The markets seem to be in a confound state between uncertainty about hopes of economic recovery and lack of earnings turnaround. We took a look at some numbers regarding the broader market fundamentals in India to assess the mismatch, if any, between expectations and realities. Read More
We do understand that Investing being game of odds, market participants would prefer to pay a premium for ‘certainty’ in earnings, growth etc. But the same question also then logically extends to expensive valuations. One has to be mindful of the fact that as much as the behavioral biases of the market might lead us to think otherwise, prospective returns essentially are a function of arithmetic calculations and not any story built around an investing idea/theme. Read More
India’s corporate sector and its leaders were very impressed as the current government took reigns at the centre on the back of reforms it had set out to achieve. However, a review of the current scenario suggests that things haven’t changed much on the ground. Essentially, the rise in share prices of a majority of companies in the last year have been driven more by valuation re-rating than actual improvement in earnings. Likewise, there is an interesting set of data that is emerging in terms of the shareholding pattern across companies. Read More
Market participants are currently factoring in a cyclical recovery and thus basing their assumptions on such a recovery. We feel that as long as we don’t see a revival in the earnings momentum (as seen in the past), the current rally continues to be one driven by sentiment and “hope”. Read More
In the news recently for the wrong reasons and free falling stock price, this company, one of the top steel makers in India, came up our research radar a couple of years ago (Sep 2012 to be precise) when one of our institutional clients had requested us to analyse it (based on specific issues concerning its balance sheet). Read More
In this opinion piece which was published in the Economic Times, the author is referring to “network effect”. Mr Sridhar has in a way suggested that companies like Flipkart and Amazon enjoy a network effect and has compared these businesses with that of Visa and Mastercard. Read More
There has been a lot of uncertainty regarding monsoon in Maharashtra this year. Till July end, there was a fear of famine, then it was a fear of floods, and now we are not really sure what to fear. It seems Indradev – the rain God – reads the latest weather forecast, and acts exactly opposite just to screw up the data. Read More
Caught in the middle of political uncertainty, market volatility and fickle FII flows, investors in the Indian stock market could take their cues from the investment behavior of multi-national corporations (MNCs). More than two dozen MNCs operating in the country have ignored all political and the economic instability issues to increase the size of their domestic investments. This, more than any rhetoric, indicates a high degree of confidence in the India growth story.