I have a question regarding the location of provision against the GNPAs in the balance sheet of a bank or nbfc. Is it in the asset side or liability side? Or it’s not a part of the balance sheet at all?
Overall structure of Redington seems good, though in the daily time frame, there were two doji candlesticks. On Friday there was a doji with a long upper wick and on Monday there was a doji with long lower wick. That does signify some indecision after the big bull candle of last week. The critical information we get from these two candles is that we need to watch the range of 150-164, which is high low of last two candles. Any move above or below these two values can provide a good move.
Major breakout level is above swing high of 178-179 from where stock price has corrected in past on couple of ocassions.
@NNaik I don’t track GE Shipping
@Garuna I don’t track redington and sona bw (?blw) fundamentally.
@Souresh_Pal You will have to ask the question related to GNPA and location of provision to some banking expert. @dd1474 might be able to provide answers.
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@Souresh_Pal
The provision aginst GNPA appear on liabilities side of Balance sheet of Bank/NBFC. There are multiple provision which the lender need to provide for. Broad classification is general and specific. Mostly, general provision are provided against standard loan and investment which bank carry on its balancesheet. In addition, some bank conservatively, in order to provide against futuere shocks, keep some provision in good time which also get clubbed into general provisions. Second type of provision is sepcific provision which are provided against stressed loan book as provided under RBI regulations. In case of restucturing of loan, there is suggeted approach by RBI following those points, bank provide specific provision against restructued loan. Specific provision are provided against specific leading or investment assets of bank. Like wise, depending on security, age and expected recovery from NPA, RBI also provide amount to be provided against specific NPA. Hope this answer your query
@Hitesh
Thanks for suggesting my name to answer this query.
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@hitesh2710 Sir,
Thankyou for your view on INDIAMART. If you could share your view on this stock as well would be grateful.
Does this look like a CUP and HANDEL?
On the daily chart it is attempting to break 200 day EXP moving average today.
Sales are growing and margins looks like bottomed. Would love your view on the company as well if you track.
You can find the guidelines on provisioning and classifications here : Reserve Bank of India - Master Circulars
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Unichem labs looks interesting… it is near all time highs inspite of not so good quarterly results …volumes and delivery are good… is the technical pattern encouraging?
@hitesh2710 Hitesh sir, what is your view on PSU banks particularly PNB, BOB, Canara bank etc. for the next 1-2 years. Fundamentally it looks like Credit growth is back and NPA numbers are improving QOQ.
I feel that the low base effect (ROE, ROA etc.) will help them in an upcycle and stocks will get rerated. P/B for most of the PSU banks barring SBI is below 1 while good private banks have valuation around 3.5 P/B. In the short term, the laggards should do well?
Thank you in advance.
Hi Hitesh Sir,
Can you please share your observation on Indraprastha medical from technical point of view?
I have seen from fundamental point of view and is already invested with tracking position.
Almost all PSU banks have very bullish breakouts and good overall structures… Past few years have been a test of patience for investors in these kind of companies and after a long time the tide seems gradually turning. One can have a basket approach of 3-5 stocks from tier 1,2 and 3 type of companies and try to ride the rallies, if one is convinced about the theme.
@vskr63 Unichem is quoting close to all time highs. There have been rumours floating around about the stake sale by promoters and hence the excitement. I do not track it too closely.
@Naresh I do not track indraprastha medical fundamentally. Chart looks good.
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Hiteshbhai sorry to clutter your thread. There is no specific thread on Indraprastha, hence posting my views here.
@Naresh Indraprastha Apollo is JV between Apollo and Govt of Delhi. They have two units: the main one, the Sarita Vihar, and the small unit, which was established in 2006. IA is one of India’s leading institutes, ranking among the top three in the country in surveys conducted by the Week and other magazines.
Said so growth is the concern. They won’t be able to open a new unit as, by mou they are restricted to the NCR region. Hence, as per me, IA will pay a good dividend, but stock appreciation may be limited. Just my opinion; I could be wrong, and you could easily disregard it.
