Eicher Motors - strong innovative business, powerful brand.

Eicher Motors Business 

Eicher Motors Limited is the listed parent of Royal Enfield, the global leader in middleweight motorcycles. 

The world’s oldest motorcycle brand in continuous production, Royal Enfield has made its distinctive motorcycles since 1901. 

Royal Enfield operates in India, and over 60 countries around the world with modern development facilities in Leicestershire, UK and Chennai, India. 

In addition to motorcycles, Eicher has a joint venture with Sweden’s AB Volvo - Volvo Eicher Commercial Vehicles Limited (VECV) - has pioneered modernisation of commercial vehicles in India and other developing countries. 

Production facilities 

Royal Enfield makes its motorcycles in Chennai, Tamil Nadu for the world.

VECV has a complete range of trucks and buses from 4.9-55 tonnes, and its integrated manufacturing plant in Pithampur, Madhya Pradesh is the global hub for medium duty five- and eight-litre engines for Volvo Group.

Aspirational

Royal Enfield (RE) remains an aspirational purchase with undiminished brand equity (consistent >90% market share in >250 cc motorcycle segment). 
Post-Covid volume prints have been under pressure. This is due to

(i) short-term pressures on discretionary spends and 

(ii) supply side disruptions in its manufacturing and value chain belt on account of the pandemic. 

Nevertheless, order book remains healthy (~1.25 lakh units as of November), with supply de-bottlenecking holding the key to quicker volume uptick. 

The company has continued to innovate on the distribution front over the past year, with small format studio stores (total count at > 1,700) adding to regular full format stores domestically and the Make It Yours (MYI) app being a first of its kind digital initiative that is witnessing good customer response.

Awards

2015: Emerging Company of the year - The Economic Times 

2015: Best Company of the year - Business Standard Annual Awards 

2015:  Next Gen. Entrepreneur - Forbes India Leadership award ( to Siddartha Lal CEO of Eicher Motors)

2017: CEO of the year - Business Standard (to Siddartha Lal CEO of Eicher Motors)

Eicher Motors Stock - past 1 year 

Eicher Motors Stock - since 1999

(Disclaimer : This blog id for information purposes only. Stock market investing is a with risk investing including risk on capital invested. Please take a well considered decision)

Hero Motors - worlds largest 2 wheeler maker in terms of no of units sold for last 19 years

Hero MotorCorp

Hero MotoCorp is India's leading two wheeler company, which has been providing customers with an excellent range of two wheelers that ensure both style and comfort. 

The story of Hero MotoCorp can be traced back to the vision of a mobile and empowered India, powered by its two wheelers. Today, Hero MotoCorp has made it its mission to become the best two wheeler company, not only in India but globally by setting benchmarks in style, performance and technology.

Manufacturing Facilities 

Hero MotoCorp has eight globally benchmarked manufacturing facilities, 

• including six in India (Dharuhera, Chittoor, Gurugram, Haridwar, Neemrana, Gujarat) and
•  one each in Colombia and Bangladesh. 

World's Largest Two Wheeler Company

In 2001, the company achieved the most sought-after recognition of being the largest and best bike manufacturer in India and also the 'World No.1' two-wheeler company in terms of unit volume sales in a calendar year. 

Hero MotoCorp Ltd. continues to maintain this position till date.

Milestones 

• 1983 - Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed.
• 1984 - Hero Honda Motors Ltd. incorporated.
• 1987 - 100,000th motorcycle produced.
• 1994 - 1,000,000th motorcycle produced.
• 2000 - 4,000,000th motorcycle produced, Splendor declared largest selling single 2 wheeler model.
• 2004 - Total sales crossed a record of 10 million motorcycles. 

• 2006 - 15 million production milestone achieved.
• 2011 - 5 million cumulative sales in a single year. 
• 2013 - 50 Million cumulative 2 wheelers production achieved.
• 2017 - 7 million cumulative slaes in a single year achieved. 
• 2019 - Hero MotoSports Wins The Pan Africa Rally 2019 At Merzouga.

