The Third Eye of Investor

With all the major IT services companies like TCS, Infosys and HCL Tech trading around their All-Time-High, let's discuss key matrices of these companies and see the opportunities in these companies from here for retail investors, if any exist.  Growth prospects Let's start with growth, because in the end, growth will decide the stock price. If company is growing it's revenue, margins are consistent or expanding, net profit is increasing, stock price will have no option but to go up in the long run. As world is moving fast towards digitalization after covid-19, adoption of tech and tech-enabled services are need of the time and is critical for businesses now. And Indian IT services companies have a role to play here, as technology provider and at times technology enabler. Future is looking good from here which we can see in revenue guidance of top companies which is going as high as 20% per annum.   Dividends/ Buybacks/ Bonus Shares These companies are huge cash generatin...

It's raining IPOs right now and days are as busy as it could get for IPO players and analysts. A lot of people I know are applying in all the IPOs and I understand the reason behind this frenzy. Most of the recent IPOs gave good listing gain to investors, which gave a sense of confidence to retail investors and hence most of them are applying blindly as  Stocks only go up!! If you are also one of them then you can take an edge over most by just analyzing few things and then you can make an informed decision. Now, if you are applying just for listing gains, then this article might not help much as listing gains are purely based on sentiments and not necessarily on underlying business or fundamentals of the company. However, a company with good fundamentals and if available at reasonable price might give good listing gain and you can even hold that for long term. So, let me share the main points which I consider before applying in an IPO.   Understanding the business and ri...

March is going crazy with IPOs. There is a long list of companies coming up with initial public offer. to raise funds. So, you must be wondering, why is it that so many companies are lining up for money at the same time. Let's discuss this. There could be various reason to it but following are also very obvious reasons: 1. Surging retail participation in equity markets - This is really good for companies planning an IPO as this can give easy exit to Private Equity investors and at times gives opportunity of encashing high valuations to the promoters also. 2. Response to recent IPO listing - This is a confidence booster. Almost all the recent IPOs were oversubscribed and listed at bumper price, way above its IPO price, which was already overvalued in most of the cases. Let's have a look at current price of recently listed companies.   Source: StockEdge We can see that most of the companies are trading at a price which is lower than listing price in most of the cases and even b...

Tata Motors today announced that its subsidiary Jaguar Land Rover Automobile Plc (JLR) has laid out a new strategy for future and before I share my view on that please have a look at below extract from that announcement.  Start of journey to become a net zero carbon business by 2039 Re-imagination of Jaguar as an all-electric luxury brand from 2025 to ‘realise its unique potential In the next five years, Land Rover will welcome six pure electric variants as it continues to be the world leader of luxury SUVs All Jaguar and Land Rover nameplates to be available in pure electric form by end of the decade; first all-electric Land Rover model in 2024 Clean-hydrogen fuel-cell power being developed in preparation for future demand On a path towards double-digit EBIT margin and positive cash flow, with an ambition to achieve positive cash net-of-debt by 2025 with a value creation approach delivering quality and profit over-volume Image source: www.tata.com/business/jlr A lot of points are ...

Information technology service sector of India is well known and well established now. Biggest IT service company in the world is now an Indian company and there are total 4 Indian companies in the world top 10 list. These are TCS, Infosys, HCL Tech and Wipro.  However, these companies are traditional IT service providers and are considered as "Old Age" IT service companies. A lot of investors consider these matured and don't expect significant growth in this industry now.  Image source: Economic Times In this digital world, technology is rapidly changing and companies are adapting to newer technologies. With these changes comes new security and technical challenges and there are companies which are converting these challenges into opportunities and working in this highly growing segment. Following are few technologies or areas to name which were not common few years back. New consumer conversions (acquisitions, engagements and transactions) through relevant mobile advert...

Indian economy was facing a down trend even before the covid-19 pandemic and covid made this even worst as shown in below chart. India's GDP growth was -23.92% and -7.54% for Q1 and Q2 2020-21 respectively. We are in a recession technically.  Image source: www.statisticstimes.com So, why am I saying economic up-cycle? Let's find this out in this blog and what should retail investors should do right now. The economy is growing negatively but we all know that this is due to strict lockdown which India imposed and economic activities were completely shut for months. And as lockdown restrictions were eased out, economic recovery was very sharp and unexpected. Some economists were attributing this recovery to festive season and pent-up demand however, it is very clear now that it is broad base economic recovery. GST collection figures and corporate earnings of December 2020 quarter are clear indicator of consumer spending behavior and economic activities of the country.  Image sour...