INVEST INDIA
17th April 2015,
 
Dear Friends,
 
Good wishes.
 
At the beginning of the financial year in April 2014 Investors & stock markets together with the people of India were impatiently awaiting Parliamentary election results and one year forward in April 2015  INDIA has ushered into an era of renewed economic growth and development and  with stock markets have posted gains of 26%+ . Well the Investors are celebrating but also wonder - WHAT NEXT?

Well for the countrymen & Investors of India a unique change has just begun and there are many unexpected and unexplored heights the country will scale promising many years of excitement and gains based on strong foundations of fundamentals. Shri Narendra Modi led NDA Government is still 5 weeks short of One year completion which is indeed a short span for a newly elected Government to implement its policy and for sure no enough time to judge their actions but herein the NDA Governement comes out with the flying colors having initiated rapid implementation of economic agenda and days full of bright sunshine overlook India after 10 long years of darkness , red tapism , corruption and absolute inaction. Some of the bright colors are highlighted herein
 
I. GOVERNMENT IN ACTION :
1.    Against Rs. 9,407crs (US$ 1.51bn) fetched in spectrum auction in November 2012 conducted by Congress led UPA Government Shri Narendra Modi's NDA Government's 89% auction of the spectrum raises Rs. 109000 crs (US$ 17.58 bn) - " Zero Loss to Infinite Gain ".

2.    The Comptroller and Auditor General(CAG) had estimated losses on account of gifting away coal blocks allocation between 2006 to 2010 by Congress led UPA at Rs. 1.86 lakh crs(US$ 30 bn). The scheme was cancelled by the Supreme Court of India but CAG was scoffed & laughed at by Congress leaders. PRESTO !! The NDA Government has auctioned only 67 coal blocks and has unlocked total value of Rs. 400,000 crs.(US$ 64.51 bn) of which 84% goes to States and 16% goes to Centre.  29 blocks successfully auctioned for Rs. 200,000 crs+(US$ 32.25 bn)brings SMILES to the CAG & People of India.
 
3.    The Union Budget's outlay is Rs. 17,77,477crs (US$ 286.68 bn) to be met out of Rs. 14,49,490 crs (US$ 233.78 bn) and non tax refund of Rs. 2,21,733 crs (US$ 35.76 bn). And this transparent magical wand of NDA brings in Rs. 3,06,000 crs (US$ 49.35 bn) ONLY from Coal Blocks Allocations & Spetrum Auctions.

4. Rajyasabha passes 5 bills in March - April 2015 including Insurance Bill and Mines & Minerals Bill against speculation of Congress led Opposition parties opposing the same. Insurance Bill supported by even Congress and Communist party and NOW only Land Acquisition Bill awaits sanction of Rajyasabha - a political victory for NDA and economic positive for the nation.

5. AND Shri Narendra Modi for whom President Obama has cited as 'India's Reformer-in-Chief ' in the Time magazine's list of 100 most influential people of the world is across the world bringing much needed investments and technology into India from USA, Russia , Japan , China , Australia and now breaking the  jinx of Rafale Air fighters deal with France and being the first Indian Prime Minister visiting Canada in 42 years signing nation building contracts there and also in Germany.

II.    MORE THAN VISIBLE IMPACT :
1.    After and long years of high inflation corrective economic actions have resulted in Wholesale Price Index  contracting in March 2015 by (-)2.33% posting steepest fall in last 9 years.
 
2.    March 2015 Consumer Price Index(CPI) inflation also comes down to 5.17% displaying reduction of more than 50% in a short span of less than one year.

3.    Economic Growth Rate of 5.1% in 2012 has started its upward journey and is poised at 7%+.
 
4.    And the Oil Bonanza or reduced crude oil prices continues to work wonders for Indian Imports , Economy and profits of the Company too creating possibilities of :
.01  Substantial savings in import cost as average monthly imports reduced from US$ 40 bn to US$ 20 bn in March '15 - Savings of fuel  import cost of app. US$ 120 bn+ by year end. 
.02  Enhancement of Foreign Exchange Reserves to life time high of US$ 343 bn in March 2015 and 
.03  Cost cutting across the country of app. US$ 50 bn+ i.e. a mighty Rs. 300,000 crs.

III.    STOCK INDICES :
1.    The BSE Sensex has been range bound for almost 6 months moving from a low of 26,867 in September 2014 to a high of 29,681 in January breaching 30000 in intraday trade and quoting at 28,440 now.

2.    The  SENSEX Price Earning(PE) ratio is at 19+ against average 5, 10 and 15 years PE ratio of 18.79 ; 18.82 and 18.53 resp.

