Translate

Thursday, 30 May 2013

Three Wheelers VS Four Wheelers (Small commercial and passenger Vehicles)




3W’s
4W’s
Price
1.25 lacs – 1.50 lacs
2 lacs – 4 lacs
Average
35 Km/Lit
28-20 Km/Lit
Cost
20 Ps/Km
2 Rs/Km

Three Wheelers way ahead:

·        3W’s have a much better access than 4W’s in India. The roads in the small towns, small cities, rural and semi rural areas very narrow but the 3W’s can roam easily without any problems.


·     Three Wheelers are even better for their service. Good technology is used in the 3W’s which is so simple that the driver can service it himself. The driver can become a half engineer on the spot thus saving his time and earning some more livelihood. Whereas 4W’s have to be taken to the service centers. The drivers have to pay for their maintenance, fees and also their time. The maintenance cost in 3W’s is negligible compared to the maintenance of a 4W. Hence more losses are incurred with 4W’s.


·         The Re-sale value of the 3W’s is considerably better than the 4W’s.


·    The dealer margin in 3W’s is also more than that of 4W’s. The small 4W’s are dependent mostly on the spare part sales and servicing.


PS: Written on 23rd April 2013

Wednesday, 29 May 2013

Index will reach 50,000 in the year 2017- Written on 4th Feb 2013

Stock market touched an all time high of 22,000 index in the year 2008. But, just after that in 2009, it collapsed to 7,500 approximately. In no time it dramatically recovered after 9 months and crossed 15,000. After the low in the stock market that was observed in 2009, today index is range bound and market is revolving between 15,000 and 18,000 since three years.

It seems the turning point of the Indian economy was in 1990. Somehow it is observed that the year 2012 has also faced similar situations but at a more developed level as there was a tremendous growth in the Indian economy from the year 1990 to 2012.

It was observed that in the past five months, index reached 20,000 and it is stabilizing at the same point. It seems to be the kissing distance from its all time high in 2008. There is no doubt that the economy has grown above 6 per cent year on year continuously from 2009.  It has made a range in the higher level of the index. 22,000 and 7,500, both were extreme points even though index has made an edge above 15,000 for more than three years.

It is estimated that at this point market will consolidate at an index point between 18,000 to 22,000 for next 12-18 months. After that it is likely to break free violently and make a substantial high of more than 22,000 approximately. I feel that by the year 2017, index will touch 50,000.


From a different point of view, violent equity bull run has started all over the world from 2003 followed by crude, real estate, bullion and currency.  Each of these saw a period of rise and then finally busted. It is estimated that from here the investments will be diverted back to equity considering currencies as the last bull market. Again a new cycle will start in the bull market. I feel that it has already started which should not last less than the tenure of five years of last bull market from the year 2003 to 2008. 

PS: Written on 4th Feb 2013

Monday, 27 May 2013

Market is very aggressive and buoyant - Written on 25th April 2012

As per my analysis & study there are four kinds of expectations in the Stock market. Those are as under.

Unexpected Un -expectation: We saw this situation in 2nd half of 2011 where negativity was at high. All bad news were at forefront. And people were expecting everything unexpected to happen in the matter of inflation, Interest rate, IIP data, Forex problems and Euro zone. Sentiment was so worse that people thought there were no tomorrow.

Expected Un- expectation: This is the scenario we are going through now. Where we know all the above problems still exist but they are known and will subside in due course. Though things have not improved and we know they are there but those things are in price as well. They do not expect any great things to happen soon.

Expected expectation: When these problems will really improve then Investors will get confidence in the market and they will start expecting positive results and positive return in the market. Their expectations in the market are reasonable. This is a very stable phase in the market and it lasts for longer term. People take wise decisions and their expectations are also met as it is easy to predict.



Unexpected Un- expectation: This situation comes again but at this stage Market is very aggressive and buoyant. People take decision from heart rather than Mind. And there expectations are unreasonable and unrealistic. And it leads to a burst of a bull cycle. Then panic emerges and people lose all hopes in the market, economy, Govt. and system, which is again a similar to No.1 kind of situation.

PS : Written on  25th April 2012

Sunday, 26 May 2013

THE FUTURE OF THE TEA INDUSTRY

Tea, as a beverage, is enjoyed by more than half of the world's population. The tea market is highly vibrant and full of challenges. The consumption of tea worldwide is growing at 3% per annum, whereas the production of tea had been static since the last decade.

From year 1997 to year 2010, tea prices were almost stagnant and the production of tea was adversely affected as the tea garden owners suffered huge loss due to poor tea prices in the market. There was a negligible increase in the price of tea in comparison to inflation. New tea estates were hardly developed and all this resulted in migration of farmers from tea cultivation to other crops.

