Friday, January 1, 2010

Decade of equities: When India took centre-stage.......

I have been through an article from Monercontrol site which I am pasting here with my COMMENTS in Bracket......

Decade of equities: When India took centre-stage.......

A decade is a long time. Especially in equity markets. When 1999 ended, the world had just witnessed the burst of a dotcom bubble that, in hind sight, many people reckoned couldn’t have gotten more nonsensical. End of 2009, and we are being thrust out of yet another larger financial bubble which, when it burst last year, threatened to obliterate the very face of capitalism.

It goes to prove the legendary Warren Buffet’s words, who once said, ‘Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.’ How many investors, though, burnt their fingers in the late 90s’ dotcom bubble and the euphoria over realty stocks back here in India between 2005 and 2007 remains to be ascertained.

But the overall story doesn’t change. Over the longer term, India’s benchmark Sensex — what with its forceful, violent corrections along the way — maintains its head up. Start 2000, and the Sensex hovered around the 5,000 mark. End of 2009, it’s above 17,000. Compare that with US stocks, and Wall Street has moved all over the place but remained exactly where it was a decade ago.

Markets often smell things in advance, it is often said. No wonder then that stock markets in China and India — the new superpowers of the east — headed up while their developed counterparts sensed something was going wrong with the world’s superpower, America, as it loaded up on its gargantuan debt by spending more than it earned, fought costly, bloody wars it was not winning, and implemented economic policies that defied both rationality and economics.

2009 resumption of bull market?

Was the correction of 2008 just another — mega, as it may — blip for the Indian market machine, one that bummed it up but which it will shrug and move on? Billionaire investor Rakesh Jhunjhunwala believes so. The Indian Warren Buffett, as he is dubbed by the media, has often said the Indian economy, with its large savings, young working age populace and a clean financial system unlike the troublesome one in the west, “is in its teens”.

“I see no reason why — if Indian software exports grow by 10-15%, commodity prices hold at reasonable levels and we have good government policies — India cannot grow at double digits,” he told CNBC-TV18 in an interview in June. The Indian economy grew 7.9% last quarter when the developed nations strategised ways to fight their way out of the recession, which in simpler terms means negative growth. India, Jhunjhunwala said, would continue to attract capital from the world because of its astounding growth.

“The fall from 21,000 to 7,500-8,000 for the index [in 2008] was just a correction in the longer-term bull market in India,” he said. “Actually, the first correction started in September 2001 because the real bottom the market made was post-September 11, 2001, and then the market went up to 3,500 and had a historic correction back in April 2003.”

A staggering four-and-a-half year bull market then saw the Sensex reach all-time highs of 21,000 in January 2008, just when the global financial crisis hit home. “Now, I do not think the Sensex will cross 21,000 in a straight line. We have to correct and we have to make a range and only then we can have the next move.”

‘India in midst of ‘something special’’

Another veteran of the stock market, Ramesh Damani, thinks India is in the midst of “something truly special”.

“This bull market in terms of how well it bounced back from lows is suggesting that there is something going on that is extraordinary in India. We are in the process of taking India from a trillion-dollar economy to not a 2-trillion dollar or a 3-trillion dollar economy but something far greater,”( Here is the crux...India not in making a 2 or 3 trillion economy but far greater then this) Damani told CNBC-TV18 recently. “Maybe in a generation, we will take a population from affliction to affluence, from poverty to prosperity, maybe we would go from 100 million people in the middle class right now to a billion people in the middle class and that has profound implications for various investment horizons.” (Understand the finer lines of this sentence)

After the spectacular run seen in 2009, investors would be doing wishful thinking to expect the same pace of rise ahead, believes renowned fund manager Madhu Kela of Reliance MF. He, however, said now was a market in which stock pickers would shine. ( This is what I am doing here)“Stock-specific, there are humongous opportunities. If one is right in predicting the Indian bull run, you can even today find companies, which are in the vicinity of Rs 5,000-15,000 crore market cap that could go up three-five times over the next few years,” he recently said.

Damani says the idea now is to hunt for bargains where you can buy companies with the proverbial tri-factors: good management, good business and good value.

The market guru summed up the overall sentiment over the country nicely when he likened India of today to the America of the 50s:( One need to understand this quote) “You knew that [back then in America] the Korean War took place and the Vietnam War took place and the race riots took place but the index kept plodding higher over periods of time and if you bought the right companies at that time, you made an enormous amount of fortune by the time 2000 came around."

"So maybe we will see a lot of corrections during this way, riots in India, slippages and liquidity crises but if you invest in the right kind of companies and the right kind of stocks, probably there is a pot at the end of the rainbow that is waiting for investors.”

My Comments:
In One para RJ says that we are in teens.In one para RD says that we are going to become BIG not as 2 -3 trillion economy but much greater then that.

