TCS, WiproBSE -0.31 %, HCL Tech, etc disappointed the market," says K. Sandeep Nayak, ED & CEO, Centrum Broking. The disappointment with weak numbers is more this time because the market had factored in a possible turnaround with a stable government. "After a business friendly government came to power, there were hopes that things will improve in a year. As the recovery is still not strong, it is affecting sentiments," says Jigar Shah, CEO, KIM ENG Securities. 

Another factor triggering pain is the decision by the Income Tax Department to send minimum alternative tax (MAT) notices to foreign portfolio investors (FPI). According to sources, the department has already issued MAT notices to around 100 FPIs. In some cases, the subject matter dates back 7-8 years, a first in the last 23 years of FPI investment in India. "This retrospective tax is causing a lot of anguish," says Shah. This also raises operational hurdles for the foreign funds. "These funds can't collect MAT retrospectively from the investors who have already redeemed. 

This is like trying to collect additional fares from passengers after they have alighted from the bus," says Nayak. After several days of market fall, the Income Tax Department clarified that "FPIs covered under double taxation avoidance agreement (DTAA) will be exempt from MAT". 

The pull-back on 22 April can be attributed to this. However, it does not solve the problems of FPIs coming from other countries and the pressures on markets will continue for some time due to this. 

There are several other negative factors at play. The meteorological department has predicted below normal monsoon. Rain failure can create problems like high food inflation and reduced rural demand. The fall in international commodities, especially crude, was the main factor that helped bring wholesale inflation to negative levels. The recent pull-back in crude prices may push it once again to the positive territory. Spike in crude prices and a bad monsoon is something our economy can ill afford. It will also force the RBI to delay rate cuts. 

However, there is no reason to panic. "Though the Nifty could dip below 8,000 levels, value buyers will emerge. Our Nifty target for December is 9,540 and we are not changing that," says Shah. Long term investors should try to make use of this annual phenomenon.  - ETNOW

{{ The Guest Post Blogger organization was not involved in the creation of this content. - Dalvi Prabhakar B, Founder & Digital Manager (SEO,SEM,SMO) }}

Thursday 12 March 2015

Benchmarks add gains Infra, Power lead


Benchmarks add gains Infra, Power lead
Indian equity markets added gains and continued trading in green in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on positive note from the early trade after the International Monetary Fund (IMF) in its annual assessment report for the country raised its growth forecast for the current fiscal to 7.2%. Investors have however adopted cautious approach ahead of the release of February CPI and January IIP data, which is scheduled to be released later in the day. Traders were seen piling positions in Infra, Power and Auto stocks. In scrip specific development, Jindal Stainless was trading firm after India’s trade ministry recommended anti-dumping duty on hot rolled flat products of stainless steel imports. ITC was trading in green as the company effected 10 to 25 percent price hikes across cigarettes of various lengths.

Wednesday 11 March 2015

Benchmarks continue firm trade, TECK, Infra lead FOR 11 March Indian Market


English: Logo of Airtel
           Indian equity markets continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters taking cues from European counterparts. Investors have started taking cautious approach ahead of the release of February CPI and January IIP data, which is scheduled to be released on Thursday. Traders were seen piling positions in TECK, Infra and Power stocks while selling was witnessed in Metal, Realty and Consumer Durables sector stocks. In scrip specific development, Jubilant Life Sciences was trading in green after a foreign brokerage firm retained a buy rating on the stock stating that the valuations of the stock are attractive, given expectations of improvement in EBITDA margins and free cash flows.  

Monday 2 February 2015

India not expensive, to thrive if earnings deliver: Baring


Indian markets are on the path of improvement and if earnings growth are delivered as per expectations, then it will continue to remain buoyant, believes Ajay Argal, Head of Indian Equities at Baring Asset Management (Asia). Argal doesn’t feel that Indian markets are expensive from a 3-4 year horizon but says that one needs to take a stock-specific approach this year as many stocks still look fairly valued. He remains bullish on banks and expects a pick-up in growth in four-wheelers.

Below is the transcript of Ajay Argal's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18. 

Latha: Let me first start with the global cues. We have seen a bit of a negative growth numbers or pessimistic growth numbers coming in from both the United States and China if you please, the purchasing manager’s index (PMI) numbers are not looking too hot. Do you think we are going to see a longish bit of risk aversion or is this going to be just a brief dip and equities will be back in fashion?

