I’d still rather wait on the sidelines and hope something unreasonable happens(similar to covid 2020 when dividend yields of companies like offs etc shot up to 12 percent!). The cheaper i get it the better. It’s one of those companies wherein i won’t regret owning it if it rebounds off 18 and i never buy it again. But il put in a lot of cash at rs. 15/16. So I’d rather wait for the off chance of a price drop happening. Again, it’s nonsensical… but if the market does indeed fall another 10 to 20 percent then it could happen. Also as is obvious I’m still not well versed in it. Will take me some time to actually understand the company well. I’ve only run through the forum and the annual report so far. Government run financials always give me a bit of pause too and a higher mos though I agree that irfc looks a bit different and quite enticing long term
Hey this stock had been good for me few years back…i am also passively tracking it…one thing I noticed that usually by June every year they declare dividend but this year they have not…
A high and consistent div yield had been one of good aspect of this stock…are you aware of any div policy changed this year or anything management mentioned about it? Thanks
They recommended Rs 4 divided in May. So there’s no issue there. Post AGM it will be approved and added. That makes the dividend Rs. 8 for last year. Based on the concalls i’ve attended i think we can expect dividend to fall to around Rs 6 or so since they will need cash for their new PF of products. Also, expenses should stay elevated for the next few quarters. So i dont expect dividend to be more than this 5.5 to 8 range for the next year or 2. Hence why ive kept my target price below 120 so i can get atleast a 5 percent yield for my troubles
Hi @Malkd,
I like reading your views but this thread has been silent for a while now. Would like to know what did you add in this recent fall and any new positions that you created. How do you view the recent rally…is it a proper bull rally or just a bounce given that all the macro events are now priced in. would like to know your views. Also, do you think intellect and ugro are at levels where one can start looking to add for a long term. thanks.
Hey @Gaurav_Bhandari
As mentioned earlier I’ve been out in the real world building cash and would only be able to invest again around December/Jan. So I’ve been staying away from looking at my PF or my watchlist since there’s nothing i can do about either of them. I’m hoping we go back into a bear market. Have no comment regards whether we are in a bull market or a bear market. Some companies are still available at nice prices. This thread will be active again in a few months.
Sir how do you see the results of Bajaj Consumer Care? Are you still invested in it?
It’s along expected lines…as mentioned in my posts above though i was tracking it and hoping for a sub 120 entry price to guarantee a good dividend yield for what should be a tough few quarters/years since the quality of the company isn’t the best. Also, the money i had available was deepak nitrite money… and there was no way I’d have removed the money from DN to put it into Bajaj consumer. I didn’t blink even at rs. 129. Now that it’s 160+ I’m going to give it a hard pass until and unless it somehow goes to that sub 120 level. When i do start investing again post building my safety net(another few months to go) il probably start elsewhere unless it’s at 1700 crores valuation which is where id planned on investing. I don’t see the company turning around so soon so I’ve not given up hope on buying at low valuations
Hello @Malkd
Do you still hold Kaveri Seeds. In case you’ve sold it off, would love to know what prompted the decision.
Thanks
Hey sarthak. I actually havent owned it for so long that ive forgotten why i sold and when i sold haha. It was a mix of breaking a huge support + me wanting to leave the agri sector well alone + a few coeporate governance issues if i remember correctly. I beleive even now its below the 470 threshold which i never thought it would break. Something isn’t right. I havent followed recent concalls etc though
Its been a long time since ive been active in this thread. Basically ive been sprucing up my main business so havent had time for equity(or the money). Over the past few year ive managed to
- Shut down one office hence saving rent and employee costs. Adjusted my business model such that this has no negative effect on revenue
- Removed the need for all sales persons/employees and i only employ faculty now. Done this by making my sales pipeline fully digital + fully investing in the samsung ecosystem so i can handle all leads myself and i now personally hande all big ticket clients too. Somehow managed to maintain revenues even with this huge drop in operating expenditure
- Now that my costs have dropped by a huge amount my safety buffer of 2x yearly costs is almost met(i keep this amount in idfc savings account).
Basically, By end of this fiscal year my revenues should stay similar to pre covid… my yearly expenditure has falled by 66 percent… il have a safety buffer of 2 to 3x yearly expenses tucked away… and my business will be totally antifragile. Its been a long year and ive had to brush up on a lot of old skills(website design, digital pipeline for sales etc…)but its been worth it.
Now that im almost set there im turning my eye toward the market too. These days it takes a lot to get me interested (havent sold a share from my PF since last update and havent bought anything either).
One company that has got me really interested though is zensar tech…
The more i study it(concalls, presentations, balance sheet) the more i realise how underpriced it is(all the major stats ie roce etc, cash in hand, dividend policy, company communication).
