Category: GuestPost

Note by well known Kochi investor K S Priyan 

Bi-polar impact of Kerala deluge: big win coming for some & permanent loss for others.

Big win : Reconstruction, Supply n Leverage

– Cement, roofing, pipe, electrical, wood and plywood cos will have an unprecedented demand starting 15days for next 3months at least fm the staggering amount of reconstruction needed. A fortnight of poor offtake that too in midst of monsoon low season is nothing.

Cement – Ramco,Ind Cement
Wires – Vguard
Roofing- Everest, Visaka
Steel – JSW n others
Electrical – Havells, CG
Other- HIL, Cera

– Lower income households and MSMEs are the biggest users of Gold loans cos and therefore a dramatically higher demand for loans can be expected. On the other hand there will be rising delinquency but as collateral(LTV sub 75pct) is gold, a strong n liquid asset, the net impact will be NIL.

– PV sales will rocket as cars in thousands have been damaged beyond repair. Maruti n Mahindra

– Roads estimated over 5k km have been damaged and need repair or rebuild at express pace. Tar/ Bitumen manufacturers will see demand surge

– Organised retail chains like Big Bazaar n Reliance Mart are running out of stock. In ST their ability to manage supply chain will stand out compared to mom-pop shops.

– Massive medical demand of anti-infection, gastroenteritis, antibacterial etc. Cipla, DRL, Abbott best placed

The ones really impacted are:

– Wonderla will not be able to recover the loss of visitor. Discretionary spend will be seriously curtailed as will be travel fm northern districts to Kochi, an important stream of income

– Rubfila will be impacted in med term with serious hike in RM cost and low latex availability in ST. Weak rupee is not helping in imports either. Questionable ability to pass rising cost

– Insurance cos are going to take big hit. Massive loss for car, crop and establishment insurance. Bajaj Allianz, Hdfc Ergo n NIA would be top of losers

– Banking to certain extent due to slow biz, loan delinquency, damage to branch infra, employee absenteeism. Drop in CASA in ST for Federal, SIB, DXB

– KNR toll controls the main entry to Kerala fm TN side. The traffic is down to trickle and will take time to normalise. Permanent loss

– Air travel is unrecoverable and biggest impact would be to INDIGO

– Aster Medcity, the sole listed hospital has been closed since last week and will take a fortnight to reach full availability. Massive loss expected from biz loss

– Liquor cos are looking at serious loss fm, short-med term impact of wage loss, lost Onam week sale(makes 5-6pct of annual), impacted distribution and competing demand of surplus inflow in next month in MT. USL, Radico, UBL

– Gold retail is complete washout. Marriages have been postponed or planned in low key. TITAN has minor presence

– Tea and coffee estates of Munnar, Wynad n Coorg are in serious trouble fm record rain fm mid-july and now the washout expected to last 2weeks. Further absenteeism will drag prod down for next 6months. Darjeeling estates have taken year to recover fm troubles and sets an example. TGBL, Tata Coffee, Harrison’s etc

– Muthoot Capital will have med term impact on demand and higher delinquency. Collateral(2W) in most cases will be worthless. Onam sale washout is serious but may get normalised in q3

– 2W sales are washout in q2 with entire festival peak lost. May take upto late Q3 for stabilisation of demand

Mixed to low impact :

– VGuard has NO factory in Kerala. Therefore a prod disruption may not happen. Sales especially of high margin stabilizer be impacted in ST fm lost Onam sales in Q2. This will more than be covered in incoming reconstruction n refurbishing demand In Q2-3

– Kitex staff live in dorms on campus fully provided for. The location is on high land. Impact is abysmal if any. Weak rupee is good

-Tyre companies stock RM 2-3 months advance and then Indian prod in monsoon only contributes to 15-20pct of consumption, rest being imported. Global rubber prices are soft and compensate more than enuf for Rupee depreciation.

– Cochin Shipyard has been spared any damage to inventory or work day loss

This guest post is written by Pranshu Maheshwari of SimpleMoney, a  Chennai-based fintech startup.He explains his product offering:

If you invest in direct mutual funds or are considering it, chances are, you have been overwhelmed by keeping track of all of your funds across multiple fund houses and portals.

If you have tried your hand at portfolio tracking, you probably know how exhausting and time consuming it can be. You have probably spent long hours in front of an Excel spreadsheet updating your information, or have manually uploaded your information to portals on an all too regular basis.

One option to overcome this could be logging in directly to the fund house’s website, but if you invest in different funds, this can be time consuming. With greater awareness of the benefits of investing in mutual funds directly, more of us are now investing across different platforms. Keeping track of all of this can be very difficult.