Hero MotorCorp Share - Past 1 year 

Hero MotorCorp Share - Past 5 years 

Hero MotorCorp Share - Since 1999

(Disclaimer : This blog is for information purposes only. Equity market investing is a with risk investing, including risk on capital invested. Please take a well considered decision.)

How to shortlist stocks for investing - Steps and approach

 “Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” -
Warren Buffett

A brief note on the Steps we use to select a stock to invest into in the Indian Stock Market 

1.Management of the company 

1. Efficiency and consistency of management (longevity as well..)
2. Strategy and goals of the company.
3. Execution Potential and consistency of execution. 
4. Insider buying and buybacks ( we do not like this) 
5. Perks and Compensation to Staff and Workers '
6. Transparency 

2. Fundamentals of the company.

1. Earnings per share (EPS)
2. Price to Earnings Ratio (p/e)
3. Price to Book Ratio (p/b)
4. Debt to Equity Ratio
5. Return on Equity 
6. Price to Sales 
7. Current Ratio
8. Dividend Track Record 
9. Sales growth and Operating Profit Margin

3. Do we understand the products and services offered by the company.  What we do not understand we do not buy?

4.Will people still be using the products and services of this company 10-15 years from now. (at least 5 years !)

5. Does the company have a low cost competitive durable advantage?

6. Does the Company have a MOAT

1. MOAT in stock market investing is a term coined by Warren Buffet.
2.  A moat is a deep, wide ditch surrounding a castle, fort, or town, typically filled with water and intended as a defense against attack. Some stocks have a similar moat around them. That’s why it’s really tough for its competitors to defeat them in its sector.

7.What  is the company doing that its competitors are not?

A portfolio based on these parameters does not necessarily track the stock market indices - but provides an equity investing portfolio which is consistent on returns and offers a lower risk within the equity asset class.  

On a risk return perspective it is certainly a theme in which your monies should be invested to start with.  Risk can then be further increased if returns are favorable. 

DISCLAIMER :  THIS BLOG IS FOR INFORMATION AND NOT TO SOLICIT ANY BUSINESS. PAST PERFORMANCE IS NOT AN INDICATION OF THE PERFORMANCE OF STOCK IN FUTURE. EQUITY STOCK INVESTING IS A WITH RISK INVESTING INCLUDING RISK ON CAPITAL INVESTED. PLEASE TAKE AN INFORMED DECISION BEFORE INVESTING IN A EQUITY STOCK.

Britannia - Indian Biscuit Giant is 64 times in past 21 years.

 Britannia Industries Limited is an Indian food-products corporation. 

Founded in 1892 and headquartered in Kolkata, it is one of India's oldest existing companies. 

It is now part of the Wadia Group headed by Nusli Wadia.

PRODUCTS OF BRITANNIA

(Source : www.britannia.co.in)

Britannia Stock - Past 1 year

Britannia Stock - Past 5 years

Britannia Stock - Since 1999

BRITANNIA'S DISTRIBUTION AND MANUFACTURING

(Source : www.britannia.co.in)

The company was established in 1892 by a group of British businessmen with an investment of ₹265.

Initially, biscuits were manufactured in a small house in central Kolkata. Later, the enterprise was acquired by the Gupta brothers mainly Nalin Chandra Gupta, an attorney, and operated under the name "V.K Brothers." 

In 1918, C.H. Holmes, an English businessman based in Kolkata, was taken on as a partner and The Britannia Biscuit Company Limited (BBCo) was launched.

The company name was changed to the current "Britannia Industries Limited" in 1979.

A few years later, control moved through a complicated process, which is still not fully understood, to Rajan Pillai, a Kerala-based businessman.

It was later taken control by Nusli Wadia and has remained with Wadia Group since then.

DISCLAIMER :  THIS BLOG IS FOR INFORMATION AND NOT TO SOLICIT ANY BUSINESS. PAST PERFORMANCE IS NOT AN INDICATION OF THE PERFORMANCE OF STOCK IN FUTURE.

