Look to understand!

One of the best ways to look at potential opportunities is to look at the environment around oneself and one can see how well the economy and get a hint of how specific companies are doing and will do.

Here are 11 such examples:

1. More foreigners in markets and airports indicate better room utilization and potential increases in rents for hotels and maybe better IT business and companies like Kingfisher, Jet

2. Construction sites empty and now restarting --- improvement in the realty market

3. People queuing up for loans at banks – or the branch manager smiling – better returns for banks

4. Price Hikes in petrol and diesel—will mean higher inflation and hence potential increases in RBI rates.

5. More no of new vehicles being added—better performance for the transport majors—if more commercial vehicles—then TATA Motors, Ashok Leyland,etc and if more individual—then better returns for Maruti, Hero Honda etc.

6. Work happening on infrastructure at a fast pace—good tidings for L&T, JP Associates, IVRCL etc.

7. Bad Monsoon—impact on FMCG companies: -ve on HUL, ITC, Godrej and  +ve for fertilizer companies

8. Salary Hikes/ increased attrition—things looking up for the companies ( read some of the recent comments on attrition in the IT sector)

9. Long lines at shopping malls--- great for retail companies-- Arvind mills, shopper stop , Vishal retail etc.

10. Reduced Direct taxes—will impact people’s take home positively and hence is great for white good manufacturers.

11. Naukri.com advertisement: Jobs are back !! :)


Simple enough?


These are great indicators of understanding what is the trend of the market and which companies are in the race for better performance.


what other areas can you think off which we can identify from our surroundings? Would appreciate any comments !


Best advice for fundamental investing is to keep your eyes and ears open.


Happy Investing!


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Advanced Tax Numbers-- What do they imply?

Every qtr, companies need to pay advance tax as per the schedule given in the Income Tax act. While these numbers are provided they give us as investors some good information on potential earnings of companies before the results season starts. Hence market forces eagerly look forward to this leading indicator to companies performances.

So if the advanced tax numbers are higher than last quarter or YOY ( year on year) it indicates healthy performance of the company and  a price movement in the scrip is expected.

However, sometimes we should be careful of these numbers and there could be some exceptions.

1. There could have been an exception income for the company because of which tax out go could be higher.
2. The comparison should be YOY or quarter on quarter
3. Some companies may be in a tax free environment and hence the tax outgo comparisons may not work at all.


But here are some details of the recent advanced tax numbers--- all of them giving  a positive signal to the healthy performance of these companies. Great, Same, worse

                                                     Now           Last year


RIL                                                770             365

ACC                                              330               340

Infosys                                           250               125

Union Bank of India                       185              253

ICICI                                            350             250

Asian Paints                                    60             43

SBI                                              1857             1810

Tata Motors                                   115                0

BOB                                              300             280

Zee entertainment                            97            109

Tata steel                                       513               406

L&T                                              270              275

Bajaj Auto                                    177                60

M&M                                           235                  0

So the ones in blue should have or can move up in the coming few days....  this is one of the reasons that in todays trade reliance was up 4%!
 
Hope this adds to your understanding of the market...
 
Happy investing.

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