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Home > Business > Stock Chat > Transcript
'Growth in FMCG is a problem'
June 08, 2004
kans : Is it OK to accumulate ONGC at current pricing ??
Ramesh S Damani : Hello everyone. Thanks for joining. Let's start. ONGC is under pressure due to rerating of PSUs and IPO overhang.
kans : How is HLL Expected to fare in the next 6 months ???
Ramesh S Damani : Growth in FMCG is a problem and that has still not changed. Maybe a good monsoon will.
Pradeep : What's your take on Auto Ancillary & FORGING INDUSTRY SHARES especially low priced and good management ones?????????
Ramesh S Damani : They represent a good opportunity. I was impressed with Banco products results. Gave a Rs 7.5 dividend on a price of Rs 105. I bought some for trading today.
a shah : Why Hind. Const. stock is these cheap??Any dampner reason you know, like some project failure or liabilties..otherwise it has all the crieteria of yours to be great investment pick..(div yeild,wroth,p/e ratio,market cap,t.o. etc..)Please enlighten if you can..
Ramesh S Damani : All B group shares are at ridiculous valuations. Yield, P/E or market cap. Additionally these stocks suffer from lack of market fancy.
jhakaas : mr.damani .. i've not understood the l&t demerger deal. i originally owned 300 shares of l&t for which i have now received 120 shares of ultra tech and 150 shares of l&t (engg). what are their market values ?
Ramesh S Damani : That will be determined when they are listed.
vikas3 : VST TILLERS / SWARAJ ENGINES : Both have low equity and very good EPS. VST has EPS 12 with just PE under 4 . Looks good buy if moonsoon is good. Your views
Ramesh S Damani : They are. I trade in VST Tillers. Swaraj Engines with a Rs 15 dividend is attractive. Good ideas.
kans : You did mention that the market would remain listless untill budget. Is there some stocks worth accumulatine at this pricing ??
Ramesh S Damani : Look at the stocks with a yield.
Sonali : Hi Damani - Greetings from USA. I just woke up to join ur chat. Am a great fan of yours. Would u mind parting with your email id so i could get in regular touch with you? This 10 hour time differential makes it difficult to be in regular touch with you - Thanks
Ramesh S Damani : Thanks for joining in. That is great. Unfortunately i can't disclose it on a public medium.What do you do and why are you interested in Indian stocks?
anaam : Sir,GRUH FINANCE is a company pramoted by HDFC.They have been inproving their performance year after year under HDFC's guidance.Paying Rs 1.80 div.Financing in rural housing sector.Omce there is a thrust after rural upgradation,I think it a worth investment.What's your view???????????????
Ramesh S Damani : It does look attractive, however its parent may not allow it to grow.
BASANTMAHESHWARI : Want you to answer this one. Suppose the FII limit in a stock hits 26% and RBI bans further purchases then one FII sells and their total holding falls below 26%do prospective FII buyers need fresh RBI approval or the approval is granted de facto?
Ramesh S Damani : I think below 24% from 26% RBI permits fresh buying. They advise the market if it is allowed or not. In the above case no new permision is needed.
vikas3 : Crest : Has just 15 crores sales with 17 crores loss ?( due to write off looks like ) but recent interview with the company says they have USD 10m contracts in hand for this year and some surprise for the shareholder. Your views
Ramesh S Damani : The company is struggling. However the risk to reward is in your favour. Not a blue chip for sure.
MoneyMaster : Now that since dis-investment of PSUs are clear dont u feel that market should evaluate them based on their performance ,cash flow etc and not just based on triggers like dis-investment?
Ramesh S Damani : That is what they are doing. The divestment premium is gone.
baracuda : du yu feel that after restructuring kale consultancy has bcom a better company and do yu see it posting an eps of 5 for fy o5.at the iata meet in singapore airlines have decided to cut costsans save upto 3billion us per year to offset the high fuel costs how does this affect kale
Ramesh S Damani : They should do Rs 5. They need to build a sales momentum. They have a good niche. They need to deliver.
BASANTMAHESHWARI : Zodiac results looks great they carry 8% in shoppers stop as well that could be sold off to get in money.Does it look set to hit 400 in a years time. It is at abysmally low market cap of around 85 crores and paid Rs 7?
Ramesh S Damani : Results look good to me. At this market cap we need to stay invested.
a shah : SIr in view of expected good monsoon, A farmer oriented govt., good pvc cycle..Then with 3 rs. div and at 55 rs. Finolex ind. offers good scope of appreciation??Your views please....
Ramesh S Damani : It is a good idea.
MoneyMaster : How would u rate the CMP of the new govt? Do u feel that it is realistic and progressive?
Ramesh S Damani : Let's see what they deliver in the Budget. Would they have the guts to take on the Left?
