Investment in Tribhovandas Jeweller's - An Opportunity for Long Term Investor

Tribhovandas jeweler is ones of the most respected jewelers in North India for their quality product in the gold segment. They entered into the equity market with full fanfare but faced the turbulent time post dismal performance. Management quickly identified the gap and move strategically to start increasing its footprint through franchisee model in tier 2 and tier 3 cities. 

The stock price stumbles from 180 level to 60 INR in the last one year. Company in recent quarter made respectable profit and the market capitalization's is also under 500 Cr.

As global economy is again entering into economic crisis thanks to confusion created by UK referendum coupled with unrest in Middle East. The lack of economic growth and the signal supported by US Federal Reserve indicate the investor to turn towards Gold and the price went above $1400 ounce. 

It is expected that the gold price will cross $1550 in coming quarter. At the same time, Indian economy is coming on track and the monsoon  is tracking in the right direction which in turn will give more bump to gold buyer community during festive time especially in tier 2 and tier 3 where Tribhovandas already showing their presence. 

It will help company to increase their margin and subsequently increased profitability which will attract retail investor towards the company equity. In my point of view, the stock price may jump more than 50 % very quickly with little good news flow from the company.

Disclaimer - Consult your financial consultant before investing

Indian Banks NPA & Restructured Loan Issues - Blamed Others for Own Mistake

For the last two years, the state of Indian Public Sector bank is not in good shape. Everyone is throwing ball in each other court and more specifically, the gifted economy by previous government. As per the article by The Indian Express, Public Sector bank is sitting on more than $110 Bn restructured loan and NPA's whereas write off already done is only for $18 Bn.

The Indian Central Bank Governor took bold step to clean up the books of bank to ensure that next level of growth happen from start while current government is trying to fund the losses of PSU banks by increasing the excise duty on Oil as well as not reducing the oil price.

We all the time blame the industry for taking the loan and not servicing sky high interest rate. I would like to put across few facts which everyone should ask from the employee of PSU banks.

ü  Do they know the analytics or not. If yes, then why they kept on giving the loan to companies having problem of servicing of interest only. Don't blame others but blame internal team members.

ü  Government bank always gives loan against securities, what happened to those securities. They can sell and reduce some losses.

ü  Many Companies reached out to bank for the waiver of high interest rate for certain duration so that money goes in the improvement of infrastructure of companies and ultimately improves the performance.

ü  Why bank is crying that they incurred losses, loan rate of 10 o 15% on the commercial is one of the highest and they made handsome interest rate. Why they did not tried to recover their principle amount.

It's very easy to say that X, Y, Z did a wrong business step and got trapped in this mess but in my point of view; PSU did the blunder as ignorance overweighed duties where they overlooked many KPI's to fulfill their quarterly target and taking home the fat award.

In point of view; RBI must think of hiring professional to run the PSU bank and apply the same rule which US Federal Reserve implemented post financial crisis.

It's my point of view, if anyone is having better view then please contributes.

Tata CLiQ e-commerce platform - Serious Competitor

For the last three year, India is the talking point everywhere around e-commerce boom with more than 70 million user uses e-commerce portal for one or another reason. The potential ofe-commerce is huge provided tackled properly in a strategic manner given the fact that mobility data user are growing. Till now only 23% of total data users are opting for e-Commerce sites; be it mobile or WEB and transaction rate is in low single digit until unless e-commerce portals are going for flash sales.

Interesting maximum revenue of established e-commerce companies revenue comes from electronics section and predominantly from mobile devices. Still e-commerce companies only sells around 15-17% of the total shipped Smartphone through their portal and rest falls in Local Retailer segment. After observing the trend of e-commerce companies performance as well as the threat points; at last Tata group announced their entry into the said segment.

We should remember that they have very strong experience through their retail business around fashion, electronics and other segment and many of the Tata Sons controlled companies offer many products such as capital goods and all. During phase 1 of retail business, they defined the process of procuring to warehousing to channel management to delivery management which is very crucial for any organization to be successful.

 Secondly, Tata sons also controlled one of the finest companies in the IT segment and can change the tide on the basis of innovative mechanism which no one can even think off. Given the above facts, CLiQ may immediately impose itself as non avoidable competitor in the market place using its unmatched brand value, great market reach, producer of many product.