Tata Elxsi is 48 times since 1999. Tata groups flagship in IOT - Internet of Things

Silicon Valley's First Indian Startup 

Elxsi was founded in 1979 by Joe Rizzi and Thampy Thomas (who would go on to found NexGen Microsystems).  It is widely believed that Elxsi was the first startup founded by an Indian in Silicon Valley.

Venture investors included Tata Group and Arthur Rock.  In 1989 however, Elxsi left the computer business because of the general shift away from the use of mainframes in Global Computer industry and the advent of personal computer. 

The Tata Group kept the name Tata Elxsi and it is now a part of the Tata group.

Current Business 

Tata Elxsi is amongst the world's leading providers of design and technology service across industries including Automotive, Broadcast, Communications and Healthcare. 

Key Areas 

Tata Elxsi is helping customers reimagine their products and services through design thinking and application of digital technologies such as 

1. IOT - Internet of Things 
2. Cloud
3. Mobility 
4. Virtual Reality 
5. Artificial Intelligence 

Business Performance

Over the years Tata Elxsi has diversified its business out of automotive sector i - which used to contribute a chunk of its revenues.  The automotive sector now contributes to about 42% of its revenues. 

Within Automotive sector 60% of its revenue comes from Europe 30% from US 10% from Japan and Korea.  JLR is its largest client and contributes 14.5% of its total revenue. 

Other sector which contribute to its revenues include Broadcast and Communications.  In this sector FTH and 5G has opened up new opportunities for service providers like Tata Elxsi. 

Tata Elxsi has also partnered with leading DTH service providers by innovations a hybrid DTH set top box = Internet TV which brings together the best of online content and linear TV on one platform. 

Tata Elxsi's healthcare business is also witnessing a healthy growth. 

The key is how does this company execute its business strategy in new areas and de-risks its business from its largest clients, sectors and geographies. 

Tata Elxsi Share Price - Past 1 year  

Tata Elxsi Share Price - Since Inception

(Disclaimer : This blog is for information purposes only. Stock market investing is a with risk investing including risk on the capital invested. )

Porters 5 forces model and the key to investing in stocks

Moat - What is it?

According to Warren Buffet a successful company is one which is having a "MOAT" 

Companies that are performing well are constantly challenged by competitors but with a deep and wide "MOAT" these companies are able to sustain competition.

Porters 5 forces model 

The five-forces perspective is associated with its originator, Michael E. Porter of Harvard University. This framework was first published in Harvard Business Review in 1979.

The state of competition in an industry is decided by five forces. 

These are 

1. Threat of entry,
2. Threat of substitution,
3. Bargaining power of suppliers,
4. Bargaining power of buyers; and 
5. Intensity of rivalry.

Application

1. A successful company's strategy is aimed to best defend itself from such forces.  Deep dive into each of these forces is required to determine the competitive strength of a company.
2. A company which is able to score well on all these forces is able to consistently deliver good profits and growth.  It is able to handle these forces much better than competition. Hence its stock is able to provide consistent returns to its shareholders. 
3. With time the status of companies keeps changing with respect to these five forces and hence a careful study goes a long way in determining whether the stock is attractive or not. 
4. Porter's analysis framework defines the important criteria to determine the stability of a corporation. High threat levels typically signal that future profits may deteriorate and vice versa. 

For example, a hot firm in a growing industry might quickly become obsolete if barriers to entry are not present. Likewise, a company selling products for which there are numerous substitutes will not be able to exercise pricing power to improve its margins, and it may even lose market share to its competitors.

The qualitative measures introduced by Michael Porter in Porter's five-force framework allow investors to draw conclusions about a corporation that are not immediately apparent on the balance sheet but will have a material impact on future performance.

 Although quantitative factors such as the price/earnings and debt/equity ratio are often the primary concerns for investors, qualitative criteria play an equal role in uncovering stocks that will provide long-term value. 

DISCLAIMER :  THIS BLOG IS FOR INFORMATION AND NOT TO SOLICIT ANY BUSINESS. PAST PERFORMANCE IS NOT AN INDICATION OF THE PERFORMANCE OF STOCK IN FUTURE. EQUITY STOCK INVESTING IS A WITH RISK INVESTING INCLUDING RISK ON CAPITAL INVESTED. PLEASE TAKE AN INFORMED DECISION BEFORE INVESTING IN A EQUITY STOCK

HUL - Hindustan Unilever in India's largest FMCG company.

