Emkay Research: Buy | TP 600 Rs. (Oct 1 Report)

“Coal India’s production volumes tend to be seasonal with the second quarter of any fiscal year softer than the rest of the quarters. The seasonality factor has averaged 41.4%/58.6% for 1H/2H, historically . Essentially, the production of 341mt in 1H implies full-year production of 825mt adjusted for seasonality , which is marginally lower than our estimate of 830mt and the company’s guidance of 838mt for FY25.” – Emkay Research

Emkay says dont worry about productionn coming down in monsoon months. Coal India is on track to achieve its ambitious target of increased coal prodution this year. The best is yet to come. Q3 and Q4 will be better.

Hi All,

I am sharing my portfolio below and the rationale behind my investing strategy. My portfolio is inclined towards the financial sector, now I want to add options where I can diversify it properly. Also, going forward I want to generate around 17-18% returns, so I would like your suggestions on how to change my portfolio and investment strategy.

Thanks in advance.

Was comparing IDFC First Bank and Federal Bank Q2 Business Updates

Both IDFC First Bank and Federal Bank have released provisional business updates for Q2 FY25. Here’s a comparison based on available data:

Key Metrics:

IDFC First Bank (IDFCFB):
● Strong Growth: IDFCFB witnessed robust growth in both loans and deposits during Q2 FY25
●CASA Focus: The bank’s CASA deposits surged by 37.6% YoY, contributing to a higher CASA ratio. This indicates a shift towards a more favorable deposit mix.
●Legacy Debt Repayment: IDFCFB is actively raising funds to repay existing borrowings, explaining the higher deposit growth compared to loan growth.This strategy aims to improve the bank’s financial health in the long run.
●Recent Merger: The merger of IDFC Limited with IDFC First Bank concluded on October 1, 2024, resulting in zero promoter holding. This transition positions IDFCFB as an independent entity, which could influence investor perception.

Federal Bank:
●Steady Growth: Federal Bank also exhibited healthy growth in advances and deposits, though at a slightly lower rate than IDFCFB.
●Retail Focus: The bank’s internal classification reveals a higher growth rate in retail credit (23%) compared to wholesale credit (13%). This focus on retail lending could imply lower risk and potentially higher profitability.
●Stronger Credit Rating: Federal Bank currently enjoys a slightly higher credit rating of AAA from CRISIL compared to IDFCFB’s AA+ Stable. A higher credit rating suggests lower credit risk for investors.

Conclusion:
●IDFCFB’s strong growth and improving CASA ratio are positive signs, as expected legacy debt repayment and the recent merger might introduce uncertainties.
●Federal Bank’s steady performance, retail lending focus, and stronger credit rating present a more stable picture.

I totally second with Raj but even if the discussion is about the steel/Metal trading part of their business, I’d like to clarify what I meant by regulatory oversight in my prev response. Look, It’s true that basic trading in steel (e.g., buying and selling steel products) does not require any special industry-specific government approval in most cases. Any business can trade in steel as long as it is registered under GST, and follows regular business compliance procedures. But at the same time it’s important to have clear distinction between general trading and trading at scale in regulated commodities like steel.

Your statement is only true for someone who’s trading on a small scale or when the trading does not involve import, export, or large-scale infrastructure projects where regulatory frameworks come into play.

The scenario changes drastically when steel trading reaches a large scale or is linked to key infrastructure projects (such as Bharatmala, Sagarmala, Smart cities to name a few like I also mentioned above), export-import, or strategic sectors. In such cases, the steel used must meet the specifications set by relevant ministries, such as the Ministry of Road Transport and Highways or Ministry of Shipping. So for a large-scale supplier like SG Mart, they’ll certainly face additional regulatory oversight.

Also recommend reading about quality certifications like BIS registration, IEC, DGFT etc. Hope you too take the help of GPT to understand these concepts better

https://www.dgft.gov.in/CP/
https://www.bis.gov.in/

This chart is very interesting. it shows the risks of investing in small caps.

Out of 250 small caps in 2014, 3 became large, 43 became mid, and 93 fell to micro