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Thanks for this. My point that at current mcap of 780 odd crores, there is net cash on the books of 201 crores and with ROIC being among the best in the industry stock offer margin of safety. Though, I also feel growth is the only trigger for re-rating but from margin of safety point of view, this stock is no brainer.
Negative side risk is ongoing litigation of providing free health care services to poor.
@hitesh2710 ji,
How should one build conviction in a stock that has very low promoter holding? The prospects might look bright to us but if it is indeed so then why aren’t the promoters raising stake! Case in point is Camlin Fine Sciences. Its promoter holding is about 17%.
Thanks in advance.
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At the outset companies where promoter shareholding is precariously low and decreasing over time is something I put lower in pecking order of buy list.
Specifically in case of Camlin fine, promoter shareholding (according to screener) has gone down from 22.7 % to 17.55% down by nearly 10% within a period of 3 years.
In this case, what one can do is ask a relevant question to management in concall. (the company does do concall) Or if possible, attend the AGM and ask the question there.
If the explanation is satisfactory and other boxes are ticked, then we can consider investing if the story is appealing enough.
But as a general rule, I personally tend to avoid companies with very low promoter holding, or companies with a lot of pledging by promoters. There are always plenty of other options to look at and choose from.
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Hello sir,
If one were to trade completely based on charts, without knowing anything about the businesses, how should one go about it? I mean, are there any general rules that exist for such pure technical trading, does any broad framework exist?
Thank you.
If one were to trade purely based on charts without looking or knowing about fundamentals of the company, the general rules would be (it is obviously understood that the person practicing this style of trading has got a proper trading method and plan in place)
To avoid too much concentration. (We cannot bet too heavily if we do not know much about the company) So position sizing takes centre stage.
Follow strict stop losses. So first decide how to go about deciding stop losses and follow them rigorously.
And third would be to avoid getting into illiquid names. Because many times these move from circuit to circuit and its difficult to get in and out or even apply stop losses.
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Thank you for the reply sir.
I have been doing what you have mentioned. I have been looking at many ideas and not concentrating on just a few stocks, and I have been following strict stop loss, using GTT feature for this, so I would not even know if a stock is falling until it hits the stop loss, and I have also been for the most part not getting into illiquid names.
Is it possible to look at pure technical analysis and trade? Even Mark Minernivi talks about earnings. So is it possible to trade just basing on charts, with all the aforementioned things in place. Or the element of minimal knowledge about the businesses has to be a part of such trading.
If it is possible, where can one start? Is there a difference between learning technical analysis to have some general idea and use it for investing or some discretionary trading, and learning technical analysis to make an activity out of it? Does a different way of learning exist if one were to do trading based on technical analysis? Or it is the same, despite the purposes, the tools are the same, usages are different, so learn about the tools, practice and it takes a form and shape as time progresses?
Thank you.
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Hitesh ji,
With extensive modernization, capacity building and import substitution being the theme for Indian Railways, have you come across Hilton Forging ? This microcap is known to have supplied an initial set of wheels for railways, and apparently got approval too.
With the usual supplier of rail wheels, Ukraine not in the market now and difficulties in importing from China (atleast the public optics) do you think Hilton will be a winner. I’ve not been able to find who their competitors for wheels (in India) are and what their competitive advantage is.
Thank you !
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Hello Sir,
My question is about buyback strategy used by management to arrest falling prices.
Recently, I have noted two examples. One is Tanla, which did not result in much price change. The other one is IEX, which is yet to be played out. My question is, does this kind of buyback help in trend reversal on technical charts? Given that chart is already looking week for such companies, have you ever noted/experienced such strong trend reversal?
Thanks in advance!
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@hitesh2710 ji,
Thanks so much for clearing my doubt.
I have a similar kind of question. Can we trust managements who have tried delisting their company multiple times but failed, to look after minority shareholder benefits? Case in point is Allcargo Logistics. I have faith on its growth trajectory, competitive positioning and believe that the valuation is still reasonable, but the fact that they made sustained effort to delist the company during 2020-21 is making me uncomfortable.
Thanks again.
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