ICICI Pru investment over past 5 months

Almost all mutual fund managers comes on CNBC TV 18 and offer their expert advice on markets. They have standard disclaimer that they cannot discuss specific companies to buy and sell, but they talk a lot about a particular sector and macro economic trends, leading individual investor confused as to which stock to buy or sell after their expert advise.

So I decided to compare ICICI pru’s Dec-17 portfolio with May-18, to get where these brilliant mind are putting money.

To my surprise, they not only missed the bounce in IT sector but they did exactly opposite, instead of adding IT during this time, they reduced exposure in IT stock. Even if they added exposure in IT, they did in Wipro, which is the only non performing stock in IT space.

Further, they are selling companies which looks more promising companies to layman like me. L&T, HDFC Bank, HDFC, Indusind Bank, Yes Bank, Tech Mahindra, HDFC Standard Life, D-Mart, Bajaj Finserve, Kotak Mahindra Bank are the stock which they are reducing. And Stocks like NTPC, SBI, Wipro, Bharti Airtel, Idea are the ones where they think there is more value. Most of the stocks which they reduced, had significant stock price jump during these 5 months and stock which they added, fell more. They sold Midcap IT stocks like Mphasis, L&T Infotech, Mindtree which run up by 50-60%.

Nonetheless, I have placed 6 tables where one can see significant addition/reduction in Largecap, Midcap and Small Cap stocks and take cues which are the stocks to look forward.

ICICI_Pru_Investment_over_5_Months

TCS – True Wealth Distributor over 10 years

Over the past 10 years TCS generated over Rs 2 trillion for its various stakeholders.

Rs 519 bn (which is 25% of its cash generated), was paid to government in the form of various taxes.Around Rs 880 bn was paid to shareholders in the form of dividends of buyback.

14% of the money generated, gone in various investment and 10% in fixed assets.

Even after paying such hefty dividends, Shareholder’s networth and Investments grew by 7x and 14x.

Shareholders funds in FY18 B/S is Rs 851 bn, compared to which Rs 880 bn was already paid as dividend or buyback. And there is another Buyback in process.

Sales and Profit growth are at 18% CAGR.

Asian Paints – 10 year Comparison – 2008 to 2018

Over the past 10 years, Asian Paints networth has grown by 8.6 times, a CAGR of 24%.

There was no dilution of equity at all.

Most of other Balancesheet and P&L items multiplied by 3x – 4x. In that context, growth in networth by 8.6x is a remarkable achievement. One can deduce that its margins were constantly improving.

Of the Total cash generated over 10 years, 28% went to Government of India, 28% invested in fixed assets and 29% came to shareholders as dividend.

Bharat 22 ETF for Listing gains

Just a quick relook at the previous Bharat 22 ETF, in case anyone wish to apply for new one.

It look 11 days for 3.5% listing gains. This time the discount has been further reduced to just 2.5%.

Given the fact that markets are more shaky compared to 6-7 months ago, this 2.5% is too less to venture into, unless you have absolute free cash.

However, it has received good response from anchor investors.

Can TCS Buyback Arbitrage fail ?

2.4 Lacs Arbitrager can spoil the TCS Buyback party

Do we really have so many arbitrager in Indian Equity Market ?

In TCS Buyback is of Rs 16,000 crores, Rs 2,400 crores would be reserved for Small Shareholders who hold shares worth less than Rs 2 lac on X-date.

Now we will have reports coming from brokerage houses like the below one, circulated on whatsapp to entice us to go for arbitrage in TCS and also generate some brokergae for them.

Many firms will go ahead with even providing any funding facilities so that one can participate in it.

If one arbitrager uses avergae 5 demat accounts, he would be buying Rs 10 lac worth of shares. If there are suppose 2,40,000 arbitrager they will buy TCS worth of Rs 24,000 crores and tender in Buyback.

In that case only 10% of stock tender will get accepted, and rest will get credited.

I guess in India, there wont be arbitrager more than 80,000. Probably, we would be able to guess it better after TCS Buyback. With 80000 arbitrager, we will have 30% acceptance ratio.

This is one of the mail circulated by Anand Rathi, many more will come directly in our mail boxes from various broking houses like ICICI Securities, HDFC Securties, IIFL.  CNBC TV 18 has already started educating retail investors. Hope they all do not blow too much air in the balloon.

Access updated Financial data for Equity Research

Access to updated data, excel models and PDFs for company analysis.

Site: www.QuantsPartner.wordpress.com 

User ID: equityanalyst007

Password: companyanalysis

Wipro up 2%, ADR Down by 17% – Post Buy Back Announcement

Wipro up 2%, ADR Down by 17% – Post Buy Back Announcement.

3Month performance of Wipro and its ADR.

What is it, which is holding it in Indian Market ?

and Why its ADR falling ?

Or its an Arbitrage opportunity ? with spread of 19%

 

 

Corporate India’s Sales About to Bounce

Even if Corporate India as a whole is able to post topline growth of 10% in Jun-17 quarter, it should be considered as good and a step closer to the high growth phase.

Equity Ignites – BSE 500 – Ytd Return

Equity Ignites – BSE 500 – Ytd Return

1/4th  of BSE 500 stocks have surged more than 40%.

1/2 of BSE 500 stocks have surged more than 24%.

3/4th of BSE 500 stocks have surged more than 11%.

90% of BSE 500 Stock posted gains.

Swaraj Engines – 4QFY17

Swaraj Engines  – 4QFY17 (Management Comments)

Welspun India – 4QFY17

Welspun India  – 4QFY17

Kewal Kiran – 4QFY17

Kewal Kiran  – 4QFY17

Wipro – 4QFY17

Wipro  – 4QFY17

Indian Bank – 4QFY17

Indian Bank  – 4QFY17

Rallis India – 4QFY17 – Consolidated

Rallis India  – 4QFY17 – Consolidated

Reliance Industries – 4QFY17

Reliance Industries  – 4QFY17

Ultratech Cement – 4QFY17

Nifty PE Chart 20th April 2017

 

Banks Exposure to Telecom Sector

…… and it singled out telecom to be considered immediately for provisioning amid intense competition eroding the sector’s profitability.