Its the perfect combo of good business going through a 2 to 3 quarter downturn(employee costs). I still have time to buy it though since il be deploying cash around December. Also, i still cant quite figure out if we ll see much growth here OR if this is just a short term play to bet on employee costs cooling down and margins improving by end of this fiscal. The little bit of scuttlebutt ive done through the channels i have regards recruitment isnt promising though. Their recruitment practices arent really that great. So even if i had the cash id still wait a quarter or two before investing.
Im hoping i can get it at a 3 percent dividend yield though i will settle for 2.5 too(assuming 5 rs a share… dividend will probably fall to rs 4 this year since eps should be under pressure).
Other bets that still entice me but arent quite there yet valuation wise are manappuram and hdfc amc and oracle(at 7 percent yield) and adding to my position in intellect
Cheers. Expect more updates towards the end of this year
@Malkd Instead of talking about numbers, will you be able to share business details instead. Maybe help us with why it has a right to win, if possible insights into its products.
With companies rated at single digit growth valuations(considering cash in bank and 2 percent dividend yield) there is no such thing as a right to win and i don’t expect it either. If it was rated at 20+ pe then id say that would be important. For now its a contra bet and barely investable company and Here one has to back the horse and from what ive read of Ajay S. Bhutoria and from the concalls and presentations and overall communication by management im very impressed. They have so many verticals now that id need to actually work for the company to understand the nitty gritty of each… however i like the sectors they are targetting and the numbers say they are going in the right direction with each one of them. Id say the revenues are currently sustainable and growth looks about a year or two away. Ive seen similar situations with the likes of kpit 2 years ago(priced at rs 60)… ie where a company in the IT sector is not rated due to margin compression but the revenue growth is fine. I suspect that their margins will fall to 11 or percent for the whole of this FY. And as attrition rate falls, cost of employee’s drops and consumer spending comes back in the west therell be a stabilisation at 15 to 18 percent margins with revenues at around current mcap next year/FY25 which could give a decent return over 2 to 3 years even without crazy growth in sales. At higher valuations id ask for right to wins etc… at current valuations i just want a few metrics to come back to the norm.
That being said… ive checked the recruitment side of things through the colleges and students i deal with… and the few whove heard of them have complained that their recruitment process itself poor(im not sure if im allowed to type more regards this). So there could be endemic reasons behind the higher than industry average attrition rate and costs. So i want to wait a few quarters and see if they take this now obvious failing seriously before investing
That indeed does seem to be the case. The business is available at very low valuations in line , extending back till quite a few years. Sales wise , this does look like at throw away prices but cash flows seem to be back to 2017 levels.
But below “achievement” in their recent investor presentation was a turn off.
“Modernized the product architecture by deconstructing monolithic applications into microservices”
But thanks for sharing this with us and maintaining such a nice and detailed thread. The screen which caught this for you must be really good though.
I track it due to it being a part of the goenka group tbh. When it comes to small caps my main worry is corporate governance… and i hold the goenka groups in pretty high esteem so when i noticed zensar was selling at close to 1x times sales i got interested 
. The jargon they use is a bit excessive… but they explain everythign well in their concalls. Also, im not really an IT guy so a lot of their business prima facie seems “investor” chasing… ie digital when that was in fancy + robotics when it was a buzz word etc… but the proof is in the pudding and the fact they crossed 4000 crores in sales last year shows that it hasnt been all talk in the air. Lets see how it goes. Most important metric for IT companies is attrition rate and they are provably the worst in the entire IT market right now so the bear market its been in is understandable.
Dear Malkd …you are saying that you will deploy the cash in December…how you are seeing the so far…I mean , I earn monthly and deploy my cash in direct equity as well as in mutual fund monthly keep my emergency fund intact.I have not developed suh foresight. Please discuss your mindset and if possible how to develop such foresight?
Ive explained above. Im not timing the market. Im just building a safety net of 2x to 3 x my yearly business expenses. That should get completed in december. When done il be deploying all future cash into equity so hence ive kept December/ End of this FY as my target to start deploying cash
Hi Malcolm Sir,
What is your take on recent results of IDA and LAURUS ?
IDA is in a lumpy business and these ups and downs were expected. Their margins are on the downtrend but atleast they are open about it. Revenue growth is fine. Concalls are still a joy to attend. I added the equivalent of my holding for my wife today. Combined we own a huge amount of IDA around this price.
Laurus has been a bit of a disappointment… and the guidance of dr chava has been disappointing too. That being said im in it for the long haul. Havent sold a share since i added it 2.5 years ago and it still makes up the majority of my PF. Im not too bullish on either of the above in the short term… but over a long period ie 5+ years ive no issue holding.
Thanks for the quick reply ! I also have both these for long term but IDA is at 630 odd avg so was suffering from some uneasiness . Thanks a lot for sharing your viewpoint.
HI malcolm sir,
What is your take on nazara tech growth and latest results??