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Showing posts from 2011

Important Rules of investment

Important Rules of investment.

Rather than make guesses regarding the direction of the market, here are some investment rules to follow:

Rule 1: Do not attempt to time the market. Statistically it is a certainty that a minority of the millions of investors can time the market in the short-run but the problem is that very few, if any, can time the market for sustainable periods of time. Thus don't try to time or predict the market instead keep invested for longer periods.

Rule 2: Patiently make good investments, regardless of the economic conditions. It is best to assume the market will go nowhere and invest accordingly. Paying attention to a hot or cold economy leads to investors chasing their tails. Good investments should outperform in the long-run, regardless of the macroeconomic environment.

Rule 3: Diversify. In the midst of the crisis, diversification didn't cure simultaneous drops in most asset classes; however ownership of government Treasuries, cash, and certain commo…

NIIT Technologies acquires Proyecta Sistemas de Informacion S.A.

NIIT Technologies:

NIIT has acquired Proyecta Sistemas de Informacion S.A. (Proyecta) and this acquisition by NIITT as a good strategic step. It will likely enhance the presence of NIITT in the European region and will also give it access to large accounts, which can be scaled in the future. The valuations accorded to Proyecta are also not demanding and we expect little impact on the EPS of NIITT.

The FY12E EPS stands at Rs.32.6 and DCF - based price target stands at Rs.276 (Rs.280), based on FY12 earnings. At this target price FY12 earnings will be discounted by about 8.5x which is undemanding. Long term investors can buy on declines, since NIITT has been achieving consistent revenue growth and margins over the past few quarters.

LIC Housing Finance

LIC Housing Finance Results update:

NII grew 41.1% YoY (19.4% QoQ) on back of strong loan growth (34.2% YoY; 10.2% QoQ) along with margin expansion (15 bps YoY; 31 bps QoQ). Net Income was also up 47.4% YoY on back of strong core performance and robust non-interest income (2x Q4FY10; mainly aided by Rs.321 mn profit on sale on investment).

Growth in sanctions & disbursement continued during Q4FY11. Overall sanctions & disbursement grew at healthy pace of 25.3% (YoY) and 34.2% (YoY), respectively. LICHF also bought loan portfolio from LIC (Rs.12.5 bn); adjusting this individual disbursement/loan book grew 37.6% and 34.0%, respectively. Unsurprisingly, developer loan took a breather during Q4FY11 and its disbursement declined 74% YoY.

NIM improved both QoQ and YoY, which is a positive suprise. Asset quality continued to improve further - gross NPA and net NPA now stand at 0.47% (Q4FY10: 0.69%; Q3FY11: 0.67%) and 0.03% (Q4FY10: 0.12%; Q3FY11: 0.18%), respectively.

Long term inves…

Tata Consultancy Services

Result Update: Tata Consultancy Services :

TCS' 3Q results beat market estimates on all fronts. A strong 5.7% volume growth was the highlight of the results. This was better than the growth rates reported by peers during the quarter and that too, on a larger base. The broad based nature of growth lends a degree of stability to the revenues.

Management commentary reflects greater optimism, likely on the back of strong pipeline and better deal flow. TCS won 9 large deals during the quarter. Management has seen continued revival in discretionary spends as well as in cost efficiency initiatives, which is encouraging.
Record hiring during the quarter also indicates good visibility. Realizations were higher, which is also encouraging from the margins perspective. Rate increases may continue, if demand sustains.

FY11E earnings now stand at Rs.44 per share (v/s 42 earlier) and FY12E earnings at Rs.51.7 (Rs.47.7), after considering higher tax rates for the fiscal. Accordingly the price tar…