Union Budget 2013 ~ India is a BLESsed Economy

Felt like a stand up comedian as had the house of 400 well informed investors in splits !  when I address and interacted with them on Budget Day Feb 28 evening itself at a Budget Review Event jointly hosted by AIVF,JITO and the BSE Brokers Forum at KC College Auditorium

Gaurav Parikh on Dias before his Humorous Address to 400 in the audience On Budget Day Feb 28,2013

Covered this on our Company website as below :

SCRIP STANDPOINT ~ A View

Slide Share ~ The Presentation at the Event to support the Address & Interaction

Union Budget 2013 ~ India is a BLESSsed Economy…

Enjoyed on the Budget Day Evening itself Feb 28,2013 addressing and interacting with a well informed audience of 400 on the Union Budget 2013 ~ on how the Government plans to make Money to tackle deficits and how we can ! ~ plan to host a few thoughts of my presentation on the company website www.jsalphaa.com and on this blog ~ covered how FM has cleverly and conveniently balanced the budget ~ also covered  the Forward Trends in Equities &  Indices & Gold & Exchange Rate & how Debts & Deficits are forcing Disinvestments & how the malaise continues on our exchanges and it will be some time before the retail investor comes back,if at all ~ spoke on Liquidity,Sentiment,Momentum and Valuation

Felt more like a Stand Up Comedian as the audience were in splits on some of the budget and stock market situations I presented…

Union Budget 2013 Review Event

Ask yourself this ~ Did it really matter to me here in India who won the USA Presidency ? ~ am I better or worse off !? ~does it affect my health,my family,my job or business,my wealth….my stocks ! ? ~ am I really going to advice to get out of Indian IT Space !?

On US Foreign Political or Economic Policy Issues,neither Obama nor Mitt Romney would dare to effect any changes that will affect US Interests

Happy for Obama that he won as incumbent…..and his anti India IT outsourcing stance ,am told by Indian IT Insiders is only a local  appeasement tactic to protect American Jobs,as they really have little choice in the matter as of date ~ call it Catch 22 ~ they want to protect American Jobs but in a leveraged economy and a recessionary environment the economics simply don’t work out  not to outsource ~ having said this the cap on H-1B Visa for highly skilled foreign workers has been dropped by USA from 195000 in 2001 to just 85000 this year ~ Indian IT Companies get round this hurdle by rationalising the team numbers on a project,local US Hiring and doing more work on the Project out of India…of course they have been accused of other ways too !

David Bier,an US immigration policy analyst,wrote in Forbes earlier this Year that Foreign Highly Skilled workers on H -1B Visas create jobs not take them ~ in support,he quoted a 2009 finding by the National Foundation for  American Policy that for every H-1B Visa request it co-related with five new jobs at major firms and more than seven new jobs at firms with less than 5000 employees   !

Though  Indian IT may not be a great Investment Theme that it was in the 1990s and earlier part of the 21st Century when all IT majors,except for  Satyam, were simply great multi bagger pickings !, the IT Story is far from ebbing and I’m not going to advice Clients to move out of this space totally ~or even switch from TCS to Infosys like CLSA thinks should be done !

Make no Mistake,Obama will continue to bully India on both fronts and,I daresay, we shall continue to acquiesce quickly without serious debate justifying US entry on grounds of aiding GDP Growth and creating millions of jobs  and upgrading our Infrastructure with latest technology !  ~ We need to be cautious that while USA promotes their Interests aggressively,they will as they need to survive and recover from a faltering and highly leveraged economy,we need to safeguard our interests ~ I genuinely fear this is not happening  ~ we are opening out more US exposure in Insurance,Retail,Defence,Aviation,Agriculture,Banking,Higher Education,Automobiles and allied sectors without the rigors of  an intelligent debate without premediated bias or prejudice on the long term implications of this

1. Opening out FDI and allowing US MNCs to flood and penetrate India overwhelmingly
2. Enter into Billions of US $ Contracts with US Engineering and Technology Companies to manufacture Equipment and transfer technology to set up India’s Nuclear Power for Peaceful Purposes Infrastructure and for other Major Infra Projects

Have a look at my several Obama Posts when he visited India in November 2010 in the middle of his first Presidency

The first one on November 6,2010 lists many issues where USA and India are not on the same page

The last one on November 17,2010 laments how highly US educated Indians are used as pawns by US Corporates

Insiders in Heritage Foods ~ up from Rs 300 to Rs 450 levels in a month ! MNC Takeover?

