Hi @hitesh2710 bhai, I have a query . How Market/we should value NBFCs ?Is it on P/B basis or P/E basis ?For example Bajaj Fin is growing at 20% ROE and EPS growth with 35% CAGR . Now if we consider P/B basis , then Bajaj Fin stock price will grow 20% CAGR(considering P/B will stagnant) but if we consider P/E basis stock price will grow 35% CAGR(Considering P/E will stagnant). What is the right framework to calculate future price of a NBFC?
Hi Hitesh Ji, what is your view on Hikal? You purchased this sometimes ago…Piramal Ent is available at a time correction phase, why MFs are not buying it? I think it is a good long term bet. Kindly comment on Piramal Ent.
Hello Hitesh sir,
I want your views on wim plast Ind. (cello brand furniture company).
The most common yardstick to measure NBFC or any other financial company is to go by price to book ratio. In isolation, P/B doesnt mean much by itself. It should ideally be combined with ROA which gives a good idea how well the company is sweating its book in terms of returns. And with asset quality which is provided by NPA figures and provisioin coverage.
If you were to compare the book value of Bajaj Finance with Capital First ( like to like NBFC) putting in above figures you will clearly see the reasons why Bajaj Finance quotes at premium valuations. Same goes for Gruh vs Canfin vs PNBHF and so on.
For companies where growth has been consistent and predictable one can also use PE just to get an additional parameter to value the company. I often use PE ratio in Bajaj Finance during sharp market cuts to evaluate its merit in terms of investment preference.
And many a times one should not get stuck on numbers alone while thinking about investments. There’s alway a risk of becoming an excel cowboy with this approach.
Hikal remains a company which looks promising but the proof of the pudding will be in the eating. It needs to eke out consistent growth numbers going forward. The space it is in remains exciting.
Piramal is as you say undergoing time correction. When this one gets over is anybody’s guess. I dont know why MFs are not buying it. Maybe they are already saturated with the stock. You need to dig deeper and find out MF holding in Piramal over past few quarters and find out what changes have happened.
@Agarmalwa, I dont track Wimplast or any other peers so not much idea about it.
Hi @hitesh2710 The textile companies are facing headwinds due to various global and domestic factors. Some good names like Indocount are beaten down. It’s down by 65% ever since the egyptian cotton saga hit the textile stocks. What’s your view on it ?
L&T Fin holdings has been focusing on improving ROE for the past several quarters and are walking the talk. How does ROE compare with ROA as a yard-stick?
ROE and ROA are closely related. ROE is arrived at by multiplying ROA with leverage.
Do you have idea on Aditya Capital. I find it interesting play on fictionalization led by an able management. Thanks.
Egyptian cotton issue happened with welspun
Hi, Yes I do aware of that. What i meant was, the ICIL was beaten too because of that scandal.
@hitesh2710 Hi Hitesh Sir can you please share your views on 8K Miles and DeNora India?
Hello Hitesh sir , please share your thoughts on Prime focus. Reliance has major stake in this company. from recent highs it is taking support at 90 +
@Dhiren_Shukla I dont have much idea about 8k miles or de nora.
@bwjoshi I had a brief look at prime focus some time back but found that the company had a lot of debt. Since then havent followed it up.
@manivannan.g ICIL has been beaten down a lot from its previous highs. And that company has been one which had in the past created a lot of wealth for its shareholders. But since its downtrend commenced, it has not shown any strength in terms of price action. I havent tracked its financials but the charts do seem to tell a story of its woes.
@ramanhp AB Capital remains one of the bets in the financialisation of savings theme. The chart shows a breakout from a short term flag pattern with good volumes. I had a look at its presentation and found that inspite of strong growth in its lending business, asset quality remained quite strong. The other businesses also seem to be doing quite well. It remains in my watchlist for further study. As of now it looks good for a technical bounce but still remains below its 200 dema.
Hitesh ji, being a doc what’s your view on Narayana Hrudalaya and Health care global- one being an affordable health care play and expanding to many places and other a niche cancer sector play and also in expansion mode. Both operate as asset light model in capex heavy business. Your views will be much appreciated
Hitesh Bhai, Please do share your insights about the technical charts of Max India Ltd. What interests me is the WHITE candles supported with large volumes in last couple of trading days?. Regards.
Hi @hitesh2710 Do you track Deep Industries or CMI ltd? What are your thoughts on it if you are tracking them?
greetings for the day. Do you find value in CFS comanies like allcargo and gateway distriparks at these levels. GAteway is having a dividend yield of 4.2% at current levels and is seeing continued buying from the promoter.