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    L&T’s defense foray

    We generally associate L&T with a lot of things - but of late the company has been making the news in one area - defense equipment. There seems to be tremendous uncertainty in order flow at the moment - with the liquidity constraints and fiscal constraints of the government hurting order flow...
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    Another demerger in Reliance?

    The recent news flow in Reliance seems to point to another demerger coming up shortly. There is an attempt to consolidate the debt, in the parent company, and close that debt to large extent by selling stake in oil and gas entity to Saudi Aramco. We are witnessing similar sort of restructuring...
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    Reliance 4Q 2020 earnings

    In December last year, Jio hiked prices - this should go directly to bottom line. Jan 2020 onwards, IMO2020 kicks in - Reliance is big beneficiary of this. Falling oil price typically results in greater refining margins, but also inventory losses. However, Reliance has been scalping Crude that...
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    BHEL could be tasty

    BHEL’s numbers for Q3 weren’t exactly setting the market on fire. But it’s possible the market is over-reacting to the numbers. The stock is down almost 25% in last 15 days - and even if we extrapolate the earnings from yesterday’s announcement, it is still available at a relatively cheap 20x...
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    ONGC Dividend Trade

    With Saturday’s announcement of ending of Dividend Distribution Tax, there is a very interesting scenario - companies like ONGC, which have a high dividend yield, and which normally pay their dividends in end-February would be incentivized to delay their payment by a month - to April. This delay...
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    Reliance Sum of Parts

    The recent news flow on the Grey market pricing of Reliance Retail provides interesting ways to value Reliance. While the market is focusing on the fact that most people won’t take this offer, there are other valuable things to consider. If Reliance is willing to pay 1 share of RIL for 4 shares...
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    Yes Bank - RBI’s folly

    RBI kicked out Rana Kapoor from Yes Bank, and created some unintended consequences. The new management has much more incentive to safeguard its own interest, than to safeguard the interest of the bank. Ravneet Gill will be a fool if he takes up some proposal that will benefit Yes Bank, but...
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    63 moons could be ready for lift off

    Today is the day when PC and his bureaucrat cronies have to respond to the ₹10,000 crore lawsuit against them by 63 moons. And judge has clearly warned them - no further delays. It seems like this might be a positive for 63 moons for following reasons. - recent court cases have been going in...
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    L&T Conundrum

    Uddhav Thackeray’s move to review all projects underway in Maharashtra has ensured that L&T is available at an attractive price. But realistically, there is little the government can do about already awarded and in progress contracts. Also, Nirmala Sitharaman’s announcement over the weekend...
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    Yes Or No?

    We all know Yes Bank is seeking money. And we now know that people who could be impacted by Yes Bank seeking money at these low levels have accepted this, because they don’t really have much choice. So questions now are these - will Yes be able to raise money? - will the raised money be enough...
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    Yes Bank - Knee Jerk reaction

    We need to see the Yes Bank statement in perspective. - The Company has made provisions for its entire exposure to IL&FS as well as Jet Airways. - There is scope for recovery in both these assets - and whatever recovery there is, will go directly to bottom line. - Despite these provisions...
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    Yes Bank - smart move by Gill

    Ravneet Gill surprised markets by declaring a massive loss in Q4 numbers of Yes Bank. However, this could be a blessing in disguise for the bank. In a single stroke he has almost completely eliminated the overhang from IL&FS and Jet to some extent. And with the announced capital raising of over...
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    Yes Bank - Beggar and Ferrari

    You know the story of the beggar who won a lottery? He immediately and got himself a Ferrari. When the salesman asked him what he would do in the Ferrari, the beggar told him, why, he would go begging in his new Ferrari, of course! The market seems to be treating YesBank, in very much the same...
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    Vedanta - knee jerk reaction

    Corporate Governance issues seem to be the flavor of the season - and after the Dewan Housing fiasco, no one seems to be taking any chances. Vedanta's results were bad in terms of revenues, but the profits were higher than expectations. However, the market has latched on to a related party...
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    Caution: Bank Rerating ahead

    Over the last few months, there have been several interesting news items about the banking sector, and most of these have been ignored by the markets. And the net effect could be a dramatic rerating of the entire bank sector. Let's start with NPAs. These were once thought of as an intractable...
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    The Bank boom ahead

    For years, Indian banks were pathetic stocks. All Indian Banks put together are not as big as the 10th largest largest bank in China. And there were multiple reasons for this. But literally overnight, things are changing. October saw the resolution of the bad debt situation at Essar, with...
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    Time to buy Calls!

    Guys - at times like this, it is best to buy. This is not about showing patriotism. This is about being smart. Within days the situation will calm down, and at that point, it will look ridiculous to have missed it. But to be safe, buy Calls. So that risk is very limited
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    INR - deviating from the script

    This was not the script that one expected for INR. Raghuram Rajan, favorite of the markets, stepped down as RBI Governor 2 weeks back. $25-30 Billion USD of FCNR deposits maturing from September to November. Most people expected Rupee to weaken, and justifiably so. But Rupee has managed to...
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    Cairn - Vedanta - interesting situation

    Recently, oil prices have been moving up. Also, Cairn got an extension on its Barmer block in Rajasthan. This should have had a positive impact on Cairn stock - however, what's happening is that the stock is coming down! The reason is that Copper and other metal prices have been coming down...
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    Sun Pharma - interesting situation!

    Sun Pharma is buying back Rs 675 crores of stock at Rs 900/share - over 15% premium to current prices. That's a great indication of the confidence the promoters have in the prospects of the company, and a great way to enhance returns to all shareholders. That decreases shares outstanding by...