Subhash, (firstly please don’t put a ji at the end of my name)… here is my take on what you said…
Lets look at some data. The DJIA index has dropped around 50% only 4 times in the last 112 years (for DJIA) – 1929, 1939, 1974 & 2008 (In 2000, it fell less than 40%, the major collapse came in Nasdaq). That makes a 50% fall less than a 25-year event. As I said, recency effect may be taking its toll here
There is a lot of research on economic or market predictions and it has been fairly conclusively proven that they are just noise. The way I look at it is, if I am invested in the right companies, the management will take care of the business environment. If the market is bad, it will be bad for everyone. Cash, to me, is not an asset allocation strategy. It may be for others and I am perfectly okay with that.
Whether one wants to be fully invested or want to have cash depends primarily on 2 things:-
i) one’s temperament & ii) one’s investment time horizon
I think a lot of useful information/discussion about market cycles is getting lost in Atul Auto’s thread Request admin to move the market cycle discussion to its own thread or a relevant existing thread.
I bought 4 pharma names 1 agro chem co and one junk IT company between Jan 2008 and Oct 2008 but most of it was bought before the crash only some in Oct 2008. For a large part of depression period I was like a frozen chicken.
Thank goodness that the pharma plays worked and covered for the losses made by other names.
while moving on NH 8 from Surat to Ahmedabad on friday mar 8thwas noticing number of cargo carrying trailers plying / meeting eyesat any point of time… could see much lesser trafficthan earlier experience… while I am of the camp of Abhishek staying invested but time to take measured steps for deploying fresh cash.
Another point saw lot of Atul’s cargo carrying autos moving / parked in and around a’bad most of them Atul Shakti ( perhas all) however could only spot one atul’s passenger carrying auto.
After a long time Atul Auto chart shows that there are more buyers than sellers. The column has changed from O column to X column. It gave a false sell signal at 175 and then changed columns. The next resistance for the stock is at 225 where it will make a double top.
As per RSI in above chart, there is a W formation with lower bottoms, which is a good sign. The stock is also very close to 30 at the lower band with much scope to rise. Looks a good buy.
The interconnectedness is all BS with respect to anytime future or in History. Imagine people would have been talking about Computers connecting every market in the world and making it difficult to make money in long term, but did it?
No the basics remain the same. You pick a strong Moat company and stick to it as long as it is capable of delivering as you expected and get of it if you feel its not.
I believe 2008 is not one off event and it might potentially repeated but not because of interconnectedness but as part of economy cycle i DONT KNOW if that is 5/10/20 years from now that is all
I have not read all the posts on Atul Auto on this forum. But here are my unsolicated views
Atul Auto does not has any economic moat. It doesn’t has a network that Bajaj or Piaggio already have established, nor does it has a product differentiation or brand compared to them. The financial metrics may show that the company has been growing at a tremendous pace ( when seen in isolation). But if you check the market metrics and benchmark it with Bajaj or Piaggio the picture becomes lot clearer. The market share of Atul Auto has remained more or less the same (about 4%) for the last five years, when compared to the rate at which Bajaj has been capturing the market that looks pedestal.
Another point to be noted is that the Atul Auto does not has any product offering in the premium range, they are only targeting the customers at the bottom of the pyramid. You cannot get great margins down there.
I therefore do not feel comfortable investing in Atul Auto. I welcome and look forward to your views.
atul auto seems to be bucking the trend of auto slowdown even in march 13. figures of sales performance released on bse indicate around 17-18% growth for march 13 and for full year as well.
M&M’s 3 wheeler segment degrow by 5% while their total auto sales went up by 11% in March. Probably M&M is not much interested in 3 wheeler segment as there is 3% degrowth for the segment in FY13 while total auto sales are up 17% in FY13.
I think the co has posted excellent set of sales nos for the month of march and if they can maintain this run-rate, the co should do very well.
If one looks at the macro environment then the performance is highly commendable.
This is the reason why over very short term especially in case of challenging times (like in last 2 months), we shouldn’t loose sight of the longer term underlying story. In the case of Atul, I think they have a good opportunity as the co has a successful model and product and has to just increase penetration in new areas (increase distributors in new states). The co has been doing it well and with the product profile expansion this year, things may happen for them.
I dont think atul auto is into tractors. If they had gone into it they would have come out with trumpets and announced it in a grand style.
There are plenty of good auto/auto ancillary companies in Rajkot besides atul auto. It could be fieldmarshal who specialise in diesel engines. Not too sure about it.
There is already lot of debate going on about Bajaj’s RE60 (quadricycle) which as per Bajaj is meant to replace the 3 wheeler auto’s. They are waiting for a new vehicle classification for this quadricycle which will be less stringent than the cars in terms of emission and safety norms.
I had seen few of these tata magic iris in bbsr market, but the number’s were not very large. One thing i am wondering now, is how these are different than the quadricycles, for which Bajaj is trying. If indeed the quadricycle’s are cleared by govt., i think it will be a game changer in the auto market.
I find these comments from competition very interesting, and the counter points from Rajiv Bajaj, very appealing.
Says Piaggio India MD Ravi Chopra: “A quadricycle concept for both passenger and cargo should be allowed, and the norms should be aligned with those of the EU as they are time-tested. We would be interested in it, and would hope for a level-playing field to facilitate potential manufacturers to develop and offer products.”
The apprehension, of course, is that Bajaj Auto may have a headstart as not only does it have its product ready with the RE 60 but is also getting ready to roll out the vehicle from a factory in Aurangabad by the middle of 2013. Other auto makers will need at least two years from the day a policy is released to get to the market.
Bajaj counters that this is precisely what a first-mover advantage is all about. That’s what innovation is all about, he argues. “(A level-playing field) will blunt every competitive edge as there will be no first-mover advantage for anyone - we would all compete on price and run commoditised businesses,” says Bajaj.
@vinod: Yes, have noticed this and yes, this vehicle would be more comfortable for passenger but the difference is in carrying capacity. Normal 3 wheeler of atul would be usually carrying almost twice the no of people in this vehicle. But yes, over a longer term, this might have an impact on traditional 3 wheelers as ppl might seek more comfort etc.
My Colleague mentioned seeing a couple of Atul ricks here in Pune city, Knowing my interest in the company, what caught his eyes were the bright colors & Atul return in bold, Have asked him to keep an eye out for the models
Going by the article, i get a feel that, the RE60 may get a regulatory nod as replacement for 3 wheeler autos in the first phase. If that does happen, we could have interesting times ahead, both for auto industry and Bajaj Auto in particular. Bajaj Auto is ready with production capacity of 5k per month for RE60 and the competition will take 2 years to catch up (as per reports)