Sonali : I am betting on TEA shares. especially B & A Ltd which is low profile, profit making and has Rs.100 Book value with Price of Rs.14/- Do let me know ur views on it
Ramesh S Damani : I am sorry I don't folow it.
Mathew : Hi Ramesh, sometime back i'd checked on the sugar stocks with you, they had a fantastic run and are now back to their early levels. What is your call now? Sugar price continue to go up, only dampener is the SC ruling on SAP. Pls advise
Ramesh S Damani : Sugar as a commodity is doing well. What will happen in India depends on the political equation.
rishib : sir what will be the implication of VAT on liquor companies?
Ramesh S Damani : Bullish, it will hit the unorganised sector and help the organised sector.
baracuda : tata elexsi has posted good full year results their vcl division is doing good do yu see it as an investmentat the current price
Ramesh S Damani : Yes I do. I own it and am optimistic about its prospects.
mattooajay : RAMESH,WHATZ UR TAKE ON MAX INDAI AT CURRENT LEVELS???
Ramesh S Damani : I think you could tender some at 200 unless you are very patient.
skk : ramesh tell us one thing which stock due you feel is worth investing at this time.
Ramesh S Damani : Tata Elixsi looks good, expensive but with good prospects.
vikas3 : ZODIAC and Mahavir : Zodiac after result has become very good buy. Mahavir is at very low PE of 5 . Are these 2 with rajasthan syn good portfolio in textile
Ramesh S Damani : Shri Raj declared a dividend of 60. Post 2005 they will do well. I sold some recently to book profits but they should do well.
Sonali : What's your guestimate on textile & jute stocks keeping the budget in mind. good trading calls???
Ramesh S Damani : Very few jute stocks are available. Textile will do well post 2005. I had recommended Himatsingka, Seide, Zodiac, Shree Raj. They all look good.
baracuda : i have read a report that visits to large it cos in india by prospective clients is on an upswing in the last 2 months so do yu see this as an indicator to invest in infosys at the current valuation
Ramesh S Damani : They will show good growth after some time they look attractive.
MoneyMaster : Can u suggest and good Pharma stocks that are worth investing at the current levels considering a 3 years time frame?
Ramesh S Damani : I would look at Merck and Glaxo.
nrnPRIMEMINISTER : Sir,MCDowell,UB,GoldiAm Still black Horse or Greay Horse? Please. We all believe your analysis in our campus.
Ramesh S Damani : They all are good stocks at great valuation. In the market you need to learn to bepatient. May I suggest the students do a valuation of Harbin breweries China with UB Beer and McDowell. It would be an eyeopener.
pkots : ramesh saab plz answer atleast one question out of many asked by me.how is strides acrolab looking to U?
Ramesh S Damani : It just got listed today in bse. Unfortunately I don't follow it.
BASANTMAHESHWARI : I recently read a research report on Textile by ALchemy forwarded by a friend of mine. They have strong buys on ARvind, Mahavir,Vardhaman,Ind Rayon. Do any of these stock impress you?
Ramesh S Damani : They all look reasonable bets. Indian Rayon could be a dark horse due to BPO buisness and insurance.
kans : You mention UB Holdings as a possible gold mine. What is the actual name of the stock and code if you remember.
Ramesh S Damani : UB Holding no in BSE is 507458.
baracuda : about kale i have not read the harbin deal but asiana of korea seems to be happy with their alliance with kale also have they got any bpo work for their new bpo outfit.i have purchased 4000kale at 38 forming 0.5% of my portfolioand should i add tata elxsi
Ramesh S Damani : Elixsi would be safer I think. It is a young growth company. Kale is still struggling but with a good niche.
anaam : Sir,Even Jim Rogers' suggested that India should give sizable thrust to its agri sector. The NEW ALLIANCE seriously does so.....Pl look at Excel Crop,Syengenta,Punjab Tractors,indeed your VST,Finolex Ind,etc......Any I have missed??????
Ramesh S Damani : Also take a look at KSB Pumps. I own it.
skk : what about other stocks which u have mentioned time to time for investment like goldiam/crest/kale/logix/godrej/mazda etc. Are they not attractive at these prices for investment.pl. reply
Ramesh S Damani : I still own all of them. Goldiam, Godrej, Mazda are value bets. The tech companies are speculative but with good risk/reward.
MoneyMaster : Are u still bullish on SBI after the beating it got from the market and also considering that it is a PSU bank?
Ramesh S Damani : Yes, but it has been scary.
vikas3 : Harbin and mcdowell / UB : Would you shares some key comparitive figures of the 2 and its meaning for us
Ramesh S Damani : Harbin was sold for 4000crs has 5% market share in North China and sell a bottle of beer for Rs 10. UB an Mcdowell control 40% of beer and liquor market and is available for roughtly 400 crs.
rishib : Sir valuations of harbin etc are fine, but how would u discount Indian govt. policies ( a big negative absent in china brasil etc. ) in a any valuation model.