3.    Now with the Q4 / Annual Corporate results being awaited even a 3% to 4% hike in Corporate profits of BSE Sensex companies will result in PE ratio coming down to 18.45 - an attractive trigger for markets to move up by 1500 to 2500 points to 30500+.

4.    Add to this IMF and World Bank's predictions of Indian economy's growth surpassing the growth rate of Chiina over next 2 years which can enhance corporate profits from 15%+ to 18% or 20%+ making the Sensex cheaper and attractive year after year attracting hoardes of Indian and Gobal investments an promising LONG TERM GROWTH & GAINS.

IV.    FAR REACHING POSSIBILITIES :
1.    Savings of forex and cost cutting contributed by crude oil - Rs. 300,000 crs over next 12 months.

2.    Availability of coal boosting Energy and Manufacturing.

3.    Enhancing economic possibilities of spectrum freedom can replica creation of more jobs like USA over a period of time and of course results beneficial for consumer and economy with faster and cheaper data intensive services whic will enhance economic growth.
 
4.    With inflation cut off to sensible level interest rates cut in next quarter and over year  will result in cost cutting for Industry and enhance Corporate profits and will result into Individual's saving - one more Plus for Economy
 
5.   And the Re-rating initiated by Moody's is for sure to be followed by Standard & Poor's and Fitch which can result in competitive interest rates and thereby savings in borrowing cost of Government and Corporate Bonds and also attract tonnes of additional investments in Indian equities.
 
V.   CONCERNS OF DEPRECIATING RUPEE :
Most often NRI investors are worried about the devaluation of Indian Rupee to the US$ and the GBP and which blocks their invstment inititatives in India Equities . Well the Rupee is depreciating which is a positive for trade & industry for a developing economy but negative for overseas investors .
 
BUT investments need to be viewed in TOTALLITY and the devaluation can not be talked about in isolation as the developing stage of Indian economy which devalues the Indain curency also gives OPPORTUNITY of LARGE GAINS. The Gains of BSE Sensex.
 
NOW speaking of Bank Interst US$ 100,000 at 3.5% over 10 years would have grown  to US$ 141,700 & over 15 years to US $  168,700 ;
WHEREAS in INR terms a Bank CD in INR at 10% over 10 years would have grown  to US$ 193,300 & over 15 years to US $  316,700 .
 
AND THE GAINS OF INDIA's BSE SENSEX in US$ terms ARE JUST INCOMPARABLE with US's DOW & UK's FTSE : 
 
Years / Index
BSE GAIN in INR
BSE % GAIN in US $
FTSE GAIN in GBP
FTSE %  GAIN in US $
DOW GAIN in US $
DOW GAIN % in US $
1 Year
5571.22
24.89%
293.00
15.84%
1518.65
9.23%
3 Years
9121.72
52.41%
479.70
26.07%
4998.74
38.52%
5 Years
10429.72
59.50%
1211.80
21.85%
7119.68
65.58%
10 Years
21464.67
330.59%
1997.00
78.99%
7472.55
71.14%
 
Well well well .... the POSSIBILITIES ARE ENDLESS as reflected in  last 10 months eventful and successful initiatives of NDA government which will continue to grow by the day and yield  wonders for Indian people at large but much more investors in Indian equities.
 
One more time  very strongly suggesting TO INVEST MORE IN INDIA and while WEALTH CREATING HELP NATION BUILDING TOO.
 
Happy investments 

Sincerely, 
RAJESH H DHRUVA
nrimutualfunds.com
Tel. No. : 0091 281 245 3367 (four lines) / 245 9613
Cell : 0091 98240 49944
email  rajesh@femaonline.comkeynote@nribanks.com
 
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Dear Friends,

Good wishes.

1st January of 2015 on the calender showed new Year 2015's morning but for INDIA and its entire population of 125 bn and 2 bn Indians abroad a New Year full of hopes , dreams & possibilities has begun long back on the 16th May of 2014 with Shri Narendra Modi's Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) winning the general elections and taking over the reigns of Republic of India .

With Shri Narendra Modi's government on the move from day one Indian economy and business have got a shot in arm which is reflected in the prices of Indian Stock markets inviting all and one to invest in Indian Equity with strong fundamentals of corporates and econmy which are briefly discussed herein.