The global tea industry is largely dominated by India - the largest producer and consumer of tea. India is followed by China, Sri Lanka, Kenya and Indonesia in the production hierarchy of countries. Tea continues to be the common man's drink throughout the country. “After water, tea is the second most consumed beverage in India, so with the increase in its consumption, tea prices are likely to increase in the next five years which may go up to 1000 Rs. Per kg”, says Mr. Vijay Kedia- Director Kedia Securities.
Accounting for over 30% of the global production, India is a world leader in all aspects of tea production, consumption as well as export. It offers a variety of products, from original Orthodox to CTC and now green tea, Darjeeling tea, Assam tea and Nilgiri tea. No other country has so many popular varieties of tea. Hindustan Unilever is the current market leader in terms of sales value with over 20 per cent market share; while Tata Tea is the leader in terms of sales volume with nearly 20 per cent market share.

Mr. Kedia also stated, “Price has shot up like anything in the new season which has just started.  Due to less carry forward from last year there is shortage of tea especially quality Tea. Tea prices are likely to be firm this year benefiting tea companies. Market price of Tea in this month is harder around 20% compared to last year in March.”

Thus with the increase in demand of tea worldwide, it is highly expected that the tea prices will soar up in the next five years as the production is still very limited. But despite this price hike, it is anticipated that tea will still have its own consumer segment and enjoy the standing in the market.

PS: Written on 4th April 2012

Thursday, 23 May 2013

Index will reach 35,000 in the year 2014-15


After the low in the stock market that was observed in 2009, today market is revolving in the base rate of 5400 being 10 per cent more or less in the past three years. After three years of low in the market, now it has moved towards higher range being side wards.  It can be estimated that in the second half of 2012 market may show an all time new high.
 
Also, elections are ahead in 2014 so market might be a bit shaky as it has been seen in the past. But, I feel that every time it is not necessary that history will repeat itself, sometimes the completely reverse thing could happen to create a new history. So in my view if the government in 2014 will be stable and pro reform by any chance, then in the year 2014-15 Index will see a new high up to 35,000.

Also another reason why I feel that India will see new high in 2014-15 is that when the world economy was not in a good condition, then too India’s economy grew by 6% as compared to other countries. So if things fare well including the government and reforms then it will grow by 9% in 2014-15.

Due to the reforms by the government we cannot expect any change to happen overnight, its effects would be seen in at least a year’s time. But of course we can see a positive change in the sentiment and confidence of the people. We are moving from pessimism towards optimism. The market rise is 25% but written participation (people investing money) in the market is negligible. Though index has appreciated but there was hardly any investment made in the market. I feel that this was the time when people missed the opportunity as they were not prepared. Also in the past three years market has become range bound due to substantial rise. (5600 – 5800). This is indicating that there is a buying at every reaction and investors who did not participate in the rally are ready to invest when the market reacts. This might last till December 2012. January 2013 will see new buying in the market in anticipation of third quarter results and in expectation of further reforms. In India we do not need one time reform, but we need more of constant reforms as per the changes in the rapidly changing world economy. 

Due to the reforms by the government we cannot expect any change to happen overnight, its effects would be seen in at least a year’s time. But of course we can see a positive change in the sentiment and confidence of the people. We are moving from pessimism towards optimism. The market rise is 25% but written participation (people investing money) in the market is negligible. Though index has appreciated but there was hardly any investment made in the market. I feel that this was the time when people missed the opportunity as they were not prepared. Also in the past three years market has become range bound due to substantial rise. (5600 – 5800). This is indicating that there is a buying at every reaction and investors who did not participate in the rally are ready to invest when the market reacts. This might last till December 2012. January 2013 will see new buying in the market in anticipation of third quarter results and in expectation of further reforms. In India we do not need one time reform, but we need more of constant reforms as per the changes in the rapidly changing world economy. 

PS: Written on 1st Feb 2013

What are the things that an investor should not do when rupee depreciates?

Though prediction of rupee is very difficult for an investor to understand but abnormal fluctuations of rupee certainly upsets the plan of any company, thus affecting the prediction of price movement in any stock.

Since we are in a phase where INR is continuously depreciating against USD, it is better to avoid such stocks where import content is very high or the companies which are net importers.

Investors should avoid investing in companies which are heavily dependent on imports for their raw materials.

So, the companies where the import content is much lesser than their exports or the companies which have a pricing power to pass on their costly imports to their customers should be identified to invest.

Investors should invest in such companies which are export oriented, where the depreciation of rupee will be beneficial to them


Also Read: http://businesstoday.intoday.in/story/rupee-falling-against-the-dollar-heres-what-not-to-do/1/185677.html

Wednesday, 22 May 2013

If you follow certain principles in stock market, then the worst situation in market is the best situation to invest- Written on 6th June 2012

It seems to be the beginning of a new bull market. Economy turns around after six months of turning around of stock market. Market reacts to any situation before the economy.

1990 was the worst year in Indian recent economy history. In 1990 we were 270 billion USD economy. But although our economy has grown four times since then, the phase of 2012 is compared to that of 1990. Today the Indian economy is more than 1 trillion USD. Savings rate in India is dropping YOY on higher GDP YOY.

