Visaka, one of our multi-bagger

Housing for all scheme by the Government is a positive for the economy in various manners. 4 Crore houses to be build by 2022, the creation itself will bring huge business opportunities for the Cement, Steel and home construction goods manufacturers. Once the houses are ready, the occupants will need to have the basic necessities to run their homes, utensils, durable’s, furnishing etc., these businesses will flourish.

In line with this thought, our investment in Visaka Industries, a company that manufactures sheets for houses as well as other home construction accessories. We purchased this stock when it came in our research ranking table in the month of January 2017 at a price of ₹190 per share. It is 8 months since we are holding this stock, apart from the dividend of r₹6 per share, the current price of the stock is ₹672.00. An appreciation of ₹482 or 250% growth in 8 months.

One of the Multi-baggers in our portfolio…..

 

Movers and Shakers for 19th August 2017

Movers and Shakers of the week: $400 bn Forex Reserves JAM- Jan Dhan, Aadhaar & Mobile advantage Barcelona Terror Attacks Vishal Sikka resignation from Infosys

USD at ₹64, poised for 60 in few months

When it rains, it pours cats and dogs. how true is this saying. A period where everything is working in India’s favor, good governance, good geo-politics, international accreditation, good monsoon, pro-industry bureaucracy, lower commodity prices, high on reforms, high on FOREX and along with that strength of the INR.

A couple of months back, USD was trading at ₹69 to a dollar, now it is ₹64, a near 10% appreciation. If INR appreciates, it is pain for exporters. IT companies have lost 10% of their margins just because of this appreciation. Analysts expect the USD to reach 60 soon, IT and Pharma will become a sure no, no for investors.

In spite of the USD losing value, our FOREX reserves have reached historic peak, we are about to touch the $400 Billion mark by September 2017. Again another good thing is that, the remittances from NRI’s have been on the high, both because of the top class investment climate in India and the uncertainties of holding USD. Along with this advantage, Crude Oil prices holding at $60 is a big advantage for India.

Above 60B$ saved per annum and crude will not see its previous high of 126$ again, it will only decline. All these savings are expected to be ploughed into the economy in various ways, one of the main emphasis would be infrastructure. Look forward to see a totally changed India in the next decade.

Sikka quits, long awaited

Infosys CEO Vishal Sikka resigns citing ‘continuous assault’ by NRN as the reason. With the kind on interference that the Ex-CEO was doing often, this news was expected…..

The wealth creator has now become the destroyer. 20000 crores of value lost today alone, since the stock corrects 7%. As it is, the Tech sector is loomed with slow growth, losing margins and now governance issues. INFY is one of the highly owned stocks by mutual funds, which means all the investors have lost wealth. And all this due to one person’s insecurity.

Old management in actual reality wants to control the company, while for the world, they show that, they have given management to expert hands. This episode along with the events that have been happening in the TATA group, shows the world that, Indian’s are still to learn a lot when it comes to having their wealth managed by professionals.

Though the Tech sector is a poor performer and the stock is showing very less growth, why did Mutual funds load so much exposure into this stock? HDFC owns 2%, ICICI Pru owns 1.50%. Is it due to the vicious thought that, it will come up one day and they should own it or just parked funds forcefully due to high capital availability, as the company has good liquidity and old track record of performance?

Such exposures are some of the reasons that Mutual Funds under-perform and lose confidence of investors.

There is open criticism in the media about the Infy board not able to manage a man with 3.44% stake, clear signs of more trouble in future. Stay away from technology stocks and more so from INFY. Protect the profit made from the stock in the early years, move out and invest in some good performing one’s and grow wealth. Do not become emotional and lose the gains made.