I have slightly different view of TCS ... I believe with TATA's sound management and deep commitment, TCS has biggest chance to get into league of Accenture and IBM over next 6-10 years
Comparing Accenture and IBM & TCS chart here ...
@Accenture
Current P/E Ratio 16.9
P/E Ratio 52 Weeks Ago 19.9
5-Year Avg. P/E Ratio 19.4
@IBM
Current P/E Ratio 16.6
P/E Ratio 52 Weeks Ago 16.8
5-Year Avg. P/E Ratio 17.9
@TCS
PE ratio 21.19
So even with rising rupee & global slowdown, emergence of other cheap development location such as Poland & Romania etc., i still believe it can be compensated by tremendous potential of domestic market which yet to be fully explored and I believe TCS will have a fair share of domestic market
So I still see there's growth opportunity though it won't be same what it used to be earlier ..
your take Puys
invest in petroleum and energy sector yaar
When you speak of Energy Sector, which companies do you have exactly in your mind?
PSU or private?
Problem with Indian Oil Sector is that it's highly govt regulated, there is little freedom and govt can change whole sector scenario whenever if feel necessary ..
To elaborate my point, take ex. of reliance ... we know reliance has now built world's biggest refinery at jamnagar & most of profit reliance plans to make by exporting oil from refinery... what if govt after couple of years comes with new regulation where they impose total / partial ban of exporting oil (citing high oil prices or some other reasong) as excuse ... what option does reliance have in this situation ->
a. shut down refinery
b. lobby govt to chance regulation so that if favors them ( this is their specialty)
c. sell oil in domestic market
a. -> not feasible / practicle
b. -> they might succeeded one more time ( their track record says so) but again they might not ( take ex. Reliance Petrol Pump which has to shut down due to irratic govt policy)
c. -> sell oil in domestic market @ govt prescribed rate, which means far lower margin than export market or even losses ( look at IOC )
This scenario will never happen in US (look at current profit & revenue of EXXON Mobile, they are at all time high)
Puys, I am slightly confused here .... how do we calculate effect of projected of PE ratio on market price
I mean, TCS has current PE ratio of 21.xx, now after 3 years it become let's say closer to 16.xx but then again it's revenue will increase by another 50%(hypothetical fig. taken for ex.), then how we can figure out price of TCS stock after 3 years based on current revenue & projected revenue growth ...
Is there any formula for this?
Puys, I am slightly confused here .... how do we calculate effect of projected of PE ratio on market price
I mean, TCS has current PE ratio of 21.xx, now after 3 years it become let's say closer to 16.xx but then again it's revenue will increase by another 50%(hypothetical fig. taken for ex.), then how we can figure out price of TCS stock after 3 years based on current revenue & projected revenue growth ...
Is there any formula for this?
Revenue doesn't have todo anything with PE. Revenue is what the company gets through its sales. From this the various input costs, taxes, interest on loans and deductions are made to get the final earnings PAT. This didvided by number of shares gives you the EPS. EPS is used in calculating PE ratio.
So you have the revenue increasing by 50% for TCS. But you cannot predict the profits. Assuming the final PAT/Revenue ratio remaining constant over the next few years, using the current PAT, revenue and projected revenue, calculate the projected PAT. Not a great way to predict the prices, if you find something useful please post here 😃
@jshah29 Thank you but I am sorry to this, your post went above my head :(
then you discount all the future cash flows in the current terms and get fair price according to future earnings... this ismore of an absolute model and does not take into account market and industry scenarios... so its not entirely fool proof...can you elaborate this once more through easier terms
Puys, one more query....
I know one need a Demat account to buy / sell shares.... now I want to open demat account in my name ..
I visited website of various banks such as HDFC, ShareKhan but problem is they provide service to very limited cities and I am being from a small town (taluka place) so my city is not listed in their list
So what option do I have? Is there any company which will provide Demat Services all over India?
@jshah29 Thank you but I am sorry to this, your post went above my head :(
can you elaborate this once more through easier terms
Wat J shah is saying is that u need to discount the cash flows to bring them at par at current value
Suppose u invest 100 rupees today, so post 5 years u ll get bak 100 + X amount (X = interest )
So to get those figures at current calue u need to discount them at some rate.
Cheers
MK
@jshah29 Thank you but I am sorry to this, your post went above my head :(
can you elaborate this once more through easier terms
i thought so - when i read it myself, i too could not figure out anything - sorry for that dude
in simple terms - why would you hold a stock? Coz the company earns money? Now when company earns money how would you benefit?
in two ways - either you get dividend or the price appreciates
so one major reason of holding stock is to receive dividends - and you are just trying to value the present value of the future dividends through discounting.... and price you are paying to get that dividend flow in future
2nd scenario - if the company does not pay you dividends, it keeps the money to itself hoping that it shall earn more money from the earnings... however, you assume there is an end to company when it shall liquidated or be taken over and the you being owner will get fair value price... and hence the model tries to arrive at such a price again thru discounting the earnings...
see DDM chapter on the link below... its a lil complex - let me knw if u dnt understand
http://www.finint.ase.ro/Materiale/Manuale/Investment%20Valuation_Damodaran/ch13.pdf
Puys, one more query....
I know one need a Demat account to buy / sell shares.... now I want to open demat account in my name ..
I visited website of various banks such as HDFC, ShareKhan but problem is they provide service to very limited cities and I am being from a small town (taluka place) so my city is not listed in their list
So what option do I have? Is there any company which will provide Demat Services all over India?