 

Read more at:
http://economictimes.indiatimes.com/articleshowsp/58243530.cms?intenttarget=no&utm_source=newsletter&utm_medium=email&utm_campaign=Marketnewsletter2&type=marketsmorning&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Infosys – Be watchful for the Companies where Torchbearer are changing hands

Infosys – Be watchful for the Companies where Torchbearer are changing hands

In 2011, Narayana Murthy stepped down from the company’s board.

Its interesting to see that in following 6 years company’s stock performed badly vs other peer companies like TCS, HCL Tech, TechM. Whereas, during 2007 to 2011 all were in complete sync.

1QFY17 – Early sign of Turning Profit Cycle of Indian Corporate

1QFY17 – Early sign of Turning Profit Cycle of Indian Corporate

Understanding Mahindra & Mahindra – KPI (Key Performance Indicators)

Understanding Mahindra & Mahindra – KPI (Key Performance Indicators)

Understanding Tata Motors – KPI (Key Performance Indicators)

Change in Brokers Recommendations (plus all Recent recommendations of Select Brokers) – Sep-16

(Also includes all the recent recommendations of select brokers)

Change in Broker Recommendations – Companywise

Change in Broker Recommendations – Brokerwise

All Recent Recommendations by Brokers at Glance

NTPC – KPI (Key Performance Indicators)

Welspun Group Management Personnel & Other Companies

 

 

Glance at Mutual Fund Investment during July-16

 

Change in Broker Recommendations

Change in Broker Recommendations – Companywise

Change in Broker Recommendations – Brokerwise

Birla Trust Tata Group, Everybody like Financials (MF buying/selling for the month of Jun-16)

Birla Trust Tata Group, Everybody like Financials (MF buying/selling for the month of Jun-16).

HDFC MF likes TCS, SBI, HPCl Coal India. Invested over Rs 100 crores in the month of Jun-16. Significantly reduced holding from Grasim and Vedanta.

Reliance MF’s top bets are Financials like Yes Bank, Max Financial and SBI. Sold of Sanofi worth Rs 200 crores. Redington sold of for than Rs 100 crores. Now its completely out of newly listed micro finance company Ujjivan Financial (Sold worth Rs 50+ crores).

Huge buying by ICICI MF in Sun Pharma, invested over Rs 500 crores. Also invested Rs 200 crores each in Cummins India and HDFC Bank.

Birla’s top bets are Tata Steel and SBI. Interestingly, all other MF’s were negative on Tata Motors and collectively sold around 13 mn shares whereas Birla bought 1.4 mn shares. It shows Birla’s strong liking for Tata group companies.

Franklin Templton’s top bets are IOCL and Idea.

DSP Black rock invested major amount in SBI and Yes Bank. Took position again in Asian Paints and M&M.

When all MF’s where Buying SBI and ICICI, mutual fund arm of these companies were actually selling both the counter.

Overall, we can say most fund managers preferred financials, in that preferred PSU over private. SBI and Yes Bank were the top pick.

When all MFs sold 10 mn shares of ITC, DSP black rock bought 30 mn shares of ITC.

Companywise Reco & Target Prices Issued By Brokers – as Of 30th Jun-16

 

 

 

BROKER WISE UNIVERSE’S RECOMMENDATION AND TARGET PRICE, AS OF 30th June -16 (AMBIT, ANAND RATHI, ANTIQUE, AXIS CAPITAL, CENTRUM, EDELWEISS, ELARA, EMKAY, HDFC, ICICI SEC, IDFC, IIFL, KARVY, KOTAK, MOTILAL OSWAL, NIRMAL BANG, PL, SPARK CAPITAL)

Broker wise universe’s Recommendation and Target Price, as of 30th June -16 (Ambit, Anand Rathi, Antique, Axis Capital, Centrum, Edelweiss, Elara, Emkay, HDFC,  ICICI Sec, IDFC, IIFL, Karvy, Kotak, Motilal Oswal, Nirmal Bang, PL, Spark Capital)

Ambit

Anand Rathi

Antique

Axis

Centrum

Edel

Elara

Emkay

HDFC

ICICI

IDFC

IIFL

Karvy

Kotak

Motilal

Nirmal Bang

Spark Capital

Companywise Reco & Target Prices issued by Brokers – Jun-16

Most of the 4^th quarter results are out, and analysts on the street have reviewed their ratings and target prices with the result updates.

Here is a quick reference, Company-wise list for most of the company’s tracked in the market, by the major brokers.

 

Nifty’s Profit CAGR matches with the Index CAGR at 8-9% (over 5 years).

Nifty’s Profit CAGR matches with the Index CAGR at 8-9% (over 5 years).

This is very close to PPF rates for this period.

 

 

Notes:

Current Constituents of Nifty were considered for Profit Growth.

Bharti Infratel is not considered.

Standalone PAT is considered for all the Companies.

 

 

India Inc. Sales, PBIDT and PAT grew by 7%, 36% and 24% (4QFY16)

One must take a careful look at Agricultural and Allied sectors, as companies under these sectors had high profit growth for this quarter 4QFY16.

• Ex-Oil & BFSI, Aggregate India Inc. Sales, PBIDT and PAT growth stands at 7%, 36% and 24%. It should be noted that all the numbers represent POSITIVE growth, against which most of the leading newspaper are reporting negative growth, which, in most cases must be due to including Oil & BFSI sector.
• India Inc. MEDIAN growth stands at 8% (Sales), 16% (PBIDT) and 19% (PAT). This indicates that falling operating cost (majorly Raw material cost) remains to be the key source of profit.
• Like each quarter, this quarter also IT continue to significantly pull up the overall all profitability of Corporates. Aggregate PAT growth of this sector is 33%. This Sector contribute more than 20% of the total corporate profits.
• One must take a careful look at Agricultural and Allied sectors, as companies under these sectors had high profit growth.
• ALL the Sugar Companies reported huge growth in profits, majorly because of rise in prices.
• Chemicals, Auto Anc, Fertilizers, Textiles are other worth analyzing sectors.

