Category Archives: Economy & Finance

Read the latest on Economy and Finance aspects of the country. Find out how the Micro and Macro factors affect the Indian Economy.

Weekly Expiry for Nifty – A New Chapter in Equity Derivatives for India

Weekly Expiry for Nifty – A New Chapter in Equity Derivatives for India

Today’s post I will take you back to the controversial aspect in the Stock Market for the majority of Indians. We have already seen in the previous posts of mine on what are derivatives and how they are traded and also how they help the investors to cut down the losses.

Though that’s the main reason for derivatives being introduced, the agenda has completely changed and we see more traders than investors in today’s market. But let me tell you that the number of traders that we see in our Indian Stock Market is much less when compared to Stock markets like America, Europe, China and Japan. For your easy understanding, India’s population contributes to almost 20% of world’s population whereas the Indian Stock Market derivatives trading contribution is at laughable 0.5% of 100%. That’s the fact which would hit us badly but that’s the reality.

Reasons for not trading are many, some are technical while some are due to fear. There is no need to fear or worry, derivatives if learnt properly is very easy and very profitable indeed. Let me tell you the story of derivatives in just 3 simple points:

1. Unlike stocks, where one person’s loss is another person’s gain, derivatives trading is something where everyone can gain or everyone can lose. In simple terms, if you want to buy something you need not have a seller and vice versa. So, in derivatives, if you feel that you can make profits, everyone can buy and everyone will gain money. Thus wealth is created in Options contracts of derivatives. Otherwise also in equities, if we see the loss made by one person is the gain for another person. But the derivates markets are different, here both the traders can make profits at the same time. It’s because of this derivatives market that the world was able to fund the internet and technological revolutions.

2. In Indian till last month, there were monthly expiry Futures and Options contracts. And as we are in the European options methodology, a trader has to wait for the end of the month to close transactions and get the money into the bank account. This limits him from trading very frequently and you would also have to wait till the last day to get your money. But now from this week, Nifty weekly contracts were introduced and the first expiry will happen on 14th Feb. Now the trader can get the profit he made in his account every week and that is a major advantage of weekly expiry. This will surely increase the volume of the contracts traded.

3. The Last point we need to look at is why the derivatives are so low in India? It’s just 0.5% of the total volume of derivatives across the World. Even in that, 90% of derivatives volumes come from equities that mean other derivatives take just 10%. Whereas if we look at the USA derivatives markets, in the OTC category 77% of the derivatives volumes come from Fixed Income derivatives, 9.3% comes from Currency and 8.3% from Credit, 3.5% from equities and only 1.3% come from Commodity derivatives. So if we look at our derivatives it’s a complete monopoly, with no other instruments able to pitch in and increase the derivatives contribution.

India has a long way to go. First, the volumes in equity derivatives have to increase, then other instruments like debt, currencies should be tried. Derivatives are simple and easy if you really want to learn to multiply your money, make a small effort of learning it because the future for Indian Stock Markets is Derivatives Market!

NDA’s Interim Budget for India – Big Bonanza for every Indian! #BUdget2019

NDA’s Interim Budget for India – Big Bonanza for every Indian! 

It was on the 1st of February 2019, the stand-in union Finance Minister Piyush Goyal’s tabled the interim budget, which is the final budget for the country goes for polls. So many expected that it would be a lame duck budget. But the perceptions of those critics would have surely taken a backward leap after a highly rated budget presentation by the Finance Minister. 

It really had to be nothing less than a 5 star budget for the people to regain the confidence in the Govt and bring back belief in the minds of the Indians which was otherwise slowly going down on the back of unapproved Jobs Data reported by Business Standard, the Ram Mandir issue and other issues relating to the Govt. People on the left were upfront talking about a potential ‘Election Budget’ by Fin Minister Piyush Goyal, which would hurt the Indian economy but just win the voters for the NDA in the upcoming elections 2019. 

It was not a surprise to many people like me, who were thinking and expecting that the big ticket announcements will be with a connection to Farmers and Middle class of India. That’s exactly what the FM did this budget. NDA planned it in such a way that the economy is not at all hurt by the promises made in the budget, which is what is Right with the ‘Right’. 

