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“In India, companies may fall sick, but promoters rarely do!”

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Boom!as FM Busts Corporate Tax!~Wow!How!Now!?

Released today under my authorship in the SCRIP STANDPOINT Module of Jeena Scriptech Alpha Advisors Pvt Ltd  

“How’s the Josh !?”

Boom!as FM Busts Corporate Tax!~Wow!How!Now!?

The effect of Fun & Excitement peaks when the cause is least expected

Market Sentiment has reversed dramatically & instantaneously !  

BSE & NSE  has seen the Sensex & Nifty created historic surges moving respectively 5.32% & 1921 points up to 38015 & 569 points to 11274 on Friday,September 20,2019 & even more by 2.83% to 39090 & 11600 on Monday ,September 23,2019 to aggregate a surge of 8.3% in just two trading days with Total Market Capitalisation zooming up in just these two trading days by Rs 10,45,700 crs or nearly US $ 150 Billion  to  Rs 148,87,830 crs or near US $ 2.1 Trillion ,thus regaining US $ 2 Trillion Capitalisation quickly ! 

Date Sensex Close Up/(Down)  Points, % Approx Total Market Cap

(Rs Crs)

Total Market Cap Up (Down )

Rs Crs, %

Friday ,September 13,2019

A Week Before

37385 1,42,42,950
Thursday,September 19,2019

Day before Tax Rate  Game Changing Significant Slash Announcement


36093 (1292), – 3.46 1,38,42,130 (4,00,820),  -2.8
Friday,September 20,2019

Morning of  FM’s Tax Rate  Game Changing Significant Slash Announcement

38015 1922, 5.32 % 1,45,34,237 6,92,107,   5
Monday,September 23,2019

On Second Trading Day after  FM’s Tax Rate  Game Changing Significant Slash Announcement

39090 1075, 2.83 %


2997 in two days, 8.3%

1,48,87,830 3,53,593,   2.43


10,45,700,   7.56 

Wow ! How !  Now ! ?

It took a Government Sacrifice of  Rs 1,45,000 crs or US $ 20 Billion in Corporate Tax Revenues to create a 7x sacrifice surge in Market Cap of US $ 150 Billion in just two trading days !

It’s like the Government conceding to the Corporate Sector ” Hey Guys ! we’re transferring our Revenues to you as you’ll can put it to more productive use by funding an Investment Capex Cycle to stimulate more growth for better returns than we can through increased Government Spending “

What is clearly a Market Valuation Re-Rating Move,on the morning of Friday,September 19,2019 our FM Mrs Nirmala Sitharaman announced,what should be seen as a forced measure, a Tax Bonanza for Corporates busting the Tax Rate from an effective high of 34.94% for most to an effective 25.168% with no requirement for those who opt for this rate,  to pay the Minimum Alternate Tax which too was slashed to an effective 17% from  the current 18.5%.Another major tax incentive will be a Tax rate of just 15% for manufacturing companies incorporated after October 1,2019  & who commence manufacturing by March end 2023

Such Tax Rate Cuts & Incentives  announcements should have been part of the budget in early July.If one recalls since the NDA came to power in 2014,it’s always been their stated intent to reduce the Corporate Tax Rates gradually to 25%.Economic slowdown is a catalyst to this ‘one shot’ reduction now & that’s why it can be viewed as a forced measure

It’s a ‘No Brainer’ that Markets would instantly turn euphoric as back of envelopes calculations see the Nifty 50 Companies,whose aggregate FY 19 PAT was Rs 370000 crs , benefit by a clean Rs 27000 crs or US $ 3.8 billion in FY 20 on this Tax Rate reduction.Factor in Earnings Growth before Tax & the benefit is even higher  read more

Bodal Chemicals keeps sinking 5% ~ Closes week at Rs 28

Bodal Chemicals has sunk to another lower circuit today to close the week at Rs 28

This was my post earlier this week where I was shocked at the advice on it by a leading Broking House

Bodal Chemicals @ Rs 35 ~ Shocked At The Advice Of A Broking House Promoted By A Private Bank

A few have sought my views on it wondering ,like this Broking House who recommended long term risk investors clients to average in the Rs 26 to Rs 28 range , whether it’s a good buy now !