Proxy Trade in Coal

If anyone has view on how the Global Coal Prices will move, he can play his bets through NMDC & GMDC. For any average Indian, who is not a High Networth Individual (HNI), this is most easiest way for proxy trading in Coal.

10 year stock price chart of NMDC & GMDC, moves in tandem with Australian Thermal coal prices. (Coal, Australian thermal coal, 12000- btu/pound, less than 1% sulfur, 14% ash, FOB Newcastle/Port Kembla, US Dollars per Metric Ton).

Both the Stock has Correlation Coefficient more than 0.80.

 

Tyre Companies had a Dream-Run over 5 years

Tyre Companies are Direct play on Commodity prices.

• Over the past 5 years, Most of the Tyres Companies stock price have run up by 300-400%, Whereas Sensex gained around just 40%. (i.e. a CAGR of 30+% vs Sensex’s 7%)

• Only reason for such an extra-ordinary performance is Super Normal Operating Margins, due to steep fall in Rubber prices. Tyres is a small sector, which is one of the big beneficiaries of fall in global commodities prices.

• For past 5 years, every year Operating margin have risen each year, compare to previous year (from FY11 – 10% to FY16 – 24%)

• Topline CAGR is 8%, Operating Profit CAGR is 28% and Profit CAGR is 34%.

• Profit CAGR matches with the stock price CAGR.

One must take a note of this fact that, most of the analyst on the street have assumed similar higher margin for FY17 & FY18. No analyst assumes steep fall in margin.

A Buy case for PSUs over Pvt Companies

Reflection:

• BSE PSU Index inching closer to low levels of 2009.
• If global & domestic conditions improves back, returns from PSU’s would be superior.
• India can’t progress without the participation of PSUs.

Last 5 year were terrible for PSU companies and their stock prices. They lost the pace of growth with private companies, and were the big dragger for the collective index – Nifty.

PSU Index, has very high weight age of Oil & Gas sector 33%, BFSI 23%, Metal & Mining 18%, Power 17% and Capital Goods 5%.

Collectively these 5 sectors accounts for 96% of the market cap of the index.

 

What Explains the underperformance of PSUs ?

• Havoc in International Crude prices directly impacted Indian Oil & Gas companies as well.
• Corporate NPA plagued PSU Banks.
• Falling commodity prices impacted entire Capital Expenditure cycle for Metals, Power and Capital goods companies.

Overnight banks can’t come out of this mess, similarly it may take considerable time for Capex cycle to resume its old pace, and there are early sign of crude bottoming out.

If things improves in next 5 years  to the level where it was 5 years back (Year 2011), there are good chances that PSUs will outperform the market. In other words, this hypothesis is based on mean reversion theory.

 

Importance of PSU’s for Economy:

To substantiate the importance of PSUs, we can note things, like there can be no substitute of State Bank of India, which has PAN India connectivity. In India, 30% of ATMs are of SBI (PSU Bank ATMs are 72% of the Total). There are many such PSU companies which will have to exist in their healthier shape, if India need to progress. India can’t progress without the participation of these PSUs.

Most of these companies operates in Industries, which can be loosely termed as monopoly. These are the companies which generate cash for government in various form (dividends, stake sale etc), so government will always not only rescue but augment  their growth.

It would be difficult to think substitute of ONGC, Coal India, NTPC, IOCL, BPCL, HPCL, GAIL, NTPC, Power Grid, NHPC, Oil India, SAIL. Most of them play key role in nation building and their capacities which built over several years, cannot be easily replicated by the private companies.

And most of these companies face relatively less Technological Risk from a small non-existent player.

We have witness the disruptive role that e-commerce is playing against the way many traditional businesses were run. Entry of a Baba in FMCG space is creating a lot of fuss among the existing well established players. Such kind of risks are not there in the most of the sectors where PSU operates.

PSU’s are no doubt very inefficient, but at the same time they operate in the environments where no other private players can operate. And many times their profitability are caped for the larger interest of country.

On a Regression analysis, there is good upside for BSE PSU, wen compared with Nifty.

Crude Impact on Stock

An analysis of Indian Stock’s performance, when Crude started tumbling from Jun-2014

In Jun-14, Crude was above $105. Recently, it touched to the lowest level of $34 and resisted to fall further. Now it’s around $46. Many feels that crude has bottomed out now. Such a drastic change in Crude had impact on all kinds of markets, be it stock, currency, bonds or other  commodities market.

Notable movement in Indian stock during these 22 month are :

• Nifty gained 5% vs 56% fall in crude prices.
• Most PSU Bank stock fell by 60-70%. Private Bank’s stock rose by 40-80%.
• Most of the Consumer Durables, FMCG, Paints & Chemicals, Pharma and Textiles stocks have posted huge gains.
• All BSE 500 FMCG stock have given positive return.
• Aviation stocks, SpiceJet and Jet Airways prices multiplied by 4.3 and 2.6 times.
• Most of the Mining & Minerals, Power Generation, Steel stock fell sharply.

Check out MFs favored stocks in April-16

Auto Sales for FY16

• Commercial Vehicles & Multi utility vehicles posted strong growth of more than 12% in FY16. This is a good indication that Industrial and commercial activities are improving in the country.
• Cars sales grew by 5.7% and Two wheeler sales grew by just 2.7%, which indicates that benefits of improvement in economy has not still come to people, especially to middle class people who buys Two wheelers. Infact, in FY15, two wheeler sales grew at better rate of 9%.

Street Estimates for 4QFY16 (for most sought after Companies)

During the result season, it’s helpful if we have the street estimates in front of us, before the actual result get declared. So, we can ourselves judge if the results were as expected  or there is any surprise or shock element.