Bulk Deals in Heritage Food a few days ago…….

01/11/12 KOTAK INDIA FOCUS FUND  -193397  at Rs 390.00

01/11/12 ASHISH RAMESHCHANDRA KACHOLIA  +194000 at Rs390.00

31/10/12 KOTAK INDIA FOCUS FUND – 248525 at Rs 385.00

31/10/12 KOTAK INDIA FOCUS FUND  - 84500 at Rs 380.18

I had blogged on this just a fortnight ago on October 22,2012

Heritage Food is flying high at Rs 360+ surging over 130% in 100 days since Director’s wife picked up 50000 shares at @ Rs 155 !

The Price is running away from what Valuation indicates…..and it could only mean one of three…

• It’s close to being acquired by a MNC like HUL or Nestle ~Company has been actively wooed in the past
• Non Linear Growth in Earnings going forward ~ How? ~ Check my recent blog post linked above
• Market Machinations ~ Definitely evident

Check out the BSE Trading Pattern from October 1,2012 below

Interestingly on the trading days highlighted in Bold Green where the Volumes have been abnormally high ,the Delivery % has been quite low except for the two days when the above bulk deals were done !

The Volume on BSE today also was high at 88000 shares with price surging to a record Rs 450 before closing at Rs 444+

Heritage Food is flying high at Rs 360+ surging over 130% in 100 days since Director’s wife picked up 50000 shares at @ Rs 155 !

Closed at Rs 357 today after a high of Rs 367

The Company was set up by the ex Andhra Pradesh CM,Chandrababu Naidu and is headed  by his wife, N Bhuvaneshwari ~ They hold @ 46% of the Equity  ~ Above Director’s wife shares too are included in the Promoter Group

Heritage Foods was quoted @ Rs 150 in the beginning of July 2012 ~ There was some relatively heavy volume on July 4 and July 11 ~ Company informed the BSE in a communication dated July 5,2012 but updated on BSE website on July 12,2012  that Nara Brahmani,wife of Executive Director Nara Lokesh had purchased 50000 shares in the Open Market through Zen Securities at Rs 77.50 lakhs or Rs 155 per share on July 4,2012  ~ She held just 500 shares prior to this !

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Heritage_Foods_(India)_Ltd_200712_SAST.pdf

Check out the first Fortnight July 2012 volumes on BSE for Heritage ~ normal trading was in a few thousands except for the two days stated above

Well Done Guys ! You’ve gained a cool 130% or over Rs 1,00,00,000 or Rs One Crore in gains INSIDE  just 100 days !

Valuation wise the FY 12 EPS was @ Rs 8 with PAT at RS 9.19 crs on an Equity (FV Rs 10) of Rs 11.53 crs ~ Book Value is Rs 80 with Networth just above Rs 92 crs ~ Q 1 FY 13 has shown superlative strong results and the mood is upbeat with a strong surge in PAT expected this year ~ PAT for the the three months ending June 30,2012 was Rs 8.44 crs ~ it thus earned in three months nearly as much as it had in the whole of last year !  However with Closing Price at Rs 357 today ,and considering FY 12 Earnings and Assets,relative valuation give a P/E of 45 and P/BV of 4.5 ~ That’s High ! and clearly a record FY 13 Year is being reflected in the surging share price  ~ EPS should comfortably double past Rs 16 and even move above Rs 20 ~ that adjusts the Forward P/E to below 20….The current Market Cap is just Rs 411 crs or @ US $ 75 Million for a Company whose Sales should cross Rs 1500 crs this year through a strong marketing and distribution Chain that cannot be replicated overnight ~ and what’s US $ 75 million for a FMCG MNC to buy out 100% of a leading Indian Listed Dairy Company that has a major market share in South India through over 1000 Franchisee and Own Retail Outlets and Parlors     

