Dhamakedaar Budget
“Maine bola tah na ke Piyushbhai solid Budget dega,” Madan Kaka declared with a big smile on his face.
There was much jubilation in Dalal Street as Piyush Goyal unravelled benefits after benefits for the Indian economy.
In keeping with the festive mood, Shyambhai and Mandakini were offering free Adrak Chai to all punters.
The farm sector received a massive relief package of Rs. 75000 crore which will cause farm income to double by 2022.
total farm package of 75000cr announced https://t.co/yY9csq7yNw
— Sonia Shenoy (@_soniashenoy) February 1, 2019
There were also generous concessions awarded to the realty sector which will benefit HFC and realty stocks.
Budget boosts housing finance, realty stocks https://t.co/R0evMPSsX9 pic.twitter.com/6rYlg1F8ss
— Times of India (@timesofindia) February 2, 2019
Income-tax benefits were also showered upon the middle class.
ITS A #PERSONALFINANCE BUDGET FOLKS!!!
No income tax for income up to Rs 5 lakh
Standard deduction hiked from Rs 40,000 to Rs 50,000!!!#Budget2019 #ElectionBudget #wealth #incometax— Surabhi Upadhyay (@SurabhiUpadhyay) February 1, 2019
Billionaire Mark Mobius gave the Budget a clean chit. He described it as “excellent” and “positive for consumption“. He opined that it can boost the GDP by 50 Bps.
CONSUMPTION, CONSUMPTION, CONSUMPTION!
– No Tax upto 5 Lk For Middle Class
– Farm Package for Farmers with Land <2 AcresMark Mobius Says
– Excellent Budget
– Positive for Consumption
– Can Boost GDP by 50 Bps #Budget2019 #ELECTIONBUDGET#FMCGIsLife @MarkMobiusReal https://t.co/PUBXUyuA5e— Mangalam Maloo (@blitzkreigm) February 1, 2019
Sonia Shenoy rightly described the Budget as a “Masterstroke“.
Masterstroke ! #Budget2019
— Sonia Shenoy (@_soniashenoy) February 1, 2019
Naturally, the Bulls ran amok and sent the Sensex surging like a rocket.
Bulls run amok on Dalal Street after US Federal Reserve signals a pause in rate hikes at least in the short-term. Sensex rallies over 600 points, Nifty soars past 10,800 #MarketSnapshot pic.twitter.com/i9lwvWrlqX
— CNBC-TV18 News (@CNBCTV18News) January 31, 2019
Dalal Street smiles, sensex gains 213 points https://t.co/7KG6tZZKR5
— TOI Business (@TOIBusiness) February 2, 2019
(Jubilation in Dalal Street)
Porinju hauls up novices for displaying attitude of ‘hopelessness’
It is no secret that the novices of Dalal Street are in a highly despondent mood nowadays.
They have suffered such colossal losses owing to the ongoing Bear market that they are in no mood to buy stocks.
Even multibagger stock recommendations are met with hostility.
This sorry state of affairs has not escaped Porinju’s attention.
“I have never seen hopelessness like this in my time of two, three decades. Even as Nifty and Sensex are near their highs and reasonably outperforming global markets this last one year, the average investor in India has shown some kind of hopelessness, which is very bad,” he exclaimed, his eyes flashing in anger.
“I feel even without waiting for the bigger event, the general elections, investors are going to come back to the market. Something will be definitely coming up to stop that hopelessness or extreme fear in the market. People have just got so much averse to equities. I think this not sustainable,” he added.
Porinju counselled novices to see the “Big Picture” and not be obsessed about their petty losses in the market.
“We are at $2,000 per capita income at this point against $1,200-1,300 a few years ago. This is a trigger point. If you compare, China is now $10,000 and once we go to some $2,500 or near $3,000 per capita, that is going to make a huge positive impact on the consumption story, especially discretionary consumption,” he said in a soothing tone.
It is not a time to get depressed or feel the pain. This is the time to look at the positives, he added.
“The India growth story is intact. Our organic growth, whatever happens on the political side, is going to continue. And this is very important. I think the per capita income and the roadmap for the next, two, three, four years’ will give you a lot of energy to pick stocks in the market,” he said in a conciliatory tone.
Even Dhirubhai Ambani was managing governments, bribing, but Reliance is still multibagger
Porinju explained that his hypothesis with regard to alleged “chor” managements turning a new leaf is still valid.
“The corporate governance issue is a major thing affecting or impacting the market of late and most of the corporate governance issues are because of the reason reforms in the economy, in the nation because those reforms are bringing out the existing problems especially with regard to the corporate governance,” he pointed out.
