Dalelorenzo's GDI Blog
19May/210

Mutual fund investor’s guide to risky investments

Play it safe is an advice most investors, specially the brand-new ones, hate to hear. I am young and I can afford to make the extra risk. Or I have the health risks appetite- I can take the extra risk. These are the common causes one comes across in many mutual fund meetings. This article will look at whether you can invest in risky boulevards if you are young and take extra risk. Also, what should be used retain while investing in risky alternatives? One, being young automatically characterizes you to take extra risk. It is your mental even out. A young person may be extremely reluctant to make big perils. He may be interested in thriving his fund conservatively. Another boy may want to take all the risk and construct high returns because he doesn’t have any responsibilities. First, you should figure out which radical do you belong to before you start your investments.Two, you should also make sure you are not being risky. Many youngsters crave a prize. Bumper benefits may be the only driving influence for most them. Such investors often get in and out of investments incessantly to male big bucks. Often these investors lose equanimity and abandon their speculations. Make sure that you have realistic plans.Yes , now you can consider investing in high risk speculations. Nonetheless, recollect one thing very clearly: not all risky investments have the same risk or they will offer the same kind of returns. So you should be careful while investing in these options.For example, a high risk investment like mid cap planned is totally different from investing in small cap schemes, infrastructure schemes or other sector strategies. This means you should do the homework of procure about your every asset. You should also remember how much extra risk you are talking to do those extra returns. You should ensure that you are okay with the extra risk.You should ever keep in mind that these likely higher returns are not assured. Higher risk does not ever result in higher return. This is especially true in the short term. Too, sometimes these financings can test the patience investors. Sometimes, you would also figure out the risk is much higher than you saw.

Read more: economictimes.indiatimes.com

27Mar/210

Timt to bet on FMCG mid & smallcaps: Anshul Saigal

If one can find the freedom appoints in that space, with a one-two year occasion range, there is definitely money to be made in FMCG space, says Anshul Saigal, Portfolio Manager& Head-PMS, Kotak Mahindra AMC.On privates versus PSU banksThe trend vis-a-vis the large cap private banks and the PSU banks has been laid out over many years and conditions have not changed for this trend to change. It looks like the trend of some market share gains by private sector companies banks is going to continue in the future -- foreseeable as well as distant. The veer came strengthened by the fact that some of the banks were able to access the capital sells and conjure uppercase and strengthen their balance sheets which allows them to gain market share even faster going forward. Clearly those banks were more on the private area than the PSU side. Also one cannot overlook the fact that the consumers want to go to more credible actors for their bank requirements, in this case the private banks. All the conditions seem to suggest that the trend of market share amplifications is going to continue and there are 4-5 sizable private sector companies banks and there is a lot of market share to be taken. If the banking pie is worth Rs 100, then Rs 70 goes to PSUs, about Rs 10 -1 2 to NBFCs and the rest goes to private sector banks. Even though the private sector banks have outperformed in recent times, but clearly their share is very small in the context of the overall bank tart in its own country. So nothing would seem to indicate that private sector banks will see a hasten protrusion. On FMCG theme and midcap playersWe have seen that over the last 2 to three years, the FMCG space and the consumption cavity in general has been less correlated to financial act. We have visualized outperformance in this space compared to the rest of the markets. The outperformance has now become so austere that many of these FMCG fellowships were transactions at unsustainable valuation differentials and that required either FMCG valuations would need to correct or the rest of the market would need to see an expansion in valuations to catch up. In the past six odd months, FMCG companionships has already been underperformed the broader markets. The valuation spread is tightening and the rest of the market is outperforming the FMCG space though there is always scope to make money if you are a stock picker. In the mid and smallcap space, even in the FMCG segment there are opportunities to make money. There are tailwinds and to a certain extent animal forces have come out as beings are going out and spending and the sentimentality is improving. All these things are leading to volume growth in the mid and smallcap seat. If one can find the freedom specifies in that space, with a one-two year age scope, there is definitely money to be made in FMCG space. On whether BPCL and BEML are worthy of long-term investment or transactions pots on disinvestment newsAnshul Saigal: Both these companies are corporations with different ventures embedded in one company. For instance, BEML has a metro business, a excuse business and certain other industries. BPCL has an oil marketing business, a refining the enterprises and it has oil and gas wells for extraction. These are very different jobs, all embedded into a company. Someone coming to buy these companies will have to keep in mind that they are buying a conglomerate rather than a standalone business with a single cable of business. These corporations would have been of greater value had they been split and sold differently because people would have had the opportunity to get into the different indications of enterprises and have that risk profile added to their portfolios. But these are still very valuable and enormous assets. After disinvestment, numerous PSU companionships become much more efficient and much more client oriented. Their industries have grown manifold over the years, BSNL being a case in point. There may be value for strategic investors in these companies and the nature of these professions may be very different formerly this divestment plays out. So tactical investors may find value in both the stocks in the short term as also in the long term.On how to play the real estate and residence expect resurgence -- via plaster and real estate majors or via ancillaries In the US and Canada, where there is a recovery in real estate properties, while real estate rates had moved up marginally, the log costs have double-faced because unlike in India where we use concrete to build constructs, in the US and Canada they use wood and log and those prices have virtually double-dealing. So clearly in the US, construct information are a great behavior to play the real estate recovery. Similarly, in India, residence improvement and building substances are a very interesting method to play the real estate recovery. We are coming off virtually 6-7 years of consolidation in real estate and conditions are such that fringe players or weaker musicians are out of the market and the stronger actors are becoming stronger. The busines is consolidating in their spare. In 2017, the listed players had about 6-7% of market share in the Indian real estate space. That market share in three to four years, has gone up to 22%. This tells us that these companies are becoming stronger and too that organised actors "whos doing" gratifying to organised real estate firms are going to see market share incomes and this trend will strengthen going forward. Home improvement frisks -- be it tiles, sanitaryware, faucets, plywood etc or improving fabrics; plaster, steel -- all stand to benefit from a real estate recovery. And so I would say that that could be a nice way to play a recovery if one believes there is going to be a recovery then those would be a neat space to play the real estate improvement. On crude prices and power& oil marketing companiesAll commodity expenditures, including exertion rates are appreciating an uptick and the outlook for these expenditures is that they can remain strong and picture an upward path move forward. However, the free movement of persons in stock tolls as too exertion prices is only a fraction of the flower that we learnt in 2007 -0 8 and 12 -1 3 years have transferred after that peak. We are still a fraction of those tolls in terms of where commodity expenditures are today. If merchandise tolls continue this trend upwards, then we could continue to see an expansion in gross refining perimeters. We have realise deepened interest in energy and petroleum extraction companionships. Another interesting way to play this trend would be to bet on sugar now as with ethanol mixing, carbohydrate has become a play on energy. It becomes an interesting play as vigor prices become stronger going forward.

