Most consumer companies are as you say reporting lacklustre numbers. So is the case with autos. And real estate.
That always makes me wonder from where these lending companies get their growth.
One way to look at things could be that the bottom of the pyramid is shifting from unorganised to organised lenders. Nowadays most of the guys at bottom of the pyramid are document ready and almost all have bank accounts. This has probably made the job of lending easier.
Imagine bajaj finance giving loans for dental treatments.
Asian Paints remains by far the biggest company in paints segment and has a dominant place in the replacement market, where you and me get our houses, furniture etc painted. For companies with well recognised moats (by markets), a few quarters of lacklustre growth is always pardoned. You get the usual knee jerk 4-5% or atmost 10% cut and suddenly a lot of funds/FIIs, and HNIs start flocking to buy and provide support to the counter. And with the kind of business dominance these companies have they usually make up for these quarterly blips soon.
I havent looked at Berger paints or Asian paints valuations so cannot comment on that. Asian paints is a company which one buys in a staggered manner once it corrects say over 4-6 months or some similar interval. And then remain invested.
Newgen as far as I have seen seems like a good company but I dont understand these software companies too well. They mention that they are getting good traction in business from small and midsized banks and enterprises in the US and numbers seem to reflect the same.
Prataap snacks is mainly into kids snacks etc. Numbers have been lacklustre of late. Last I saw, Malabar funds had a stake in the company.
I have Whirlpool in my watchlist. I havent found anything shady in balance sheet when I saw it. If you can dig up specific details from wherever you have read, we can follow it up.
You can say am I still stuck with Multibase? And the answer is yes but position has been reduced but small holding still remains. The latest quarterly number and the exit from Antifoam product is very disappointing. Maybe in the AGM management could guide from where growth is going to come from.
Hi Sir Are you tracking hawkins there sales increased by massive 17% YOY and profit 10% YOY inspite of slowdown and all. What is your view is the managment became agressive in promoting there product?
Although itâs domain of Hitesh Sir, I would like to share my 2 cents giving loan is very easy recovering loan is difficult. Any company can grow by diluting the lending standards
I keep tracking Hawkins in the hope that someday it will start showing fast growth only to be disappointed.
The valuations accorded to the company have also shrunk gradually from 50 PE to current less than 30 PE and dividend yield also has gone up above 3% .
I see only two triggers for the company.
Fast growth and strong rerating leading to supernormal returns.
Company being sold off in which case it would fetch much higher value than the market cap.
Both signal uncertain timelines and hence only on watchlist. It can be a good parking space as downside seem limited (unless growth really falters) and there can be the occasional bouts of optimism which can be utilised to sell/cut position
Hitesh Sir, What are your views on Page Industries for 10 years+?
Help me understand this, Pageâs Other Equity(Reserves) reduced in year FY19 vs FY18. It makes the ROE & ROCE look better but Isnât reduction in Reserves a negative thing?
@hitesh2710 ji, What is your opinion on Crisil? They are the biggest and perhaps the most reputed player in the credit rating, research and analytics space with the most diversified offering.
Hi Hiteshbhai,
1 Can havells management be considered in the same league as Asian paints and Pidilite on trustworthiness and "walk the talk " basis?
2 If 50% of portfolio is there in secular stocks and the price of non secular stocks increases , then should one need to rebalance the portfolio to bring the proportion back to earlier or let the stocks appreciate without the need for rebalancing ?
Many thanks
Hello @hitesh2710 ji, one general query on Non listed company investment. What is your take on Non Listed company investment, if you give us some of your experience/views and platform where we can explore this field. I am not exposed to this field and my knowledge is limited. If you educate us with your experience and views then a lot of people in this forum interested in this would be benefited.
@sujay85, Crisil suffers from lack of growth in its core business of rating. The KPO business is as of now the key monitorable. If and when economy recovers and credit demand picks up, these rating agencies would have a good time.
I havent tracked it too closely of late so not much idea about current valuations.
Havells management till now have done quite well if one goes by their long term wealth creation track record. They had the odd misadventure like the sylvannia acquisition though thats all a part and parcel of business. If one looks at how they have consolidated their position in the face of stiff competition from MNC and strong domestic players they seem to have done a great job.
Regarding run up in non secular stocks in a particular portfolio, one always has to remember that non secular or cyclical or opportunistic bets have a definite sell price. These companies should never be confused with secular growth stories. About proportion of various types of companies in a portfolio, its an individual call. For stocks that run up and if the run up is too sharp, there can be a case for giving some rope and try to book periodic profits so as not to miss on profits.
@sarthakkumar19_ ITC seems to be pricing in the worst kind of news that could come about from the budget in terms of hike in some kind of duties on cigarettes. However I feel till the event is over there could be pressure on the stock price.
I feel in the current scenario IT stocks which keep going for periodic buybacks and which throw up huge amounts of cash flows could be interesting parking spaces. e.g infosys, tcs, hcl tec etc.
@hitesh2710 bhai have you been tracking Axis bank recently ? A new CEO Amitabh Chaudhry (ex- HDFC Life insurance) has been hired to lead and FY19 results of the company were impressive and looks like its up for a big transformation. Even UBS in its latest report are very positive on it and they are expecting best in class return ratios and even RoA gap between Axis and HDFC to minimize and expecting share price to double in next 3 years. Any views or comments here ?
Axis bank seems to be getting back on track after the clean up in its books. And a new jockey from a reputed stable should guide the bank safely over any potential hurdles.
Stock price looks quite strong, consistently posting fresh new highs.
Hitesh sir,
Namaskar,
Whatâs your say on DHFL at current scenario. Keeping in mind number is not supporting the company and future of liability is seeming one step away from collapsing the company but at the same time equating it with companyâs glorious past, current valuation, recalling also that equity investing is not only a number game and last not the least Kapil wadhwanâs confidence showing in CNBC TV18 recent interview.
Sir wheather one should have little fresh exposure in a very calibrated way or not.