Source: ANI – FM Piyush Goyal with the Budget Briefcase

Firstly, the highlights of Budget 2019:

1. No tax on individuals having income up to Rs.5 lac.
2. Under PM Kissan Yojana, every farmer will receive direct bank transfer of 6,000 ₹ for owning farmland 2 hectares. 
3. A Standard deduction for Salaried employees raised from Rs. 40,000 to Rs. 50,000.
4. Threshold limit for TDS on rent increased from Rs.180000 to Rs.240000.
5. Record 3 Lakh crore budget for the Indian Defence. 
6. Raising the threshold limit for earnings through investments/savings for retired/homemakers to 40,000 from 10,000. 
7. Pension scheme for the unorganized workforce of India which will give 3,000 per month after the person attains 60 years. 

My View on the interim budget presented by Finance Minister:

Firstly, Finance Minister, Piyush Goyal has given his best. This was expected to be a really different budget and Piyush Goyal’s oratory skills and presentation of the budget was really very impressive. Not to forget Piyush Goyal is the Chartered Accountant and scored 3rd rank as a student. 

The two big schemes or announcements for this budget will surely be the Income Tax rebate till 5 lakhs and the 6,000 rupees benefit to the farmers. But if asked, I would rate the tax rebate as the bigger announcement. 

With the standard deductions getting increased and with all the other available deductions one doesn’t have to pay any tax even if his income goes up to 7 lakh. Apart from this, the scheme which raised the tax rebate from earnings for non-working women/retired personnel is a welcome move. People will now don’t have to bother much till their earnings are 40,000. Finally, the defence budget has been promised at 3 lakh crore rupees which are the all-time record for the defence ministry. These are some of the real big winners from the budget! 

But how will the Govt earn revenue when he raised the tax rebate level to 5 lakh and how will they fund the other schemes like PM Kissan Yojana and 3 Lakh Finance Budget?

Source: Press Bureau of India

This is the Govt which has the studied economics well. If we think a little bit the logic is easy to understand. With a little effort, even an intermediate student whom I posed this question was able to answer. 

This Govt believes in Consumption as the key factor to drive and grow the economy. Let’s say there is an individual who earns 5,00,000 rupees, till last year he would pay the tax of amount ranging between 5000 to 10,000. But now with the rebate coming in, he doesn’t have to pay any tax. 

So what he would do is either save, consume or invest. If he invests in any kind of financial instrument he would pay either Long term capital gains tax or short term capital gains tax. If he wishes to save, then the Bank will make the tax payment to Govt for showing higher deposits. If he wishes to purchase a product or render any service he would be paying GST. This is how the Govt has well worked on the plan of raising the Tax rebate to 5,00,000. It may look so simple today, only the time will tell how will this work and how much it has really gone into the heads of Indians!

What’s the outlook for Indian Stock Markets for the next 3 months?

What’s the outlook for Indian Stock Markets for the next 3 months?

Politics is one of the major fundamentals in the movement of the Stock Market. Generally, markets react very sharply to any kind of unfavourable measures taken by the Govt for the economy. So when it comes to elections, the moment the ‘markets’ don’t get the desired result the reaction would be severe to watch. There are days when Stock markets have shown rapid upwards and downwards movement riding on the outcome of the elections. Till early 2012 stock markets were solidly behind UPA led by Congress. But a series of scams that took place later changed the sentiment and from mid-2013 it wanted the NDA led by BJP to come to power.


The measurement starts from February 2014, exactly 5 years ago when there were opinion polls that put NDA ahead of UPA. That is where Nifty started its journey from 6000. This mark of 6000 was reached way back in 2008 and from then on Nifty was stuck there. By the time results came towards the end of May Nifty scaled 7000. Then the victory of BJP in Maharashtra, Jharkhand and Haryana in late 2014 pushed it to 8000 mark. Just before the results of Delhi and Bihar in March 2015 Nifty scaled 9000. But the losses for BJP in both the states pushed Nifty back all the way to 7000 and from there it started its journey back again upwards. Just before demonetization, Nifty scaled 9000 again November 2016 but it took the massive victory of Uttar Pradesh in March 2017 that made Nifty to capture 10000. The subsequent victories in Gujarat in November 2017 and Karnataka in early 2018 pushed Nifty to 11000 mark. But that was the end. The losses in Madhya Pradesh and Rajasthan brought it back to 10500 levels and now we are back to the situation again we started 5 years ago, with Lok Sabha elections, just around the corner.

