Company Research

Tata Consultancy Services (TCS) and Infosys are two of the strongest pillars of the Indian IT sector. One is India’s largest IT services company, and the other the most respected.

However, since they are the ‘poster boys’ of Indian IT, and are keenly looked up by stock markets, industry and job seekers, the rivalry too runs deep between them.

So whether it is the fight for talent, clients, deals or stock market valuations, the two companies are at each other’s neck all the time.

In this post, I present a graphical comparison of the two companies based on their performance over the past 20 quarters (5 years).

Let’s start right here.

[Read more…] about Infosys Vs TCS: The Fight Continues

First, here is a short analysis of the latest quarterly result announced by Infosys early today morning.

Source: Infosys, Safal Niveshak Research; * EBITDA-Earnings Before Interest, Tax, Depreciation & Amortization (Also known as Operating Profit);
** Volume-Number of man-hours billed during the quarter
As you can see from the above chart, sales growth has come in at a strong 31% YoY during the quarter ended December 2011 (3QFY12).

This is a much faster pace of growth than what Infosys had recorded during the previous quarter ended September 2011 (2QFY12).

[Read more…] about Infosys’s Crime…Unearthed Again!

Welcome to the second issue of the Safal Niveshak StockTalk. (Download PDF Report)

After covering L&T in the first report, this time I delve deeper into Tata Steel, India’s largest private sector and world’s eleventh-largest steel manufacturing company.

Based on your feedback on the L&T report, I’ve tried to be as comprehensive as possible while maintaining the simplicity of analysis that Safal Niveshak stands for.

Before we dive into Tata Steel, here is a brief overview of the sections of this report:

1. About Tata Steel
2. Steel Industry’s Shareholder Value Creation Model (New addition)
3. Safal Niveshak’s 25-Point Checklist
4. Intrinsic Value Assumptions
5. Financial & Market Snapshot
6. “Should I Buy Tata Steel?” Checklist [Read more…] about Safal Niveshak StockTalk #2: Tata Steel

“What’s in a name? That which we call a rose by any other name would smell as sweet,” wrote Shakespeare in Romeo and Juliet.

You can experience the truth of these words when you come to know that a company whose name was derived from the adage ‘be careful about loan’ or ‘sujh bujh ke loan lena’, is now one of the worst indebted companies in India, and one that has been extremely careless with it borrowing.

I’m talking about the wind energy major Suzlon (sujh+loan) – once a darling of the stock markets and now as worthless as Punam Pandey.

The company’s management, which narrated a promising story to the analysts and investors during the company’s pre-IPO conference in 2005, is now struggling to keep their company above water.

The promoter, Tulsi Tanti, once regarded as the poster-boy of India’s globalization story, is now being blamed for bringing his company and its shareholders down to their knees.
[Read more…] about Investing Lessons from the ‘Black Hole’ Called Suzlon

Welcome to the first issue of the Safal Niveshak StockTalk. (Download PDF Report)

Based on requests, we start with the analysis on L&T, which is India’s largest engineering company, and one that has business spread across a wide domain in the engineering, capital goods, and construction spaces.

Since this is the first issue of the Safal Niveshak StockTalk, I expect to receive feedback from you on the quality of the analysis and reporting plus your suggestion for improving the analysis further.

I won’t say this report would perfectly capture the entire business and performance of L&T. But I’ve tried to be as comprehensive as possible while maintaining the simplicity of analysis that Safal Niveshak stands for.
[Read more…] about Safal Niveshak StockTalk #1: Larsen & Toubro

Ever since I launched the Safal Niveshak movement in July 2011, I’ve received innumerable requests from readers for my views on specific stocks.

Someone asked, “I hold 50 shares of Tata Motors. What should I do?”

And then, someone else wanted to know, “I want to buy shares of Coal India. Should I buy or wait?”

I’ve resisted giving my views so far, but have now found an alternative to help you, my dear reader.

Here’s presenting Safal Niveshak StockTalk, wherein I will research and write a simple-to-understand report on one company every fortnight, but without giving any specific buy/hold/sell recommendations.
[Read more…] about Launching…Safal Niveshak StockTalk

“A Microlending Star Moves On” read a headline in today’s issue of The Wall Street Journal.

The report talked about the resignation of Vikram Akula, one of the best-known figures in microfinance, from the company he founded – SKS Microfinance.

Akula founded SKS in 1998 and guided it to a stock-market listing in August last year that raised Rs 16.5 billion.

As per the latest available data, SKS has 7.7 million clients in over 2,400 branches in 19 states across India (with a large proportion coming from Andhra Pradesh). SKS charges an annual effective interest rate between 26% and 31% for core loan products.

Well, those were some data points about the business of the company. Talking about the stock’s performance since its listing, here is a chart that bares it all. [Read more…] about 3 Lessons from the Rise and Fall of SKS Microfinance

As a long-term investor and independent analyst, I’m always on the hunt for great businesses that are available for cheap prices.

After all, there is no other way I know of that can help my wealth (whatever little I have currently) compound over the years.

Anyways, my search for such companies involves a lot of hard work. I screen for companies that have had very good past track record. I look for businesses that are easy to understand. And I look for stocks that combine these strengths and are still available for cheap.

But then, as I search for the best businesses, I come across a lot of bad businesses – some that are difficult to understand, and some that are…just bad.

Here are three companies that I believe are really bad businesses to own for investors.
[Read more…] about 3 Stocks I Wouldn’t Touch With a 10-Foot Pole

You know what’s the most asked question in India?

It is – “What’s the score?”

And the second most?

How about – “How much did the Sensex close at?”

If you live in the financial capital of Mumbai, every business paper you read, every business channel you see, most people you meet in the local train…you will always get to hear someone uttering the ‘Sensex’ word.

There is no doubt that India’s benchmark stock market index (that’s what the Sensex is) can claim to have the largest mindshare among people who invest in stocks, or who are at least interested in reading about stocks.
[Read more…] about India’s Greatest Companies: But Should You Buy Them?

Do you remember the story of the three little pigs?

The first little pig built his house with straw, only to see the wolf blow it down. The second pig built his house with sticks and suffered the same fate.

The third pig built his house with bricks. The big, bad wolf huffed and puffed, but he couldn’t blow it down.

So what’s the lesson investors can draw from this story?

Well, it is that in corporate finance, cash is the equivalent of bricks. In fact, smart investors lay a lot of emphasis on companies that generate a plenty of cash as these are in the best position to withstand the huffing and puffing of a slowing economy and competition.
[Read more…] about India’s 7 Most Consistent Cash Generating Companies