I dont track Coal India as understanding the business is a difficult job as there are a lot of moving parts in the business and there is also an element of cyclicality to it.
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Yes sir , they are putting this plant for IKEA. As IKEA is planning to expand in India so I think demand for CS furniture will be there for Shaily. But I am more concern about CS biz…as far as i think it’s not a niche segment as compare to their existing industrial plastic segment…
But IKEA as a client, we can expect high quality product in CS …let’s see how things move going ahead…
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Hello hitesh bhai are you tracking ceramic companies basmati rice exporters and piber cement bord companies?
Hi Hitesh Sir,
Do you track Infra Companies which are into road construction. I like companies dealing majorly in HAM projects. As per my understanding following are pros and cons
Pros:
- Strong order book
- Good execution by top companies in the sector
- India needs a lot of roads due to huge growth in traffic and that gives gud business visibility for next several years
Cons:
- NHAI slowdown in project auctions in last two quarters
- Election year and no surety if next govt (if no BJP) will continue their focus on infra
- Liquidity crunch due to recent ILFS havoc in NBFC market
Pls let us know your views on this sector in general and few companies that you may be tracking.
Sir, i saw many brokers suggesting Indian Hotels, what is your kind views on this?
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@hitesh2710 Sir,
I am a newbie investor trying to get my hands dirty in the indian capital markets after reading few books on stock market and following various post in Valuepickr. In one such post I happen to read the book of Pat Dorsey, to get hold of the science part of the stock selection. After reading the book, I selected eClerx, Bajaj Auto and Page Industries. My selection rationale is as follows-
Though a technology company eClerx moat seems to me as a classic text book one, in multiple historical parameters like NPM, ROIC, ROE, financial leverage and free cash flow generation. Its valuation is also attractive with high margin of safety.
Bajaj Auto is another one where the parameters are attractive and i feel that its present valuation is just about right to enter the stock.
Page is the only stock which seems to test my nerves as it is expensive in terms of the conventional parameters like PE, PB, PS, cash return ratio, etc. but its free cash flow generation stands out. It offers high margin of safety if we consider the business as a whole. Typical time horizon that I am considering is between 5-10 years as I believe, market takes time to reward companies with high free cash flow generation.
Your view point in my above selection and possible loopholes will not only help me become a better investor but also make my day! Thanks in advance.
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Dear @hitesh2710 Sir,
Have you ever looked at any of the following companies?
If yes, I would love to know your views on the same:
- Ultramarine & Pigments (decent business with decent ratios)
- Orient Refractories (good business with good ratios)
- Dynavision (assured rental situation)
- Facor Alloys (Turnaround situation)
- BCL Industries
- Bodal Chemicals
Sincerely,
django
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Hi Hitesh Sir,
I am avid reader of all your responses in this forum.
I noted you were following Deepak fertilizer once from technical point of view.
Are you still following deepak fertilzer. What are your views on it now.
Regards,
Saurabh
Bajaj auto is a good solid dividend player without growth. If they can buy ducarti it can Be a game changer .
Page expensive cash machine. Discloser I hold it for years.
Eclerx good company as I am not following can’t comment .
I will suggest to buy some solid players like hdfc bank kotak bank on Decline . I own both.
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Hi @hitesh2710,
A financial organization projecting growing AUM at a CAGR of 15% will translate to how much earning growth ?
Thanks for your time …
Ceramic tiles companies might see some light at the end of tunnel now that crude prices have collapsed. Power and fuel costs account for a big chunk of production costs for these companies. Its also reflected in strong upmove in Kajaria after the prolonged correction. I think these companies may not regain their lost market fancy but if bought at decent enough valuations can give good returns.
Not looking at basmati rice exporters or fiber board companies.
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Moat is important only if the company is able to translate this moat into higher sales and profit figures. Eclerx has not been able to do that since past many quarters. Same thing applies to Bajaj Auto, although being cyclical it will have its demand spurts and lead to strong growth for some time after tepid periods.
Page has been consistent in showing growth though the quantum of growth keeps fluctuating. But since they keep entering newer product ranges rather than sitting on their dominant market of underclothing, they will continue to see periodic spurts of good growth in between routine periods of unexciting growth.
Free cash flow is a good parameter to look at in companies you analyse but if one were to list up parameters to evaluate, growth would rank among the topmost.
While screening companies it would be a good idea to first make a list of companies showing good growth and then go deep down by using the parameters you have enlisted like NPM, ROIC, ROE, leverage, free cash flow and others.
I would tend to look at companies with good consistent replacement demand and market dominant position . This list would include companies like Asian Paints, Pidilite, HDFC Bank, Page Inds, just to name a few companies. Next important step is to look closely at valuations at which these companies are available and what kind of valuations we are ready to pay for these cos.
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From the list of companies you have put up, I liked Orient refractories, and had looked at it some time back. It remains a dominant player in refractories business with an MNC promoter. It can be classified under the FMIG group, which includes companies involved in producing fast moving industrial goods. Replacement demand always remains good for these companies as they produce consummables and hence are not affected too much by the cycles of the underlying sector.
Rest of them I dont track.
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Of late, Deepak fertiliser has had a nightmarish chart pattern. The stock price has fallen from a high of 500 to current levels of 142. And its almost a vertical fall. I dont track its fundamentals so no idea about why it has fallen so much, but if charts were to tell a story, it would be an ugly one.
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If a company is supposed to grow its AUM at 15% CAGR, then profit growth cannot be taken for granted. It seems you are looking only at one parameter in evaluating the business in question. One has to take into account all the factors affecting the profitability like NIM, cost of funds, cost to income ratio (and possible operating leverage due to growth), provisions depending upon quality of loan book etc.
Indian hotels had some time back given its vision for the next few years. If it can deliver according to the vision document, it can be a decent bet. I am waiting for some kind of consistent improvement in numbers before taking a call.
Technically it looks resilient with good support between 130-135 which seems like a good level to accumulate.
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@hitesh2710 … Thank you for your reply and guidance.
Assuming everything is taken care of then what does this signal?
I was hearing management on media saying that we are looking to grow our AUM by 15% this year… What does the management want to say by this … Obviously there is a message …
Please give your perspective …
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There are some things in business which are under management control and others are not. So one cannot predict what kind of profit growth will happen if AUM grows 15% cagr.
Maybe you should drop a line of query to the management to get your answers. You seem to be sure there is a message in what they say and I cant find out what the message is. 
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@hitesh2710 Sir,
It is indeed very enlightening to know the priority that drives stock selection. Can you also share some good investment books which like Pat Dorsey book, easy to digest and deals with the science part of stock selection but for growth stocks, or in other word complements the Pat Dorsey book.
~Riddhi
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Sir, have you been tracking Micro-finance institutions of late? cost of funds have risen by 0.5-1%(as per HP Singh of SATIN) but as they maintain a large spread, wont affect their profitability much? MFIs(Ujjivan and Satin) have been on a strong upward trajectory since Q3 of last year… How do you see this part of the NBFC sector going forward?
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