Here are the dates of different elections in the past for your reference.

2014 May – General Elections
2014 November – Maharashtra, Haryana & Jharkhand
2015 March – Bihar & Delhi
2016 November – Demonetization
2017 March – Uttar Pradesh
2017 November – Gujarat
2018 April – Karnataka
2018 December – Madhya Pradesh, Chattisgarh & Rajasthan

If the things really turn out to be negative for BJP and if so-called 3rd Front supported by Congress forms the Government, we are to see a big fall in the markets and NIFTY could well go to 6000 mark yet again. This 6000 mark is something that Nifty tested in 2008, 2010 and 2014. Now we might go back to where we have started. Even if Congress forms a minority Govt also thing won’t be different and we might test the 6000 levels. In another scenario, if things change for good and BJP starts gaining its momentum in the last few left out days, with the mood of the Nation NIFTY will also react positively and it can hit 11,000 after the budget. This is only because of a positive feeling about the Govt.

Once the results come in for the BJP then we shall see the NIFTY moving all the way towards 12000 and by the time Modi takes the oath again, he will be welcomed by another all-time high of 12000 on Nifty, just like how it welcomed Modi in 2014 with an all-time high of 7000! So, interesting 100 days ahead of us!

Govt of India appoints shaktikanta das as the new governor of rbi! uncertainty ahead??

Indian news channels are on fire and a lot of action has been taking place in the country. India’s win over Australia, Exit polls and results, Extradition of Christian Michel and Vijay Mallya and the resignation of RBI Governor are the top ones to consider. So much of action in all aspects from all the sides, to the BJP it’s a combo of victories and defeats. But the possible disaster that clearly seems to be taking a shape is the appointment of new RBI Governor. Latest news of Shaktikanta Das appointed as 25th RBI Governor is a point to worry about. The retired IAS officer Das was an economic affairs secretary in the Government before being appointed as Governor of RBI.

Before talking about why Das may not be the right choice, let me tell you why Urijit Patel was removed from the role. Urijit Patel was removed from the role of Governor for his dissent towards Govt on issues related to the Liquidity and the survival of NBFC’s. Govt of India wants RBI to release money from its reserves as it feels that with easing inflation India needs more money to float in the market which could help in achieving higher GDP growth. This would also make the business activities running, apart from that Govt wanted to bring back stability in the life of NBFC companies by funding them and bringing them out of NPA turmoil. Once these things were not agreed by Urijit he was made to leave RBI. This is the biggest event in the history of Indian Central Bank history, at least in the last 2 decades.

Now am taking you to something you need to clearly glance at. What am putting is the qualification of previous RBI governors.

I will explain the logic after you finish reading this list.

1. Dr. Urjit Patel (2016-2018) Masters in Economics, PhD in Economics 
2. Dr. Raghuram Rajan (2013-2016) PGDM Finance, PhD London School of Business
3. Dr. Subba Rao (2008-2013) MA Economics, PhD Economics
4. Dr. YV Reddy (2003-2008) MA Economics, PhD Economics
5. Dr. Bimal Jalan (1998-2003) MA Economics, PhD Economics 
6. Dr. Rangarajan (1992-1997) M.Com, PhD in Economics

You can see that clearly, those who have had the longest time in the office of RBI are all the Doctorate holders in Economics or in the field of Finance. Finance and Economics are two crucial areas for any of RBI Governors. The RBI governor deals with both the micro and macroeconomic parameters of a nation like Inflation, Crude Oil, Money Supply, GDP, Trade date, Currency etc; that’s the reason why the Governor must and should understand the Finance and Economics in equal measure. Let’s now look at the qualifications of Shaktikanta Das. Das is a graduate (BA) and a postgraduate (MA) in history. That’s the core of Mr. Das. Now, he had done advanced financial management course from Indian Institute of Management Bangalore and development banking and institutional credit from the National Institute of Bank Management. Apart from these, he also had attended few finance-related management short-term courses. All these are less than 1year duration and doesn’t add value or understanding to the complexities involved in decision making at RBI. Nothing against the extremely talented person like Mr. Das. But Sir, just because you have been part of EAS of India for a year and a half you are not surely eligible for this post. You might have got short courses in Finance and Banking but not that’s not enough.

