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...

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...

Stock markets across the globe have fallen recently due to rising bond yields. Let us understand the relation between bonds and equities and try to figure out whether this fall will continue or it is just an overreaction of slight increase in bond rates and markets will rally again. Nifty - Last 5 days chart Government bond yield - Last 5 days chart Bond yield and equities have inverse relation, in general which we can see in published charts. However, it is not absolute relation because equities can move up or down due to a lot of other factors also but recent fall was primarily due to concerns over increasing bond yields. If bond rates are high, it is very obvious that few investors will move to bonds from equity as it is safer option and your capital is protected.  Stocks are risky by nature. You can lose your entire capital forget about dividend or capital appreciation. Whereas bonds are secured, in general and if it is government bond then of course it is backed by government ...

Heranba Industries Limited's IPO is opening for public tomorrow to raise up-to Rs. 625.24 crores. So, let's discuss this IPO. Company profile Heranba is a manufacturers of Synthetic Pyrethroids and its intermediates in India based out of Vapi, Gujarat, with Corporate and Administration Offices in Mumbai. It has a wide network of business in India as well as in world market with a phenomenal growth rate year after year. It produce advance agro-chemical solutions based on specially developed technology. Its Public Health products are supplied in both Government Tenders and to Pest control companies. It has expertise on all the key chemical reactions on commercial scales. Presently engaged in the following processes: Objective of the IPO 1. To fund working capital requirements 2. General corporate purpose Third Eye View - Not growth oriented but a good opportunity for retail investors to participate in.  Financial data Numbers are looking fabulous. Net worth is increasing, profit...

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...

Brookfield Real Estate Investment Trust (REIT) is here with its ₹ 3,800 crores Initial Public Offer (IPO). Now, Brookfield is not the first REIT in India which is hitting the exchanges but it is one of the few. We have only 2 listed REITs right now in the Indian market (Embassy Office Parks REIT and Mindspace Business Parks REIT) and Brookfield will be third in this list. And hence it is important to understand this REIT concept as it is fairly new in India and whether you as an investor should invest in these or not.  Let me just briefly touch upon Brookfield's IPO and then I will discuss about REITs in general. Brookfield IPO is closed now and it got oversubscribed 7.94 times which is not very good number considering recent oversubscription of other stocks in the market. 17 February 2020 is the listing date and let's see how market will react to this.  Now, why we saw only 7.94 times oversubscription even in this kind of roaring bull market, if I may say so. One reason ...