This is a shame, because mutual funds are actually great investment tools, but it’s possible that some of you might be discouraged from investing directly because of how difficult it can be to keep track of everything. The benefit of saving you 1-2% by investing in direct (rather than regular) funds would be outweighed by the hassle of all this manual tracking!

I tried to figure out if there could be an easier way of doing all this, which is when I built SimpleMoney, a tool that tracks your portfolio by reading the investment statements in your inbox, eliminating the need for data entry or uploading of information.

All you need to do is login, and your portfolio will be loaded automatically. New investments and transactions are added automatically too.

With SimpleMoney, you can see the performance of your portfolio with just a couple of clicks. SimpleMoney calculates metrics like absolute change and XIRR for all your investments. XIRR is an important value that will help you compare the performance of different information and help you evaluate your returns.

You can see this data for individual funds, by asset class, or by type of fund. You can also compare your returns against the market using our proprietary algorithm, CorrectCompare™.

SimpleMoney calculates all these metrics over various time periods, from the last one day to the last five years. I personally find this useful to figure out whether my funds are underperforming against the market, and I have been able to move out of bad investments quickly.

If you invest on behalf of your family members, you can track investments from multiple email IDs on SimpleMoney, and categorize them into subfolios by using the PAN number, folio number or name.

SimpleMoney also shows you all the capital gains taxes for your investments, allowing you to automatically calculate your advance tax liability.

SimpleMoney is free, and it takes just ten seconds of work to track your entire portfolio – we’d love for you to try it out and let us know what you think!

If you have any questions, please get in touch at support@simplemoney.in, and we’ll be happy to answer.

Happy investing!

The post below has been written by well known and highly respected Pune investor Jiten Parmar.

 

Many believe Indian markets are expensive. Nifty P/E is 24.

My take on this.

I believe we must consider the following :

1) Equity competes with the following classes for investment – Real Estate, Gold, Debt (FD, bank deposits, debt MF).

Let’s analyze each of this.

Real Estate:

This asset is in a cyclical downturn. Prices have been coming down and I don’t see that changing in the near term. Real Estate as an investment is not at all a paying asset class right now. And I see lower and lower domestic investment inflows in that.

Gold :
Fascination of gold is decreasing by the day among Indians. I definitely see lot less attraction for gold among the young Indians. Gold imports are coming down. And returns are very low, right now.

Debt :
FD rates, return on debt instruments are coming down by the day. 6-7% return barely matches inflation. So in real term you are really not making anything.

This leaves Equity as the only asset class which can give superior returns.

2) Based on above factors, we are seeing record inflows into equity domestically.

More than 5000 Cr per month coming into equities via MF SIPS apart from lumpsum investments.

LIC and other life insurance also invest a sizable amount in equity.

EPFO and NPS equity inflows have also started. These domestic inflows have really helped in stabilizing and supporting the market even in case of FII outflows.

Our dependence on FIIs has definitely come down. I don’t see domestic inflows slowing down, which will keep fueling the equity markets.

3) Fiscal health of government is also much improved. Tax compliance is bound to increase.

Merging of formal and informal economy has been fueled by Demonetization and will further gather pace with impending GST (a game changer reform).

FIIs are looking at India with renewed vigor (Mar 2017 showed record inflows).

With political stability, reform path is clear.

And a sovereign rating upgrade sooner or later is imminent. This can lead to more FII inflows.

4) Economy is bound to improve from here. Earnings are at a low and sooner or later I see them improving. Massive infra push definitely seems like happening. Many initiatives of government will bear fruit sooner or later.

So, in conclusion, I think that Indian markets may remain expensive or in fact become more expensive.

Corrections may come intermittently (and since many have big cash, will be bought into, thus protecting big downfall).

Runway seems clear at least for the next few years as far as equity is concerned.

And the supposedly expensive 24 P/E may be the new normal for sometime to come.

 

We have a special treat today. Puneet Khurana has shared his deck presented at an Investor’s Meet in Mumbai.

Puneet has headed Research for various hedge funds and is Visiting Faculty at IIT Delhi.

He has a great podcast series where he interviews value investors at his blog  Stoic Investing and  is also active on Twitter

Disclaimer:The stocks discussed here are only for informational purposes and not a recommendation to buy/hold/sell.Kindly consult your investment advisor before investing.

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We have a special treat today. Gordon DSouza has shared his deck presented at the IIF Meet in Mumbai

Disclaimer:The stocks discussed here are only for informational purposes and not a recommendation to buy/hold/sell.Kindly consult your investment advisor before investing.

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