Read more: economictimes.indiatimes.com

14Mar/210

Sabharwal on how to play the housing market revival

Business have become a bit shallow on the largecap side as focus has spread more to the broader marketplaces, says Sandip Sabharwal, consultant, asksandipsabharwal.com. At a go when there is a view that FII spurts may not be as robust as what they have been for a long time, FII dominated capitals which are not cheap which are not a clear bet on cyclical or the economic recovery have been the outperformers. Yesterday, there was a strong price action in Kotak Bank and HDFC Bank.I would not predict too much into it. In my view, some sort of rotation is taking place if some inventory does not perform for some time and then some fund comes in there. In fact, world markets have become a bit shallow including the largecap side as focus has spread more to the broader markets. A small amount of buying or F& O activity in these furnishes can take them up. No specific progress has happened which could be positive for them except for the fact that there is a general belief that when interest rates bottom out and start moving up, some of these banks with high cost on asset excellence, actually benefit from that. They have a high CASA ratio and their costs do not go up as much, whereas on the lend back, they can be priced higher as the RBI starts stiffening. Low interest rates and high affordability had given rise to a revitalization in the casing busines. You play games that by buying real estate properties capitals or dwelling improvement inventories. How are you approaching this? What have you added there last-place? In the dwelling improvement line-up, there are currently numerous each category of companies. On one side, "were having" the draw companies which did well in the initial season and now the government has relented because there are some input cost pushes etc. Then there are companies which cater to houses being built or improved. This includes sanitaryware companionships like Kajaria Ceramics etc. Kajaria Ceramics is a brilliant company and they have given very strong guidance for next year and that has been something which I have been positive about for several years. The tone of management is very good and they are debt free. They should do well near expression again. The challenge is that in the near term, these evaluations have become higher because everyone is focusing on these companies and they are not correcting when business rectify. The best approach is to accumulate gradually and keep on accumulating these companies on every plunge. There are some other corporations on the plywood area but I have not really looked at them. ET Now: You ought to have optimistic on gold for over a year and a half now. Do you think the trend is still intact after the recent correction? Or is a large part of the increases behind us? Sandip Sabharwal: At around $1,850, gold tolls should have peaked out for the near term but the target buying range is between $ 1,600 to $1,650 per ounce. That will be a good price level to get into gold because longer term, inflationary concerns are being underestimated at this stage really because inflation has not been there for some time. It does not mean inflation would not come back. It will come back because of the space the easy money policies and gargantuan fiscal stimulation are to be introduced and are sure to generate a lot of inflation. Gold frequently does is a good one in high inflation spans. The timing is slightly difficult to predict but over the next two-three years, gold should do is a good one. Coming to real estate, we have got Godrej Assets. The QIP is in the news but that apart, we have been hearing positive things on the segment. In words of return possible in the near term or even with an annual prognosi, how much scope is there in some of these counters? Some of the regions in play-acts -- the Bangalore-based and Mumbai-based developers have had a strong up move. So, a lot of the positives are in. I would think that the best inventory at this stage in this segment is the largest real estate company -- DLF. It still ogles undervalued relative to the improved fundamentals. Their strategy has been in terms of deleveraging their sector balance sheets and what kind of potential growth they might be able to show. There exist some upside left. Some of the regional actors can be bought on troughs because real estate is a long-term cycle and once the revival cycle starts , normally it previous a few years. The opportunity will come. It is still a awfully under owned segment of world markets. Most monies do not own many of these stocks or even though they are they own, it is in very small proportion. As the research results start coming out, the whole sector will still work better. So, beings have to look for opportunities both in terms of like corporations like Godrej Quality or business from Bangalore like Sobha Developers or look at Oberoi Realty in the premium segment or even some of the companies which take over contracts to make real estate campaigns. This part segment will do well over the next two, three years but we need to look at entry point because many of these inventories have run up very sharply.