India's Largest FMCG Company

HUL is India's largest FMCG (Fast Moving Consumer Goods) company.

It is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products.

History 

Presence and reach - Most Indians use HUL products 

And HUL is market leader in 8 market segments 

Over past 10 years - EPS (Earnings per share) of the company has become 3 times 

Share Price 

past 5 years - HUL Share is 2.6 times 

past 21 years - HUL Share is 13 times 

(Disclaimer : This blog is for information purposes only)

Tesla Market Cap Crosses USD 500 billion - what's unique about the company

Tesla Market Cap Crosses USD 500 billion 

Tesla Inc crossed $500 billion in market value on Tuesday as investors lapped up its shares in the run-up to its addition to the S&P 500 index, extending a meteoric rally that has seen the stock gain more than six times this year.

Shares of the electric-car maker have risen nearly 28% since the S&P Dow Jones Indices decided to add the company to the benchmark index from Dec. 21.

Its shares rose as much as 3.9% to a record high of $542.35 in early trading, valuing the company briefly at $514 billion.

Tesla to become part of S&P 500

·       S&P Dow Jones Indices recently announced  that Tesla will join the S&P 500 effective prior to trading on Monday, Dec. 21.

·       Upon entry, Tesla is already one of the S&P 500's 10 most valuable companies based on Monday's closing prices.

History 

Tesla - an American electric vehicle and clean energy company - started business in the year 2003 in Palo Alto, California. 

The company's name is a tribute to inventor and electrical engineer Nikola Tesla. Eon Musk who is the current CEO of the company was the fourth employee of the company. 

Tesla has been pushing the envelope on battery usage since its inception. The 2008 Tesla Roadster was the first highway-legal production car to employ lithium ion batteries. It was also the first to manage a range of over 200 miles. 

Sales 

Tesla's global vehicle sales increased by 50% in 2019 - over 2018. 

In 2020 its sales have already crossed a million mark. They are already 3 times that in 2019. Its Model 3 has already sold more than 500,000 cars making it the best selling electric car in the world.

No wonder then its shares have skyrocketed.

Aspirational 

The market for fully electric vehicles is growing.

Some reasons behind the growth include 

• new regulations on safety
• vehicle emissions
• technological advances, and 
• shifting customer needs and expectations.

Tesla has been able to catch the attention of people seeking to buy electric cars and has also become an aspirational product. 

The Beginning Approach 

Tesla took a unique approach to getting its first vehicle in the market. 

It did not try to build a relatively affordable car that it could mass produce and market. Instead it took the opposite approach, focusing on creating a compelling car.

It was costly to build an electric car in the "initial days". Tesla therefore took the approach of making an "electric sports car".  An electric sports car could match upto price of other gasoline based sports cars and yet be aspirational.

The Next Stage 

Once Tesla established its brand it went in for growth. Tesla's current business model is based on

1. Direct Sales Tesla has created an international network of company-owned showrooms and galleries. They are located mostly in prominent urban centers around the world.  Tesla believes this helps it in the speed of its product development.
2. Supercharger Network Tesla has created its own network of Supercharger stations. These are places where drivers can fully charge their Tesla vehicles in about 30 minutes for free. This is to speed up the rate of adoption for electric cars.

Doing things differently 

According to Harvard Business Review Tesla does four things which sets itself apart 

1.  It develops cars as if it is a software product.
2.  It simplifies buying process putting the consumer in control. 
3.  It leverages its technological prowess in battery technology to minimise the total cost of ownership over the vehicle's timeline. 