Factors like inflation, interest rate, IIP, GDP, politics, investment sentiments are all against the economy, most of them being on the mercy of political will. Many stocks are at historically cheaper valuation. But, one cannot go wrong in consumer stocks. Since 1990 we have crossed three stages. India is at the third stage of savings pattern.  From a high saving rate with low income to high savings rate to higher income to currently (falling) low savings rate to higher income. Our savings rate has fallen from 36% in 2009 to below 30 % in 2011 that too on rising income.  It is a big change which will result in a phenomenal boom in consumerism.
With the downfall of the Indian economy, consumer stocks or consumerism is the sector which will not be affected and it is advisable to invest in such stocks.

If one wants to invest in the stock market then he should be prepared for the worst to happen. If we look at the current scenario of the Indian economy then one should invest with the assumption that Greece, Spain and few more countries could collapse, the value of Rupee against dollar could depreciate even more, GDP rate might grow at 5 to 6%, fiscal deficit can be assumed to be 6%, crude could cost 100 Rs. and the Government could fall. 

Any and every investment in stocks always has a content of speculation. One key factor that should be understood by investors is that one should invest a part of one’s savings not a part of one’s earnings in stock market.  

PS: Written on 6th June 2012


Tum Mujhe Yun Bhula Na Paoge- Old Hindi Melody Song




I have always found peace in music, be it singing or listening to music. In the above video I have tried singing one of my favourite song.

Tum Mujhe Yun Bhula Na Paoge is a old hindi melody, originally sung by Mohammad Rafi, in the movie Pagla Kahin Ka (1970),  starring Shammi Kapoor.

Hindi Lyrics:
(Woh baharein woh chandani raatein
(Mere haatho mein tera chehra tha
(Mujhko dekde bina karaar naa tha 

Tum mujhe yuh bhula na paoge
haan tum mujhe yuh bhula na paoge
Jab kabhi bhi sunoge geet mere
Sanng sanng tum bhi gungunaoge
Haan tum mujhe yuh bhula na paoge
Ho tum mujhe yuh ...

Humne ki thi woh pyaar ki baatein)-2
Un najaroon ki yaad aayegi 
Jab khayaloon mein mujhko laoge
Haan tum mujhe yuh bhula na paoge
Ho tum mujhe yuh ...

Jaise koi gulab hota hai)-2
Aaur sahara liya tha bahon ka
woh shaam kis tarah bhulaoge
Haan tum mujhe yuh bhula na paoge
Ho tum mujhe yuh ...

Ek aisa bhi daaur gujra hai)-2
Jhooth manu tho puchlo dil se
Mein Kahoonga tho ruth jaoge
Haan tum mujhe yuh bhula na paoge

3W industry likely to perform well in the FY 2013-14 - Written on 23rd April 2013.


With the crash in Gold and crude prices, rupee is likely to appreciate and Indian economy may revive. This in turn will create a boom in the stock market.

Oil marketing companies and automobile industry will be largely benefited by the debacle in crude price, which hence will prove to be beneficial for the whole economy. If fiscal deficit will reduce, foreign investment will increase which will change the sentiment among people. Inflation rate in the country will also decrease and big change could be observed at macro levels.

I am bullish on 3 wheeler industry, and I foresee a very good future of this industry in the automobile sector.  3 Wheeler industry is the only one which has registered a growth of 5% in the last financial year. With the revival of the economy, the sales of 3 wheeler industry will be boosted.  Small commercial and passenger 4 wheeler which was once thought to be replacing 3 wheeler is under huge pressure. 3 wheeler industry is seeing growth and “4w replacing 3w” was just a gimmick and people are now realizing that.

Three Wheelers (3W’s) in India is widely used as an affordable means of short distance travelling and for transportation of goods. 3W is the backbone of passenger transportation and goods carrier for 1000’s of villages and towns and small cities of India. Even in the cities one cannot imagine life without a three wheeler. The 3W’s are also a boon amongst the city’s narrow roads, no footpaths and heavy traffic.

No vehicle in the world can match the economy of a 3 Wheeler.  India is the world’s foremost producer, consumer and exporter of three-wheelers (Source SIAM). 3W’s are the most economical mode of transportation available in the commercial vehicle category. It is the cheapest mode of passenger transportation in the world. Not only this, but it also provides with significant employment opportunities to individual with lower investment whereas returns of Investment are far better and faster. One 3W generates approximately 3.9 units of an employment in rural/ semi rural and small towns in India.

With major push in retail of consumer goods and better infrastructures available, the need of the economical transport like 3W’s has increased. Government should exempt three wheeler industry from excise duty in order to encourage its usage thus saving on costly imported fuel burnt by the small Four Wheelers (4W’s). Small 4W’s can never replace a 3W economically.  

PS: Written on 23rd April 2013.