Best way to answer this is by reproducing below for wider readership this exchange of email content between a GM who works in the Chairman’s Office of a well known Corporate Group and who was one of the fortunate few to exit at a profit when he observed that Promoters were selling

Blog Reader : Hi Gaurav, Introducing myself, my name is _____ and I work with the ____ group.I am quite passionate about Indian stock market and I read your blog with great interest. The insights given by you are great.Regarding your latest blog on Bodal, I was following this stock – I read both buy and sell reports of ______ – I myself bought at 40 and exited at 62 when I saw that the promoters were selling.What I want to ask you is what is the real value of this stock. It has posted handsome earnings in Q1 and is slated to give good earnings in Q2 as well, depending, of course, on HAC prices, which have been fluctuating widely.Q1 FY15 EPS – 4.8  Q4 FY14 EPS – 4.1….Even if it can give in FY15 an EPS of Rs. 15, I would consider it damn cheap at a price of Rs. 32 odd now.What do you think? Please give your views.

Me : Glad you enjoy my blog….you are probably an exception to have exited with good gains in Bodal Chemicals….thousands of small investors have clearly suffered.….You work with ___ closely…ask him how important is Corporate Governance especially in recent years…practice & perception both….You need to go deeper than the numbers especially in Bodal Chemicals given what is being played out…When I consider an idea I go for Pedigree,Business Model,Financials and then the Valuation in this order….if I find it difficult to get past the first I rarely venture beyond that !….Retail investors have clearly been shorted badly here inside a month….Too many Questions pop up that on what I believe was a facilitated exit by one of the Promoters….if FY 15 and FY 16 too are going to be marvelous years as CMD Suresh Patel has stated giving strong Revenues and Profit targets too in his statement as Company is coming out of CDR  then he should have ensured that the exiting Promoter shares should have been picked up internally….Such Companies don’t deserve a healthy PE Multiple for two reasons….Corporate Governance Issues + Significant Volatility & Quick Swings in Global Prices of Chemical Products they sell …..Bankers who have lend to them may ask for part repayment or topping up security as Share Price has crashed to Rs 31 and a major part of Promoters shares are pledged for these loans…of course due to a great FY 14 they have prepaid over Rs 100 crs on the CDR loan restructuring in FY 15 till date….Once credibility is lost it take a long time to regain it….Even if it’s simply an investor perception…… Investor Interest in Bodal Chemicals may wane for what is playing out        read more

Sensex crosses 25000 ! but it is not a broad based rally ! Sell Sensex Scrips for now

Sensex crosses 25000 ! but it is not a broad based rally ! Sell Sensex Scrips for now…can re-enter later

SENSEX at 10.10 am 25217 up 1312 or 5.49%
Pr Close : 23905.60 Open : 24271.54 High : 25375.63 Low : 24271.54



11.85 %



9.69 %



9.46 %



8.38 %



7.91 %



7.37 %



7.31 %



7.16 %



7.08 %



6.91 %



6.25 %



6.21 %



5.98 %



5.94 %



5.94 %



5.11 %



5.06 %



5.05 %



4.92 %



4.75 %



4.60 %



3.54 %



2.61 %



2.49 %



1.44 %



1.33 %



1.32 %



1.27 %



0.98 %



-0.89 %

Will the Sensex close over 24000 for the first time on Election Outcome Day Today !?

Will the Sensex close over 24000 for the first time on Election Outcome Day Today !?….Singapore Nifty is up 1% early Indian Morning !

Our Capitalism Index our Sensex has recorded an intraday High of 24068.95 earlier this week on Tuesday, May 13,2014  but has never closed above 24000….yesterday it closed at 23905.60 ready to leap past 24000 again and even as all expect close with great vigour over 24000 today as all EXIT Polls indicate a BJP Victory and NDA forming the next government and Narendra Modi becoming India’s 14th Prime Minister

Will FIIs pump in a record US $ One Billion today or Monday and a further US $ 20 billion in the next six months !?

How many will announce IPOs in the next three months…..25 companies….50 companies…100 companies !?

Indian Rupee strengthens 10 % at least to US $ = Rs 54 over next six months !?

Will India GDP show an uptick of at least 1 % to cross 5.5% in FY 15 !?

From Vibrant Gujarat to Vibrant India  & a Vibrant Sensex & Saffron Indian Skies  !?

….or will we have kissed 24000 and fade away back to 22000 in quick time !?

I’m neither a detractor nor am attracted to any political party or leader…just Positive &  Optimisitic as always ! 🙂

Cheers !

Sensex 24000 & Nifty 7100 ~ A Final Short Term Flourish coming up ?

Sensex & Nifty at Record Existence Highs of 24000 and 7100 respectively ~ A Final Short Term Flourish coming up ?  

