Accelya offers a great set of products? I would say…yes.
How wide is Accelya moat? wide enough to keep competitors away.reason for that…1) Accelya provide products to shitty industry.Airlines are not much profitable industries.No one thinks of doing a business with someone who might not pay you.
Companies usually do not change vendor for these kind of product easily. Its a lot of re-work and headque. security of data is also important.
Very few companies provide that set of products worldwide. So not much of competition. This also proves the first point.
4)Not much capital intensive business as other IT services.
Annuity(pay as you go) based model provide revenue visibility.I can say that more(atleast 5x) people will travel through air after 10 years. So growth concern is not there.
IMO, Dollar or for that matter any other currency appreciation/depriciation does not really matter here. They have a global presence.
please correct me if i am wrong.
thx,
vaibhav
The problem that has always plagued the niche / small IT players has been that they lack deep client relationships. So, where a TCS can go and talk to a CIO of a company, a Accelya or RS will at most get to reach the divisional IT Heads. Plus, unless the product or offering is really differentiated, what I have seen is that larger players wise up to the opportunity and offer similar products / services to the clients. That is one reason, if you recall, standalone Testing services players, all sort of disappeared after the initial few years of great performance. So, the key to look for in small, niche players is what exactly is it that they offer and how easily it can be replicated by the larger players. In India, we really don’t have product based IP led companies. It is more of niche services. And they are fairly easily replicable.
Ecommerce is a completely different business. Its actually more retail than IT. For say Amazon, web is the sales channel. But the bulk of the expenses are in warehousing and distriubution, not IT.
Day by day we are seeing all sort of stocks jumping 5%, 10% and even 20% even though some of them are loss making cos.
Market is still in “buy panic mode” and over a period of time only **QUALITY **should do better among today’s risers.
We cannot afford to focus of 1 or 2 sectors only, instead now is a time to **CREATE NEW PORTFOLIO FOR LONG **which includes quality stocks in,
Cyclicals like engineering, auto ancillary, NBFC, Infra / Power / Auto, Consumption play (mainly real estate proxy), Food and Agri, Plastic, Specialty Chemical__and other sectors too. In fact why should have bias for any sector ?
So which are those QUALITY cos to tag in watchlist?
Shall we not create 10-20 such quality cos and discuss in just 1 thread with key highlights and potential for next 5 yr (without digging in too depth. for dip diving separate thread is an option)
That is my sincere request to Donald and other Gurus here.
Creating a portfolio for the long term is a continuous endeavour - not a knee-jerk reaction to an election result.
Also, the differentiator for ValuePickr (or us as investors) is the depth of thought-process and research, not superficial macro discussions, which anyway cannot be validated, except in hindsight.
“buy panic mode” **QUALITY **should ** CREATE which _
Cyclicals _ Chemicaland ** why ? ** ** just yr ****
Challenge ourselves and refine our strategies further.
To come up with some names (companies/sectors) that will benefit from the changing macros & economics, identify the performers amongst them so that we can park some of our funds (capital in opportunistic portfolio) to these.
I personally know some of my friends who were quick to reshuffle their portfolios just 2 weeks back and are sitting on cool 30-35% gains in just 2 weeks.
One of the industries that will benefit from an increased infra demand is the Cement Industry. Unlike the other highly leveraged, high risk businesses in infra, Cement companies require less debt owing to the great cash generating power. Many of the cement companies I looked at were consistently generating a higher CFO than their Net Profits. In addition, most of the companies are adding more capacity.
The only problem is that most of these companies have rallied up quite a bit in the past few weeks.
I would like to take a contrarian view for this topic, so far valupickr’s mantra of "Separating the wheat from the chaff " is being carried out with good success so far, my policy is don’t fix if it ain’t broken , while that being said i am not opposed to constructive change in the process evolution.
If we take into account of great investors they have not changed their strategies based on the market condition or euphoria. I hope we are not moving towards a method of capturing mood of the market and change of methods accordingly. I know your intent is not that but based on the various feed back received so far we seem to guess the favorable sector and concentrate on them.
I am no expert in investing in cyclical and i am a newbie to investment so bear with my limited knowledge of how things work in a bull market.
