Monthly Archives: June 2014


Firstly a person, who wants to starts a business, should have the courage to face the challenges and losses in order to achieve success. He should be Risk taker, passionate, curious to know how things work, imaginative, persistent, hardworking and self-confident, strong people skills and he should have a pre definite goal to achieve.
The business idea has to be unique in today’s world, in order to give tough competition to his competitors. Ideas he can get from the existing products and services, the people, distribution channels or any other source. The three things entrepreneur needs to have 1. Lawyer- to make him aware of the rules and regulations, 2. Patent – to make his product his own, 3. Insurance – to bear the uncertainties.
Having a unique business idea will help to attract customers. You can take an example of Facebook or Uniqueness is the key to success because if you are offering the same thing then the customers would not be attracted as they already have their trustworthy brands, and if you are not innovative then you have to cut your cost which will be difficult at the initial stage. Hence come out with innovative ideas and your business will definitely bloom if know how intelligently to market yourself.
Failure should not affect the entrepreneur, the best example of failure to success entrepreneurs – KFC’s Colonel Sanders developed a “chicken recipe” which he took to different restaurants got rejected 1000 times but still he did not lose hope and finally he started up with KFC and has reached heights. A unique trademark will also help your brand to gain recognition. So, if you have a unique idea, unique business plan, an attractive trademark, then you are all set to “START UP”.


Recently in a statement PM Narendra Modi had told to everyone in related to economy that Agar Admi Bimar Ho To Usko Thik Hone K Liye Dawai Deni Jaruri He. He means that currently Economy is not in a good phase and it required taking tough decision to improve economy. So the first pill he gives is rise in passenger rail fare hike by 14.2% and freight price hike by 6%. Now the question people or Aam Admi is asking does this is required? Currently Indian Railway is running on Rs 30 Cr of loss in a day. To cover that government is paying subsidy of Rs 26000 Cr to Indian railway every year. Thereby increases fiscal deficit.
So Increase in fare price will help Indian Railway to earn about Rs 8000 Cr to Rs 11000 Cr per year. So how these will be benefited
1)      This will help Indian railway to become more modernize
2)      It will help to improve safety
3)      Will help to increase more rail lines
4)      More importantly It will help to reduce the subsidy burden
As lower subsidy means reduction in fiscal deficit. And reduction in fiscal deficit means chances of reduction in interest rates, strong rupee, help in to bring down inflation, and rise in GDP. These will lead to increase jobs.

Why we are Bullish On Equities!!!

“GOLD”, when this word is heard anywhere around india, the speaker gets attention of all the ears around him. Gold is consider to be one of the preferred investment of savings in India. Gold Jewellery is highest consumed in India. Whenever i ask my elders what to of the savings, they would reply “Buy Gold”. I am sure many of my friends and colleagues would be facing that. Arent we creating some bubble in gold?? On the charts i was bearish and i am bearish on Gold since it hit 34000+ in last January and i did even post it on this blog. Second thing to gold is “Real Estate”. Last ten years inflation in India was majorily due to real estate prices. People became rich unexpectedly faster due to doubling and tripling of Land price in even less than a year of buying the property. A survey by a renowned agency said that saving in financial market droped from 8% from 2008 to just 2% in 2013 of total saving i.e., rest of saving is in either gold and Real estate. Buhh!!! arent we smelling a bubble in real estate??? It my view that when more than 80% of public is bullish in any asset of investment than we can expect a big move in prices on either side. Since we have seen a continuous upside in real estate segment, we can be bias on downside of the prices. On other side Gold is treated as a just a mere investment option in US. I just came across of the article of Ex. member of FED Mr. Randall S Kroszner who stated to our indian Journalist that they wont give more weightage to Gold at this level as their economy is recovering but yet not inflating. Gold is just the hedge against inflation for them. So we can make out that Gold demand in global market will decline so is the case India. On other side Equity has very less portion of ones saving in India, which gives huge opportunities on upside in the Equity. Technically, Gold has strong resistance at 28000/30350 where current rally could hault. Therefore, looking at inter asset analysis, Equity is the underperformer and  we are bullish on it for LONG TERM 

The Indian Power Sector

The Indian Power sector includes – coal, lignite, natural gas, oil, hydro and nuclear power to other viable non-conventional sources such as wind, solar, agriculture and domestic waste.
Currently, if we have a look at the Indian Power sector, the country is facing a deficit of 8.7% in 2012-13 and the peak power deficit was 9% indicating a huge gap between demand and supply of electricity due to the shortage of coal, problems regarding power plants and inefficient use of resources.
We believe that Indian power sector can be improvised if the government allows privatization in the coal mining, production processes and the coal plants are facing shortage of coal so if the government take measures to make the supply flow smooth then there will be increase in the production of electricity. Hence if the new government works on these issues and allows more share of private then there will be fast developments seen and the power sector will boom in the coming years by FY 2020. So we believe that it is the right time to invest in this sector.

