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)

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)

Sun Pharma - Profit rises by 70% as compared to the same quarter last year

Quarterly Profit 

Sun Pharmaceuticals quarterly profit rose on the back of lower operating expenses and higher other income. 

Net profit rose 70% year-on-year to Rs 1,813 crore in the three months ended September, India’s largest drugmaker said in an exchange filing. 

That compares with the Rs 1,124-crore consensus estimate of analysts tracked by Bloomberg. The company had reported a net loss of Rs 1,656 crore in the preceding quarter.

Sun Pharma Stock - past 1 year 

Sun Pharma Stock - past 5 years 

About Sun Pharma 

According to Wikipedia - Sun Pharmaceuticals was established by Mr. Dilip Shanghvi in 1983 in Vapi, Gujarat, with five products to treat psychiatry ailments. 

Cardiology products were introduced in 1987 followed by gastroenterology products in 1989. 

Today, it is the largest chronic prescription company in India and a market leader in psychiatry, neurology, cardiology, orthopedics, ophthalmology, gastroenterology and nephrology.

The 2014 acquisition of Ranbaxy made Sun the largest pharma company in India, the largest Indian pharma company in the US, and the 5th largest speciality generic company globally.

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

HDFC Ltd. Quarterly results - Net Interest Income increases by 21%.

Increase in Net Interest Income (NII)

HDFC Ltd. India's largest housing finance company reported an increase in its Net Interest Income or NII by 21% to Rs.3647 crores as compared to the same period last year. 

Total advances for the home financer rose 10% as compared to the same period a year ago to Rs.5.4lakh crores.  On an assets under management basis, growth in the individual loan book was 9% while growth on non-individual book was 13%.

Net Profits

In the quarter ending September last year, HDFC's net profit included profit from sale of Gruh Finance.  If one were to not take that into account then Net Profit of the company increased by 27%. 

Net profit of the company for the quarter ended September 30, 2020 was Rs.2870 crores.

About HDFC 

Housing Development Finance Corporation Limited or HDFC is an Indian Financial Conglomerate based in Mumbai, India.

It is a major provider of finance for housing in India.

It also has a presence in banking, life and general insurance, asset management, venture capital, realty, education, deposits and education loans.

HDFC's distribution network spans 396 outlets (including 109 offices of HDFC's distribution company HDFC Sales Private Limited) which cater to approx. 2,400 towns and cities spread across India.^[2] To cater to Non Resident Indians (NRIs), HDFC has offices in London, Singapore and Dubai and service associates in Middle East countries.

Major Subsidiaries and Associates 

• HDFC Bank 
• HDFC Standard Life Insurance Company Limited 
• HDFC Asset Management Company Limited 
• HDFC ERGO General Insurance Company 
• Gruh Finance 
• HDFC Property Fund
• HDFC Red 
• HDFC Credila Financial Services 

HDFC Ltd. - past 1 year

HDFC Ltd. - past 5 years 

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