Read more: economictimes.indiatimes.com

9Mar/210

What to buy in auto & digital themes: Khemka

Pharma would continue to report good doubled toe raise move forward with steady boundaries, says Siddhartha Khemka, Head of Retail Research, MOFSL Auto has been a well discovered tale. Where do you realise fresh buying opportunities? A sector pirouette is happening and in the last couple of fourths, it is happening at a pretty fast pace. Auto did well for some time and then we realized a correction. The monthly crowds have been mostly okay and have been in line with beliefs and some are below beliefs. But the overall anticipation is that with the new year starting things will improve for automobile. Some of the companies have been talking about February being much better and at analysts’ matches and management interactions, there have been talks of improving profit. A case in point is Tata Engine, which was the major gainer out of the automobile bundle, yesterday. We had the managing for the investor’s day for JLR over the weekend and they seem to be focussed on improving profitability, increasing pay and well geared for the future with a start of a lot of EVs in the world markets. Apart from that, some of the auto ancillaries have been doing well in anticipation of impetus from the EV space and talks of PLI scheme for the automobile sphere. Within the OEMs, we like Maruti which is doing good in the passenger vehicle space. M& M is our opted collect to play the agricultural sphere and among the two-wheelers, we like Hero Moto. This is the preferred basket within the OEMs; within the auto ancillaries we like Motherson. We believe they are the best suited to benefit out of the entire world-wide change from the traditional automobiles to EVs. What is your outlook on privatisation of PSU banks? Do you like this theme? Yes. It sounds the government is pretty determined to go through with privatisation of PSUs. A mint of steps are being taken despite the times and postponements for umpteen eras for Air India privatisation. BPCL disinvestment was supposed to happen last year but got spread. But now the government has met its planneds very clear and are taking steps in the right direction. They are taking those steps -- be it in Concor or in Shipping Corporation. Now BPCL is selling off its stake in Numaligarh refinery as that division needed to stay within the public space. This paves behavior for BPCL to be privatised and this would be one of the biggest privatisations. We certainly like this theme. Historically, a good deal of these PSU firms are not that efficient. They has not been able to been at the forefront of growth. The only thing that they offer is appreciate in terms of trading at a much-much discount to some of the other peers. With the private participates coming in and turning around the business in terms of efficiency, profitability further improve and hence these evaluations. We have been positive on the OMCs for some time now. BPCL continues to do well and we is confident that with the Numaligarh refinery transaction at a much better valuation than earlier expected, the overall mark for these other refining enterprises is caused and hence that is a big positive step for BPCL. How are you looked at the numbers from the pharma space? Will we meet strong domestic as well as international growth across the board? Pharma has been reporting strong amounts for the last three consecutive quarters and upright pandemic, things have improved for the companies not only on the domestic front but including information on the international front with the US FDA become much more lenient in making approbation for flowers and concoctions. We have identified a strong product pipeline for a lot of these companies which are not related to Covid, but rather lifestyle cankers for which we will have heavy demand going forward. A bigger challenge for the pharma opening was the pressure on toll realisation which has easy off a lot post the pandemic. A fortune of raw material expenditures have come down leading to improvement in perimeters. We accept pharma would continue to report good double toe proliferation going forward with the continuous margins and that should lead to good returns from the cavity. Are there any broths in the brand-new economy gig frolic gap that you would propose? Does it interest you? Yes, this is a space which is a niche play and it is doing very well. This is a digital theme although different corporations are in separate segments. Some of the