You can go thru other options as well like Religare, Kotak, Reliance.
I suggest consider the amount and frequency of trading that you will conduct. Since the different companies will better suit different requirements.
For ex, Reliance has a high fixed cost but less brokerage on trades above a certain limit. So thats very good for a person who trades a lot. Another like Religare may have consistent brokerage on trades but a low fixed cost. So think of those.
You can always call the customer helpline of any of them and ask about services for your town.
int development in real esate sectoer
EMMAR MGF which came out with a IPO@600 which failed has now sold shares to citibank at 300 which devalues emmar landbank by 50% :wow:
clearly means there is huge downside in real esate stocks and property prices.
big crash seems sure in real esate
Emaar MGF was a high priced IPO which was one of the reasons why it did not get subscribed...market crash being the other... So it may not be a huge impact on the market... and I cant expect Unitech or DLF going down any more...they have come down enough...
int development in real esate sectoer
EMMAR MGF which came out with a IPO@600 which failed has now sold shares to citibank at 300 which devalues emmar landbank by 50% :wow:
clearly means there is huge downside in real esate stocks and property prices.
big crash seems sure in real esate
Emaar MGF was a very ambitious IPO, at 600 it was horrendously overpriced, even at 300 I guess the management will be getting good driving money for their business, Emaar also arranged some $800 million from some PEs (I- Banks I guess). Slowing down real estate is a different story, which has different implications in different cities, For example - in Delhi - Noida region the prices have dropped because of large supply and not so huge demand, however, in a city like mumbai, the prices have increased to 300% in last 2 years is because of huge demand.
I remember in 2001, Hiranandani Powai (Central sub-urban place in Mumbai, near IIT Bombay), was priced at 3,500-4,000 Rs / sq-ft, and now the rate is around 13,500-14,000 Rs / sq-ft.
Emaar IPO may have been priced too high. But a real estate crash could very well be on its way. History has it that whenever a sustained stock market rally is halted, a real estate crash is seen.
rockball SaysEmaar IPO may have been priced too high. But a real estate crash could very well be on its way. History has it that whenever a sustained stock market rally is halted, a real estate crash is seen.
totally agree... its just matter of time that real estate slowdown will start showing...
Puys, check this out
Relisting after 7 years, KGN stock rockets 76000%
does any1 have any idea how what's the real story behind it? are promoted playing game here as only 700 shares are available in market?
Puys, check this out
Relisting after 7 years, KGN stock rockets 76000%
does any1 have any idea how what's the real story behind it? are promoted playing game here as only 700 shares are available in market?
It is an interesting read. It brings to limelight, a probable flaw in SEBI's listing day rules, which do not impose any circuit on a on the day of listing. And then, a 5% circuit applied from today! Imagine, how may weeks / months / years would it take for the script to reach it's lows if ever that were to happeN! 😁
Is there any place where I can find the inflation data for previous years.
Lets say I want to know what was the inflation rate for the month of June in 2006.
Any link or website may be helpful
thanks
reachmonil SaysIt is an interesting read. It brings to limelight, a probable flaw in SEBI's listing day rules, which do not impose any circuit on a on the day of listing. And then, a 5% circuit applied from today! Imagine, how may weeks / months / years would it take for the script to reach it's lows if ever that were to happeN! :D
may be for relisting it needs to have a circuit filter but again what happens when if a company is relisting after long time (say period of 3-5 years) and have turned around itself superbly... a 5% (or even a 20% ) filter would not do justice then...
jshah29 Saysmay be for relisting it needs to have a circuit filter but again what happens when if a company is relisting after long time (say period of 3-5 years) and have turned around itself superbly... a 5% (or even a 20% ) filter would not do justice then...
True. But, the flaw out here is that the listing day is termed and a day for 'price discovery'. Can the markets be let loose to discover price? I think this will invite a lot of attention from operators. I agree that a 5 or 20% filter does not make sense, specifically when the script has been off trading for years. But, SEBI possible needs to look into it's Price Discovery mechanism.
Also pay attention to Sylph Technologies. It was trading at Rs 0.80 on 15th Feb, 2002 when it was delisted. It relisted today on the bourses. Low-125, High-800, CMP-525.
True. But, the flaw out here is that the listing day is termed and a day for 'price discovery'. Can the markets be let loose to discover price? I think this will invite a lot of attention from operators. I agree that a 5 or 20% filter does not make sense, specifically when the script has been off trading for years. But, SEBI possible needs to look into it's Price Discovery mechanism.
Also pay attention to Sylph Technologies. It was trading at Rs 0.80 on 15th Feb, 2002 when it was delisted. It relisted today on the bourses. Low-125, High-800, CMP-525. :wow:
agree with you... while filter will not make sense, there has to be some sort of guidelines (not regulation) on price discovery mechanism...
in cases like yday, SEBI needs to go behind the scenes and see who was the broker and more specifically the client... and then find out if the client was a rathole connected to promoters... in such cases, it shdl come down very strongly against the company and shld be banned for a period of time...
The problem is not with re listing stocks alone... There was an IPO called Nissan Copper ... Its issue price was sub 40 levels and it zoomed to 120+ on the issue day... now its way below its 52 week high... This is not a one time occurance.. the recent aishwarya telecom also had such an incident... And what I son understand it is how bought the share at 55,000... and what purpose does it serve... the only reason I think should be short covering after the poor chap went short at some low price...