Vivek - Kaveri seems to be making a base between 400-500. Make take a little longer time due to weak market conditions. There was a lot of selling happened by IDFC and promoters in range of 800-1000 making chart patterns weak. Add to it below expectation results and not a good forecast for rest of year. It remains to be seen whether IDFC has fully exited the counter or not by now. The change of guard at IDFC has spelt some bad times for this stock.
Anyways going through their quarterly presentation and annual report gives me enough confidence that the stock will bounce back sooner than most people expect it to. Its in a very niche business with high profit margins and huge entry barriers. The cash on books gives a comfort as well. I guess promoter’s haven’t done anything wrong. They are just undecided and being cautious considering the outlook in distributing the cash to shareholders. Give business the time. Time is a wonderful friend of good business and a enemy for a bad business.
In case I will have spare cash in future I will avg down my positions - currently my avg is 783. This stock has given me huge profits thrice. I have entered at near around 800 and sold at 950-1000 thrice in my trading portfolio before finally deciding to invest as core stock when it again came down.
Arun - Tata Motors has a great history. JLR is a recent addition to their business. It has a wealth creating chart and has made several investors who are holding it for decades quite wealthy. Even with Zero sales in China the stock is a clear buy. The big structural change and disruption acc to me is not wrt China now but shift in future to driver less cars for all premium car makers. That’s a bigger threat than a small issue like China.
I’ve been invested in Tata Motors for quite some time and added more when it was at 100ish levels ( pre-split), so yes, it has given me very good returns in last few years and I recently exited at 500+ ! What you mention about driver-less car is true, but that is to me a little beyond the current issues in China. Remember that their recent great profitability was quite a lot due to China, which accounts now for 25% of their revenues.
I also do not overlook the fact that Tata Motors needs cash constantly to keep up growth and that they’re not doing as well in domestic market with their local brands. In fact the last time they offered rights at 330, the stock dived way below that. In last 15 years, they have sought money 3 times from capital markets.
Since you have entered in Atul Auto and looking at tata Motors Could I request you to look at Force Motors and provide your Views.
I owned this stock for brief period in the recent run up and than sold it on its way down for small profit only.
The Reason of selling was
Just came across an old news article about their management purchasing an aircraft for their plant visits in Indore from Pune.
In their AR they themselves did not sound to optimistic except their Force Traveller
In their AR they had no mention of the Engine manufacturing for BMW and Merc.
The reason for taking a position was
Their Force Traveller is present all over Gurgaon
Now even Force Trax is being visible in various parts of Gurgaon
The News that they would be producing engines for Merc and BMW.(They also produces axles for
these luxury cars)
Promoter have increased their stake in last one year.
At one point of time I was invested in both Atul Auto and Force Motors but to me 3 wheeler Market over all is slowing down however the trend of Using Force traveller as shuttle and Cabs in IT and other Service industries is growing so I was biased towards this.
Kapil - Sure will study force motors and come up with suggestion soon.
Currently I have no idea about Force Motors. Have never tracked it but yes I do see
lots and lots of Force travelers these days and with tourism industry
expected to do well in coming times due to policy of visa in arrival
travelers have a long way to go. To give you an example for the first time
we are contemplating to book a Force travelers for our trip to Jim Corbett
few weeks from now. Earlier we never thought so.
Regarding three wheeler industry I see it as a temporary halt. LAST MILE
CONNECTIVITY, INCREASING RURAL ROAD THRUSTS WHERE THREE WHEELER IS
PROFFERED MODE OF TRANSPORTATION AND COST EFFECTIVE ALSO, PROXY PLAY TO
FMCG AND RETAIL PLAYERS TO PUSH IN TIER 2 CITIES FOR CARGO SEGMENT I SEE
THIS INDUSTRY HAS A HUGE GROWTH POTENTIAL.
varun…tata elxi is a good innovative company working on a multitude of upcoming technologies…Do you see KPIT in the same league ? At first look, KPIT looked more of a services company, than an innovative company.
Well I see connected cars, life sciences systems and traffic management as a
very big theme in coming times. By connected cars I mean car as an
extension of your mobile phone. KPIT is into the designs and solutions of
vehicle safety and connected systems. In life sciences systems as well it
is into several products like e-clinical solutions. One has to go through
their website to understand the areas they are researching and working on.