So what’s happening ! ~ Heritage Foods has been wooed by several FMCG Multinationals in the past ~ like the likes of HUL & Nestle ! ~ It’s Dairy Division is the Main Driver while the Retail Division is recovering from the nascent loss

Non Linear Earnings Growth is indicated  clearly in FY 13 and coupled with prospects of a multinational acquiring the company,there could be a further rise in this Hyderabad based company ! Q 1 FY 13  was superlative  ~ Q 2 results September 30,2012 results are to be declared when the Board meets on October 30,2012 and should confirm that FY 13 will be very upbeat with all time record earnings

But then  did we know,like the Company’s Directors did that  the June Quarter would be so delightful ! and record earnings would be made  ~ they picked up shares in four days after the June Quarter ended ! ~ results of course were updated by BSE on it’s website on July 30,2012 when the Company informed them

…or else we too would,or maybe I should say should or could  have picked the share up at Rs 155 in early July 2012 and got these awesome 130% gains in 100 days !  ~ Early August the Price began nudging Rs 200 and early September had crossed Rs 250 with October beginning  powering it past Rs 300  and in the last three days surging past Rs 320 and swinging like a pendulum intra day between Rs 325 to Rs 372

“From Farm to Fork” is the slogan of Heritage Foods ~ it’s got a spright in it’s steps and it’s best years have arrived  

So are you going to Drink Milk at Rs 357!?

Cheers !

The Aroma of Starbucks Coffee is wafting already ! ~ smelt it as I walked  into my office this morning !

The first outlet opens in my Office Building~ Elphinstone Building at Horniman Circle,Fort,South Mumbai  tomorrow and heavy preparations are on ~ looks like a huge opening blitz ~ trust the Americans for this ~the street is swarming with them with Coats and Blazers despite the October heat~ and a whole lot of heavy swivelling spotlights have been mounted on two special frames bordering St Thomas Cathedral boundary Wall and focussed on our Building ~ Pay & Parking Area has been vacated and cordoned off to make space for a huge makeshift stage and some seating area ~I guess for some performances and speeches at the launch  ~ A huge White drape hangs vertically on the building where I’m assuming they’re planning to beam Starbucks ads etc ~ The Building corridor on the Street has been cordoned off too and the Starbucks Outlet has been concealed by black drapes in the Corridor so nobody gets a peek in before it actually is thrown open ! ~ yet the Coffee has already began to brew and the strong and intoxicating, and I must say can easily induce addiction,aroma is already wafting the Street outside !

So become a Web Client and I’ll buy you a Starbucks Coffee ! ~ become a personal client and I buy you more than one ! as we would interact often ~Come on ! others are offering worse to seduce you ! ~ like 50% off on their Advisory Fees or even guaranteed returns !

Of course ! you can buy your own Starbucks Coffee ! ~ but look at it this way ! ~ with me,in due course, you should be able to do so comfortably and as often as you would like without holding back and without even a twinge of guilt ! ~ maybe you’d buy me one too !

It’s of course quite another thought whether one should indulge in Starbucks Coffee at all ! ~  it’s an addictive Consumer Discretionary Spending ! Starbucks costs Star Bucks ! ~ an average of over US $ 2 without the frills and toppings ~ let’s see what their opening pricing is in India

….and Tata Global Beverages is holding strong at Rs 163 just now ! ~ that’s probably a bit more than the Opening Price of a Starbucks Coffee in India !

Cheers  !

Tata Global Beverages Anyone at Rs 150+ !?

Starbucks Coffee Anyone at Rs 150+ !?

Yeah ! Starbucks is opening it’s first India outlet in South Mumbai on October 20, 2012 below my Office  at Horniman Circle,Fort !

Starbucks Below ! I’m above !

Gives all of You  a Starbucks Reason to visit me now !

Just for the record had strongly recommended to Clients,Tata Global Beverages in the Rs 80+ to Rs 100 range in December 2011 and January 2012  as a Portfolio consideration ~ this is another classic illustration of Investor Herd Psychology ~ not many really took heed and advantage as at the time in 2011 the Market Sentiment was yet perceived as dull and flat with bearish undertones despite our saying  a bullish wave is seen to being unleashed for a very short while ~ Now we see huge interest and Volumes from Rs 130+ levels

I think the Price is being build up for the Grand Opening of Starbucks in India for later this month !