RBI functioning is a lot different especially from the time Rajan took over. We now have Monetary Policy Committee (MPC) which composites of 6 members including RBI Governor, Deputy Governor, 3rd RBI person and 3 others from academics and private bodies. Right now in the 6 people, Viral Acharya is the Deputy Governor has got years of experience in Banking and his PhD from New York University. The other members include professors from IIMA and Delhi School of Economics.

With this being the Committee what would Mr. Das do? Will he understand the language of LAF, Open Market operations and the currency exchange?

These are a few things which I feel Mr. Das might not be able to connect to and needs a lot of time. Would be happy if things go the other way and Mr. Das takes excellent decisions, but as of now, things look worrying and not a wise move from BJP. Govt needs to re-think on this before it turns out to be another embarrassment like letting go of Rajan in 3 years and Urjit Patel resigning in 2 years!

Top 10 Cities in India as per GDP and its Richest Person #India

Right now, for today let’s learn and know a bit more about the cities of India.

Hmm!! Not interesting? Okay, what if I say that today’s post is all about the Top 10 Indian Cities on the basis of GDP (Gross Domestic Product) and as well tell you, who is the Richest Person in each City is. Now that gets even more interesting!!

Top 10 Cities in India as per GDP and its Richest Person

1. Mumbai – The Business Capital – $310 Billion GDPMumbai, I am sure most of you would have already predicted that the Finance City of India would be the topmost city. Mumbai is the only city that contributes 300 million plus to the GDP of nearly 3 trillion!! That means this city alone accounts for 10% of our country’s GDP. Mumbai being a port city, business city, and more importantly Entertainment City, it has got a lot of avenues to produce goods and services. It is the house for many top companies headquarters and also financial institutions like RBI, Stock Exchanges both NSE & BSE. Now the Richest person of this City is again not very tough to predict, off the 28 Billionaires in this City, it’s India’s richest person, the head of Reliance Industries Mukesh Ambani who tops the list with $44.8 Billion.

2. Delhi – India’s Capital City – $293.6 Billion GDP India’s Capital City is making news many reasons recently, the biggest worry being the Air Quality. Delhi being the capital city has got a lot of money generated from the service sector and is the city with the lowest unemployment rates in Country. Delhi is home for 18 billionaires and its Shiv Nadar the Head of HCL Technologies tops the list. HCL Chairman Shiv Nadar stands on the top with $13.90 Billion.

3. Kolkata – City of trams – $150.1 Billion GDP The City where the first trade center in India was created by the Britishers is the 3rd in the list. Kolkata is home for 4 billionaires and it’s the place for companies like Coal India, ITC, Britannia’s headquartered. Employment of Kolkata is concentrated mostly in the services sector. Talking about the richest person in the city, it is the head of Shree Cements founder Benu Gopal Bangur who has a net worth of $6.7 Billion.

4. Bengaluru – Silicon City – $110 Billion GDP Bangalore or Bengaluru is famously known as the Tech City with biggest IT-firms located in the City that has got the name of Silicon Valley of India. Bengaluru itself contributes to 35% of India’s IT Exports. Silicon City is the home for 8 billionaires and the top of the list is business tycoon Azim Premji who is the chairman on Wipro India. Azim Premji is also known for his philanthropy, his net worth stands at $15.6 Billion.

5. Chennai – The Hot City – $78.6 Billion GDP The Capital City of Tamil Nadu, the city of heat and the city that’s home for most of the automobile, finance and healthcare services stands at 5th in the list. Not just the hub for core businesses, this city is South India’s Movie Hub. This city is the home for 4 Billionaires. As I was telling you the importance of entertainment in this city, the top richest person in this city is Kalanithi Maran, the Chairman and founder of SUN Group which has a big empire in Media. His net worth is at $5 billion.