Though the list contains most sought after companies, you can always bring to my notice, if any important company is missing from the list.

Debt Trap, Promoters pledge more shares

Debt Trap, Promoters pledge more shares.

Videocon Inds, Future Retail, Tree House Edu, Jindal Steel, Elecon Engg, Dish TV, Zee Media, Jubilant Food, Adlabs Entert, Bajaj Corp, Man Inds, Kalpataru Power.

Broker wise universe’s Recommendation and Target Price, as of May-16 (Ambit, Anand Rathi, Antique, Axis Capital, Centrum, Edelweiss, Elara, Emkay, HDFC, ICICI Sec, IDFC, IIFL, Karvy, Kotak, Motilal Oswal, Nirmal Bang, PL, Spark Capital)

Broker wise universe’s Recommendation and Target Price, as of May-16 (Ambit, Anand Rathi, Antique, Axis Capital, Centrum, Edelweiss, Elara, Emkay, HDFC,  ICICI Sec, IDFC, IIFL, Karvy, Kotak, Motilal Oswal, Nirmal Bang, PL, Spark Capital)

Eye on the Street – 29th Apr 16

Some of my quick observations

• All Brokers are negative on ABB, some brokers see downside in the range of 40-50%.
• Almost all brokers see 20-30% upside in Yes Bank. ICICI securities has 40% upside while ICICI direct.com has just 2%, incidentally both these firms have maximum and minimum upside for this stock.
• Macquarie sees 37% downside in UltraTech Cement.
• P. Morgan has placed 128% upside on Indiabull Real Estate.
• In Idea Cellular, UBS sees 44% upside Credit Suisse and Morgan Stanley sees downside of 24% & 32% respectively.
• Jefferies is the only broker who is negative on Maruti Suzuki.
• JM financial has 42% upside on Axis Bank. Any other broker has maximum upside of 21%.

Eye on the Street – 25th Apr 16

Axis Capital seems to be most aggressive broker, in terms of assigning Target Price to Stocks.

Macquarie sees 37% Upside in HDFC Bank.

Axis Capital sees 36% downside in Shree cement, similar for Guj Pipavav Port.

HSBC sees 67% upside in Suzlon and 33% downside in Siemens.

Brokers Latest Reco and TP on Infosys, TCS, Wipro

Brokers Estimates for RIL, Cairn (Today’s Results- 22nd April 16)

Yes, HDFC & Reliance (each) sold Rs 1,500 worth of shares during month of Mar-16

Yes, HDFC & Reliance (each) sold Rs 1,500 worth of shares during month of Mar-16.

In just two stocks (Reliance & Infosys), they collectively sold for approx Rs 800 crores.

Eye on Street – 12th April 2016 (New Releases by Brokers)

Reports Released during 8th April to 11th April 2016

Eye on Street – 8th April 2016 (New Releases by Brokers)

 

Company wise Detailed

 

New Releases by Brokers – 6th April 2016

Everyday a lot of equity research reports get released. Our Google group account is bombarded with the reports. It’s almost impossible to read all the reports. Primarily, an investor looks for the analyst recommendation and target price after which they may decide to read it or discard it. Here I have tried to put together all the recommendation and Target prices of reports came out on 6th April 2006.

New Releases by Brokers – 5th April 2016

Everyday a lot of equity research reports get released. Our Google group account is bombarded with the reports. It’s almost impossible to read all the reports. Primarily, an investor looks for the analyst recommendation and target price after which they may decide to read it or discard it. Here I have tried to put together all the recommendation and Target prices of reports came out on 5^th April 2006.

Though I have arranged it Company wise, but I have also arranged same on Broker wise as many investor assign high weightage to a particular broker.

 

Domestic Brokers Target Prices (Edelweiss, Motilal Oswal,IIFL,IDFC,Axis Capital,Kotak,Emkay)

Foreign Brokers Target Prices (Credit Suisse, JP Morgan, Macquarie, Morgan Stanley, UBS, Nomura, Goldman Sachs)

Consensus Target Price & Reco for Nifty 50 stocks

• No matter, how bleak picture is painted by daily News papers about the Banks, but they are the most preferred bets of Equity Research Analyst.
• Not only analyst see big upside in Banks, but analyst who are positive outscore negative with very high margin, compared with other companies.
• Auto is another analyst favorite sector. (Maruti & Tata Motors)
• Across other sectors Grasim, Power grid, Coal India, HCL Tech and Zee entertainment are the most endorsed stocks.
• Many analyst have SELL rating on PNB, BHEL and Tata Steel.

Table: Consensus Target Price & Reco for Nifty 50 stocks

Consensus PAT estimates of Nifty 50 Companies – around 20% for FY17 & FY18

• Considering equity research analyst estimates, Nifty Companies Profits are set to grow by whopping 20% for FY17 & FY18.
• In FY17, huge Profit growth is expected in various sectors. Auto 27%, BFSI 30%, Cement 35%, Capital Goods & Infra 43%, Mining & Metals 31%, Pharma 34%.
• Surprisingly, analyst except profit to shrink only in Telecom sector.
• They expect moderate growth in I.T. 11%, FMCG 14%, and Power 13%, and just 5% in Oil & Gas sector.

Profit Estimates of Nifty 50 Companies

 

FII’s One Rupee, creates / vanishes Rupees 60 from Indian stock Market

• FII’s One Rupee, creates / vanishes Rupees 60 from Indian stock Market. This is the power of FII’s money. (See Table 1)
• Nifty may move by up 10% if FII’s invest around Rs 13,000 crores in a month and vice-versa.
• Though, till now in Mar-16 month, FII’s invested only Rs 7,700 crores and Nifty is up by 10%.