(Disclaimer : This blog is for information purposes only)

Infoedge - India's largest recruitment portal and investing in startups - 27 times in 14 years

Info Edge - is a leading online classified business in India 

It's businesses include 

1. naukri.com - largest job site in India (approx. 80% market share)
2. 99acres.com - largest Online real estate business in India (approx. 40% marketshare)
3. jeevansaathi.com - third largest online matrimonial business in India 
4. shiksha.com - educational classifieds business in India 

Apart from this - Info Edge is invested in Technology - based startups 

1. Zomato.com - Online restaurant search engine and food delivery site (27.7% shareholding)
2. PolicyBazaar.com - Online insurance policies marketplace (13.6% shareholding)
3. meritnation - Supplementary online learning platform for K12 entrance exams ( 66% shareholding)
4. ustraa - Mens grooming range (47% shareholding)

Info Edge also floated a Class II fund in January 2020, duly registered by SEBI to fund investments unrelated to the core operation entity.  Proposed Corpus of the fund is USD 100 million.

Institutional Shareholders of Info Edge include 

Info Edge Stock - since 2006 - is up 27times 

Info Edge Stock - past 1 year 

(Disclaimer : This blog is for information purposes only and not to solicit any business or provide any investment advise)

Pidilite reports 4% approx increase in Net sales as compared to last year - July to Sept quarter.

Pidilite Quarterly Numbers 

Net Sales at Rs 1,880.33 crore in September 2020 up 4.08% from Rs. 1,806.58 crore in September 2019.

Quarterly Net Profit at Rs. 356.42 crore in September 2020 up 9.93% from Rs. 324.22 crore in September 2019.

EBITDA stands at Rs. 534.33 crore in September 2020 up 26.02% from Rs. 424.02 crore in September 2019.

Pidilite Ind EPS has increased to Rs. 7.01 in September 2020 from Rs. 6.38 in September 2019.

Pidilite MD - Mr. Bharat Puri's statement 

Pidilite Industries Managing Director Bharat Puri said.

"This quarter saw steadily improving demand conditions each month. Consumer and Bazaar businesses grew volumes aided by strong growth in the rural and semi-urban areas. B2B businesses as well as the metros, while improving sequentially have still to reach pre-Covid levels," 

"Our profitability was aided by benign input costs as well as strong cost optimisation measures."

Pidilite acquires Araldite Brand

Pidilite Industries Ltd, owner of Fevicol brand, has signed a definitive agreement with Huntsman Group (USA) for acquiring a 100 per cent stake in one of its subsidiaries in India - Huntsman Advanced Materials Solutions Pvt Ltd (HAMSPL) — for ₹2,100 crore. 

HAMSPL manufactures and sells adhesives, sealants and other products under brands such as Araldite, Araldite Karpenter and Araseal in India.

Under the terms of the agreement, Huntsman will receive approximately 90 per cent of the cash consideration at closing and balance approximately 10 per cent under an earnout within 18 months if the business achieves sales revenue in-line with 2019. The transaction is expected to close by next week. 

Pidilite Stock - Past 1 year

Pidilite Stock - Past 5 years

Pidilite started its business in 1959. 

Since then it has been a pioneer in consumer and speciality chemicals in India. 

Currently it manufactures adhesives sealants, waterproofing solutions, construction chemicals, industrial resins and polymers.

For the industrial segment it manufactures Organic Pigments, Textile and Paper Chemicals, Industrial resins, Leather Chemicals, Industrial Adhesives, Footwear Adhesives and Industrial Bonding Solutions. 

It has 8 manufacturing facilities and its products are available in 71 countries all over the world. 

Its leading brands are 

1. Fevicol
2. Fevicol MR
3. Dr. Fixit 
4. Fevikwik
5. M-seal
6. Fevistik
7. Fevicryl

The 61-year old Pidilite’s brand Fevicol is ubiquitous for adhesives in India. A 70% market share in the segment is dominance worthy of envy. 

Apart from Fevicol, Dr Fixit, M-Seal are prominent brands in waterproofing, and the company is market leader in this segment as well.  

The two segments together make for more than half of the company’s ₹6,000 crore revenue. 

These products are widely used by carpenters, painters, plumbers, mechanics, households, students, offices etc. 

The fact that the COVID-19 crisis has forced potential home buyers to save the money and renovate homes instead, should be good news for the company.

(Disclaimer :This blog is for general information purposes and not to solicit business or provide any type of investment advise)