What if we become a 2-3 trillion economy from a trillion dollar economy?and what can happen if we become much greater then that?At 1 trillion economy we are at 17k , what if we become a 2-3 trillion economy and then much bigger then that?It is anybody's guess.......Have I to elaborate that where can be the sensex?

“Maybe in a generation, we will take a population from affliction to affluence, from poverty to prosperity, maybe we would go from 100 million people in the middle class right now to a billion people in the middle class and that has profound implications for various investment horizons.”

Can one be able to understand what it means?From going 100 million of middle class people to 1 billion middle class people?Can anyone imagine the impact of this when that happens?I think there are many of my readers who are smart enough to understand the bottomline what it means......
RD and likes says that we are at where US economy was in 50's.....what does it mean?I leave that to my readers.....
I am again listing some stocks which are looking good and the list may consist of new ones as well as old ones.That doesn't mean that which are leftout are not good as it will be difficult for me to recall all stock I recomended in past and write it here.....
1)Surya Chakra Power
This stock I recomended when I use to write at mmb and that is in last bull run.
2)Laffans Petro.
Signing MOU with Huntsman Chemical is a trigger for this Co....
3)Sujana Towers.
If someone can read the consolidate results(not standalone) there is something which I have seen which looks mind blowing to me at this time.Maybe I have overread it or not interpreted well.But if anyone can find and read it and tell me what it is, I will be glad ....
4)Rasandik Eng....
5) PAE
6)Goldstone Infra
7)SNL Bearing
8)Geometric Ltd
9)Kale Consultancy
I already recomended here at over 90...
10)Heidelberg Cement
11) Prism Cement
12)Yash Raj Containeur
13)Venus Remedies
14)Surya Pharma
15)Ind Swift Ltd
16)Ind Swift Lab
17)Resonance Speciality
This also I use to recomend at mmb
18)Jupiter Bio
19)Apar Ind
20)PSL Ltd
21)Kirloskar Ferro
22)LT Foods
23)Marg Ltd
24)MSK Project
25)JMC Project
26)Shriram EPC
27)Ennore Coke
28)India Glycols
29)Lumax Ind
30)Investment Precision and Casting
31)Super Spinning
32)Super Sales
33)Suryalata Spinning
34)Suryajyoti Spinnig
35)Surayvanshi Spinning
36)Mazda Ind
There are many which I may have missed....but the calls remains the same......Well, these are stocks whose management are not proved.This is blank calls except do the DD and then take the plunge.....
Best of Luck for New Year......
We Welcome 2010.......and against what our beloved bear opinion of seeing 12k first before 21k comes...I say we will see 21k first and never see 12k.....anytime........
Today I saw that Money Matters was firing all cylinders and closed at 168...Supreme Potro made a new high of 31.85,Kirlos Ferro made a 52 week high at 37.65,Mcnally Bharat made a 52 week high at 239,Tinplate recomended at 43 cum right made a life time high of 94.80 and many more to come......


  1. This the quote of the year and perhaps a great way to end 2009 in style "I say we will see 21k first and never see 12k.....anytime........"

  2. Dear Rajeev,

    Congratulations and Wish You a FANTASTIC NEW YEAR. May it bring you unlimited Joy and Success.

  3. Dear Rajeev,

    Can you please specify what exactly have you seen in the Sujana Twrs Consolidated figure that is so eye popping ??

    Infact i am little worried that the consolidated Net Profit has infact declined from 32cr(stand alone) to just 12 cr.

    Looking forward to your views

  4. Mitzz,
    Seems u have found the consolidate figure of Sujana Towers....
    Now tell me what are the sales figures of Standalone and sales figures of Consolidate entity.....

  5. Dear Rajeev,

    The consolidated Topline is 780cr while the standalone Topline was 698cr. That would mean 82cr higher.
    But then why has the Net profit come at 12.98cr consolidated compared to 31.98cr in standalone.

    Sujana twrs has three subsidiaries. Two are currently operational and the third 'sujana transmission' is yet to commence business.

    So do the numbers imply that the subsidiaries contributed 82cr to the topline but were loss making and hence resulted in a decline of 20cr in net profits ??

    I am thus still wondering if there is anything positive that i can make of it.

    Ofcourse I am sure that you will be able to decipher the numbers more clearly.

    Thus awaiting your expert opinion

  6. Hi rajiv

    Please can you share your thoughts on Hitech Plast (Containers & Packaging) FV 10.00 CMP Rs 97

    (in Cr.) Sep-09 Jun-09 FY08-09
    Revenue 44.92 37.16 135.14
    Net Profit 4.51 3.55 9.26
    EPS 3.42 2.69 7.03
    Cash EPS 4.08 3.32 9.44
    P/E 10.74 -- 13.90

  7. Dear Rajeev Ji

    M follwoing your blog regilarily but writing for the first time.

