CP | Dalal Street

Mutual Funds Review

Grow your money 10 Times in 12-15 Years – Investment Strategy

February 1, 2011February 1, 20113 min read

The Indian Stock Market has witnessed 2 Big Bull Phases – Dec-2008 to Jan 2000 and April-2003 to Dec-2007. Our first investment advise came out in Dec-2003, the second phase of the Bull Run. Now are we in the third phase of bull run ? or are we headed for a short term bear market etc are the questions that run on your mind. Irrespective of how global equities behave, you can create wealth in Indian equities.

We have discussed how a 10 to 15 year SIP has already yielded ~30% Compounded returns. However, this time around I am advising investors who can invest in Lumpsum to take advantage of the on-going correction. However, your SIPs should still continue after (more…)

Equity Research

ICICI Bank – Earnings In-Line

January 24, 2011January 25, 20112 min read

ICICI Bank Net profit of Rs14.4bn (up 30% y/y, 16% q/q) beat expectations due to lower loan loss provisions (LLP). NII of Rs23.1bn (up 12%y/y, 5%q/q) was driven by flat sequential NIM at 2.6% and 15% y/y loan growth. Corporate loans supported loans growth while retail book stayed flat.

Core fee income grew at 14%y/y, 2%q/q. Credit cost declined 54% y/y, 28% q/q to 1%. We believe margins (more…)

Breaking Corporate India Earnings News

BHEL – Electrifying Order Book and Future

January 24, 2011January 25, 20111 min read

BHEL reported 3QFY11 net sales of Rs88.5bn up 25% YoY, EBITDA margins of 21.4% up 126bps YoY, and PAT of Rs14bn up 31% YoY. Adjusting for the change in accounting, Adj. PAT at Rs13.4bn was up 25% YoY, 10% ahead of CIRA and 4% ahead of consensus.

Quality of earnings was better with 21% fall in treasury (more…)

Breaking Corporate India Earnings News

Larsen & Toubro – Results Review

January 18, 20112 min read

Larsen & Toubro’s (L&T) Q3FY11 PAT, at Rs 8.1 bn, driven by strong execution in the E&C segment. Robust revenue growth of 41% YoY reinforces confidence in execution of strong order book of Rs 1,149 bn. Margins have dipped YoY by 150 bps to 10.8%, but this is more a qtly fluctuation than a trend. While revenue guidance has been maintained (20% YoY growth in FY11E), mgmt has highlighted that order flow guidance (25% YoY growth) could be at risk due to deferment of orders to FY12E.

L&T removed order for IT parks of ~Rs20bn from Godrej & Arun Excello on lack of progress. Led by delay of orders from power (more…)

Economy, Markets and Macro Views

Politics & Corruption Impact on Stocks – Sectors to Stay Out

January 18, 2011April 18, 20203 min read

The most important problem India is facing now is Rampant Corruption from Taluka Panchyat Office to the Offices of Union Government. We expressed our concern as FIIs are unlikely to invest in Economies run by Corrupt Governments [Read here & here] After that most FIIs published report on “Scams & Corruption” in India which has led to the stalemate in our parliament hindering Major Policy Decisions and Blocking the most sought after GST – Goods & Service Tax Bill which was supposed to be implemented from April-1st-2011. This has led to the overall change in Macro sentiment reducing the Market Premium which Indian commanded in the past.

License Raj was the form of Corruption until (more…)

Breaking Corporate India Earnings News

Investors Exit Reliance Anil Ambani Group – Poor Corporate Governance

January 17, 20111 min read

The country’s watchdog – SEBI settled dispute of Reliance Infra & Reliance Natural Resources involved in fund diversion to group company – RCom by collecting fine amounting to Rs 50 [Rs 25 cR + Rs 25 cR] Cr from Directors including Anil Ambani. This tells us how bad these companies are run – Reliance Infra and RNRL [Now part of Reliance Power] Reliance ADAG Large Cap Stocks were caught in Bloodbath on the Street with each of them falling between 6% to 10%.

The SEBI order said that (more…)

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