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Does HDFC AMC deserve High Valuation ? Review

April 13, 2019

HDFC Asset Management Company – HDFC AMC has a strong brand pull (benefitting from parentage), relatively higher proportion of equity assets and continued delivery on fund performance make it one of the best plays to capitalize on the financial savings opportunity in the country.

Big Opportunity
MF AUM is just c.12% of GDP (vs global average of 62%). Long term AUM growth rates have been healthy (18% CAGR over last 19 years) and we see them sustaining in the future. Importantly, share of individual investors in the AUM has been inching up and the uptick in “sticky retail flows’ should shield the industry from cyclical whipsaws in the market. HDFCAMC is one of Read more

Valuation of Indian Markets & Relentless FII Selling

October 3, 2017

Foreign Institutional Investors have been net sellers in the last two months offloading stocks worth about Rs 24,000 Cr [Aug & Sep] Source: NSDL. Domestic Investors have aggressively bought stocks to ward off free fall in the markets. To us it is a sure sign indication of downward revision of Earnings for FY 2018 from Rs 1626 to Rs 1601 and further down to Rs 1550 as we start getting the September quarter results.

Valuation of Indian Markets:
Instead of the BSE 500, we are now taking into Read more

Why Value Investing Does not Work in India ?

March 5, 2017

Indian small & midcap stocks have witnessed a sharp rally since the lows of Aug 2013 and have outperformed large caps significantly over this period. A large part of this relative outperformance is explained by the price multiple rerating seen over this period. While the price multiple rerating does explain a large part of equity returns in the short run, it is the underlying business performance and earnings growth that should drive performance in the long run.

In fact it’s quite interesting to note that for small stocks, the multiple Read more

Why Investor Dislike Birla’s Grasim – Aditya Birla Nuvo Merger ?

August 17, 2016

Grasim Aditya Birla Nuvo DealGrasim Industries Ltd has proposed to merge Aditya Birla Nuvo Ltd with itself. Shareholders of Aditya Birla Nuvo would get 3 shares of Grasim for every 10 shares they hold. Thereafter, Aditya Birla Financial Services – would be demerged and listed as a separate entity where for every 1 share held in Grasim a shareholder will get 7 shares in Aditya Birla Financial Services which would be then listed separately.

Wouldn’t it be better to first demerge Aditya Birla Financial Services from Read more

Next Gen Indian Private Banks Converge into IT Companies

March 23, 2016

Indian Banks Go DigitalOver the last 2 years we have been constantly accumulating high asset quality Indian Private banks and we have mentioned the same to our followers on twitter. Ir-respective of which Party comes to power to Govern India, modern Indian private banks have always been on the leading edge of innovation offering bouquet of financial services leveraging the power of Information Technology.

During the late 90s they were the first one to begin with Computerized Banking. In the 2000s they invented Internet Banking and in the last Read more

Rise of Specialty Internet Only Banks in China

February 29, 2016

Internet Only Banks in China WeBank, founded in late 2014, is the first private internet bank in China. Tencent owns a 30% stake in WeBank, while investment firms Baiyeyuan Investment (Not listed) and Liye Group (Not listed) each own 20%. The entity as a whole has registered capital of Rmb3 bn (US$482 mn). WeBank’s scope covers personal banking, corporate banking, and international banking.

In May 2015, WeBank launched its first product ‘Weilidai’, providing personal credit lines to users without the need for guarantee or collateral, Read more

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