6. Hyderabad – India’s Pharmaceutical Capital – $75.2 Billion GDP The city of Nizam, Pearls, Biryani, Sherwani stands 6th in the list. Hyderabad in the field of business is mostly known for Pearls and it’s the major trade center for pearls. Hyderabad has over 90% of the population employed in the tertiary sector and is the city for major pharma companies and also the IT companies. Microsoft, IBM, Google are present in Hyderabad. Of the 6 billionaires in the city, the richest person is Lagadapati Madhusudhan Rao whose net worth stands at $2.3 billion. Madhusudhan Rao is the head of Lanco Infratech. Since we are from Hyderabad, you might be interested in knowing more billionaires from the city.

Here is the list of Top 5.1. Lagadapati Madhusudhan Rao (LANCO Infra) $2.3 billion.2. Murali Divi (Divi’s lab) $2.1 billion.3. K. Anji Reddy (Dr. Reddy’s) $1.5 billion.4. G.V. Krishna Reddy (GVK) $1.3 billion5. G.M. Rao (GMR) $1.0 billion

7. Pune – Oxford of the East – $69 Billion GDP Pune is the second largest city of Maharashtra and it is also in the list of Top 10 Cities standing at 7th position. Pune is majorly known for automobile companies and as well as Educational institutions. Symbiosis, Ferguson, MIT to name a few in educational institutions and Volkswagen, Ford, Mercedes are the automobile plants present in Pune. Pune is home to 5 billionaires and off them the richest person is Cyrus Poonawala with a net worth of $8.8 Billion, Poonawala is a Chairman of Poonawala Group which produces almost all the vaccines that are administered in India today.

8. Ahmedabad – Manchester of India – $68 Billion GDPThe largest city of Gujarat stands at 8th Position. Ahmedabad is also in the news nowadays for the name change. This is known for its textile industry which is a major contributor to the economy. This city is home for Indian companies like Zydus Cadila and Torrent Pharmaceuticals, Nirma Group, Adani Group. Without any doubt, it is the Adani who is the richest person in Ahmedabad. Gautam Adani the richest person has total a net worth of $6.8 billion is the chairman of Adani group.

9. Surat – The Diamond City – $59.8 Billion GDPSurat well known for diamonds and textiles stands at 9th position. Interestingly Surat accounts for 90 percent of Diamond Cutting and is home for companies like GAIL, ONGC, Reliance, Ambuja, and others. $835 million is the net worth of the richest person in Surat. He is the Diamond owner Savji Dhanji Dholakia.

10. Vishakhapatnam – Port City – $43.5 Billion GDPLast and final city in the list of ten cities is the Port City – Vizag. Vizag is home for companies like GAIL, Hindustan Shipyard, Visaka Steel Plant and others. The richest person from this part of the city is Ramoji Rao. Though he has shifted, still counting him as a person from Vishakhapatnam. Ramoji has got the consolidated net worth of $1.5 billion.

Myths & Realities of Options Trading Indian Stock Markets #Trading

Just to update, Indian Stock market is on fire and is doing fantastically and for last one week, it’s making an all-time high on a daily basis and trading at 11750 now. Not very long ago people were talking about corrections and fall in the market, which never happened. In many of my last posts, I have spoken about the importance of the Stock Market as a financial instrument to make money. Most of you would understand the Stock Market well, the actual motive behind the investments in stocks is to make profits. But unfortunately, when stocks fall and you lose your money it shakes your faith on the stock market.

That’s something which is not in your hands, but yes what is in your hands is to cut losses even in falling markets and that is possible only in ‘Options Market’. To trade in options market, all you need is a decent portfolio of stocks which is not less than 1 lakh rupees.

If I have explained options in simple words, here it is: Let’s say that you are the owner of a house, and the value of the house is a 30 lakh rupees. Suppose you need money on an urgent basis and you in short of cash, you can pledge the house and raise funds to meet your needs and then slowly you can re-pay it back in installments. After you clear everything, your financial need is met, as well as the ownership of the house is also with you.  In another case, let’s say that you have instead of pledging the house as collateral, you will given the half of the property for rent to make money. This will make it more easier for the people as you get the rent money which can be used to pay back the money you borrowed.