“People are getting caught. Those who have been very unethically managing, those who have been cheating minority shareholders, who have been siphoning out money now they are getting exposed and there is more pain/ That is where I went wrong,” he added.
Porinju cited recent examples of stocks like ZEE, Vedanta, Sun Pharma, Sterlite Technologies etc which have got butchered on the Bourses owing to alleged corporate governance lapses.
“The next one, two, three years a theme will be where there is very clear evidence or symptoms of improving corporate governance,” he pointed out.
He also explained that alleged lapses in corporate governances have been happening since time immemorial but this has not stopped the stocks from delivering multibagger gains.
“Everybody has a past in our market history. There are very few there who have been ethical and professional by attitude from the beginning. Even Dhirubhai Ambani was managing governments, bribing. All these things have been happening in this country,” he said.
“If the companies are not affected operationally because of this promoter level problems, I feel it is an excellent opportunity to buy into some of the C group companies because provided the operations of the company do not get affected,” he advised.
“They all have fallen to a very attractive valuations going by the operations and the fundamentals of company,” it was stated.
Legal system in India allows promoters to siphon-out money, cheat minority shareholders and defraud banks – all within the framework, just need to choose the right loopholes!
— Porinju Veliyath (@porinju) January 30, 2019
Nobody is looking at Kaya despite great promoter and quality business model
Porinju cited Kaya as an example of how investors are blind to multibagger opportunities and are ignoring the stock despite it ticking all the boxes in terms of promoter quality, management ability and robust business model.
“Like Kaya is consumption story which I was talking about one of our largest holdings but nobody wants to look at that kind of small companies, irrespective of the quality of the company or the greatness of the promoter or the management or the business model,” he lamented.
He emphasized that consumption stocks like Kaya will be big beneficiaries of the increase in per capita income and will see “huge explosive growth“.
“India is getting into a point of per capita income $3000 maybe in the next three to four years’ time. So $3000 per capita income is going to make huge explosive growth in the so called discretionary spending,” he explained.
With particular reference to Kaya, Porinju opined that it is at “inflection point” and can blossom into a magnificent “billion dollar co“.
#PorinjuTopPick | Pick 1: Kaya is our largest holding in the portfolio; at an inflection point. Kaya can become a billion dollar co over 5-6 years. @porinju #Budget2019 #BudgetSession pic.twitter.com/tGuv8K5HDA
— ET NOW (@ETNOWlive) February 1, 2019
#PorinjuTopPick | The smallcap czar @porinju shares one of his TOP MID-CAP PICKS#Budget2019 #Budget @AyeshaFaridi1 @nikunjdalmia #BudgetSession pic.twitter.com/qiK1wQN7hp
— ET NOW (@ETNOWlive) February 1, 2019
Porinju’s Equity Intelligence PMS Fund is the single largest shareholder of Kaya.
Equity Intelligence holding in Kaya has now crossed the 15% mark. @porinju now holds almost a staggering 2 million shares. Bet big, bet hard on high conviction stocks. pic.twitter.com/QkciGQ2V50
— Kush Katakia (@kushkatakia) June 8, 2018
EQ's @porinju now owns a staggering 1751617 shares of Kaya Ltd. This works out to a massive 35% of the free float. This is what I would call "Putting money where your mouth is". https://t.co/EHarFRHfoJ
— Kush Katakia (@kushkatakia) April 18, 2018
Unfortunately, the stock is presently in the doldrums. It has lost 28% on a YoY basis and 12% over 24 months.
| KAYA LTD – KEY FUNDAMENTALS | |||
| PARAMETER | VALUES | ||
| MARKET CAP | (Rs CR) | 952 | |
| EPS – TTM | (Rs) | [*S] | – |
| P/E RATIO | (X) | [*S] | – |
| FACE VALUE | (Rs) | 10 | |
| LATEST DIVIDEND | (%) | – | |
| LATEST DIVIDEND DATE | – | ||
| DIVIDEND YIELD | (%) | 0.00 | |
| BOOK VALUE / SHARE | (Rs) | [*S] | 127.22 |
| P/B RATIO | (Rs) | [*S] | 5.73 |
([*C] Consolidated [*S] Standalone)
| KAYA LTD – FINANCIAL RESULTS | |||
| PARTICULARS (Rs CR) | SEP 2018 | SEP 2017 | % CHG |
| NET SALES | 107.46 | 101.4 | 5.98 |
| OTHER INCOME | 1.36 | 1.89 | -28.04 |
| TOTAL INCOME | 108.82 | 103.29 | 5.35 |
| TOTAL EXPENSES | 104.43 | 98.48 | 6.04 |
| OPERATING PROFIT | 4.39 | 4.81 | -8.73 |
| NET PROFIT | -1.5 | -1.15 | -30.43 |
| EQUITY CAPITAL | 13.06 | 13.03 | – |
(Source: Business Standard)
Conclusion
Prima facie, it does appear that Piyush Goyal’s budget will be a game changer which will send the stock markets surging back to their past days of glory. There is now no justification for our continuing to cower in fear and hide in the bunkers. We should start tucking into high quality consumption stocks ASAP as advised by Porinju!