I. GOVERNMENT IN ACTION :

Well, 7 months is normally understood to be a very short span for any new government to function and for sure for any one to to judge a new government's functioning. But Shri Narendra Modi's government has commenced action and implemented economic agenda in these 7 months which the previous government didn't bother to take up over decades of its rule. Important agendas of the government is briefly highlighted herein :

1. Foreign Direct Investment (FDI) cap in insurance raised after 20 long years.
2. FDI in Defense and Railways opened and liberalized in Real Estate and Insurance.
3. Coal Blocks auction initiated which was suffocating Power sector and Industry at large.
4. Investment commitments sealed with USA , China , Japan and Russia.
5. Strangulating laws regarding Land Acquisition ; Labour laws ; Domestic Gas and Toll Collection simplified and implemented.
6. Common Goods and Service Tax (GST) initiated.
7. Transparent disinvestments of Public Sector Companies initiated .
8. Diesel prices deregulated .
9. Subsidies to poor by direct transfer launched.
10. Banking inclusion for poor and rural mass implemented.
11. Telecom Spectrum auction initiated whereas Defense Spectrum of 2100 MHz band freed for commercial use.
12. Public Sector banks autonomy initiated and
13. Planning Commission replaced by National Institute for Transforming India (NITI) Aayog.

II. VISIBLE IMPACT :

And the green shoots of this action chart and in some cases the fruits are also visible. The glaring examples are :
(1). Consumer Price Index (CPI) reflecting the retail inflation has come down from 9.13% in December 2013 to 4.2% in November 2014.

(2). The Wholesale Price Index (WPI) has moved from 6.4% in December 2013 and has come down 0% in November 2014.

(3). The Gross Domestic Product (GDP) growth rate has started moving up from 4.7% last year end shooting up to 5.5% this year end.

(4). And the bonanza of prices of oil below the level of US$ 50 has created multiple possibilities of :
.01 Foreign Exchange savings of app. US$ 10 bn this Qrt. and possibly US$ 40 bn per year if the rates donot go up .
.02 Thereby enhancement of Foreign Exchange Reserves of US$ 40 bn+.
.03 Cost cutting across the country of US$ 40 bn plus i.e. INR 2,50,000 crs+.

III. STOCK INDICES :

The journey of BSE Sensex from 17000 to 27000 in a short span of 3 years normally would be understood as Bull- Run of the Indian Stock Markets and also message of markets being overpriced whereas the facts are exactly the opposite.

The barometer of valuation of an index or stock price is the Price Earning / PE ratio which is multiple of the Earnings. Now Investors and media talk a lot about the BSE Sensex gain of 58% from 17000 to 27000 but totally miss the Earnings gain of 49% of all 30 BSE Companies making BSE Sensex which is the backbone.

It is interesting to note that today's PE ratio of BSE Sensex at 18.82 and Nifty PE of 18.30 is close to and below average PE ratio of last 5, 10 and 15 years being 18.79 ; 18.82 and 18.53 resp.

IV. POSSIBLITIES :

Well it seems that ALL these positive factors have been considered by the market pundits across the globe which is why Morgan Stanely ; Goldman Sachs; Dr. Mark Mobius ; Macquarie ; Rakesh Jhunjhunwala ; Ramesh Damani and almost all Investment Analysts are singing one song in unison - that of - " INVEST INDIA ".

And yesterday India's leading InfoTech Company Infosys has already surprised the markets by unusual 13% rise in Q3 profits and revenue growth of 6% pushing its stock prices by 7%+. Well with Q3 results lined up to follow the
EPS of 1494 should improve by atleast 4% to 1554 and PE ratio of even 19 should result in BSE at the level of 29552. And imagine as and when the Indian Stock Markets start into a Bull Run even a PE of 21 will shoot the BSE Sensex to 32663.

At the cost of repetition it be said and understood that Indian Stock markets are not overpriced but are rather underpriced. Still a good time to INVEST.

Happy Investmnets

RAJESH H DHRUVA
femaonline.com / nrimutualfunds.com
 
 
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23rd July 2014,
 
Dear Friends,
 
Good wishes.
 
I am very happy to inform you that Indian stock markets have saluted Shri Narendra Modi's Government posting 21% gains during the first seven months this current year.
 
Rakesh Jhunjhunwala the largest Investor and Investment Guru of Indian stock markets upon formation of Shri Narendra Modi's Government had said on 17th May, 2014 "This is start of the biggest bull market : From 6300 (Nifty), I see Nifty doubling in the next three years, not from this figure from the previous high" and this seems to be coming true literally with market pundits in India and acrosss the globe echoing the views of Rakesh Jhunjhunwala . Few instances being :
 
Ramesh S Damani, whom Rakesh Jhunjhunwala considers a Guru said on 22nd July, 2014 that
 "The current bull market will last for long and this is the best phase for retail investors to be in".
 