Options are also something similar. Your stocks in the portfolio can be used as the collateral in options and you can make money with ZERO investments as the collateral is only required to shown. This is one of the good ways of utilizing your portfolio to make that extra cash when the portfolio is making losses. As mentioned above all that you need to have is at least 80,000 to 1,00,000 rupees worth of stocks. Then you can go for trading in Options markets.

Let me now tell you a bit more about Options.  There are two types of Options Contracts: Calls and Puts.

Suppose you are expecting that market will fall a bit, then showing your portfolio as collateral you will sell a call. If the market actually falls, then you get the entire money that you sold the call option. In other case, if you feel that the market is going to rise a bit, then you can sell a put for the same collateral. If the market rises, you make profit by getting all the money that you have sold the put for.

These Calls and Puts are the two sides of the Option Chain and are risky to trade.  But there are many people who actually trade in the options market and lose lot of money. That failure can be mainly because of the improper understanding of the market. So don’t enter the options, if you are not completely aware and take the advice of a professional who you can trust, before entering the market.

Lastly, the reason for writing this article is because, these days many demat accounts are coming with options trading and the greedy companies pull innocent people by giving them wrong picture about options. Options are to be traded only after knowing everything about it totally and it’s something that can be easily learned. All that is required is common sense and presence of mind. This is just an introductory article to give you broad overview of options. I will come up with more articles in future that will teach you options trading in a simpler way. That way you can prevent yourself from getting cheated by greedy stock broking companies.

It’s Just Another Nifty Correction or are we heading to CRISIS?

It’s Just Another Nifty Correction or are we heading to CRISIS?

It’s been long time since I have written something on stock market and I think there is no other better time than today to write. All because of the

worries that are ruling the stock market. So, deviating from the promise that I made last week where I said I would give my predictions on Rajya Sabha polls, I am writing about markets. The reason is simple. In last one week many things have changed and many allies are deserting BJP and its not wise to predict anything as of now.

So, coming to the markets we have seen a lot of volatility in last one week. With Global Factors in negative plane and Domestic Factors adding to it the fall seemed to be immine

nt and it did happen. Investors need to very cautious at this point of time, because it is very crucial not to lose his patience and take a rash decision. I would say that this is worrying but it’s not game over yet. Let’s not panic because that will only make it worse for investors.

 

I have few points to discuss whic

h will make you to see the other side of the story. I have taken the point of analysis as the time when Modi came to power i.e. from May 2014.

  1. Correction is Obvious for Long Term Growth

If you look at the table given in the image you can see that in the history of stock market every time after good bullish run we had seen a fall that is ranging from 10% to 15% on Nifty. When the stock market goes up trending by 25%-35% there is always chance of 10% correction minimum. So, the correction that we are seeing now is natural because after the

demonetization we have moved all the way

up by 40% from 7980 to 11120 and now is the time to cool down a bit.

  1. Connecting Nifty 50, Bank Nifty, NSE Mid Cap 50 and BSE Small Cap 100

Nifty 50 is the major index that represents the Stock market of India. But there are also other Indices which are slowly gathering pace in the Stock Market. They are much riskier and have got lot of movement when compared to nifty. The average returns on Nifty for last 4 years are standing at 31.6% whereas the average fall is at -12%. Bank Nifty is with average returns of 46% and average fall of -16%, Mid Cap 50 with average returns of 45% and average fall of -13% and finally BSE Small Cap 100 with average returns standing at 53% versus fall of -14% average. That statistics shows that Nifty can mostly fall till 12% which is the lowest when compared to all other indices.

  1. Crisis and the fall comparing to 2008 vs 2018

There are also voices which are talking about the fall going as deep as the 2008 economic crisis. In 2008 Nifty fell from 6300 in Jan to 2525 in October month. Making it a worst fall ever in the history with a fall of 60% in just 10 months.  Coming to present situation, the patterns of chart look the same when compared to the 2008 crisis. But the factors that are there today are not that worrying as in 2008 and don’t carry huge weight to make the market crash as bad as 50%. The average fall of 10-12% is something that is surely acceptable and one should be able to take it.