They may opt to connect their retail outlets with CLiQ where user can place an order online whereas delivery or demo can be done through retail outlets.

Given the branding, most of the buyer and seller will be more than happy to get attached with them and on top of that, Tata may not opt to reverse strategy where they choose to acquire only profitable user base instead of user base to generate virtual valuation to get the funding.

In my opinion, the combination of CLiQ and Tata Group controlled retail outlet may pose very stiff competition to its competitor and believe that it will be learning for everyone. Its a move by Tata Sons which carry a capability to change the market dynamics

Is India Government believe in Cess & Levy - Where we are heading ?

The Government of India post assuming office chalked out ambitious plan to clean India to change the image of India. The vision of government was very noble and launched the program with fanfare wherein everyone nominated their favorite to be part of it.

Indian Media in order to capture the user base, followed the organized events by the government and flashed images of ministers to local people trying to keep the street to colony clean. The opposition bombarded government and called it as PR activities. In order to generate awareness among the common people government spent heavily through print and digital media by allocating multi million $.

Time moved on and Indian citizen moved on and we all know what happened in Delhi when Local MunicipalCorporation went for Strike and whole Delhi get converted into Garbage Center. We all observed that all politician to local citizen kept talking and blaming each other including popular Indian Media houses but no one initiated collectively to clean the city.

As government spent heavily and in order to fill up cost, Finance ministry came out with fantastic Swachh Bharat Cess wherein there is no Cleanness. To be my utter surprise they started charging the cess attached with service tax and other taxes. If go by the collected tax and projections; finance ministry will be generating $1 Bn in FY17 but we don't see any changes on the ground.

In my point of view,  no one who got nominated by prominent personality is even bothering to go out to the street and observe the situation.

Country faced severe drought and Finance ministry came out with Krishi Kalyan Cess and expecting to garner around $800 Mn per annum.

Finance ministry observed that India is moving fast towards digital and mobile Internet and how to garner additional revenue from it so came out with equalization levy of 6% popularly known as Google tax. With growing digital and mobility business, they will be generating around $400 - $500 mn in tax collection per annum.

Now Raining season is coming and most of the metro cities will be flooded as there is no sewage mechanism and strongly believe that finance ministry will be coming out with Sewage cess.

I appreciate the initiation but it should be reflected on ground. I also do understand that it takes time to change the mindset of people but also believe that  government should not be squeezing common people in such a way that at the end they start thinking that their contribution is going under water. In point of view, The income tax payers should be kept away from above cess but non- paying  income tax citizen should be charged service tax and other cess. Would love to see everyone comment

Government is hopeful for growth even in bad economic data- Where action to arrest further fall in economy

Indian Government official comes out and claim that everything will be ok as government is planning X,Y,Z. On a contrary, IIP, PMI, CPI, WPI, Inflation are giving clear signals that economic environment is going from bad to worst. In my point of view, I don’t give too much weightage to slight fall in WPI and CPI for one week. Even though, EU countries are experiencing severe economic recession than also they are managing their inflation magnificently. Did government managed to implement any policies in Telecom, Power, Capital Good, Heavy Industries, Mining, Infrastructure, Retail, Oil & Gas. I failed to see that and would appreciate if any reader got one then please share through comments. Government should consider swift policy enforcement to kick-start economy.

India Mulling FDI Limit Removal in Telecom Sector – Should Government focus Policy Clarity &Implementation OR FDI ?

In view of shoring off confidence in Indian Telecom sector, GoM are mulling removing FDI cap to bring in value investment from outside. Barring Bharti Airtel Stake sell, the Indian Telecom Sector little FDI investment in the last 2 year. The 2G scam, 3G auction saga, one time license fee, 3G roaming, security clearance, spectrum re-farming are some of the on-going contention which got lots of media glare and created negative sentiment about India Telecom Story. The cancellation of 2G license and loss of $ Bn’s , International Telecom giants burnt their investment. If we really want to attract FDI in Telecom; the policy clarity and implementation of above mentioned few contentions would send positive signals to potential investors