 
Motilal Oswal's Raamdeo Agrawal says – “Next 25 years will be better than last 25 years for investors”.
 
 
"India is in a bull market and it will probably continue", said Mark Mobius, Executive Chairman, Templeton Emerging Markets Group, Franklin Templeton Investments . He added "inflows from foreign institutional investors (FIIs) could double from last year".
 
"The Sensex, the best performer among recognised global markets in 2014, could scale 31,000 by March 2015 in abull case scenario", according to Ridham Desai, Managing Director and India Equity Strategist of Morgan Stanley.
 
Every investment analyst in India and across the world is absolutely bullish about performance of Indian Stock markets which by and large is expected to grow by 50% to 100% over next 3 to 5 years resp.
 
We strongly suggest additional investment of substantial portion of your surplus funds in equity schemes of Indian Mutual Funds at the earliest as the current year Q1 corporate results following Q4  aggregate net profit of 965 companies, excluding petroleum and banking and finance, showing a strong 62.2% YoY growth during the quarter ; better than expected monsoon across India ; easing of oil prices and dynamic rapid action on economic front by Modi Government promise a quantum leap of stock indices over next 4 to 6 months.
 
Happy investments and regards,
 
RAJESH H DHRUVA
Chief Executive
nrimutualfunds.com

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17th June 2014

Dear Friends ,

The BSE sensex has moved from 19,177 on 14th June 2013 to 25,190 today - a gain of 31.55% over 1 year. Apparently this looks like a big gain but fundamentals tell a different story about markets being just reasonably priced.

March 2013 Year's Earnings Per Share(EPS) of BSE sensex shares was 1145 which has gained 18.35% to an EPS of Rs 1355 for Year ended March 2014 and market analyst expect the same to grow to 1550 for year ended March 2015 which results in 1 year forward PE of 16.45.

Well there are plenty of signs telling us that the markets are not costly and markets have sufficient steam to give 20%+ returns over next 1 year as earnings of March 2015 of Rs. 1550 discounted at 10 years average PE ratio of 18.8 results in BSE sensex level of 29300 and at Bullish PE of 22 indicates BSE Sensex level of 34000 - a gain of 35% from now. We strongly suggest investment in equity schemes of Indian Mutual Funds up till the market levels of 27,000 following various strengths which are briefly mentioned herein :

I. FUNDAMENTALS :
1. Q4 results of March 2014 show aggregate profits of 965 companies [ excluding petroleum, banking and finance ] posting a fantastic growth of 62.2% Year On Year(YoY) supported by 17.5% growth in revenue and 3 years record operational margins of 18.57% with operating profits posting 45.5% YoY growth.
2. For sure this earnings of Q4 will continue the pattern of better margins Quarter after Quarter and may improve in 2014-15 with Modi Government's initiatives to remove road blocks of power, mining and infrastructure which would accelerate growth.
4. Higher infrastructure spending and better consumer demand should accelerate volumes and should add to profits over next 2 to 3 years.

II. TECHNICALS :
1. Global interest in Indian stock markets have crossed US$ 9.4 billion in the first 5 and half months this year.
2. FII investment is expected to cross US $ 30 billion in current year .
3. The Modi Government is planning legislation for investment of insurance and pension corpus in stock markets with expertise of mutual fund companies.
4. And the Indian resident investors have also turned positive being attracted and convinced by the bullish movement of the stock markets .

III. GOVERNMENT ACTION :
1. Modi Government does not have a magic wand but here is a Government ready to act .
2. The reversal of political paralysis and decision making paralysis itself is a magical big relief for economy as also people at large.
2. The BJP has undertaken detailed study of various road-blocks and seems to be prepared with corrective measures much before the election results were declared as is distinctly reflected in their decision and action plan implementation within a short span of fortnight being :
.01 Empowered Group of Ministers being abolished .
.02 Administration and Secretaries being empowered and encouraged to take decisions.
.03 Dis-investment taking off with fresh valuation proposed for selloff of 33% government holding of Hindustan Zinc which could fetch more than Rs. 23000/- crores as against the expectation of Rs. 15000 crores by the previous government.
.04 Listing of UTI Mutual Fund expected to add another Rs 30000 crores in the hands of stakeholders.
.05 State Bank of India merger with subsidiaries State Bank of Bikaner and State Bank of Jaipur, State bank of Mysore, State Bank of Travankor, State Bank of Hyderabad and State Bank of Patiala being talked about seriously.
.06 Road blocks in Mining and Power sector being removed.
.07 Shortage of coal supply to power plants being removed.
.08 Road construction across India and in particular in North East to be revived .
.09 Agricultural productivity and storage of agriculture produce to be a priority and
.10 Retrospective amendments in taxation to end.