All the voices talking about the fall due to NDA Govt and its policies doesn’t look strong. Because already in NDA Government Stock Market has seen three 10+% fall and seen huge recoveries. I would say that It’s just a correction and chances of big crash look low. That said, the target of 12,000 that we had thought of in the beginning of the year now looks very slim but its not impossible. If a 10% fall can happen in 2months then we have more 8 months for out target to be reached. So, never lose faith on the markets. Move cautiously, observe the fundamentals, evaluate the technical and use the Futures and Options wisely to make up for the money that you are losing on your portfolio!

So, cheer up India is shining!

Importance of Companies in Country’s Growth

A Special Post – Company and its Results!

Today, am coming up with this special post, just to tell my friends on Facebook and the followers on Twitter and on my website the growing importance of corporate company results of listed companies. For keen watchers of Indian economy, they act as a leading indicator in predicting the growth. In this post I have two points to discuss

  1. How much has one company grown with respect to profits?
  2. How are the overall Q3 results till now?

Every Business applies itself only to make profits and that’s their motive. But in doing so the economy also grows and that is the direct goal of Govt. When the Govt goes onto make liberal policies, they expect the Companies to generate more employment. Govt and Business look to be two different things in a country, but in reality they are inseparable. Yes, every company isn’t always true with respect to using the people’s money neither is the Govt. Governments fails and so does Businesses.

The main course of this article is to bring out the review for Quarter 3 results till now and how good or bad the companies have been reporting.  But before that I will talk about one company that has been doing wonders in the Business. Its undoubtedly the Big ‘D’’ Dhirubhai Ambani’s Reliance Industries.

Reliance Industries 1976-77 2016-17 % Gain
PAT 0.5746 Cr 31,425 Cr 54,68,921.92

In 1976-77 financial year Reliance made profits of 57.46 lakhs or 0.57 crore and in the last fiscal year they recorded profits of 31,425 crore which is whopping 54.6 lakh % increase in 40 years!

Not sure if this can be achieved by any other investment source. That’s the power of Business. Keeping profits aside and talk about the growth that Reliance has brought to the country then it is impeccable. From textile to telecom and refineries to retail. Everywhere its Reliance and with it, India is also growing. Thanks to Dhirubhai Ambani and his Vision.

 

Quarter 3 results FY 17-18 – PAT and Revenue in crores

Sl. No Company PAT Revenue % PAT % Revenue Result
1 HCL Tech 2207 12433 9.47 7.93 Average
2 HDFC bank 4642.6 14183.5 20 23.9 Good
3 ICICI Prudential life 452 6795.13 0.5 19.26 Bad
4 IDFC bank 146 495 -24 -5 Bad
5 ITC 3090.2 10579.11 16.75 -35.86 Bad
6 Infosys 5129 17794 37.6 1.3 Good
7 Jubilant Foodworks 66.02 798.5 230 20.55 Good
8 Kotak Bank 1053.2 2393.72 19.7 16.8 Good
9 NIIT Tech 75.6 756.5 21 9 Good
10 Reliance Industries 9423 102500 23 7.8 Good
11 Wipro 1930 13669 12 1.83 Average
12 Adani Ports 1001 2689 19.5 22 Good
13 Bharti Airtel 306 20319 -39 -13 Average
14 Ultratech cement 421.5 7590 2.25 19.1 Bad
15 Yes bank 1076.9 1880.8 22 26.82 Good
16 HUL 1326 8590 28 14 Good
17 Bharti Infratel 585 3655 -6 -7 Bad
18 SREI Infra 105 1405 56 24 Good
19 Tata Sponge 36 226.12 228 36 Good
20 Zee Entertainment 321.7 1838.07 28 12 Good

 

So far, we have seen more than 50 companies declaring their results and off them I have picked up 20 companies. The result if we see objectively there have been 12 companies with good results, 3 with neutral or average results and 5 of them coming out with bad results.

The results from 12 companies though look good they aren’t enough to call this as good earnings season for Quarter 3. There are both equal positives and negatives to be picked up.