 

 

PPF rates now more aligned with G-Sec, an expected good move

• Over the past 1year, 10-year India G-sec yield have fallen around 50 basis points. This has led government to reduce PPF rates by 60 basis points.
• An ordinary investor of such saving schemes may feel agitated for reduction in rate, but it’s a fair reduction.
• In a reverse situation, when interest rates are rising, it’s more likely that government will increase the interest rate of PPF.
• In FY11, PPF rates were 8%, with the rising 10-yr G-sec yield, PPF rates were revised to as high as 8.80% in FY13.
• It’s actually good if government ALWAYS keep it align with the G-sec yield, so that savers (lenders in other words) will always get same interest which government pays to the other bond holders. So this reduces scope of extra-ordinary gain or loss.
• Below is the 15 year chart of Avg 10 year G-sec yield and prevalent PPF Rate, where one can see that PPF rate is always more than G-sec yield.

Sensex and India’s 20 YRS GDP

• Sensex, apart from serving the general purpose of indicating stock market’s mood, also broadly reflects the growth of the economy as a whole.
• In the first chart, 20 year data is plotted for GDP on one axis and Sensex on another axis. Sensex line closely follows the slope of GDP. However, since it also reflects the market psychology, for brief periods, Sensex enters & exit from over or under valuation zone, but it broadly remain in line to GDP.
• In the second chart, GDP & Sensex data are plotted and a linear regression line is drawn for Sensex. Right most data is current expected GDP of FY16 & current Sensex, which is below the regression line, indicating that the general market are slightly undervalued compared to the GDP.

India’s 20 year GDP at Current Prices & Sensex

Regression Trend of Sensex and India’s 20 yrs GDP

 

All Fund Managers like them …

All Fund Managers like them …

ICICI Bank, ITC, Aurobindo Pharma, H D F C, Tata Motors, IndusInd Bank, Crompton Greaves, GAIL (India).

Though,

Bharti Airtel, Reliance Inds, Eicher Motors, TCS may be the good companies, but most of the FMs are not positive about their stock prices.

What SBI AMC Bought & Sold in Feb-16

Bought:

Aurobindo Pharma, ITC, Precision Camshf, The Ramco Cement, H P C L, Infosys, Narayana Hrudaya, Motherson Sumi, Dr Lal Pathlabs, Shriram Trans., HDFC Bank, ICICI Bank, Coal India, Divi’s Lab., St Bk of India, Voltas, Sun Pharma.Inds., SKF India, Indian Hotels, Maruti Suzuki, Grindwell Norton

Sold:

Eicher Motors, Mahindra Finance, Pidilite Inds., TCS, Bajaj Fin., Yes Bank, Nestle India, Shri.City Union., Bharti Airtel, Hind. Unilever, GlaxoSmith C H L

What DSP BR AMC Bought & Sold in Feb-16

Bought:

Cadila Health., Larsen & Toubro, Team Lease Serv., Infosys, NTPC, ICICI Bank, Exide Inds., Torrent Pharma., Petronet LNG, Crompton Greaves, Vedanta, Suprajit Engg., Hindalco Inds., GAIL (India)

Sold:

Reliance Inds., Maruti Suzuki, HDFC Bank, Container Corpn., UltraTech Cem., HCL Technologies, Tata Motors-DVR, Tech Mahindra, Bayer Crop Sci., Dr Lal Pathlabs, Tata Steel, Ashok Leyland, Motherson Sumi

 

What Franklin Templeton AMC Bought & Sold in Feb-16

Bought:

ICICI Bank, United Spirits, Aditya Bir. Fas., HDFC Bank, H D F C, IndusInd Bank, St Bk of India, Tata Motors, B P C L, Voltas, Dr Reddy’s Labs, Cadila Health., Kotak Mah. Bank, Maruti Suzuki, Jubilant Food., Arvind Ltd

Sold:

Eicher Motors, TCS, Hind. Unilever, UltraTech Cem., Axis Bank, Torrent Power, Bharat Electron, Kansai Nerolac

What Birla AMC Bought & Sold in Feb-16

Bought:

NTPC, Crompton Greaves, GAIL (India), ICICI Bank, Vedanta, Lupin, Tata Motors, Hindalco Inds., ITC, Aurobindo Pharma

Sold:

Eicher Motors, Axis Bank, Larsen & Toubro, Reliance Inds., UltraTech Cem., HDFC Bank, Maruti Suzuki, Motherson Sumi

 

What UTI AMC Bought & Sold in Feb-16

Bought:

H D F C, IndusInd Bank, ITC, ICICI Bank, Divi’s Lab., Torrent Pharma., eClerx Services, Yes Bank, Amara Raja Batt., Motherson Sumi, P I Inds., Page Industries, Cummins India

Sold:

HDFC Bank, H P C L, Apollo Tyres, JSW Steel, Bank of Baroda, Arvind Ltd, UltraTech Cem., Bajaj Auto, IRB Infra.Devl., Union Bank (I), Bharat Forge, Zee Entertainmen, Reliance Inds., NCC

What Reliance AMC Bought & Sold in Feb-16

Bought:

Aditya Bir. Fas., Maruti Suzuki, Indian Hotels, Tata Motors, United Spirits, Jubilant Food., HDFC Bank, Axis Bank, ICICI Bank, IndusInd Bank, Indiabulls Hous., Motherson Sumi, Aurobindo Pharma, Jet Airways, United Breweries, H D F C, BEML Ltd

Sold:

Sun Pharma.Inds., Lak. Mach. Works, Hindustan Media, Trent, PVR, UltraTech Cem., The Ramco Cement, Blue Star, eClerx Services, Cadila Health., Cummins India, Tata Steel, B H E L

What ICICI Pru AMC Bought & Sold in Feb-16

Bought:

ICICI Bank, B P C L, ITC, St Bk of India, NTPC, Cipla, Ipca Labs., Container Corpn., Dabur India, Divi’s Lab., Maruti Suzuki, Tech Mahindra, Motherson Sumi, Suprajit Engg., Tata Power Co., Tata Motors, Mahindra Finance, Thermax, B H E L, O N G C, Engineers India.

