Jewellery i think is a hot sector in current markets. It seems people are factoring in consistent growth for many years to come while looking at the sector.
Trick would remain to buy undervalued stocks with good balance sheets and exit at right time. TBZ was such an example. Same with thangmayil etc.
I dont want to get into the sector at all so not looking at any of the stocks in the sector. Maybe if Titan comes down to very alluring levels, I might consider an entry.
basically all these purely research companies are more or less a lottery ticket. If they discover a new molecule then you get windfall gains otherwise you end up looking stupid holding the stock for long periods of time in hope of some positive outcome.
Hitesh Bhai,
If you consider growth the valuations seems attractive. I understand some names have run up a lot too quickly. Hope you are not anchoring to the price?
Like TBZ is quoting at 16x FY2013E and analysts are predicting a 30% CAGR for the next few years.
Thatās a PEG of 0.5
I think jewellery stocks currently are at levels the real estate stocks were in 2004-2005, fast run up but still with a lot of potential. at the same time they entail the same risk of over supply of paper. I think many jewellers are going to go public in next 1-2 years.
I am worried about a steep correction in gold price but not holding my long position in jewellery stocks as this is very hard to predict.
Remembered from mention of good BS, PCJ would be debt free company post IPO.
Except for gold leasing they would hardly have any debt. They were one of the first companies to adopt the gold leasing model.
Regards,
Excel
Sticking to Titan, and adding very very slowly with larger buys on dips may be the best foot forward in terms of jewellery plays.
The organized market is still nascent with huge scope of growth and best plays would be Titan and TBZ simply because of the trust and reputation they enjoy. Forget BS, financials for a moment, in terms of sustainability and growth ahead for next 10-12 years, these two are way ahead of the league.
Another amazing thing is Titanās ability to create completely new brands and business lines, it is more of a modern organized retail play. Once the eye wear category breaks even, it will significantly contribute to bottom line. It is this constant use of cash cows to establish new Question marks and nourish them to Stars - is what sets Titan apart. (Refer : http://en.wikipedia.org/wiki/Growth-share_matrix)
Valuations are a concern, but for a patient investor it will present opportunities, like last year it was available at 160 levels for a brief period of time.
Hi Rudra, I am looking at PCJ as a rerating story once its PE is even half of Titan. Titan would become a better play post rerating. At a PE of 7.3 being clubbed with likes of gitanjali is ridiculous. I donāt know if your are from NCR but boarders from NCR could confirm that PCJ is number 1 or number 2 in north. Regards,
Hi rudra titan marketcap 25000 cr now if we are expecting a CAGR of 25% it would be 250000 cr after ten years.Do you think it is possible.I feel that if one were to invest in jwellery sector TBZ is a clear winner. Titan has reached such a position that from here it can only loose market share to higher end players like TBZ in jwellary.
Jewellery i think is a hot sector in current markets. It seems people are factoring in consistent growth for many years to come while looking at the sector.
Trick would remain to buy undervalued stocks with good balance sheets and exit at right time. TBZ was such an example. Same with thangmayil etc.
I dont want to get into the sector at all so not looking at any of the stocks in the sector. Maybe if Titan comes down to very alluring levels, I might consider an entry.
Exelbhai you are right here. Tbz is a hourse for a long race.But because of speculative interest stock has run up dangeriously. Once it cools down it is an excellant buy. Basically it is an play on increasing aspirations and buying power of urban women. This is a very relavent theme and can be a ten bagger in ten years
Hitesh bhai how ARMAN financials appears to you. It is a gujrat based microfinance company and after reelection of modi a lot of people in this sector are talking about this one. Basically how are the promotors? Being from gujrat can you throw some light on this one.All firangi analysts are still upbit about microfinance sector in gujrat as this region is famous for good credit history of small unbankable borrowers.
prasad,
I dont have much idea about promoters of arman. But having looked at it one aspect emerges interesting.
The RIF Northwest 2 fund investment (by private equity player incofin) was to the tune of around 15 crores by way of equity and convertible warrants at a price of roundabout 57.
Current market cap of the company is close to 16 crores. So effectively a new investor into the company has access to the company funded totally by RIF guys and you get advantage of reserves of pre placement thrown in for free. Valuationwise this seems to be very alluring.
Businesswise I dont know how far they can go but since the PE guys have invested at a hefty premium to market price here I guess they would definitely want to see that the company charts out a strong growth path.
Hitesh bhai can you please put up a small write up on arman (may be untested but still worth a look). I have been told by people working in this field that Arman infact is doing a lot of good things and may show exponential grwoth of EPS in next four to five years. If the topic is officially started we will get some valuable inputs from Donald/Ayush/Rudra. Because the opportunity ahead is really huge for this small company.Fortunately they are operating in gujrat which indeed has high credit rating for small borrowers (I have confirmed this from some people working in as NGO in this field). As I mentioned some firangi friends are expecting this to be a 500 cr company.
Once the discussion starts may be somebody staying near Ahmadabad may throw some more light on this one.
As gruh is one of my top holdings I keep a look on future possible players in microfinance sector and this company was refered to me two years ago. I had bought this one at 16 and promptly sold at 24 but again the noise has started about this one.
Hereās a decent, but old report on Arman by the HBJ guys. The PE thingy is not mentioned.
What is surprising though is that even after SKS listed and ran away to highs, this one didnāt. Maybe there is a lesson in how Arman was overpriced at that time (also, maybe a pointer in how we are betting on Kaveri given Nuzhiveeduās impending IPO).
Hitesh bhaiā¦ why canfin and why not bajaj finserv???
I believe they are 2 diferent business to compare. One is on general and car insurance and the other on mortgage. Looks to me that both are good (IMHO).
~Supratik
lesser chances of defaults in housing finance business. Plus there was huge undervaluation as I pointed out in the thread earlier.
Hi Hitesh,
Is Unichem a buy at cmp of 186 odd?
Regards
Hitesh jee,
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On BILT. avantha group looking to list sabah forest and BILT graphic paper to reduce its debt. Could be the trigger you were looking for. http://m.moneycontrol.com/news/ipo-upcoming-issues/avantha-power-ipo-to-hit-mktjuly-aug-13-avantha-group_802362.html
Hi Hitesh,
Which ones among your holdings do you think are good buys at current market price for someonewantingto make fresh purchase??
Regards
Dear Hiteshji,
Do you follow A.K. Capital? They deal with Bond market. Does valuations look appealing to you and does the sector hold any promise?
~Supratik
someonewantingto
unichem around 185, ajanta pharma around 385-90, fdc around 95, shilpa medicare around 295.
pl note that in the first three my buy price is quite low as compared to cmp.
I dont have much idea about a k capital. Sometimes back I think stock underwent sharp correction due to some management or other concerns.