companies within this space that we like are IndiaMart which is in the B2B space, which is where JustDial has just participated. We are seeing how the valuation had run up for IndiaMart because of the scarcity payment that it was getting and which is now getting distributed with a second player like JustDial getting in. While we continue to like IndiaMart, we have lowered the rating to neutral having regard to the high-pitched valuation. On digital, we have recently established coverage on a brand-new stock -- SBI Cards. This is mainly a play on the increasing digitisation in terms of events which have accelerated announced the pandemic. SBI Cards is the second largest player in the Indian card space and it has the benefit of the parentage of SBI and payed its access to the client base of SBI, has received continuous growing in the past. The financials are pretty strong and the valuations are pretty cozy. That is a stock within the new age digital theme that we like. How are you looking at the Tata Group business like Trent, Tata Consumer? Some of these specifies in the consumer basket have doing well. Tata as a group has ascertained a huge modify announce N Chandra coming in as the chairman. The part group of business have refocused towards return fractions and efficient use of capital is the main mantra rather than the earlier intention of expanding and becoming a global leader. So that has helped a lot of these companies. We have assured the change in leadership management and consolidation of the consumer business from Tata Chemicals into Tata Consumer as well as closing of some of the loss-making businesses globally. From here on, the fib for Tata Consumer is about the process of improving margins which will lead to higher growth in net profit. On the top course, the focus is going to be integration, economies of magnitude and cross selling between the two segments. The third new segment that they are launching is Tata Sampann which is also doing well. On the operating leveraging, improvement in EBIT margins because of the its effectiveness and magnitude will lead to higher growth. Similarly, Trent is in a kind of unlock trade. With the lockdown, all these plazas and showrooms were shut and retail stores were closed. With the reopening, we have seen pent-up demand and a lot of these companies are moving towards e-retailing which are likely to be the increment driver in future. Tata Consumer is gonna be a consistent compounder. We still have a buy rating on Tata Consumer. Trent is a long term play given the very high valuation that it commands. Over the last few years, we have seen that the premium valuation exactly continues and they have given consistent 20% plus growth. They should continue to do that in future as well. How are you looking at some of the recent rolls? If you look at some of the recent listings and also include some of the IPOs in the last one year, a lot of these companies are niche firms within their space and some of them were firstly of its nature and that captivated a lot of interest. Another large-scale part is that some of these IPOs are in the midcap space within that Rs 1,000 -2, 000 -3, 000 crore market detonator with an IPO size of about Rs 400 -7 00 crore. It is a usual sugared recognize where you have a huge market liquidity driven rally and there is a lot of appetite for some of these newer, niche corporations and the first-of-its-kind listing fellowships. We have investigated a good deal of demand for such IPOs. The other ingredient is that these IPOs were coming out with good valuations and hence the demand was pretty strong, a case in point the recent listing in the railway segment. Even in the past we have seen some of the better managed railway companies like IRCTC, which is a kind of a monopoly within the rail ticketing platform, has visualized a huge interest even on the IPO post listing and it continues to do well. RailTel is another company which is a play on purvey broadband business through the railway network and that has done well although we do not have a view on that. The MTAR Technologies IPO which kickings off today is a play on not only defence but civil nuclear energy and we understand the numbers being somewhat steady. It is a private firm but a play on defence and we believe it could see steady expansion move forward. The valuations are not that expensive and could see some enumerate incomes. One can look at this IPO from a long-term perspective as well.

Read more: economictimes.indiatimes.com