    It took two year to reach 1 lack hits but will be 1 million hits in another two years. Its too good!

    Wish U n fellow readers A Very Bright n Enriching New Year!

    East Africa

  8. Mitz,
    give me the link where u saw both the results.I want to cross check it....

  9. sir ji
    first accept my happy newyear 2010
    i follow only 5 people in stock market for my buy.U R one of them.
    i watch your recomandation from long time.
    recently i enter in following scrip on your recomandation
    3-yasraj container
    i m happy with your performance i m not adding some stock because i already hold 10 stock in my portfolio before your recomandation
    i say only one thing about you
    sir ji please share your view about MADRAS FERTILISER cmp 10 (PSU) trade only in nse

  10. Pradeep,
    Hitech Plast is definately looking good and worth a punt at this rate....

  11. hi mitz and rajeev

    i still dont know where mitz got these detailed results for sujana towers. if both of you get some additional info then kindly share it on this board. reading about their expansion plans it looks a great company to invest in.


  12. hi rajeev and mitz

    yes i know now what mitz is talking about.rajeev if you click on notes in this qr results on bse website you will find what mitz is talking about..

    mitz in those numbers , i think consolidated numbers are for this quarter only and going by that it does look that there was a loss of about 3.5 crores due to subsidaries. these numbers are given for every quarter and i think there has always been profit due to subsidaries.

    rest you can correct me


  13. Dear Rajeev,

    I am posting the link. It was actually announced on bse on 30-12-2009. The consolidated figures for the whole year are posted at the bottom of that page.

  14. Hi rajiv

    please can you share your thoughts on Kaweri Telecom
    FV 10 CMP 67
    Right issue expected

    (in Cr.) Sep-09 Jun-09 FY08-09
    Revenue 59.51 35.34 180.57
    Net Profit 10.13 5.36 11.34
    EPS 10.07 5.33 11.27
    Cash EPS 10.57 5.74 12.58
    P/E 3.86 -- 5.94

  15. Ok Mitz,
    That is also what I saw.
    Now the question here is,whether the consolidate figure of 780 cr is for Sep 09 qr or for whole year.
    If we look at the net profit, then it is 12.92 cr and if we see the np for standalone then it is 16.50 cr , which means that there was a loss of 3.5 cr in the subsidiary....for this qr but the SALES is much much bigger in Subs comparing to standalone sales which is just 254 cr.......that is what I would like to know....whether the consolidate figure shown is for this quater or for whole year...if it is for this qr then that is if so then Sujana becomes automatically a $600 mn co...

  16. Dear Rajeev,

    I rechecked the results with a fine comb because if you are saying sumthing is looking very good then there must be some thing.

    a) I discovered that the previous year results (year ending sep 2008) were for 15 months and the current year ( year ending sep 2009) is for 12 months only.

    However i still havent figured out if my reading of the consolidated nos has any mistake.

    I am anyways totally bullish on sujana twrs and have decided to hold on to it for a minimum of five years. A company that is infusing so much of capital (@ Rs55), expanding capacity to such a large extent, getting into newer fields definately deserves to be held on for long term.

  17. Pradeep,
    I have been recomending Kavveri since my mmb days....that is my favourite is a buy.....

  18. Dear Rajeev,

    Yes you are right. The announcement does not clearly specify if the consolidated nos is for the sep qtr or the whole year.

    But it states "The below mentioned consolidated financials consists of audited financials of sujana towers limited and unaudited financials of it's two subsidiaries"

    So do u percieve they have given the audited results of just the sep qtr ???

    If it is so then Sujana should go beyond Rs 250 within the next one year itself.

  19. BLIMEY !!!

    Rajeev, I just went through the notes after every qtr results and have found the following :

    dec08 mar09 jun09 sep09
    stand T.L 125cr 159cr 174cr 238cr
    alone N.P 3.8cr 5.1cr 6.4cr 16.5cr

    dec08 mar09 jun09 sep09
    consol T.L 754c 188c 200c 780C
    idated N.P 5.5C 5.63C 6.95C 12.92C

    As can be seen the consolidated Topline of 780cr is for the qtr ending sep 2009 and not for the full year.

    The consolidated Topline for the whole year works out to Rs 1922 cr and consol profit works out to Rs 31 cr.

    I await your analysis of these numbers

  20. Mitz,
    That is HUGE , isn't it?780cr Topline for 1 qr makes it a 3200 cr co adn what is the Mcap?.....just 215 cr...!
    Mitz, remember not to discuss such things anywhere else which we discuss here all the pros and cons..operators if wants to corner more shares and if others starts buying then the upmove will be he will not get the required quantity he is aiming to corner....