India Value Invest

Sonata Software : A value buy or a value trap?

2011-12-18T21:23:00.000+05:30

Sonata software was founded in the year 1986. The company is in the business of providing IT consulting and software services. Financials The average ROCE of the company on consolidated basis over the last five years is 26%. On a consolidated basis, the company has debt of INR 30.76 crore while the net current assets stood at INR 246.95 crore. The cash flow of the company over the last five

Blue Star : A fallen hero

2011-11-10T22:15:00.000+05:30

In the past, I have written a lot of praise about Blue Star, ranging from how management utilized buy-back effectively in 2002-2003 to reduce equity capital, how high dividend-yielding low-debt companies turn out to be good investment when Blue-Star price went up from INR 30 to 1700, and how to find next Blue-Star. Two months back I was discussing the balance sheet of Blue Star for the year FY11

How right/wrong I was?

2011-10-06T17:20:00.000+05:30

I write this blog and express my views not just on individual companies and their share prices but also overall market. Over the last one and a half year, I had observed on several occasions that Mr Market was either very enthusiastic or very depressed about a particular security or about general enthusiasm in top level companies that are part of Sensex/Nifty. How have I fared in my opinions?

Voith Paper Fabrics: A value investment?

2011-09-18T20:01:00.000+05:30

Voith Paper Fabrics was incorporated in the year 1968. Financials The average ROCE of the company over the last five years has been 15.978% with average operating profit margin of 27.12%. The operating profit margin of around 22% in the last two years was the lowest in the last eleven years. The average net profit margin was 14.52% for the last five years which is much higher than most of the

VTM - A Ben Graham value play?

2011-09-17T16:22:00.000+05:30

VTM Ltd's history dates back to 1946. Financials The average ROCE of the company over the last five years was 4.614% which is way below the average for BSE500 companies with average operating profit margins of 12.25% and net profit margins of 2.894%, most of the gap going into depreciation. There is a big surge in all these ratios in FY11 most probably due to high cotton prices. The company

Is Unichem Laboratories cheap?

2011-09-15T22:51:00.001+05:30

The promoter of the company, Prakash Mody is heavily buying shares of the company from the open market. See the table below: DateShares BoughtAmountAverage Price 8 Aug73891090247147 9 Aug309834529405146 10 Aug95921397938145 11 Aug262093744218142 12 Aug142572094638146 16 Aug17594625772570146 17 Aug3395494256145 18 Aug5160762878147 22 Aug145722091826143 23 Aug225803199009142 24 Aug6282885110142 25

Eimco Elecon - A Ben Graham value play

2011-09-11T23:18:00.001+05:30

The eimco elecon engineering company was incorporated in 1974 as a joint venture between ELECON group and the indian public. Financials The average ROCE of the company over the last five years is 15.728% with average operating profit margin of 18.984%. The margins were highest in the years between 2007 and 2009 and in years 2000 and 2001. Net profit margin too were highest in years 2008, 2000

Sensex Nifty EPS after FY11 results

2011-06-06T18:21:00.000+05:30

It seems all the results are out and the Sensex EPS as of 6 June stands at 18420.11/19.58=940.76. The Nifty EPS stands at 5532.05/20.43=270.78. This compares with 828.5 on 27 May 2010 for Sensex, i.e. an increase of 13.55% YoY and 239.4 for Nifty, i.e. 13.1% increase YoY.

Sensex EPS drops after SBI results

2011-05-17T17:03:00.000+05:30

I had tried to give an early indication of Sensex EPS for the year 2011 in an earlier post. I had assumed that since around 46% of the companies; that are part of the Sensex; had announced results that increased EPS by 12.6% YoY, there will be some more gains in EPS when all the companies finish reporting their results. Today SBI announced their horrible results for the year ended March 2011 and

Is this the end of MSFT?

2011-05-11T11:58:00.001+05:30

This is the first time I am posting on a company not listed in India. I am talking about Microsoft. This post is inspired by Microsoft's buyout of Skype for $8.5 billions. Many of the big companies that are favourite of speculators get to a point where their dominance is threatened by creative destruction that is the core of capitalism. Microsoft has dominated tech industry for more than thirty

How great companies outperform index over time?

2011-05-04T21:39:00.001+05:30

Many a times so called analysts mark companies in FMCG and Pharma sectors as defensive. But if we look at the returns generated by these companies over long term, they are many a times much better than the returns generated from index. Today, I will describe two good companies from FMCG sector which have shown the same kind of characteristics over the last 10 years. The first is Nestle and the

Where will Sensex EPS be after FY11 results?

2011-05-03T21:02:00.001+05:30

Following table shows the list of companies that have already announced their FY11 results along with their weightage in Sensex as of May 3, 2011. CompanyWeightage Reliance11.45 Infosys9.58 ICICI Bank8.29 HDFC Bank5.61 TCS4.5 Wipro1.81 Jindal Steel1.8 Sterlite1.79 Maruti1.24 In total, 46.07% of the companies have announced their results so far and the Sensex value and P/E stands at 18534.69

Is TCS really doing better than Infosys?

