India’s Savings through OIL

India is presently saving about 70b$ due to the price correction that Crude Oil had, which is presently quoted at 45-50$. It will not again reach the $100 mark. Crude Oil will become history in a couple of decades, countries who minted money through crude reserves and are holding stock will have to force sell their stocks, else it will become junk very soon.

A couple of days back there was news that India is aiming to go all electric on its vehicles by 2030. Tata Motors to launch electric bus, M&M planning more electric vehicles along with its E2O. Today there is news that Jaguar Land Rover or (JLR) will be rolling out its Electric Vehicle by 2020 and all their new variants from them on will be an EV. Volvo follows too……

All these news support the ending of the Oil Supremacy, I remember a couple of years back how much the OPEC commanded the world markets, often coming out with production cuts and help the Oil price rise in the global markets. Middle east countries drooled themselves into high time luxuries, now the tide has began to turn against them.

For India, non-dependence on Crude imports will help save tonnes of dollars as well as subsidy expenses. As it is we are witnessing the Government aggressively cutting down on subsidies. All the savings that would come through these above mentioned advantages will be spent to build our economy, the dream of seeing India as a world super power is just around the corner.

Ashok Leyland leads in August Auto sales.

Auto sales were weak for most of the frontline companies in August this year. Hero lost near 14%, TVS had a 1% growth, Maruti managed due to Ciaz and S-Cross, which otherwise would have been negative. M&M goes weak, Tata Motors 0.50% down on overall sales.

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Ashok Leyland & Eicher were super stars. Ashok Leyland managed a 39% growth, supported by pre-buying ahead of ABS (Anti breaking System) becoming a mandatory norm from October 1st 2015. The growth was slightly ahead of expectations. Eicher continued with its above 50% growth. Royal Enfield sales grew 59% and commercial vehicle sales grew 22%.The company has opened sales office in the North America, which is another positive for its growth as exports are on a steady increase.

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Ashok Leyland turned around in the last quarter and it is likely to continue its growth phase for some more time to come. Stock has already run up, but still has a lot of room to be captures. Ashok Leyland came into our portfolio at ₹74, in August 2015. Post strong growth numbers we are adding to the existing exposure after the current correction phase is over.

At its high of ₹99.65, our investment in this stock has reached 30+ percent profits in a month. The broad based correction in the market post Chinese currency crisis has brought the stock down, which is an opportunity to accumulate for those who missed it at 75 levels.