Sold:

HDFC Bank, Infosys, Bharti Airtel, M & M, HCL Technologies, Power Grid Corpn, Hero Motocorp, JSW Steel, Havells India, Titan Company, Wipro, Axis Bank, SKF India, Sun Pharma.Inds., Kotak Mah. Bank, Reliance Inds., Larsen & Toubro, Cairn India.

What HDFC AMC Bought & Sold in Feb-16

Bought:

ITC, HDFC Bank, Aurobindo Pharma, Team Lease Serv., H D F C, Cholaman.Inv.&Fn, St Bk of India, Power Grid Corpn, H P C L, IndusInd Bank, Hindalco Inds., Axis Bank, Tata Motors.

Sold:

Infosys, Reliance Inds., Bharti Airtel, TCS, Divi’s Lab., Aditya Bir. Fas., Maruti Suzuki, Pidilite Inds., Rural Elec.Corp., Larsen & Toubro.

 

20 Budgets and Stock Market Performance

20 Budgets and Stock Market Performance

India’s ROE for 25 years (from 1991 to 2016)

• India is in a Low RoE Phase.
• Looking at India’s RoE for last 25 years, we can say that we are in lull period, but we can’t say how long this period may extend.
• Every economic cycle contains seeds for another cycle and it goes on.  So, if today we are at 15% ROE, after some years we will be again at 20+% RoE (thereafter again at 15%).
• Investments, generally, pay-off well only when they are made during lull period, as cost of investment (CMP) tends to be low in this phase.
• At what price, one should Buy 15% RoE is subjective, depending on the options available to deploy the capital, interest rate, inflation and various other things.
• Today Equity is cheap, tomorrow it may be cheaper by another 10%, but in 5 yrs it has potential to get priced 300% higher. As during Low RoE phase market assign low PE and in High ROE phase market assign high PE.

50 Stocks in which Most Buying & Selling was undertaken by Top 8 AMC in Jan-16

50 Stocks in which Most Buying & Selling was undertaken by Top 8 AMC in Jan-16:

Adani Ports, Alkem Lab, Amara Raja Batt, Ambuja Cem, Apollo Tyres, Ashok Leyland, Aurobindo Pharma, Axis Bank, BHEL, BPCL, Bajaj Auto, Balrampur Chini, BOB, Bata India, Bharat Electron, Bharti Airtel, Blue Star, Cadila Health, Cairn India, CESC, Cipla, Coal India, Container Corpn, Crompton Greaves, Cummins India, Dabur India, Deepak Nitrite, Divi’s Lab, DLF, Dr Lal Pathlabs, Eicher Motors, Emami, Exide Inds, Fag Bearings, Federal Bank, GAIL, Gateway Distr, Genus Power, Glenmark Pharma, Grasim Inds, Greenply Inds, Grindwell Norton, HDFC, HPCL, Havells India, HCL Technologies, HDFC Bank, HindZinc, IOCL, ICICI Bank.

What Franklin Templeton AMC Bought & Sold in Jan-16

Bought:

ICICI Bank, Axis Bank, Larsen & Toubro, Bharti Airtel, St Bk of India, Vardhman Textile, Cadila Health., Deepak Nitrite, Yes Bank, Federal Bank, Tata Motors-DVR, Exide Inds.

Sold:

Reliance Inds., Maruti Suzuki, Sanofi India, Kansai Nerolac, Gateway Distr., Bharat Electron

What DSP Black Rock AMC Bought & Sold in Jan-16

Bought:

Reliance Inds., Sun Pharma.Inds., Interglobe Aviat, Coal India, Ashok Leyland, Tata Motors, Torrent Power, Cadila Health., Skipper, Zee Entertainmen, Infosys, Tube Investments

Sold:

Axis Bank, St Bk of India, Glenmark Pharma., TCS, SKS Microfinance, ITC, Crompton Greaves, Container Corpn., Indoco Remedies, Siemens, Larsen & Toubro, HDFC Bank, B P C L, Federal Bank, Bank of Baroda

 

What SBI AMC Bought & Sold in Jan-16

Bought:

Adani Ports, Infosys, Axis Bank, Dr Lal Pathlabs, Pidilite Inds., HCL Technologies, Whirlpool India, St Bk of India, Reliance Inds., Indian Hotels, The Ramco Cement, ICICI Bank, Cummins India

Sold:

Sun Pharma.Inds., Eicher Motors, Cadila Health., IndusInd Bank, Motherson Sumi, Exide Inds., Redington India, Bata India

WHAT UTI AMC BOUGHT & SOLD IN JAN-16

Bought:

Yes Bank, IndusInd Bank, ITC, Cummins India, Torrent Pharma., Axis Bank, Havells India, Grindwell Norton, Motherson Sumi, Ipca Labs., Pidilite Inds., Amara Raja Batt., Page Industries

Sold:

NTPC, Power Grid Corpn, UltraTech Cem., Vardhman Textile, Mahindra Finance, Exide Inds., Cipla, B P C L, I O C L

What Birla AMC Bought & Sold in Jan-16

Bought:

Yes Bank, DLF, P & G Hygiene, Kotak Mah. Bank, Infosys, Coal India, Reliance Inds., Piramal Enterp., Kaveri Seed Co., Reliance Infra., Kansai Nerolac, Divi’s Lab., H P C L, Sun TV Network, Cairn India, Bharti Airtel, Tata Motors

Sold:

Bajaj Auto, Axis Bank, Jet Airways, GAIL (India), LIC Housing Fin., ICICI Bank, IndusInd Bank, HDFC Bank

What HDFC AMC Bought & Sold in Jan-16

Bought:

Greenply Inds., Redington India, Axis Bank, Power Grid Corpn, HDFC Bank, Tata Steel, Solar Inds., Vedanta, UPL

Sold:

Reliance Inds., P & G Hygiene, ICICI Bank, ITC, Maruti Suzuki, Interglobe Aviat, TCS, Bharti Airtel, Pidilite Inds., Infosys, Oil India, B P C L, Zee Entertainmen, Aurobindo Pharma, Alkem Lab, NTPC