Sectors With Possible Upside

As the markets are at all-time high, the valuation of nifty and sector has been stretched. So in the current situation which is the sector to invest were we still able to see upside is the question in everyone’s mind. To answer that question we have done simple analysis on the basis of PE. We have compared the Nifty PE with other sector’s PE. PE is valuation ratio of a company’s current share price compared to it’s per share earnings in other words it let us know whether it is currently overvalued or undervalued.

Nifty is currently trading at PE of 20.52 as compared to it CNX Pharma is trading at multiple of 40.45, CNX Media at 34.94, CNX FMCG at 34.22, CNX Auto 31.56, CNX infra 21.83, CNX IT at 20.97, CNX PSU Banks at 12.49, OIL and GAS at 12.65, CNX Energy at 14.01 and  CNX Metal at 16.51. If we compared the Sector PE with Nifty PE, CNX IT, media, infra, pharma, auto and FMCG has been fairly value. We believe that Investors should look invest in CNX PSU Banks, Oil and Gas Sector, Energy Sector and Metal Sector were still upside is left.

The Indian Education Sector:-

The Indian Education Sector plays a very important role in the life of an individual. The government is taking effective measures in order to develop Education Sector. The Indian education sector has been recognized as a “Sunrise Sector” for investment in the recent past. It is the third largest in the world. We believe that the education sector will grow more than 16% over the next 5 years.
If we have a look at the present Education sector:-
·         The government is taking measures in order to educate more and more people and so education is also provided online these days.
·         The education sector is developing and measures are taken to educate the poor children in the rural areas as well, so this is a very good step taken by the government.
·         Development of education and many new institutions are opened up to provide education.
·         Measures are taken in order to reduce cost.

Hence, the government is taking measures to provide education and also making development in this sector but the government still needs to work more on this sector and it needs to cut down the cost so that it is affordable to the middle class and low class people as well.

Budget Play

As the Election 2014 is over, it’s action time for the new government. Narendra Modi led NDA government already started taking steps in just 3 weeks like Meeting with SAARC leaders, Setting up an SIT on black money, Giving confidence and authorities to the Bureaucrats and dissolve of EGOM and GOM etc. But the next key focus for the government and for the markets is the budget which is expected to be tabled in the parliament on 2ndweek of July, 2014. As we know that in budget government will likely to focus on Fiscal Policies, Road and Infrastructure Sector, Power Sector and Health Care Sector.

We believe that Government would also likely to focus more on Research & Development Sector, Education Sector and IT Infrastructure Sector. So under education sector we are bullish on MT Educare because of its good business model and government awareness towards education sector. Under IT sector we are bullish on companies which are more focusing towards cloud computing like HCL Infosystems. Now we are waiting for the Budget.

#212 Nifty update: Sky is the Limit

Heat Wave and Modi Wave are the 2 unstoppable waves currently prevailing in the climate. No one would have dreamt that Nifty could reach this high in such a short period. Such a vigorous rally has two implications 1) Still more upside is left or 2) this is a false rally and we may see sharp correction. I am support the first view and SKY IS THE LIMIT for this bull run. Looking at the economy data yet it hasnt recovered so well that it get digest such a move in markets but its just the expectation of the world that New govt will make India a better place and the work has already begun. Many infra and mining bills are cleared on the fast track and also Power sector is seeing some huge reforms. Two laggards in the markets since last few years were Power sector and Mining which has recently outperformed other sectors of the markets. We have Trade Balance number at 12 today during the market hours and that could be important for the markets. In my last post we did mention a range bound movement but we recommended to go long if Nifty closes above 7488 which happened last week. Our First target than 7688 almost has been achieved  which now makes us hold nifty with the tgt of 8031 on the upside. Technically indicators have turned positive for now on daily charts while weekly and monthly continue to be suggesting a strong bull run. As we all can notice in the chart, nifty is resisting near to the line which is 7715 level. Once we break the resistance line on the upside than we could see a sharp move ahead to 8031. 5 day EMA has been acting as strong closing support which is at 7568 as of now.

Our recommendation: Hold the longs which has triggered at 7488 with the next tgt of 8031. Keep a trailing closing Stop loss at 7568.

*Disclaimer: all the view are based on technical analysis and are personal. Please rely on our recommendation after thorough study and at your on risk.