When the upcycle in a sector is very strong
Poorly managed companies also make returns

2021 steel cycle-
SAIL went up from 30 to 120

Now in the current credit upcycle:-
PSU Banks are making money!

But does this mean credit culture has changed for PSU Banks?
No evidence of that

From HDFC Bank to Kotak to Bajaj Finance to Canara Bank!

How did lenders perform in Q4FY21?🤔

A thread🧵on the Banking/NBFC results

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(1/24)

HDFC Bank:Stable

🏦Profits grow at 18.2%
🏦Asset quality remains stable with credit costs at 1.65% for the quarter
🏦CAR at 18.8%
🏦Gross NPAs at 1.32% vs 1.38%
🏦HDB Financial returns to profits
🏦Watching carefully on how the second wave will turn out

(2/24)

ICICI Bank Results:-Stable

🏦Operating profit grows at 20%
🏦Covid-19 provisions increased by 1000cr to 7475cr
🏦Deposits grow by 21%
🏦Net NPA declines to 1.14%
🏦Capital Adequacy at 18.06%
🏦Retail loan growth at 20%
🏦Corporate loan growth at 13%
🏦Dividend-Rs 2/share

(3/24)

Cholamandalam Investment:Stable

🏦Disbursements decline 13%
🏦Loan loss provisions at 1.4%
🏦Profits up 29%
🏦Positive on Auto financing

(4/24)

HDFC Ltd:Strong

🏦Loan disbursements grow 60%
🏦Month of March had highest ever disbursements
🏦Gross NPAs at 1.98%
🏦Individual loan NPAs at 0.99%
🏦Non-Individual Loan NPAs at 4.77%
🏦Dividend of Rs 23/share
🏦PAT grows by 19%

(5/24)

Index Funds have been a red hot equity passive Mutual Fund strategy in the last 10 years!

A thread🧵explaining why index funds should be a part of ur equity MF portfolio!

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(1/18)

Passive vs Active Mutual Fund Strategy

Active Strategy:-

Active investing, as its name implies, takes a hands-on approach and requires that someone act in the role of a portfolio manager.

The goal of active money management is to beat the stock market’s average return

(2/18)

Passive Strategy:-

Passive investing entails a non-active role on part of the investor.

When you invest in a diversified portfolio with low costs and a long-term horizon, it tends to deliver returns comparable to the market average.

(3/18)

What are Index Funds?

Index Fund invests in stocks that imitate a stock market index like the Nifty, Sensex.

These are passively managed funds which means that the fund manager invests in the same securities as present in the underlying index in the same proportion.

(4/18)

The relentless rise of Index funds:-

The assets under management (AUM) of passive products will grow eight times from the current levels of ₹3 trillion to ₹25 trillion by 2025

Passive assets will grow to constitute 37% of the overall assets in the MF industry by 2025

(5/18)

High Copper Prices Are Terrible for EV Makers. This Company Has a Fix. https://t.co/kWu59AUGO1 via @BarronsOnline

Aadhar
UPI & now
Open Network for Digital Commerce(ONDC)

As ONDC starts testing in Bengaluru!
ONDC is yet another UPI moment(game changer) in e-commerce

A thread🧵on what is ONDC? How will it revolutionize e-commerce in India?

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(1/21)

How Big is India's e-commerce market?

In India, the Gross Merchandising Value (GMV) for the digital commerce retail market was ₹2.85 Lakh Crores (US$ 38 billion) in 2020.

(2/21)

Kirana Stores are physical in Nature:-

In India, around 1.2 crore Kirana stores, which are hyperlocal neighborhood provision stores, account for 80% of the retail sector, but most of these stores are digitally excluded.

(3/21)

India had 4.25 crore Micro, Small and Medium Enterprises (MSMEs) that could benefit from the digital revolution, the paper adds.

(4/21)

Currently, only about 20% of internet users in India are online shoppers.
By 2030, we can expect this to grow to nearly 50 crores,

(5/21)

@Gurpreetnarang2 @CMungerilal I was pointing out why cyclical stocks trade at low PEs when the earnings are strong, you misunderstood my tweet.

Markets are all about patterns and tendencies that have an edge. Here are a few I have observed and learned over the years.

A Thread.

Identify the Sector(s) of this cycle. Typically mid caps which are enjoying an earnings tailwind due to the external environment and you have a 3 year visibility into a 25% or higher eps growth. Will seem expensive throughout the cycle but will make big money.

Breakout post a genuine earnings surprise. Popularly called PEAD. Structural pattern. Works like a charm at all points of any cycle.

Serious debt reduction. Drives as much shareholder value as a high growth stock.

52 week highs across stocks in a given sector. Something is happening. Pay attention.

One key learning from @VijayKedia1 Sir:

Many of the cos he invested in: vaibhav global, Tejas networks, sudarshan chemicals he was tracking for 4-5 years before he decided to invest. Wants to pull the trigger near the bottom of biz cycle

Patience

@contrarianEPS Today Wonderla ran like anything due to opening of its parks. Wonderla has one of the strongest balance sheet in tourism, travel, entertainment and hotel related space. Some unlock investment(not trade) do work if selected properly.

🖍 What is investing cycle?

😄 2006-07, 2009-10, 2017, 2021
What fundamental, what valuation, what governance, what history when future bright 🤡

😕 2002-03, 2008, 2012-13, 2018-19
Only invest in good companies, fair valuation, with good history and honest promoter 🥵