Indices end higher as PM Modi likely to win no-trust vote


Benchmark indices gained on Friday, as the Modi government is expected to win the no-confidence vote, to be held at 6 pm today. In the 545-member (including the Speaker) Lok Sabha, the BJP-led NDA can bank on around 311 members.

The S&P BSE Sensex ended the day at 36,496, up 145 points while the broader Nifty50 index settled at 11,010, up 53 points.

IT and pharma stocks gained as the rupee hit an all-time low. The Nifty IT index was trading up by 1.5 per cent with Infosys, Tech Mahindra and HCL Tech up between 1.6 per cent to 2.6 per cent. Meanwhile, in the pharma sector, Sun Pharma and Cipla gained over 2.5 per cent each.

Among individual stocks, Bajaj Finserv hit a record high, after the Bajaj Group-owned asset & wealth management firm posted a 41 per cent surge in its first-quarter profit on Thursday.

Bajaj Auto, on the other hand, dipped 9 per cent after the company reported a lower than expected 21% year on year (YoY) growth in standalone net profit Rs 11.15 billion in June quarter (Q1FY19). Analysts on an average had expected a profit of around Rs 13 billion for the quarter

Continue Reading


Reblog: Bill Nygren: Value Investing Principles and Approach


Bill Nygren is a fund manager at Oakmark Funds. He is also Chief Investment Officer for U.S. Equities at Harris Associates. He’s particularly well-known for being a value investor who doesn’t fear the technology sector.

This post summarises key takeaways from his talk at Google in December 2017. While he reinforces many core value investing principles, he also challenges us to think differently.

The difference between gambling and investing

A value investor recognizes there are different ways she can put capital at risk and the difference between gambling (negative expected value) and investing in stocks (positive expected value)

Buying stocks like you would buy groceries

Bill observed the way his mother shopped for groceries by buying more of something that was on sale and deferring her purchase of something that wasn’t yet on sale

Smart money is not always smart

He spent two years as a research analyst at Northwestern Mutual Life where he pitched ideas of companies that he found were trading below their asset values. However, the portfolio managers chose not to buy such stocks until after they were recommended by 2-3 Wall Street analysts, by which time the price had moved to above asset values.

Continue Reading


Reblog: IPO Review – TCNS Clothing


Verdict: The Cool and Nice Stock

IPO Snapshot:

TCNS Clothing Co. Limited is entering the primary market on Wednesday 18th July 2018, with an offer for sale (OFS) of up to 1.57 crore equity shares of Rs.2 each by PE investor, promoters, current MD and former employees, all in the price band of Rs. 714 to Rs. 716 per share. Representing 25.63% of the post issue paid-up share capital, total issue size is Rs. 1,125 crore at the upper end of the price band. Issue closes on Friday 20th July and listing is likely on 30th July.

Company Overview:

TCNS Clothing Co. is a New Delhi head quartered branded apparel maker for ethnic women wear, operating 3 brands – W, Aurelia and Wishful, with sales mix of 57:33:8. Its 465 exclusive branded outlets (281 for W, 183 for Aurelia, 1 for Wishful) accounted for approximately 50% of FY18 topline of Rs. 838 crore. Further, products are sold through 1,469 large format stores, 1,522 multi-brand outlets and online/ e-commerce websites, which account for 28%, 11% and 10% of the topline respectively. While design operations are in-house, manufacturing is completely outsourced. The brand outlets, all on long term leases, are either company operated or franchised out. Company plans to open 75-80 new stores each year, to strengthen its brands.

Continue Reading


Reblog: How to use the P/E ratio


Valuations are looked at through the prism of cash flows, earnings, corporate governance, return ratios, debt-equity proportion and so on. Within these, the most primary valuation tool used by investors is the Price Earnings (P/E) ratio.

The P/E ratio is arrived at by dividing the stock market price with the company’s Earning Per Share (EPS). For example, a Rs 200 share price divided by EPS of Rs 20 represents a PE ratio of 10. Theoretically, it translated into the assumption that if we were to buy this company today it would take 10 years to earn back our investment.

The Trailing P/E ratio uses the earnings of the last 12 months, while the Forward P/E uses the expected earnings for the next 12 months, which means it requires estimating the forward earnings.

At Mumbai’s Morningstar Investment Conference in October, equity market strategist Ridham Desai and head of Morgan Stanley’s Indian equity research team tackled the subject of India’s high P/E.

Continue Reading


Infy ends 2% higher on Friday ahead of Q1 results; Sensex ends flat


The benchmark indices pared their day’s gains to end flat on Friday.

The S&P BSE Sensex ended at 36,542, down 7 points. The index had hit a fresh all-time high of 36,740.07 in intra-day deals earlier today tracking global markets ahead of information technology (IT) heavyweight Infosys June quarter earnings later in the day. The broader Nifty50 index settled at 11,019, down 4 points.