It may not be in the same league as Tata Elxsi as far as innovation is
concerned but they are working in right spaces. Moreover I see sometime in
future management change happening which may provide triggers coupled up
with throw away valuations.
My bullishness on L&T Finance holdings is finally stamped an approval by a marque PE Bain Capital today. Just a little more happy and if th stock comes down will add more positions. L&T finance holdings is by far my biggest capital investment in my portfolio though it has given no returns in past year and a half. Hope the better times ahead for the stock now.
Sometime back similar case happened in case of DHFL. I invested in DHFL 3 yrs back when it was hovering around 150-200. Stock didn’t gave me any returns for almost 2 yrs before RJ bought it sending it to new orbit. I still hold all my shares in DHFL.
Varun… Earlier you said "Currently My eye is on TTK Prestige, P&G, Titan, Glaxo Consumer,
pidilite, Bajaj corp in case any of them comes down substantially.’
What is your view on Titan & pidilite at CMP , as both have come down
Kishor Hi -
Yes I said that and I have good stake in Glaxo Consumer.
TTK Prestige especially after Nalanda Picked up stake at 2700 something
never stopped its journey and currently its too expensive for me to buy it,
I also believe that emergence of online platform has disrupted the business
model of both Hawkins and TTK prestige and unless they do something soon
they will start losing market share. Anyways I am positive but only below
3000.
P&G never corrected a lot. I keep on trading on it though for 100 bucks
time and again as it is safe stock to trade. Bajaj Corp is very expensive.
Pidilite has excellent growing and niche business model but I find it too
expensive. Have not done any intrinsic value calculations but at more than
40 PE I have no courage to buy for investments. Since I am an Architect I
meet lots of sales representatives of Pidilite about their products. Last
interaction at few weeks back suggest that they are finding it tough going
as there is a massive real estate slow down. Their water proofing and
insulation products are slightly expensive as compared to peers and even
the best of builders don’t look at brand in this area of building as they
need cost cutting. Fevicol and Fevistick are only growth drivers till real
estate picks up. My believe is fundamentals are good but the stock its
pricing too much expectations and there may be some disappointment going
forward. Stock may not correct much but there could be time correction.
Titan - Few weeks back I came across lots of start up apps with a business
model of renting out the jewellery. If this becomes a trend in future then
it many impact the Titan business though in small way. Titan is in a
business currently where you in need valuations at your side for
investments. At current valuations though it has corrected a lot I still
find little value.
As Warren Buffet Says - Investors of today will not benefit from
yesterday’s growth
Vivek -Thanks for the information. Quite disconcerting this article is.
Lets see the development in future. I guess the AGM is scheduled on 29th
Sept. Will take a call only after that.
Added more Axis Bank, Care Ratings and Delta corp to existing holdings in Yesterday’s downfall. As expected market went into tail spin.
Valuations wise there is hardly any margin of safety in Havells India however when I look into the market cap of about 15000 crore only, the management credibility and ability and the huge opportunity they are staring it with a terrific story developing around it, the stock seems to be a screaming buy. This dichotomy is difficult to overcome for me when I saw an old video of Mr. Ramdeo Agarwal and took 30% positions of what I want to invest and will wait for further correction.
Dhiraj - All 3 stocks are for long term - as of today lets say over and
above 2 yrs. Unless delta corp breaks out and goes really high discounting
long term.
Manoj - Difficult to say anything on Care. Its a low volume counter
anyways with high FII holding. Continuous daily low volume selling
suggest someone trying to get out.
"Efforts to reduce fundamental risk by buying higher quality assets often increases valuation risks, given that higher quality often sell at elevated valuation metrics. "
I always almost tends to get attracted to stocks like Page, Eicher, Bosch, HDFC, Astral, Mayur, Gruh… and the list goes on, only to get reminded by the two quotes one mentioned above and one mention below. The below one is myself edited version of Charlie Munger.
Always stay rational and inculcate a contrarian thinking for reasoning at least and long term wealth creation approach as irrationality and stupidity of others will eventually help you.
I’m also keen on Edelweiss, though its been many months since I’ve had a look. From what I made out, they have poured a lot of money into expanding various businesses including the insurance business. Margins could improve significantly going forward. Need to understand individual businesses.