Kaya does not have a great brand in the segment it operates. Its product too does not have great review. Once a business is a low margin business however great the management it is its hard to improve the operating margin. I am.not saying it’s not possible but why take chances when you have other low hanging fruits available.
Mention which are low hanging fruits ,you mentioned.
Look at the capital goods sector .There are.niche companies with good balance sheet and healthy order book.
Sirjee, any specific names here?
Ek haare hue juary ki chaal. Porinju has lost tonnes of investors money going broke on such half cooked ideas that are called CONVICTION STOCKS. We seem to have lost all sense of proportion while listening to and following such pandits. And look at what they are depending on – Rural income doubling by 2022. Anybody with even basic arithmatic knowledge should know that this requires a cagr of about 20% in farm incomes in next 3- 4 years. Ask yourself whether that is achievable? With huge deflation of agricultural produce prices, in the hand of the farmers, I suspect we may be heading towards very minimal farm income growth other than direct transfers by govt. Thus the basic premise of the entire stock market growth story is higly suspect. I wish all fellow investors all the best. However beware of such pandits who have their own axes to grind in recommending specific stocks.
Do you think market should punish him more for his half baked ideas like”Chor companies”?
You are right, fundoo. His magic band is not working. Anyway, his style was only for bull market. It was working at that time. Over now. Stocks with profit are not working. Why this stock with decreasing profit can work! Very good profit given by few still market finds some deficiency in this market. Not easy to make money.
Anyone will do well by doing exactly reverse of what Porinju recommends. Sounded like entire 75K crores meant for farmers will go to this Kaya. Don’t know what is so big deal about Kaya with annual sales rise of 5%. Any blind person will understand that HUL is far better on every parameter.
Humble request to this portal. Pls don’t publish any article or post concerning Porinju. Off late, this page became a marketing mouthpiece for couple of PMS guys.
Yes Krish you are right! Look at whats happening to Rain Industries recommended on this website few days back. Looks like its headed to double digits and may be even back to Rs 40. We need to recommend stocks which are actual value buy and not promoted by this PMS Fund Managers for their vested interest.
It is refreshing to see decent results getting sold into. Competitive intensity among investors is sagging.Probably the time to start looking deeper into Q3 numbers. Will surely bring out fresh thinking in each of us on Choices. Introspection hour in smallcaps & microcaps.
Porinju calling Dhirubhai chor??????????
I have lost 58% in Himalaya Food International . Can it come up so that I can save my investment ? w/out loss? Some expert advised about this stock …..,,
was it porinju, seems like all chor companies have an affinity towards him
Awesome comment. Everytime I read across ‘Chor’ word, I only remember Porinju.
is it going to become another LEEL?
when did Kaya become high quality high conviction stock? luring investors with messages on Twitter is not going to work anymore, all will pretty sure dump this one much like he used to do it on others
What should one do for khaitan chemical and fertilisers share?
Never give your money to pms so that they invest in shady firms. They would never play with their money in such companies…what an irony
Porinju’s PMS bled again in Jan as did Maheshwari’s
Read more at:
//economictimes.indiatimes.com/articleshow/67898100.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
I don’t know why Porinju is holding Kaya so big quantity? Mcap is the valuation we pay for the Co. Mcap is the most powerful and dependable parameter to decide to buy any Co. The sales is 200 Cr and Mcap is 1000 cr. So how one would pay 5 times Mcap to a Co which is making loss! even if we agree on Porinju’s rationale that per capita Income will go up, how much Kaya can grow in 4-5 years? Can the topline go to 1000 cr means 5 times from now? And even if that happens, the ratio will be 1:1 for sales and Mcap.
I think Kaya future growth is already discounted at this Mcap.viz price at 5 times the sales.
See, Mcap is the single parameter to figure out what we are buying as stock. If the sales and Mcap is 1:1 , we can say it is a good investment but if it is already quoting at 5 times of sales, how Kaya will turn to be a multibagger in 4-5 years? I hope Mr. Porinju can read this and give me a reply here. I am keen to know how he has valued Kaya !
NATIONAL ALUMINIUM (NALCO) NOW 57 , GOVT. OF INDIA STAKE 52%, IS IT NEXT HINDZINC?
I HAVE THIS.PLEASE SUGGEST LEVEL.