Positives

  • Hindustan Unilever results are the biggest positive till now as HUL clocked 28% increase in the profit and 14% increase in the revenues. This big up trend is clearly signifying the recovery in fast moving goods segment triggering growth.
  • Infosys which has been the company in the news for wrong reasons has caught the good eye and are doing very well both in primary and secondary market. Infosys beat street estimates this time and came out the profits increase at 37.6%.
  • The Pizza Maker Jubilant Foodworks which controls Dominos Pizzas has come with stellar results with 3-fold increase in profits. Thanks to the Pizza Eaters!
  • Banking is growing at faster pace as HDFC, Kotak, YES have hit the bulls eye yet again.

Negatives

  • Bharti Airtel is the company which has been taking so much pressure from the Big Boss Reliance as he entered with Jio. Jio has damaged Airtel bigtime and that’s the reason why Airtel had slowed down and couldn’t make higher profits this time. For future though, Airtel is still the front runner. Bharti Infratel also came in line with Airtel.
  • ICICI Prudential – the insurance wing which makes more than 19% increase in revenues but couldn’t make any profits and that’s bad sign.
  • Ultra tech and IDFC Bank are the other two bad results but not much is to be worried about the two.
  • Finally, the Software sector which is coming back into form is still seeing hiccups from big one TCS and Wipro.

Overall, it looks to be average results season till now and rate the performance companies at 5.5/10.

The rating is given with conservative approach. Hopefully we will have better performance coming ahead and maybe we will hit the ‘A’ grade rating of 7.

Till then keep an eye on remaining companies, because big one’s are still to come‼

Investments for Calendar Year 2018

Hello and welcome to the Sriram’s Portfolio Show!

Exactly about a year ago or to be precise 366 days ago on 8th January 2017 I have given 17 stocks to invest to earn minimum 17% returns. In the last Tuesday post, I have given the report card of those 17 stocks and the average returns of the portfolio were seen at 74%. Which means the portfolio was able to make 4.35 times of promised 17% returns. Well, its history now and time to talk about future.

Future is here, and India’s growth is clear!

Today am ready with 18 stocks in 2018 which will give you 18% returns and 2% extra to pay off your brokerage charges. So, overall the list of 18 stocks I am going to give will ripe 20% profits by end of the year 2018. Stocks are attached as picture to this post. Following are the stocks and their targets.

  1. Indo Count – A textile company which is weaving growth for 25 years and continuing strongly. Stock Price 125                         Target Price 150

 

  1. Gujarat Minerals – Major Lignite mineral supplier in the country hailing from Ahmedabad.

Stock Price 168                  Target 198

  1. Jet Airways – Flying high since last year and will continue to do so!

Stock Price 837                  Target 1010

  1. Escorts – The Farmer’s Choice!

Stock Price 795                  Target 945

  1. Reliance Capital – Anil Ambani’s Capital is up for Big returns!

Stock Price 604                  Target 720

  1. Yes Bank – Only one word and that is ‘YES’

Stock Price 340                  Target 405

  1. PFC – The Backbone for the growth of India’s power sector!

Stock Price 126                  Target 152

  1. Heidelberg Cements – A public limited company established under Germans and is growing big!

Stock Price 164                  Target 197

  1. Ambuja Cements – Asia’s biggest cement producing company is up for returns!

Stock Price 277                  Target 335

  1. Jindal Steel – Any cement company is useless without the Steel and its Jindal Steel!

Stock Price 248                  Target 290

  1. Infosys – Salil Parekh is up for rescue and bring back the glory!

Stock Price 1041                Target 1250

  1. Bata – Tera shoe Batha – Haan BATA hai!

Stock Price 745                  Target 880

  1. Dabur – If any Ayurveda is to be believed then believe in Dabur.

Stock Price 360                  Target 433

  1. Voltas – Now you complain of cool climate but very you soon you run behind Voltas!

Stock Price 648                  Target 778

  1. MRPL – ONGC’s obedient child is up for knocking big this time!

Stock Price 132                  Target 157

  1. Reliance Industries – One of the most important stock in India’s Stock Market growth!

Stock Price 940                  Target 1128

  1. Airtel – Though its colored red it’s the evergreen telecom company!

Stock Price 510                  Target 602

  1. Granules India – Apna Hyderbadi patta!

Stock Price 140                  Target 168

Just invest, relax and look at your portfolio when the targets are achieved!! Reap the profits, Keep investing!!!