Among sectoral indices, the Nifty PSU Bank index fell over 2% weighed by a decline in Canara Bank and Indian Bank.

Shares of smallcap companies were under pressure with the S&P BSE Smallcap index falling more than 1% after a sharp decline in stock prices of PVR, KNR Constructions, Inox Leisure and Gujarat Narmada Valley Fertilizers & Chemicals (GNFC).

Idea Cellular share price fell 2.7 per cent intraday on Friday after global research firm Credit Suisse maintained its Underperform rating on the stock with a target price at Rs 45, implying a 17 per cent downside. After the merger between the company and Vodafone, the new entity may prioritise cost savings over market share retention and the cost base should be close to current Bharti mobile cost base, the research house said.

Continue Reading


Reblog: Charlie Munger – How to Develop Your Own Investing Style


When it comes to the world’s best investors, Charlie Munger (Trades, Portfolio) is in a league of his own. For most of his career, Munger has been the right-hand man of Warren Buffett (Trades, Portfolio), which has, to some degree, limited his impact on the world of investing (although not by much). When people think of Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), it is Buffet, not Munger, who first comes to mind.

But that does not mean Munger has no investment skill. Indeed, before he joined Berkshire, he ran his ownq partnership where returns we as good as, if not better than, those of Buffett.

Still, for the past several decades, Munger has been known as Buffett’s right-hand man, so it is extremely likely he has had more influence on Buffett’s strategy than anyone else.

Continue Reading


Reblog: Understanding How The Indian Pharmaceutical Industry Works – Part 3 of 3


The 3rd article in this series explains about the key performance indicators (KPI) to track any pharmaceutical company and measure their performance. Few of those metrics are R&D spends, ANDA filings, Operating Segments, to know particularly in which market the company deals, what is the status of the products in the companies pipeline, the number of patents that have been filed by any company etc. It’s not necessary for every pharma company to have the same standards of operating and therefore financial metrics and KPI can differ from company to company.

how-indian-pharma-industry-works-part-3

The original post is written by Shuchi Nahar, appears on alphainvesco.com and is available here.


Indices shrug-off trade war fears; Sensex ends 83 pts up at 35,658 levels


The benchmark indices pared most of their day’s gains to end marginally higher on Friday tracking recovery in the global markets.

The S&P BSE Sensex ended at 35,658, up 83 points while the broader Nifty50 index settled at 10,773, up 23 points.

Among sectoral indices, the Nifty Auto index settled over 1% led by rise in the stocks of Ashok Leyland, Hero MotoCorp and Tata Motors.

The rupee recovered 21 paise from intra-day low of 69.03 to trade at 68.82 against the US dollar in late morning deals. As the US is set to impose tariffs on Chinese goods today and sustained foreign capital outflows pressured the sentiment, the rupee fell sharply to 69.03 a dollar before quoting 68.82. The rupee moved in range between 68.82 and 69.03.

Shares of paint company Asian Paints, fast moving consumer goods (FMCG) firm Hindustan Unilever (HUL) and information technology giant Tata Consultancy Services (TCS) from the Sensex have hit their respective new highs on the BSE on Friday. Thus far in the current calendar year 2018, these three stocks have outperformed the market by gaining in the range of 15% to 39%, as compared to 4.5% rise in the S&P BSE Sensex.
Continue Reading


Reblog: Understanding How The Indian Pharmaceutical Industry Works – Part 2 of 3


The second part of this series explains the various business segments in which a pharmaceutical company works. This post will help us to understand the significance of different segments in detail and will give a brief idea about how pharma companies make money through R&D , sales and marketing. The need of having a strong distribution channel, dispensing the right goods at the right place and at right time is equally important.

how-indian-pharma-industry-works-part-2

The original post is written by Shuchi Nahar, appears on alphainvesco.com and is available here.


Reblog: Understanding How The Indian Pharmaceutical Industry Works – Part 1 of 3


Following article is first in the series of articles on the Indian Pharmaceutical Industry, the first article is written to familiarize ourselves with the terminology or the jargons of the pharmaceutical industry. We will briefly touch upon terms like API, Intermediates, Formulations, Innovator drug, Generic drugs, life cycle development etc.

The Indian Pharmaceutical industry is about $ 17 bn industry (2016) with as many as 20,000 registered companies (includes MNC’s and small-scale units) directly or indirectly involved in the business of selling medicines. India has the distinction of being the lowest cost producer of medicine in the world. India also has the feather of being the largest exporter of generic drugs in the world, we have some great franchises like Lupin, Sun Pharma etc.

how-indian-pharma-industry-works-part-1

The original post is written by Shuchi Nahar, appears on alphainvesco.com and is available here.