I also think that,besides others, all those who missed the superb multibagger run of Jubilant Foodworks and Dominos are now clambering on to Tata Global Beverages and Starbucks  ! ~ Perhaps a Good Reason in itself ! ~ even though current Valuations are being ignored for Potential  Premium and Earnings going forward

Cheers !

So you think with the buoyancy in US Indices so far in 2012,Hedge Funds are having a Good time again ! ~ Think Again !

Hedge Funds underperform a buoyant S & P in 2012

I’ve held that Aggression is an extremely Risky Stance given the weak macro global headwinds that yet prevail

Joe Weisenthal just posted an interesting and revealing study  in Business Insider  that just 11% of Hedge Funds have outperformed the buoyant S & P as of August 3,2012 this year in 2012.This has been monitored by Goldman Sach’s Hedge Fund Trend Monitor by Amanda Sneider

This means that just 1 of 9 Hedge Funds have outperformed the S & P ! ~ that’s a rotten statistic ! great actually as it  shows up the huge risks in aggressive play in times like these

20% of Hedge Funds have actually made a loss while the S & P has moved up by 12% ~ The Hedge funds average return is just 4.6%

Apple is the most popular Stock held followed by Google with Exxon Mobile being the stock most shorted

Consumer Discretionary and Information technology are favourite Sectors

A Warning,perhaps, for Indian Market Bravehearts !

Perhaps you should hedge by buying September Puts just before we begin September !

Cheers !

Courtesy a Good old Friend for over 40 years now, who’s with the US MNC General Mills (Pillsbury Flour and Haagen Daz Ice Cream and other top Brands ),I was rewarded with some Haagen -Daz Gift Vouchers for a favour that I would have done anyway for a Friend

Been told by many ,who’ve tasted it overseas,of how Heavenly Haagen-Daz Ice Cream is…got to taste it yesterday at the newly opened Parlour ,bang opposite the PVR Multiplex in High Street Phoenix at Lower Parel in Central Mumbai

Simply overwhelmed by it…..Awesome Treat !…Heaven ! ~ Nothing comes even Close ~ and believe me I’ve tried them all in India ~ from the Brands to the home made hand spun to the in house classics at the leading Clubs

What sets Haagen-Daz Ice Cream apart is the source and quality of Ingredients and the making process itself ~ the right amount of Air,100% Pure rich Dairy,Nuts from Hawai,Vanilla from Madagascar and Chocolate from Belgium…the Ice Cream simply and rightly takes a long time to Melt,thus making it really a pleasurable experience ~ the density,the texture,the richness,the thickness,the blend, the taste ~ all divine !

….they’ve got 21 Flavours and three Sorbets…a single scoop is priced at Rs 180 and a double at Rs 290 and a Triple at…never mind !…these are excluding taxes !….Their Top Flavour is Belgian Chocolate….we tried out four flavours…Cookie and Cream was outstanding…the scoops can be served in a variety of ways ~ in crepes,in a waffle cone,with picola sticks,on a waffle….costing for this is separate and begins at Rs 35 ~ also with a variety of toppings that too begin at Rs 35 for each topping…so a single scoop would be an Investment of @ Rs 250 to Rs 300…The Parlour serves a variety of Cold and Hot beverages too…but my advice is to concentrate with single minded devotion and focus only on the Ice Cream and the Dessert Variations

The Parlour is staffed well and we were pleasantly surprised as to their obviously being well trained as they were courteous,prompt and best of all inspiringly knowledgable of the vast menu,explaining it patiently as we were being spoilt for choice..the current Menu Brochure itself looks superb,but the one they are launching tomorrow is a Classic ~ I thought it was a Coffee Table Book !

The New Haagen-Daz Menu ~ More like a Coffee Table Book !

Ask for it…..don’t just order from the Wall…..you’ll be stunned…I may be the first to give you’ll a peak of how it looks above !…..It’s a Chocolate and Gold Combination Hardcover ~ Beautifully Textured and Designed ~Rich & Vibrant Colour Sinful Illustrations….each Hardcover  must be costing Thousands of rupees !…it’s a disdain to call it a Menu !….Imagine spending ,rather Investing so much in just the ‘Menu Card’ !