Please advice on what am i missing from this change of strategy we are talking in this thread that is going to be additionallybeneficialfrom what we have done so far in valuepickr method of stock selections.
1)With complex network of village panchayats,jilha parishads,muncipal corporations,state govts and central govt developing India in not going to be a easy task for modi govt.
2)Modi is at his best when he takes decisions unilateraly.Opposing fractions in BJP and sangh
and his newfound craze to accomodate all has neutralised his cutting edge and more or less it is going to be a UPA II with only difference of better communication.
3)Modi has come to power with huge money spending from business houses and votes from poor and middleclass.These two classes have conflicting needs and demands and any act of striking balace between two will again push this govt to UPA II.
4)With reddys and yedi back in karnataka,paswan in bihar and gadkari and munde in maharashtra modi govt is likely to compete with UPA II on corruption.
5)If one really travels across gujrat you can feel whatever claimed prosperity achieved in
gujrat is because of business skills and hardworking nature of gujraties and there is no visible infra developement from govt side.It is at par with other forward states like maharashtra.All over India modi will find it hard to turn people from other part of India into gujju mindset and cliam credit for their hardwork.Infact people will expect him to deliver all by himself.
6)It will be unwise to jump on India growth or shining story as on now and start believing that average companies in hyped sectors will start performing.It is wise to stick with quality names which are already performing.
7)Most names have already appreciated by 25 to 100% and are already overvalued going by thier stressed balancesheets.
8)Most imp. modi will not be able to bring interest rates to 6 to 7% for a very long time and any rally before that will be a sucker.
Prasad , please don’t talk politics in this thread and please do not use Community/Castenames in bad light.
We all like ethical management and closely watchmanagement/communication closely and unless we people are dignified we cannot expect the same from governments or companies.
From no angle my post is political or in a bad taste for any community.If you are wearing red glasses world will appear red to you.I cannot help it.
Sole intension of this post is to state hard facts and save new investors in this forum fromgetting sucked in a ralley created just out of feel good factor and not by the facts.
Our companies cannot make money with 11 to 13% interest rates.The interest rates have to be brought down to 6 to 7% so that even average companies make money.
Govt is constrained by high infaltion hence it cannot reduce rates and supplyside measures to relieve inflation take four to five years to show results.
For all infra related plays money is the raw material and with these kind of rates inspite of bagging orders they are not expected to make any money.Again pricing pressure will come on infra related consumption (cement,steel,minerals etc) limiting their earnings.
Tourists are not going to come unless we improve infra,safety and cleanliness.All these
things are interdependent and require long term to play.
Unfortunately markets are ultimately driven by players who go purely on Q/Q earnings and facts and not by short term speculators who cash on momentum and feel good factor.I do not want any new investor (even seasoned investors with stagnant portfolios) to fall prey to this situation.
Wait and see how the things unfold.Investment opportunity always come.
Narendra, I do not see any political anlge in Prasad’s post. It was just a contrarian view from the current euphoria based on Modi’s win. We encourage such contrarian view points so as to make a balanced discussion and based on that discussion we all can take investment decisions. So please respect Prasad’s views. I also do not agree 100% to his views particularly point no. 5 but he has right to express his views.
In the past I have delayed investment decisions because overall negative outlook in the market affected my thinking.Markets proved me wrong and I lost the profit, my capital amountwas intact and I earned bank interest.
In the past I took hurried investment decisions because overall positive sentiment in the market affected my thinking.Markets again proved me wrong,I lost my initial gains quickly,lost capital also.
Investments made in feel good sentiment can go wrong if we assume that certain sectors are going to do better because of certain change in macro factors like govt change.Market sources anticipate such things and they get priced in well in advance.
When we buy such scripts, for profits to really show on ground takes a lot of time and meanwhile the script gets corrected/hammered out.All this comes at the cost of long held investments which had performed in bad times and are going to perform in future also.Most beautiful thing about this is that we already own them.
Again this is a small reminder to all the members that our scripts which have performed against all odd over last three to four years are definately going to outperform others if at all macros turn positive.
I see nothing except political view in Prasad’s post. So Narendra does not seems to be alone here. I strongly feel, posts with hidden/open political leanings should be discouraged.
When parties change at the centre their priorities change.
