Posts in category Value Pickr
Shilpa Medicare -Racing away on the Oncology API highway! (29-09-2015)
Hi,
Anyone attended Shilpa AGM yesterday ? please do share the insights from the meeting.
Thanks & Regards,
Anil Konda.
8k Miles Software Ltd, Cloud Computing (29-09-2015)
I tend to to agree with the article on valuations. It earned around 20cr last financial year as net profit.
Even if you take around 30-40cr as net profit for FY16 (taking the June quarter results as the base), I wonder if a market cap of 1,500cr is justified.
This is a fluid market and things can change rapidly.
I don't see a margin of safety in the investment. 
Am I missing something?
Skipper Ltd., distributing Power and Water, Is it a moat in making? (29-09-2015)
Hi VI
From Annual Report 14-15
Mahesh
GRUH Finance – mini HDFC (29-09-2015)
While I agree with you on not comparing mortgage rates of US and India, your conclusions are contradictory. If real mortgage rates are worse in India crisis should have happened in India rather than US.
In reality, crisis precipitated because of large scale mortgage application fraud, stagnating real income and rising real interest rates before crisis. I don't think any of these situations remotely exists in India. Even valuations are not outrageous. As an investor we are far away from the wrong side of the sword.
Regarding non-formal sector lending, we should consider it an opportunity since mortgage fundamentals are based on income potential rather than it is coming from formal or informal. We don't have to go too far to have comparable business. Just check what was Sriram Transport Fin doing ten yrs back. They have created an empire out of lending to informal sector with absolute volatile income profile.
Skipper Ltd., distributing Power and Water, Is it a moat in making? (29-09-2015)
Hi Mahesh,
Can you please let me know from where you have drawn the following conclusions:
1) Advance from customer increased from 26 crore 2014 to 76 crore in 2015; and
2) Company getting 70% repeat customers and increase in gross margin indicates customers accepting price hike which speaks quality product and after sale service.
US based NRI’s – How do you guys invest in equity now? (29-09-2015)
Hi Bijoy plz mail me gaurang_ray3@yahoo.com
GRUH Finance – mini HDFC (29-09-2015)
Digging too much on mortage to GDP will miss the main point which is Gruh is a leader in this space and commands a very good position in the industry backed by its track record. If you doubt the core thesis of lending to non salaried people and wonder if the size of opportunity is indeed big enough then one must look at Shriram Transport Finance which lends to a similar segment (people without bank accounts) for used trucks/vans/cars (depreciating asset) and has demonstrated its scalability across the country. STFC's market cap is 2x that of Gruh and still growing.
P.S: Shriram Transport is a wonderful business and I do not mean to undermine that at all.
GRUH Finance – mini HDFC (29-09-2015)
True - this will have a mitigation effect on the long-term...
GRUH Finance – mini HDFC (29-09-2015)
Prakash - you make good points but you are also implicitly assuming that the following two drivers of mortgage business will stay the same over the next 10-20 years.
1. Housing loans interest rates in India are at 12%-14%, while in US/Germany they are 2%-4%
2. Only 6% of Indians are employed in organized sector, while in US more than 90% are employed in the formal sector
Interest rates are more likely to move down than up and the organized sector will grow beyond 6%, thereby driving mortgage penetration.