……In Basic Three Steps it outlines how to Order and how to have the Ice Cream Scoops~ However I wanted to go even beyond  to try out each and every Sinful Dessert Preparation Illustrated in that ‘Menu’!….however had limited gift vouchers !….we were four of us ~ we had two single scoops,one double scoop and a strong latte coffee ~ had to use two of the four vouchers ! ~ don’t ask me how much !  ~ but it was worth it ! ~ and don’t retort it was just because it was a freebie !…you’d be insulting both the Ice Cream and me !

But Next Time we’re surely going to try out the Rs 1300 + taxes Chocolate Fondue served with 16 min scoops of Ice cream ~ Four Scoops Each of Four Flavours of your Choice + Fruits and other toppings….I was licking the Illustration  ! …If you saw it,you would too !~ the suave manager, Shameen ,tells me it will serve four easily ~ we plan to show him how it will serve Eight !

The Parlour was packed on a Friday Night…with waiting even at 11 pm !….we were fortunate to get the best seats in the house really…where is the penny pinching in Mumbai !?…though I must confess it felt good to see other paying and not me !

We were soon joined at the next table by a bevy of seven to eight hep young girls ~ all in minis or hot pants for my wife to comment what do Girls wear these days !…”Or Don’t !” I had to chip in !! ~ told her she was just making a fuss and being a trifle old fashioned ~ she does not think it enhanced the Ice Cream Experience in anyway ! ~ they did show us how to share without feeling awkward or embarrassed that we may be acting “Cheapo”~ order one lovely dessert and eight spoons and share it ~per head will be then an affordable between Rs 50 to Rs 100 bucks each ! ~ albeit for three to four bites each ! ~ going ‘Dutch’ on ‘Haagen-Daz’ !

Hey Buddy ! When’s the next Time I can Favour you again !…Be Generous and I’ll be Grateful and Promise to Treat you at your Own Ice Cream Parlour with your Own Gifted Vouchers !…Never Mind !…The Ice Cream’s worth Dying For and even Paying For at Prices that too are Dying for !…I yet hold two more Gift Vouchers which my Wife wants us to Gift to our Son !…I’ve held back thus far with the excuse that they would involve Gift Tax !…what one has to sacrifice to keep a Marriage alive ! ~ Haagen-Daz Gift Vouchers !

Cheers !

Performance of the BSE Sector Indices in 2011/12  and to date is quite Interesting ….What provoked this post is Sameer’s counter argument in my earlier post…he is bullish in the short term,citing the favourable upmoves in the Pharma,Cement and Auto Sectors…I’m looking at the Bigger Picture and I’m not so excited really as Macros are clearly playing up and this Government is unlikely to push big ticket reforms…we need to await 2014 General Elections,which I fear may yet again through up a fractured verdict…but I hope with a more reform friendly and decisive coalition !

Have a Look at the Performance of the BSE Sector Indices in 2011/12 and to date…Quite Interesting…The Reds & Greens signal fall or rise/holding up from over a year ago  

The Alltime High & Low Columns are quite revealing

• FMCG,Healthcare and Auto Indices  have registered All time Highs this Month…with consistent Wealth Creation in the 21st century in FMCG and Healthcare while a huge surge in the last four years in the Auto Sector
• Quick and huge  wealth destruction in the IT sector in 2000/2001,the Metals and Power Sector inside Ten months in 2008 between January and October and in the Realty Sector between Jan 2008 and March 2009  

