Hi Folks —— what are views on prospects of Inox Wind VS Suzlon ?
Posts in category Value Pickr
Tata Investment Corporation: Unusual discount to NAV (05-03-2024)
What you are saying is ideally correct. But it hardly happens in real life. If parent company needs capital then they will ask subsidiaries to throw out dividend. Especially companies like TCS where they don’t need lot of capital to grow business. Tatas are no exception and they have done that in the past. But it is okay to do so as it is not unethical.
Journey and Portfolio of a goal-based NEEV investor (05-03-2024)
What’s the relevance of P/E for financial or holding companies like Tata Invest or Bajaj Finance?
Green Hydrogen as a Fuel – Indian Companies leading the Green Revolution (05-03-2024)
Another important reason why Indian steel makers have to adopt green steel is because of the imposition of the Green Steel Directive by the European Union. If one does not comply, they will be penalized with a carbon tax, which will hit their bottom line.
This is a key lever for European Union to achieve their climate and energy targets by 2030
Tata Investment Corporation: Unusual discount to NAV (05-03-2024)
But those cash rich companies like TCS or Titan will not just simply increase dividends. They are not PSU companies or for that matter Vedanta.
Dividend is a capital allocation decision and one of the qualities well-managed companies is their ability to allocate capital where it generates the best return. And also such decisions are approved by the board.
So if ROCE of Titan is say 20+ why would it lend money to a group company when cost of capital is 12%?
Tata Investment Corporation: Unusual discount to NAV (05-03-2024)
I bought it at some 1200 in 2021 and sold after 60% gain. Do I regret it? Yes. Do I lose my sleep over it? No.
Given the modest allocation when I bought, even with 6x appreciation, my absolute return won’t have been life-changing.
Tata Investment Corporation: Unusual discount to NAV (05-03-2024)
As someone who put TIC in watchlist @ 1300 levels and never bought a single stock. Here are my learnings.
- Trend is our friend. Sometimes it helps to not be so value oriented – buy at low valuations, sell at high valuations.
- Float matters. Nothing much here, pretty basic. TIC promoters will never ever sell a single share and maintain the 73% stake. So the number of shares in supply is limited and if like last couple years, huge demand is there, brace yourselves.
- A lot of what has happened over the last 2 years is “monkey see, monkey do”. Sometimes it pays to be a rational monkey. I was waiting for the stock to go below 1200 to buy (it never did).
- I need to learn TA also to avoid loss of potential profits.
Thanks.
Tata Investment Corporation: Unusual discount to NAV (05-03-2024)
There is absolutely nothing wrong you did. Rationality requires that you sell your stock at unjustifiable valuations and move that money to other stock with better margin of safety.
If stock corrected 30-40% from high valuations you will be patting yourself on the back. It’s impossible in the market to make right calls 100% of times and no one has ever been able to do it.
What you should feel good about is that you didn’t lose your capital and you made significant gains which most of the people take any day.
Tata Investment Corporation: Unusual discount to NAV (05-03-2024)
Great call for not selling it. Very few people are able to hold onto their gains.
Tata Investment Corporation: Unusual discount to NAV (05-03-2024)
Yeah, most likely reason.
Stock moved some 40% based on news of Tata getting into semiconductor business which is about 14000 crores market cap gain. So it seems market is already valuing that business in the range of 2-3 lakh crore which is just perplexing to me.