 

What Reliance AMC Bought & Sold in Jan-16

Bought: Reliance Inds., Axis Bank, United Spirits, ITC, Coal India, Genus Power, ICICI Bank, HCL Technologies, H D F C

Sold: Divi’s Lab., HDFC Bank, Maruti Suzuki, Sun Pharma.Inds., TVS Motor Co., Tata Steel, Blue Star, The Ramco Cement

ICICI-Pru stocks bought & sold in Jan-16

ICICI-Pru stocks bought & sold in Jan-16

Stocks Bought : Larsen & Toubro, ICICI Bank, Axis Bank, Bharti Airtel, St Bk of India, Narayana Hrudaya, Cipla, Container, Coal India

Stock Reduced: Infosys, Reliance Inds., Power Grid, H D F C

Mutual Fund likes: Adani Ports, Vedanta, Cairn India, Yes Bank, Coal India

• Like all other downfalls, in this downfall also FIIs was (/is) selling heavily and our Domestic Institution (DIIs) were (/are) the buyers.
• Investors get stock wise holding data only from Mutual Funds (a part of DIIs), so I was curious to know in which Nifty stocks they were putting money.
• Adani Ports, Vedanta, Cairn India, Yes Bank, Coal India, BHEL, Tata Motors, ONGC & Tata Power are the stocks in which collective holding of MF’s gone up significantly.
• Similarly, they reduced holding from Hindalco, Idea, NTPC, BOB, Bajaj Auto, Tata Steel, HDFC, TCS, GAIL, Maruti & Tec Mahindra.
• Attached a quick list of Nifty 50 stock for review.

 

Nifty Companies Result Review

1. This Quarter (Dec-15), Nifty companies profits fell by 6.5%. BFSI’s profits fell by 11.5%. Ex-BFSI, profits are down by 4.7%.
2. Companies which knocked down the profits most are: SBI, Tata Steel, Vedanta, Cairn and BHEL. Except, SBI all other reported huge loss or marginal profit.
3. Companies which pushed up the profits are: ONGC, Power grid, Coal India, HDFC bank and TCS.
4. Auto & IT as a sector did well.
5. Companies like RIL, Kotak Bank, Asian Paints, Hero Motocorp, Bosch reported 30%+ profit growth.
6. Though 5 companies are yet to report results, but 45 companies considered accounted for 95% of profits in Dec-14 quarter.

Has Falling Commodity prices benefited India ? Yes it has.

Has Falling Commodity prices benefited India ? Yes it has.

• A study on 81 top manufacturing companies reveals that, benefit of falling commodity prices has come to Indian Corporates.
• 67 companies shows expansion is Gross Profit (GP) margin in Dec-15 quarter vs Dec-14 quarter, while in 14 companies GP margin declined.
• 50% of Companies have margin expansion by at least 2.5%.
• Gross profit margin expanded in all kind of companies, whose raw materials are hard or soft commodities.

Telecom: Competition to kill each other

Telecom: Competition to kill each other

• Telecom companies are having strong volume growth in Voice & Data segments, but bottom-line is shaking, due to competitive pricing pressure.
• There is fear of Reliance Jio’s entry.
• This Quarter combined profit of Telecoms are down from Rs 25 bn to Rs 21 bn.

A difficult Qtr for Stock & Commodity Brokers, Profit Halves

A difficult Qtr for Stock & Commodity Brokers, Profit Halves

See Table below

Paints Industry: Xtra-ordinary Margin Expansion

Paints Industry: Xtra-ordinary Margin Expansion

• Paints companies have reported Sales growth around 11%, However it translated into PBIDT growth of 22%.
• These companies raw-material is closely linked with crude oil, and falling oil prices might have reduced their input cost, thereby increasing the margins.
• Consolidated Profit of sector is up by 30%.

Nifty Companies PAT growth check for 3QFY16

Nifty Companies PAT growth check for 3QFY16

 

1. Till now 29 Companies have reported quarterly results. In Dec-14 these companies accounted for 68% of aggregate profits.
2. Nifty(ex-BFSI) aggregate profits is down by 3%.
3. In BFSI, except ICICI Bank, all reported growth in profit. Nifty profit growth, including BFSI is marginal positive at 0.6%.
4. T. companies, majorly TCS & Infosys, are pulling up the aggregate profits. Favorable currency movement is one the reason.
5. Other Tata group company, Tata Steel is biggest dragger, which reported loss of Rs 15 billion against Profit of Rs 1.5 billion.
6. Vedanta is another dragger, where profit vanished away completely. (Rs 179 mn vs Rs 15875 mn).

3QFY16, Ceramics doing well, Logistics lost it Badly

3QFY16, Ceramics doing well, Logistics lost it Badly

Ceramic Products, a very small sector, but seems to b doing very good. For This quarter (Dec-15), so far 4 ceramic company reported numbers. All have reported more than 25% profit growth, with Asian Granito PAT growth at 45%.

Logistic companies have lost it badly. Most of the company’s profit reduced in the range of 20-40%.

 

FII’s participation % in Stock Market Turnover

FII’s participation % in Stock Market Turnover

1. FIIs participation in Indian stock market turnover is falling each month. In Jan-16 it has fallen to 17% from the high of 28% for May-15.

2. It can observed in the chart that it’s the best time to Buy equities, when FIIs participation is lower.

3. For e.g. during Oct-2008 to April-2010, FIIs participation was in the range of 10-13%, and that was the good time to invest money in equities.

4. I think, one must check the valuation of equities, if at all their participation level falls to just 13-14%. There may a chance that one can get bargain deals even on large cap stocks.

.

3QFY16 FMCG Results, Falling Volumes is the concern acroos the board

3QFY16 FMCG Results, Falling Volumes is the concern across the board:

1. Most of the big FMCG Companies have reported 3QFY16 results (ITC, Hind Unilever, GCPL, Dabur, Marico). Britannia & Nestle are yet to report the nos.