2011-04-19T16:09:00.002+05:30

The financial media is ripe with the articles of praise for TCS and Infosys seems to have lost its glory over the last one year. See the headlines below: TCS takes over Infosys (livemint) TCS Infosys treading different paths (livemint) TCS topples Infosys as the most valued IT company (trak) TCS tops Infosys (DNA) Most of the analysts are not looking at the results of companies with sharp eyes.

An humble investor

2011-03-17T17:51:00.000+05:30

I was reading the transcript of Warren Buffett's interview with Financial Crisis Inquiry Commission and the following quote made me feel humble: I can tell you it’s very hard to change. I was at Solomon (laughs) and it, the nature of Wall Street is that overall it makes a lot of money relative to the number of people involved, relative to the IQ of the people involved and relative to the energy

Statement of lifetime

2011-02-24T11:55:00.001+05:30

Following is a statement from K V Kamath, one of the most respectable and experienced banker in India We can't afford to raise interest rates any more. The statement was said in an interview with economic times on 10 October 2010. I have a tendency to keep statements of famous individuals in my blog noted down with the date when I feel the person is saying this due to his vested interest and I

Are insiders fool?

2011-02-24T09:29:00.000+05:30

Generally when the Sensex/Nifty trades at more than 20 times earnings, the insider buying to selling ratio remains very low. But when a stock become cheap, promoters buy shares of their own company, both to provide confidence as well as increase their stake in the company at a bargain prices. I had seen this happening a lot between October 2008 - May 2009. Banco Products, Sarla Performance Fibers

Are good days going to come back again?

2011-02-21T12:10:00.001+05:30

Here is a snippet of the article in economic times dated 30 March 2001 with my own emphasis highlighted in bold letters: While the market may have belied the hopes of investors looking for capital appreciation, the sharp downturn in prices has raised the dividend yield for many companies. With the annual results fast approaching, dividend income from companies may prove to be a source of

Why book value matters?

2011-02-17T19:05:00.005+05:30

Most of the value investor understands the importance of book value in determining the intrinsic value of a company. Book value represents the hard assets including its inventory, fixed assets minus depreciation and its cash/receivables minus all the liabilities like provisions, accounts payable etc...Ben Graham suggests not to pay much higher than book value while buying shares of a company. If

Sensex Nifty preliminary EPS after Q3FY11

2011-02-05T02:03:00.000+05:30

While there are some companies, like Tata Steel, Tata Motors, M&M and Unitech still left to announce their Q3FY11 numbers, the preliminary EPS for Sensex and Nifty can still be calculated. Sensex ended at 18008.15 with a P/E of 19.78 which gives Sensex EPS of 910.42. The Nifty ended at 5395.75 with a P/E of 20.67 which gives Nifty EPS of 261.05. This compares with Sensex EPS of 876.36 and Nifty

Have some investment opportunities started emerging?

2011-01-22T03:09:00.000+05:30

With a correction of more than 10% in NSE Nifty over the last two months from a high of 6338 on 5 November 2010 to 5624 on 17 January 2011 and more than 20% in BSE SMALL CAP index from a high of 11168 on 10 November 2010 to 8860 on 17 January 2011, there are fair amount of chances that some investment opportunities will really be available. There is a big contradiction between the two set of

Special Situation in APW President Systems

2011-01-20T09:35:00.002+05:30

APW President Systems informed the exchanges on 7 January that Schneider Electric has acquired 55% shareholding in APW President Systems from promoters at a share price of INR 195. SEBI rules require an open offer of 20% to the minority shareholders. The announcement of the offer has been done and the specified date is February 4, 2011. Dates of opening and closing the offer are 2 March 2011 and

How banks made money while investors lost - in India

2011-01-16T13:54:00.001+05:30

There has been a lot of bashing of banks in the United States over the last three years when the US taxpayer saved banks while the employees of the banks made billions in bonuses. There wasn't a lot of bashing on banks in India though and in November 2010 the bank index climbed to all time high. Sadly though, there were companies and their investors who got punished (I wanted to use a different

Indo Borax - A Ben Graham value play

2011-01-11T13:18:00.000+05:30

I was looking at the list of companies trading below their book value and came across Indo Borax Chemicals. The company's share is trading at INR 81. The company has equity worth INR 3.481 Crore of 34,81,000 shares of face value INR 10. This translates into a market capitalization of INR 28.2 Crore. Negatives: The company started paying dividend only in 2007. Dividend yield at current price

Branded Apparel Sector - Part 3

2010-12-06T01:31:00.003+05:30

This is part 3 in the series of article discussing Branded Apparel Sector. The previous parts are here:Part 1Part 2Zodiac Clothing CompanyZodiac is a 26 year old clothing company. The company mainly manufactured shirts but is now selling trousers and accessories like belt, ties and handkerchiefs too.FinancialsCompany's average ROCE over the last five years was 20.35% with average OPM of 10.84%

Branded Apparel Sector - Part 2

2010-12-03T20:38:00.003+05:30

This is part 2 in the series of article discussing Branded Apparel Sector. The previous parts are here: Part 1 TrentThis is a Tata Group Company running branded apparel stores under the brand of "Westside". FinancialsThe average ROCE of the company over the last five years was 6.58% and lower in the recent years. The average operating profit margin was 5.1% over the last five years and