The detailed study of BSE Sensex at 25,200 plus apparently looks non-expensive as the PE at 18.59 is below even the average PE ratios of 5 , 10 and 15 years Sensex PE of 18.62, 18.70, 18.93 respectively.

Further study reveals opportunities hidden across the sectors with BSE InfoTech value PE of 17.89 ; ET100 value PE of 14.83 ; BSE Mid cap value PE at 12.16 and ET dividend value at meager 10.7.

This factors clearly display that the markets are absolutely reasonably priced and the BULL RUN has just begun. If one accounts for even 15% growth in next 3 years Earnings the EPS will move up to 2100 and at PE of 22 the BSE Sensex could be showcasing level 46200 - no wonder market pundits are talking about Sensex levels of 45000-50000. Need we say anything more.

We strongly suggest larger additional allocation in equity schemes of Indian Mutual Funds and continuation of purchase till the BSE level of 27000 with 3 years investment horizon.

Happy Investments & Best wishes.

RAJESH H DHRUVA
Chief Executive
nrimutualfunds.com

 

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17th May 2014

Dear Friends and viewers ,

Good wishes and I am happy to share my joy and happiness which is as much as the joy and happiness of billions of Indians in India and across the world.

The results of national elections are finally declared and BJP has singularly won clear majority of 283 seats and with partners of National Democratic Alliance (NDA). BJP has won 337 seats which accounts for more than 60% of the seats to be occupied in the Loksabha. Shri Narendra Modi can be singularly accredited for this victory for his tireless campaign across India and no nonsense and objective proven leadership of Gujarat State over last 12 years.

What is more interesting is the fact of a single party getting a clear majority after 30 long years and a non Congress party the very first time ever. In the last many years of gloom and doom India needed a result oriented assertive decision maker and it is the destiny of 125 crore people that Shri Narendra Modi is be the Prime Minister when India and its people need it the most.

No doubt the problems of current account deficit ; inflation ; low growth ; high unemployment ; stalled infrastructure projects hover over the nation and Mr. Modi or for that reason no one has a magic wand which can cure the issues over night but a critical analysis of these problems point to solutions within the problems. Government lethargy and paralysis of decision making have stalled infrastructure projects which can be turned around by corrective decisions and actions; inflation is a creation of supply side constraints which can be addressed more conveniently than the demand-pull inflation; unemployment can be gradually addressed by job creation in infrastructure and agriculture sector while problems of current account deficit and sluggish economic growth need more time and so also the problem of subsidies and fiscal deficit. But a determined Government can always have solutions for the economy and it is not wishful thinking but for sure Shri Narendra Modi's government will take India into uncharted growth and development and ensure internal and external security ; enhance job opportunities ; unchain the infrastructure development of mining ,oil and gas , power and construction of roads . This would mean higher inflow of foreign funds by way of Foreign Direct Investment (FDI) in business and industry and Foreign Institutional Investment (FII) in Indian stocks and debt markets .

For NRIs and Indians at home the mantra of " INVEST INDIA " across all class of assets i.e. stock markets; debt securities ; real estate ; plots of land will bring attractively high results over next 4 to 5 years time.

Ramdeo Agarwal, Jt. Managing Director of Motilal Oswal has gone on record saying " In our business generation time it will be the first majority government. We have not seen a majority government from 1989 which was almost start of our business the impact it can have on policy, governance, and execution. Yes, less than a year it should be much more balanced for new government plus this majority government is led by a very strong leader who is assertive, decisive, honest and goal oriented. This lethal combination unimaginable things will happen enough of elections now, get totally focused on business we will see many days of 1 billion$ inflows in a single day focus on business and stop worrying much about markets."

Rakesh Jhunjhunwala , India's big Bull has said on BJP being voted to power : " This is start of the biggest bull market.....No, the index will surely double and triple. If the index doubles in five years from now, it will be very poor gain. I see it happening much faster."

And experts and analysts across India and abroad share positive views for INVEST INDIA which can be viewed in print and electronic media.

I strongly suggest that for a change , independent of personal likes or otherwise , one should examine INDIA POSSIBILITIES over next few years and INVEST INDIA in equities ; euqity mutual funds and plots of gated properties as these assets could be multiplying many folds and contribute to wealth creation over next 3 to 5 years .

Happy Investments.

RAJESH H DHRUVA
Chief Executive
nrimutualfunds.com

 

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