PERFORMANCE OF BSE SECTOR INDICES AS ON APRIL 26,2012

• IT  shows a Drop,but TCS has outperformed Infosys ,which has slumped and the latter holds 48% weightage in the Index ! against just 29% by TCS !…this needs to be rectified by BSE rightaway…more so as the Market Cap of TCS is Rs 233301 crs against just Rs 135415 crs of Infosys !….The Index tracks the share price of  10 Companies with 88% weightage of just three …Infosys,TCS and Wipro …Other interesting constituents are Oracle Finance and Financial Technologies 
•   Techk comprises of 30 IT,Telecom,Media and Communication Companies and has mirrored IT fall
• FMCG has been the years Darling with ITC (55% weightage) and HUL (18% weightage) outperforming to allow the Index to hit Alltime Highs…11 Companies constitute this Index…Interesting ones are the two Kingfisher Group Companies,United Spirits and United Breweries…. and Tata Global (spotted this at Rs 80 late in 2011) and the huge 2010/2011 winner Jubilant Foods (Dominoes Pizza)
•  Consumer Durables has heavyweight Titan with 51% weightage in the Index…It’s been a flat year
• Metals has seen a bad year…In fact this Index has slumped the highest @ 35% over last year…75% Index weightage is in Five scrips led by Tata Steel with 22% followed by Coal India,Jindal Steel,Sterlite and Hindalco
• Oil & Gas too has seen a bad year…Reliance with a 54% weightage and ONGC with a 22% weightage aggregate a skewed weightage of 76% in the Index
• Capital Good Giants,India Proxy Larsen and Toubro and BHEL have a weightage of  54% and 16% respectively in the Index that monitors the share price of  17 companies,that also include Siemens,Suzlon,Havells,Thermax,ABB and Punj Lloyd…it’s been a shocking year for both,Larsen and BHEL on the bourses and the steep fall has unnerved even the aggressive Investors
• Healthcare has held up well in 2011/12…19 Healthcare and Pharma Companies comprise the Index with Sun Pharma (18%),Dr Reddys (17%) and Cipla (12%) leading the weightages
• 14 Banks comprise the Bankex with the top three weightages given to HDFC Bank (26%),ICICI Bank (25%) and State Bank of India (16%)…it’s been a very challenging year for the Banks given the slowdown in the Economy and high interest rates affecting credit offtake…the rising level of NPAs remains a threat
•  PSU ~ The Index has 60 PSU Companies in it ! with Coal India and ONGC leading at 14% each in weightages followed by State Bank of India with 9% and NTPC with 8%…Interestingly these 60 Comnpanies have an aggregate  Market Cap of Rs 1561821 crs currently….and this smartly and significantly  constitute nearly 26%,that’s over one fourth of the Total Current Market Cap of BSE of Rs 6108734 crs 
• The Auto Index covers 10 Companies across the sector spectrum of leading four HMV and LMV wheelers & Two Wheelers,Battery (Exide) & Engine (Cummins) Manufacturers and Tyres (Apollo)…Aggregate 86% weightage is given to top Five Vehicle Players led by Tata Motors with a 31% weightage .Interestingly and encouragingly too,this Index has held up well,largely due to outperformance by Tata Motors…However Index aggregate Market Cap is below 5% of total market cap 
• Realty Index tracks the share price of 12 realty companies…DLF lead weightages with 33% followed by Unitech (17%),Oberoi (10%) and HDIL (10%)…Shobha,Godrej Properties,Phoenix,D B Realty are some others in this Index…it’s continued to be a sliding year for this sector that’s been saddled with huge crippling debt,huge inventories and delayed projects….but how much more lower can it go !…search for contrarion winners in this sector over the long term…had spotted Orbit at Rs 20 + late last year and early this year…Price has doubled to @ Rs 48 currently…and even Indiabulls Real Estate at Rs 45 + levels after demerger of Indiabulls Power….it surged to Rs 80 levels before reacting now to Rs 62 …But Both do not form part of this Index 
• Power Sector is battling  Source Feed Supplies of Coal and Gas that’s crippling Operations and resulting in lower output and capacity underutilisation….Implementation of both,Public and Private Mega Projects too has been delayed for a host of reasons …This Index tracks 19 companies in the Sector that cover Generators,Transmitters and Distributors as also others that supply Equipment like BHEL which has the second largest weightage of 15% …NTPC with a 20%  leads the weightages….Incidentally Private Power Players like Reliance Power  and Adani Power have a weightage of 4% and 3%  respectively….Given the Challenges faced,the Year has been quite unkind to this Sector…the Index has slumped @ 27% in the past year…anyone for a Contrarion Bull Play here !?