I don’t think they’ll make 12% PAT margins in EPC which is what you have assumed.
Posts tagged Value Pickr
Indian Defense Sector (04-07-2024)
It is good to have a healthy debate and contrarian views especially when we put our own money in stock market with an aim to get some return and healthy debate may help us to correct our thought process.
In my view and what I have seen in my investing career, Every sector is cyclical in nature in stock market. There may be very few specific stocks without being sector specific which may have given consistent returns in every cycle.
Once , FMCG was thought to be non- cyclical. now it is found it is not.
IT is no longer non- cyclical. It is cyclical now as being seen last few years
Pharma once thought to be non- cyclical, it is not so. it has its own cycles
Steel , cement and all commodity all are cyclical.
Energy power is cyclical as it depends upon overall industrial activity and overall economy.
so, basically all business are cyclical as it depends upon capex & consumption , demand and supply which many time we try to balance.
Now coming to 2000 infra boom , what was the capex?? It was 0.5 % of GDP and that also was not actually spent due to lack of drive and initiative at that time . it was just not sufficient to drive the infra sector. So infra companies did not perform well and so also the infra stocks.
During 2023-24, what was the capex as % GDP? you will get the answer from the following link at the end of this post.
Not only the capex was fully utilised last year and it is reflected in order book position and financial performance of infra companies.
And still manufacturing has to take up and has a long way to go, given the capex push during Modi 3- a lot of PLI schemes , renewables , Atma nirbhar Bharat , Railway capex mega plan , enhanced defence budget allocation and export of defence products to international market are under implementation.
And yet fiscal deficit was still maintained at 2000 level and still the govt trying to reduce.
The Govt walks the talk.
So , my take is that as long as the Govt initiatives continue with mega capex push , there is no reason why the infra, defence would not do well.
Do for infra , capital goods , defence , railway , it seems to me has a long run-way for growth.
Valuation of stocks is something , I am not an expert. But what I have seen whenever there is a froth in the market, the market tries to correct downwards And if the market finds under-valuation in stocks , it corrects upwards. It is natural. And if there is some black swan event , then everything falls.
I always tend to believe what the realities are and the way market move is the collective decision of an universe of intellectuals.
Nifty PE crosses 24|A statistically informed entry-exit model! (04-07-2024)
Nifty is either about to enter mania phase or already topped. I am leaning towards former as Nifty has a breakout from upward trending channel. Confluence of factors suggest a minimum of 25300, but could go much higher as well. But once this rally ends, its going to be a big down market event akin to 2007, 2010, 2015
Tata Motors – DVR (04-07-2024)
Tata Motors
EU MOVES AHEAD WITH PLANNED TARIFFS ON EV IMPORTS FROM CHINA - BBG
EU PROVISIONAL DUTIES ON CHINESE EV IMPORTS TAKE EFFECT JULY 5
EU TO ADD 37.6% AVG DUTY ON NON-COOPERATING CHINESE BEV MAKERS
EU TO ADD 20.8% AVG DUTY ON COOPERATING CHINESE BEV PRODUCERS
National Peroxide (04-07-2024)
(post deleted by author)
Indian Defense Sector (04-07-2024)
Current defense sector mania is very similar to infra mania in 2000’s, basically same wine in a different bottle. Low free float in PSU defense stocks is a cherry on top and adding further fuel to the rally. Marketcap/sales ratio of PSU shipbuilding stocks is obnoxious, even higher than high ROE, sustainable growth sectors like IT, FMCG.
Management of Mazagoan, GRSE have mentioned in concalls that they are likely to see peak revenues in FY25 or FY26 and they see 20-25%CAGR revenue from FY24-FY26. This shows that current order book size while large, the execution will happen over a period of years and peak growth is more than factored in current valuations.
Like infra, defense is also cyclical. Apart from may be HAL, Midhani, BEL, its important to note that R&D spend, IP of Indian defense stocks is nothing to boast about. In case of most companies, most of the technology is insourced from Indian entitities like DRDO, or some foreign entity.
Screener.in: The destination for Intelligent Screening & Reporting in India (04-07-2024)
Hi! Is it possible to apply parameters on stocks of a particular index? e.g. Nifty 500 or BSE A stocks?