BlogKnowledge SeriesUdaykumar K.V.

Fundamentals versus PE holding vanity

Why do continuous loss-makers command a high future earning ratio?  Some stocks are worth buying based on their strong financial fundamentals, future business potential and empirical evidence of their business sustenance. Advisors recommend such stocks with an expectation of a stake sale premium when one private equity or strategic investor sells its holding to another buyer at a premium. That is no less than speculative pricing, an inseparable part of the equity market.  While the former is a safe bet, the latter is not always. Stocks of companies with private equity investments usually command a high price-earning (PE) ratio for no justifiable reasons. Such stocks move up based on newspaper reports of stake sales, which the “suitor” denies subsequently. They hit the limelight be...

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BlogKnowledge SeriesUdaykumar K.V.

Deepak Nitrite

Wait and watch defensive stock Deepak Nitrite already has a price-earnings ratio of 32 times over the earning of 2022-23, its stock may not be very lucrative unless something drastic comes to shareholders. The earning ratio is above the Sensex average. The indices are already ruling high. The chances of anything drastic seem weak in the long run. Its equity base is low at Rs 27.5 crore. With a book value of Rs 300 on a Rs 2 share, a bonus is not a remote chance.The financial result last year showed some pressure on its net margin. Naturally, return on equity also had a corresponding beating. The efficiency of capital deployment also decreased.   A diversified product portfolio and leadership are some of the products that ensure it is a safe business. Though its PE ratio is...

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BlogUdaykumar K.V.

Satire of palindrome called Soros

The Hungarian-born Soros' hunger for eating India’s democracy will end up only in sorrow. His Quantum never reveals the names of its investors. However, Soros expected Hindenburg Research, which demanded Adani to reveal the identity of its investors, to make Modi break his silence! The 93-year-old George Soros has no work in India as his stated principles have no space in a country as free and democratic as India. He may have been destined to bite the dust at the advanced autumn of his life. Quantum Fund, originally known as Double Eagle, broke the Bank of England in 1992 after his bet on the erosion of pound value. Sterling had to move out of the European Exchange Rate Mechanism after it broke the bottom of the required rate. He made a profit of $1 billion out of a $10 billion shor...

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BlogUdaykumar K.V.

An OPEN LETTER TO PRIME MINISTER

Date: 06.02.2023 To Shri: Narendra  Damodardas  Modi Hon: Prime Minister of India New Delhi Sir Sub: Railways neglect lakhs of Malayalis residing in the remote Central suburbs of the Mumbai metropolitan region The Railways neglects lakhs of Malayalis residing in the remote Central suburbs of Mumbai. Sadly, a major railway junction of the Mumbai metropolitan region mocks hapless home-going people! From Kopar to Badlapur, and up to Asangaon, in the remote Central suburb of Mumbai, there are several thousand Malayalis – in the peripheries of 13 crowded local railway stations on the route. These suburbs have the highest density of Malayali population in the entire Mumbai metro region. While the Indian railway is passing through a revolutionary phase w...

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BlogUdaykumar K.V.

Much ado about Hindenburg Research

What is going to happen ultimately? Anyone can prepare a research report with many questions in it out of a close watch on a stock with a high PE ratio and that tapped securities from various markets. Stocks with a high PE ratio are susceptible to a quick fall. Hindenburg's research report highlighted mostly the risk factors which the Adani group mentioned in its disclosures filed with respective securities watchdogs at the time of security issues. The report of Hindenburg Research on Adani dated 24th January 2023, which the Adani Group called “Mad offs of Manhattan”, appears as a new style of Investor activism, relatively a new term to Indians. There is no need for extraordinary effort to write such reports against a soft target, especially when the targeted company is running a fo...

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BlogKnowledge SeriesUdaykumar K.V.

India, the new hope of the world: The industrial powerhouse and bed of innovation

In May 2020, barely two months after the lockdown began, I wrote in a column published by a Malayalam daily that India would enter a prosperous time after the pandemic. The following quarter saw an expectedly significant contraction in India’s GDP. The following quarter saw a GDP growth of 7.5 per cent on a year-on-year basis. That showed the economy could rebound sharply soon. The nationwide lockdown, factory closure for many weeks and massive job losses wouldn't have meant anything else.  The government acted on time with the launch of many schemes under AtmaNirbhar Bharat. The Reserve Bank also acted harmoniously with the government announcements. The combined action made Rs 27.1 trillion available for keeping the economy stable and on the path of revival. According to gov...

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BlogKnowledge SeriesUdaykumar K.V.

Cheetah and biodiversity

How does it work? Cheetah may regulate the overgrowing herbivores in its enclosure and save the vegetation to a limited extent. Global warming and climate change have already endangered many herbivores and reptiles. Cheetah alone cannot balance the biodiversity even after putting in an enormous challenge to save the wild cat from extinction once more.    Life of a single species on earth is impossible because biodiversity is the dynamic nature of the planet. Lives thrive on earth because of this inherent nature. One depends on the other for a living; we call it interdependence. The logic is simple. A positive does not have an identity if a negative does not exist and vis-à-vis. There is no balance without a counterweight.  Life and creation go on smoothly with a ba...

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BlogUdaykumar K.V.Uncategorized

Listing of LIC stocks

Loss is endemic in the obtuse “IPO” market The initial grey market price of over Rs 1000 for Life Insurance Corporation of India’s (LIC) stock went miserably wrong. The grey market realised the patches late. Bulls retreated from the grey market even after seeing the commitment of angel investors. The debut of the largest life insurer’s equity might not have shocked the analysts who knew the behaviour of the secondary market. Anyway, the tepid listing that shocked the maiden equity buyers was not a big failure but a failure at the cost of optimists’ miscalculation. Angel investors' position tried to bolster sentiment towards the offer. The sheer size of the IPO and the RBI announcement of an interest rate hike by 40 basis points on the day LIC IPO opened for public subscription posed...

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BlogUdaykumar K.V.

NSE Collocation Scam: Changing the goalpost

Hunt the hiding big-cats behind Chitra and the miserable Himalayan Yogi The funny Himalayan Yogi talks linked with the NSE collocation scam in the media are apparent attempts to cover up one of the looting macabre in India after 2009. The media is still far away from the core of the scam that happened in the National Stock Exchange (NSE) since the launch of the collocation scheme in August 2009, barely three months after the election victory of the UPA II. The multi-crore NSE scam blessed by the watchdog's astonishing soft corner approach seems to seek a new dimension. Deliberately or not? Certainly, it is deliberate, because someone needs to hijack the public attention away from the web of frauds that made some clumsy forces keep building their wealth. Or, someone in the media want...

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BlogUdaykumar K.V.

Lata Mangeshkar

The immortal Nightingale of India The Nightingale of India finally left for her heavenly abode leaving thousands of her songs in over 36 languages behind her everlasting legacy. No one knows exactly how many songs she had sung. The Guinness Book of World Records was confused about the number of her recordings though once it was published, amended later and deleted finally. By September this year, she would have turned 93 years, a precious long life that regaled three generations, excited legendary leaders of India and sang spontaneously for the spirit of the nation. It was on 27th January 1963, Lata Mangeshkar, then aged 34 sang Ae mere Watan ke logon at the Ramlila Maidan of New Delhi in the presence of Prime Minister Jawaharlal Nehru. In the Sino-Indian war, which was over just...

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