A: You have to separate the various markets. The Indian markets are on the path of improvement and the market is always looking for direction of improvement in the economy and the direction of improvement for India is definitely positive. So India might be in a different position compared to some of the other leading markets. When you talk about the US, the US markets have already done phenomenally well last year and as most of us know, most of the performance came from the rerating of the markets rather than the improvement in the earnings growth and somewhat similar things have happened in India in anticipation of the earnings growth this year. So if the earnings growth which is anticipated in India is delivered then the Indian markets will continue to remain buoyant.

Latha: Are you not worried about the current valuations of the Indian market considering that Q3 numbers are worse than expected especially when you looked at the bank earnings, ICICI Bank  and Bank of Baroda  two big banks reporting 14-15 percent rise in non-performing loans (NPLs) in just one quarter, not giving you a feeling that markets are running ahead of themselves?

A: Definitely this year you need to focus more on the stock specifics. There would be differentiation in the stocks even within the same sectors, so the stocks which continue to deliver better growth which are more efficient when you are talking about the banks, the efficiency in terms of the asset quality and some of the banks are definitely growing faster even with better asset quality so even in the banks, there could be differentiation. So when you look at valuations, the valuations you have to look at it a bit longer-term. The valuations might look expensive on the near-term but that is because the earnings have been depressed in India over the last three-four years, we are just coming out of the huge downcycle. So when you need to look at valuations at a low point of the downcycle, you need to build in what the growth is possible, what the potential is over the next two-three-four years if not longer. From that perspective, the markets are not that expensive, they are definitely not as cheap as they were at the beginning of last year but definitely they are not on the very exorbitantly expensive zone.

Sonia: Automobile sector is one pocket that has delivered very good returns to shareholders in the last many years but now there is a big slowdown that we are seeing especially in the two-wheeler space, how would you approach this sector now?

A: If you look at the automobiles, even the four-wheelers, there should be a pick up in growth going forward. We have seen some of those things in the passenger car manufactures especially the market leader there is showing better growth numbers compared to the industry and gaining market share. Similarly, here, we have seen that some of the two-wheeler manufactures are gaining market share. Even if you look at a company like Bajaj Auto , you have to look at the entire business and in that business of Bajaj Auto for example there is predominance of exports. So the exports continue to do well but as far as the domestic two-wheelers are concerned, it is again part of the trend, which we have witnessed in lot of industries in India in the last three-four years that there has been a slowdown but if the economic growth picks up, which is what we are anticipating then definitely the two-wheeler industry as such will be showing healthy growth in times to come. So this is a sector definitely one should be present in as far as the portfolio is concerned.

Latha: What would be the other sectors that you are bullish on at this point? 

A: We are bullish on the banks and within the banks as I mentioned, the banks which are more efficiently run which are growing faster, which are gaining market share as a result and at the same time they are amply funded, they have good capital adequacy ratios and on top of that their current account/saving account (CASA) growth is pretty good and we have seen that over the last few months because the inflation has come down, the real rates are very healthy and that is why the deposit growth has also picked up. So funding would not be concerned for the efficient banks so we are very positive on these efficient banks and more of them are in the private sector space. 

We are also somewhat positive on industrials because going forward the order book of some of the industrials is going to pick up again you have to differentiate and you cannot put a broad brush and say the entire industrial sector would do well but we try to focus on the better companies there because as the economy picks up, there are already some signs of execution improving from the e-government side in terms of the bottlenecks, which were there but it will be slow and gradual process and that is why it is best to stick to quality and look at it from a three-five year perspective rather than try to time the stocks for the next one year only.

Sonia: I was looking at some of your stocks in the holding and you have from the IT space, Infosys  and TCS  that you hold but interestingly this time around it is HCL Technologies  and Tech Mahindra  that have performed well of course the others have as well but on the relative basis, what is your expectation of the IT sector and would you churn now to some of these stocks like HCL Technologies that have done so well this quarter? 


A: The individual stocks we keep on changing. So we held HCL Technologies for most of last year and that was the best performing stock within the IT sector for the first half of the year and we continue to participate in that. After that we shifted more our weight towards, Infosys, which we thought was discounting a lot of pessimistic projections and most of the bad news was there in the price and that is the reason we increased our position there. We also hold Tech Mahindra and in fact within the IT and that is the biggest overweight for us at the moment. If you look at the entire IT sector as a whole, again we are very positive on it but the thing is some of these companies have become so large that the growth rate will not be what it used to be in good times five-ten years ago when the US economy picks up. So because of the large size, the growth rate would come down and we think that the growth rate for the larger and better run companies will be between 13 and 16-17 percent but the opportunities are much better in some of the other sectors. That is why we are underweight in the IT sector.

{{ The Guest Post Blogger organization was not involved in the creation of this content. - Dalvi Prabhakar B, Founder & Digital Manager (SEO,SEM,SMO) }}