During 1991 we have seen this ( all MBA books have this 1992 reforms story) , when Vajpayee taken over we have seen priorities change( Ex:Golden quadrilateral, Privatisation) and when UPA came we have seen priorities change ( Ex: farmer loan waiver , 6th pay commission, NREGA).
Based on this policy shift we have seen in the past how some companies did well.
So my view is once we get more clarity on current government priorities we should target and evaluate( I m looking at how this govt responds to gold imports , there are some undervalued companies in this area) .
I see nothing except political view in Prasad’s post. So Narendra does not seems to be alone here. I strongly feel, posts with hidden/open political leanings should be discouraged.
Community/Castenames
** Narendra, views.
**
**
Subhash,
**
**
what you feel is your personal view and you have right to feel so.But try being rational and get into the core issue.NOMO will have great difficulty in bringing real interest rates down and inflation under control.Unless
this happens all other talk is just rhetoric and amature
optimism.Unfortunately markets do not run on sentiments for longer term and ask for results.
This is not possible for atleast next few years.Markets
are made of bull as well as bears and very soon later will
realise this and all the dust will settle down.
Policy changes take long time to show actual effect on real economic indicators and cannot be basis for rational investment.
Raj, try and understand on one hand we have high inflation and the other hand we have high interest rates.RBI uses rate rise as a tool to control inflation.Basically they believe that if liquidity is sucked out of market or if the money is made expensive the demand will taper down and inflation will come down.But what is happening here is that inspite of rate increaseinflation is not comming down.This is happening because we have a huge amount of black money running a parallel economy.Unless new govt shows guts to suck out this money they will notbe able to control either.When I say new govt will find it hard to control inflation and interest rates I mean this.
Now let’s get back to ways of releasing this black money in main market.If the govt takes any of the following steps we have a serious case to be optimistic
1)Make all real estate (plots,lands,shops,houses,apartments etc) compulsory in DEMAT.
2)Sale of all kinds of real estate should only happen in DEMAT format,money directly going to acount.
3)Any plot of land held more than two years without constructing a house should attract
heavy taxes.This wil discourage landbank hording and bring real estate prices down.
4)Immediately declare names of people who have huge money in foreign banks and give
a definate time line for bringing back the money.
5)Deregulate diesel prices.
6)Stop bridging fiscal deficit by printing money.
All these things are very difficult to follow and the long term FII (THE PENSION FUNDS) exactly want this.This money will bring a long lasting stable secular bull market back.Unless this happens all rallies will be short lived.
I was the great follower of ted and now value picker where i learned lot of things which are like investment principle for me one of the principle is 'never invest in such a sector or stock where the external factors like govt decisions, rupee fluctuation( but holding astral, salute to hitesh bhai as he has never compromised in this respect and avoided astral) now I ant to ask one question to seniors whether to start thinking in this regard or to follow our own principle (lot of my friend made good amount even i have recommended one of my friend to hold SBI for short term gains and he is sitting more than 50% profit but i have not compromised my above principle.
want guidance from donald sir and hitesh sir and other seniors in this regard.
Why not concentrate our energy in Quality steady moving value stocks instead of shifting to Macro level discussion ?
I understand cyclical or growth stories need attention post election but it depends on individual choice - how much % allocation required in cyclical ? Please note, I am talking about cyclical with quality only ( guess not more than 10% cyclical are quality business whom investors can trust for longer duration)
If we look at the best performer through all economic cycles we will see names like
Titan, Page, Lupin, Symphony, Cera, TTK Prestige, Eicher Motors, Amararaja, Balkrishna, Axis Bank, Ajanta Pharma and list goes on…
Exceptional performance during tough time too (during all interest rates, currency rates, inflation points, governments, boom-bear…)
So we have lot of choices today. In fact this is better time to watch movement in stocks discussed in ValuePickr. Most of value stocks offer better price today (after 6mrun up). We should take advantage of current “Cyclicaleuphoria without fundamentals” to add more value stocks in constructing core holding.
**The discussion turned out to be political which is not encouraged at all at valuepickr. Prasad’s had expressed a contrarian viewpoint and I being a die hard fan of Namo, can accept it. So guys show some maturity and accept it and discuss the investment angle of that post. We had enough of politics. **
