A Perfect Proxy To Play The Tyre Industry!

(Image Source: Annual Report of the company 2021)

Understanding the Business

Company makes just two products:

  1. Tyre bead wire
  2. High carbon steel wire

It derives major revenue from ‘Tyre bead wire’ which accounts for 89% of total capacity and 91% of revenues.

For the uninitiated, ‘Tyre bead wire’ is the soul of every tyre. It is core to the safety of tyre use; it holds the tyre to the rim, enhancing product safety. The product is mature and its application has been unchanged for more than five decades. Hence, it is unlikely to see any replacement in the years to come.


Important things to keep in mind.

Photo by Firmbee.com on Unsplash

Importance of Quarterly Results

Firstly, let us understand the importance of ‘Quarterly Results’.

The shareholders of the company have put their hard earned money in the company. So, they must know about the affairs of the company. However, they can not have access to the books of accounts of the company. This is because, only and only the management of any company can access the books.

Hence, to give a snapshot of company’s financial performance, listed companies are required to publish ‘Quarterly Results’, which are available in public domain.

Also, before we start the details, one must have…


Poised for great times ahead!

(Source)

Disclosures:

  1. This is not an investment advice. Please consult your financial adviser before investing.
  2. ‘Bharti Airtel’ is a part of my long term portfolio.

In this post, I am going to discuss:

  1. The long consolidation in telecom sector
  2. The mounting debt of telecom companies
  3. End of long consolidation
  4. Data is the new oil
  5. A rise in ‘Work from home’ culture
  6. Hopes of increase in ‘ARPUs’
  7. Telecom Sector: A probable duopoly
  8. Bharti Airtel is 5G ready
  9. Bharti Airtel’s latest acquisition: OneWeb

The long consolidation in telecom sector

The telecommunication sector in India has always been a wealth destroyer for many years before…


Understanding the gold rush!

Photo by rupixen.com on Unsplash

The year 2020 has been rocking for gold prices as we witness the highest spike since 2011. On Tuesday, 28th July, 2020, the gold futures crossed $1800 per ounce for the first time since 2011. Analysts expect this recent rally in gold to continue for a while.

But, then why is the gold shining so bright?

Let us understand things bit by bit.

Lack of demand from the biggest gold importers

China is the largest importer of gold followed by India. However, things have changed drastically amidst the Covid-19 pandemic.

China’s net imports of gold via Hong Kong fell below the exports, thereby making the net imports negative…


Economics behind volatility explained.

Photo by Jamie Street on Unsplash

Have you ever wondered why price of large cap company like Reliance Industries Limited or Apple inc. fluctuates less in magnitude but a penny stock or share price of a small cap company witnesses huge volatility?

Did you ever observe how ‘Foreign Exchange’ rates show little fluctuation and are range bound?

In this post I sincerely make an attempt to decode the economics behind the price fluctuations.

We will learn two things,

  1. Why large companies show quick change in their prices though the magnitude of change is less?
  2. What causes huge jump in prices of penny stocks? Or why on…


Curious case of Mr. Piyush Goyals’s tweet.

On 15th July, India’s railway minister, Mr. Piyush Goyal tweeted something that left everyone’s head scratching!

It is all about perspective. But, this time I feel, Mr. Piyush Goyal played with numbers. That is how statistics can be. It can be used (read misused) to fit to one’s narrative.

(Source)

Let us decode this.

India’s trade comprises of its imports and exports. Now when,

  1. Imports >Exports, there is trade deficit.
  2. Exports > Imports, there is trade surplus.

In case of India, the imports have almost always exceeded the exports. Hence, we have had trade deficit for years. …


Understanding the most misunderstood metric for picking stocks!

Photo by Precondo CA on Unsplash

PE (Price Earning) ratio is one of the most important metric used by investors to make decisions while picking up stocks. But, more often than not, it is grossly misunderstood.

Let us decode this metric.

Contents:

1. How do you decide, what to buy?

  • Case A: Fresh Apple vs Stale Apple
  • Case B: Costlier Fresh Apple vs Cheaper Fresh Apple
  • Case C: Apple vs Orange

2. How to read the PE ratio?

3. How is PE ratio misunderstood?

4. When will PE ratio not work?

1. How do you decide, what to buy?

Case A: Fresh Apple vs Stale Apple


Story of scams that hit India’s second largest public sector bank.

(Image credit: DNA India)

It was January 2018, when Punjab National Bank, India’s second largest public sector bank discovered a fraud to the tune of Rs.11,000 odd crore! That is a huge number by any metric.

The share price witnessed free fall as soon as the news became public. It was trading at Rs.180 per piece in January 2018 and since then it went down and down to see the levels of Rs.26 per piece in June 2020.Now, as an investor one may see an opportunity to enter the stock. …


How buying physical gold can harm the economy!

Photo by rupixen.com on Unsplash

India is world’s largest importer of gold with annual consumption of 800–900 tonnes. It has been a tradition to buy the yellow metal on festivals like Akshaya Tritiya. ‘Akshaya’ signifies never ending prosperity, hope, joy, success. ‘Tritiya’ indicates third phase of the moon, the time when the festival is celebrated.Every time someone buys gold ornaments or jewelry, I feel something is wrong. The reason is simple. I see gold as locked investment in a way.

Let’s understand this the easier way. It is a simple cycle,


Everything is connected.

(Image credited to ‘Sarah Hargett’, Pinterest)

Just remember this simple line,

We, the people make the economy and economy in totality makes us!

Every transaction we do, impacts the economy and every change in the economy impacts us. Basically people and economy compliment each other. It is a cycle. The resemblance of ‘How the economy works’ with the Netflix show ‘Dark’ is uncanny!

Let us understand this.

STARTING A BUSINESS

Say, ‘David’ is a budding entrepreneur. He has a business idea and to execute the same, he needs capital for his business.

He approaches a ‘Bank’. The bank lends him a loan with interest of say 10% p.a.

‘David’…

Swapnil Kabra

Chartered Accountant | Quora Top Writer 2017 & 18 | Tutor to CA aspirants

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