Rationale for some of the stock picks

at the outset, globalization n it’s uncertainties have taught me to be more diversified than what text books wd have recommended. I have upped th no of stocks to around 22 now and still believe there is ample to get good returns. In between I do introduce upto 3 stocks as trading ideas, which means they are still fundamental calls with atleast a 20 to 30 pct upside but not core. In the present section, I feel arshiya is an underdog that has India’s only free trade zone. I do not personally subscribe to the fear of debt as the business is globally a gestation business but has too many advantages. People wrongly read it to be a logistics or warehousing company while it has a significant focus on value added services. At a pe of 6 contrasted to its growth rate, the stock cd be a multi bagger.

Tv 18 and den are in fact the easiest stocks to understand. Take a monthly cable bill of 200 bucks. Say 8 go to Tv 18 for all its channels. That means a potential of 8 x. 10 cr TV sets (many households have 2 to 3 connections) or 80 crs a month as collection. Over just one year that’s 960 crs. Add the money saved as loading charges that were previously paid and add money saved on interest as co has reduced debt significantly. Numbers talk. Same for den. I suggest one reads the cable amendment act to see what a positive black swan this is.

Amar raja is a co that is continuously growing its market share at the expense of exide by a superior product, better marketing, replacement mkt focus and now capacity expansion and reorientation of its mobile business. The financials are excellent and the co has technology support of Johnson controls. Since battery is a limited life product with a shorte life than a car or a two wheeler, the roll out is better. Same for telecom towers.

Indusind, yes and icici are banks getting their acts right, partly due to renewed focus and partly due to the inefficient way in which psu banks are being run. Empirical evidence has supported a loss of mkt share and profitability and the emergence of a new leader whenever govt opened sectors to private sector. I like and own hdfc bk too but feel these banks are growing more aggressively now. Icici is just getting its act together under Chandra ko char and shd get a better valuation including when insurance opens up.

Mah satyam is a co that is energized post the tech mah takeover. Not only is the telecom industry improving or reviving in the world, the integration of mah satyam and tech m brings a better variety of services to the new entity.

Rural india or Bharat as it is called is the reason for mnm finance being a star performer. Bajaj fin also falls in this benefit.

Wockhardt has emerged out of a crises better than a magician pulling a rabbit out of his hat. With virtually no debt now and a complete focus on its operations including the USA business, the co is in a situation where I feel high growth will recur for some years and pe expansion will follow. It is still one of the cheapest pharma cos.

Mcx and ft are again obvious stories on their new exchange and the resolve with courts. Jignesh is a real smart promoter and having sorted this mess with sebi, the co is getting a very positive response to its several exchanges. If you just look at the recent price NYSE got, it is just an awakening of the potential that this sector may hold.

Kajaria and whirlpool are basking in consumption booms.

A small caveat: I own these stocks way cheaper but have added even recently. I see a secular rally in these companies if one holds them for long. As you may see from my tweets (@safiranand), I have repeatedly tweeted since 4700 to buy individual stocks ignoring the noise. I still endorse that while mkts may go one way or the other a disciplined approach to good companies will be extremely enriching.

All the best.

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