2. On consolidated basis sales & profit grew less than 5%.

3. Except, HUL, most of the companies reported double digit growth in PBIDT.

4. In ITC, Cigarette volume decline was more than expectation.

5. To maintain volumes, HUL relied on price-cuts and expend more on advertising, and its PBIDT fell by shocking 20%.

6. GCPL had robust volume growth and it seems that it did not passed on the benefit of falling commodities price to the customer, leading to profit growth of 23% on Sales growth of 6%.

7. On Volume front, Dabur was disappointing, but lower input cost helped it in posting 13% profit growth.

Commercial Vehicle sales is indicating that cycle is turning now…

Commercial Vehicle sales is indicating that cycle is turning now…

1. If one looks at the yearly sales of commercial vehicles, it can be interpreted that slowdown in commercial vehicles (CV) is a past story. CV sales actually bottomed out in CY14 itself, and CY15 can be understood as year of uptick.

2. In CY13, sales fell to 7.6 lakhs from the peak of 9 lakhs achieved in CY12. This fall continued in year CY14 as well with sales further reducing to 6.9 lakhs. In CY15, sales grew back to CY13 levels (7.5 lakhs).

3. Ashok Lelyand and Tata Motors are the 2 biggest player, with mkt share around 40% each.

Mutual Fund’s Top Picks

Mutual Fund’s Top Picks:

While going through the Mutual funds monthly holdings, I noticed follwings,

1. HDFC MF, LIC Housing Finance (increased shares from 5 lakhs to 11.5 Lakhs)
2. Birla MF, TVS Motors (increased shares from 1.5 lakhs to 12 Lakhs).
3. ICICI MF, Sundaram Finance (increased shares up from 8 lakhs to 16 lakhs).
4. DSP BR MF:

• Interglobe Aviation (increased shares from 1.3 lakhs to 5 Lakhs)
• Sun Pharma (increased shares from 4 lakhs to 13 Lakhs)
• Bharat Electronic (increased shares from 5.3 lakhs to 8 Lakhs)
• RIL (increased shares from 20 lakhs to 35 Lakhs)
• Somany Ceramics (increased shares from 14 lakhs to 22 Lakhs)

5. L&T MF,

• Astra Microwave (increased shares up from 5 lakhs to 35 lakhs).
• RIL (increased shares up from 16 lakhs to 26 lakhs)

6. Kotal MF, Glenmark Pharma (increased shares up from 0.1 lakhs to 3 lakhs).
7. SBI MF,

• Indraprastha Gas (increased shares up from 1.4 lakhs to 10 lakhs),
• Mahindra Finance (increased shares up from 39 lakhs to 60 lakhs),
• PI Industries (increased shares up from 13 lakhs to 29 lakhs)

 

Following are the Stocks, in which many funds invested significant amount.

1. Axis Bank
2. HDFC Bank
3. Infosys
4. ITC
5. L&T
6. Reliance Industries
7. Sun Pharma

 

Following two PDFs contain more details,

• Domestic_Mutual_Fund_Action_Dec_15 ,
• Major Companies Where Mutual Funds invested significantly

 

Going by the History Book of Stock’s Monthly Return…

Going by the History Book of Stock’s Monthly Return…

 

I cannot firmly say history repeat itself with reference to stock market, but there are few interesting noticeable facts which one finds when he looks  at the F&O stocks performance during the month of February for past 16 years.

Pharma stocks goes down in February month. During 2000 to 2015, Cipla fell 14 times in Feb month and rose just 2 times. Torrent Pharma posted negative monthly return 12 times, and 3 times positive return. Aurobindo fell  11 times, and rose 5 times.

Rcom, which is listed for around 9 years, have posted loss in all the Februarys . And the magnitude of loss is significant. Let see if Feb-2016 is different this time?

Asian Piants, Tata Chemicals, Ceat, Engineers India are other which are more likely to post loss in Feb (as they fell 11 times of 16).

On the positive side, Bajaj Finance is the company which posted 12 times positive return.

ACC, Motherson and Gail India were gainer 11 times out of 16.

Kaveri seeds, which is listed for 8 years, posted just once marginal negative return.

One can look performance for his stocks in this file. Monthly_Return_Analysis_2016

Companies with Relatively High Foreign Debt

INR depreciated by 8% against USD, during a year.

Naturally, Indian companies which have significant debt exposure in foreign currency will have more principal and interest burden in future years.

I have compiled a list of such companies for quick reference. Most of these companies fall in sectors like Power, Metals & Mining, Telecom, Infra & Construction, Shipping, Oil & Gas, Refineries.

Listing Gain In IPOs

1. Average Listing gains from an IPO is just 5% in Year 2015. (Average from 2004 onward stands at 24%)
2. There were 20 IPOs, 2 are yet to list. (Dr Lal & Alkem Lab).
3. Power Mech Project, which was highly oversubscribed but gave listing loss.
4. SH Kelkar, was not so oversubscribed, in fact in retail it was just 0.5 times, but gave listing gain of 15%. Similar, was the case with Indigo.
5. All other IPOs, which gave significant listing gains were highly oversubscribed, thereby reducing chances of allotment to say 1 out of 4, for retail investor. (Syngene, VRL Logistic, Inox wind).

How much LONG TERM RETURN anybody can expect from Indian Stock Markets?

Q: How much LONG TERM RETURN anybody can expect from Indian Stock Markets?

A: 12% (Shortest answer)

 

If you have ideas, but no time to undertake analysis, you can outsource it to me.

Demo site: www.indiaequityanalysis.wordpress.com

mail: vidhika.bairathi@gmail.com

85 Companies in which Most Mutual Funds are Invested in, as of 31-Oct-15

85 Companies in which Most Mutual Funds are Invested in, as of 31-Oct-15.

If you have any kind of data work which you can outsource me, please drop me a mail at Quants.Partner@hotmail.com