Long Term I remain excited but feel the Sensex & Nifty has been ‘Managed’ Up past few months,especially the 7% in the last three trading days !…Imagine Yes Bank gives you 7% in 365 days in your Savings Account…Sensex gave it in just 3 days ! …and 12% inside 3 months

The rally is not broad based…the Macros do not support it…Inflation remains High as do Interest rates….Manufacturing remains stunted….GDP  Growth Rate is lower than 5%….Monsoon Forecasts are less than Normal this Year….Ukraine Crisis is escalating…..PSU Banks have recorded the highest level of NPAs yet….though of course it is expected that Narendra Modi will decisively address many macro economic issues plaguing India when he  will be India’s 14th Prime Minister and BJP will lead a NDA Coalition Government …this should be confirmed when the Election Outcome is known day after

However there is evidence of Index Management as the Market plays out the euphoria of this expected and projected BJP & NDA Win…SEBI has already sent a notice to an individual broker who went long Rs 2000 crs in just one single day on Friday,May 9,2014 ! when his past trading record showed a significantly smaller volume of operations !

Traders would be wise to cash in….Opportunity will present itself yet again in June & July

Investors need not be perturbed as the Indices are establishing a stable base range of 22000 to 25000 for the Sensex and 6500 to 7500 for the Nifty  for the years ahead….Forecasts of 25000 and 30000 are being made by Capital Market Players  in the next 6 to 9 months…Many reckon it is the start of the ‘Mother of All Bull Runs !’….they had reckoned similarly even 10 years ago !  

FII Net Inflows which are currently at US $ 5.5  b to date in 2014 should strengthen to US $ 25 b this year supporting the buoyancy of our Markets in the second half of 2014 too

Rupee too should strengthen to move to under Rs 60 to the US $ decisively as FII Inflows strengthen and GDP Growth Recovery is evidenced to 5.5% and more

Check out related SCRIP STANDPOINT Module Web Posts linked below from March to May 2014 which spell out how to manage specific risks while riding the Bull and enjoying the Buzz


Am I being a Party Pooper in the Short Term ! ? Well, Maybe…but considering Near Term Risks,Sometimes it’s Wise to be Wrong Too ! read more

US Stocks Beginning to Bubble ? Should India Worry ?

US Stocks Beginning to Bubble ?

Would seem so if one goes by the Market Cap/GDP Indicator of 1.4… US Market Cap is @ US 23 Trillion  with the US GDP in 2013 @ US $ 16.9 Trillion …these are data points direct from the source

US Stocks Crash is expected in 2014 by quite a few  …..“We have no right to be surprised by a severe and imminent stock market crash,” explains Mark Spitznagel, a hedge fund manager who is notorious for his hugely profitable billion-dollar bet on the 2008 crisis. “In fact, we must absolutely expect it.”

“We are in a gigantic financial asset bubble,” warns Swiss adviser and fund manager Marc Faber. “It could burst any day.”

This Divergent Graph below lends support to the fact that Earnings have not Driven the Index like they should …The Index  has had a Upward Momentum of it’s own despite Drop in Earnings


S and P vs EPS

The Indian Situation is  actually different as the Sensex vs EPS Graph below depicts…so should we be really worrying too much looking at US Potential Crash Scenario being replicated here !?

Sensex Close & Quarterly Sensex EPS

Clearly the Next Trigger for our Sensex is the outcome of the ongoing General Elections…we will know by Mid May if Narendra Modi will be our PM and BJP will come back to power on it’s own or leading a NDA Coalition government

Then Sensex swiftly towards 25000 from current 22500 levels  ?

Will the US Scenario not Matter ?

What about strong FII Inflows of US $ 4.5 Billion in 2014 so far propping up our Sensex ? Will this Liquidity continue  even if Interest Rates begin rising in the USA later in 2014 as QE eases out ?

US Markets are trading at 15.5 Forward PE….. that’s higher against 13.2 and 13.8  5 year and 10 year averages respectively

Indian Markets too are trading at Forward of 15+ with FY 15 Sensex EPS Projected at Levels of Rs 1500 and current Sensex at 22500 levels…This is not overvalued by any stretch of Imagination…In fact on the contrary with a dismal GDP Growth of under 5% behind us there is an Earnings Optimism now developing

India’s Market Cap to GDP is 0.67 with Market Cap at Rs 7471165 crs or US $  1.25 Trillion day before and GDP FY 14 expected to be  Rs 11200000 crs or US $ 1.87 Trillion with US $ =Rs 60

🙂   Sensex 27000 Anyone later this year ?

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