Ramesh S Damani : Look at the market cap. That is the call at that price we can wait for a trigger just like PSU.
nrnPRIMEMINISTER : I hope you remember we mentioned that Manmohan might be the PM. We have a good fan following you. You are our campus Hero. By the way do you think that NRN can take one of two top posts sometime soon?
Ramesh S Damani : Which campus are you in?
anaam : SIR,WHY DO YOU THINK THAT A CO LIKE HDFC HAVING GOOD 7 PROGRESSIVE GOVERNANCE WILL NOT ALLOW GRUH TO FLORISH UNDER ITS UMBRELLA???????????????????????
Ramesh S Damani : They compete for similar business and HDFC clearly dominates it.
nrnPRIMEMINISTER : Sir, pure profession question from our campus, will the sensex come at least close to 5500 before budget?
Ramesh S Damani : I think 5500 may be too ambitious. 5350 is possible.
jhakaas : the Left parties say that foreign investment is welcome (a) creates new assets in the country employment (b) brings in new / latest technologies (c) generates more employment ... so, whats so sinful about these demands ???
Ramesh S Damani : There isn't. Except go to Calcutta. The city is a land that time forgot.
rishib : Sir what can be the possible triggers for balajitele, as they are not performing on growth front and margins are already high?
Ramesh S Damani : The Indian broadcast market cannot be of 350 crs. It has to grow maybe over 1-2 years. When it does Balaji will win.
ushti : i sold all e serve i held @ 825;was it a mistake or did i lose on more profit! what is the future of i flex!should i holdon to hoel, rel infra! pl guide as i am a house wife & follow yr column; regards
Ramesh S Damani : e-serve may revise price, but you cannot always get the top. I would hold on to the other shares that you mentioned.
MoneyMaster : I am an admirer of Warren Buffet but I feel that his principles on value investing cant be applied 100% right now to Indian Stock Market as ours is still only an emerging market and his principles are more suited for mature markets .Whats is ur opinion about this ?
Ramesh S Damani : Management are not as good as is generally in the West. And econmoic policies change. I am doing a special on CNBC this Saturday on Warren Buffett at 12.30 in classroon. Take a look you may enjoy it.
nriinv : Mr. Damani regarding the great fall we had did SEBI do something or the story is forgotten.
Ramesh S Damani : I haven't seen any committee set up so it is best to ask them.
a shah : Sir Indian Pramoters are very strong now to fend of any Foreign predator( with financial & political power) In India.SO valuation here won't be there..Not much compition from foreign players in sector like tobacco & liquor..
Ramesh S Damani : Clearly M&A are slow in India to non -exitent. But things change. How India has changed in the last 10 years.
rishib : Many have burnt their fingers in numerous media stories (overseas market growth, cas, corporatization were few false calls) in the last 3-4 years. Lets hope Balaji again doent prove to be a false call
Ramesh S Damani : Look at the numbers and decide.
V.A.VAITHIYNATHAN : sIR, COULD YOU KINDLY TELL ME WHETHER U ARE CHOOSING THE QUESTIONS OR SELECTING THE QUESTIONS RANDOMLY. I HAVE BEEN POSTING QUESTIONS FOR THE LAST 2/3 WEEKS AND MY QUESTIONS ARE NOT ANSWERED BY YOU. KINDLY CLARIFYmR. DAMANI PL.
Ramesh S Damani : I choose the questions. Clearly I can't answer all questions, since I am the one typing and many are asking. I answer questions that interet me or have large interest. I avoid specific stock questions unless I have something to add. I can follow only so o many stocks/sectors.
ajayk : Don't you think that with Kelakar committee reforms on tax will hit most of the big corporates very hard. ?
Ramesh S Damani : They seem good to me. It would boost the economy and help corporates.
vikas3 : I am NRI and don't get CNBC here . Is it possible to share your views on warrenbuffet class on moneycontrol.com
Ramesh S Damani : Send them an e-mail and they mayput it up on moneycontrol.com. I think the the person to contact is Arti Rewari the producer of the show.
kans : How critical FIIs are for the revival of the indian markets ????
Ramesh S Damani : Their buying would help a lot.
MoneyMaster : Is investing an Art or Science ?
Ramesh S Damani : Art
rp : Sir,Why Tisco is falling inspite of good dividend and Bonus. What is the time frame for it to cross 350 mark
Ramesh S Damani : Steel prices have softened, that accounts for the weakness.
Sharad : In Logistics whcih one is better Gati or Blue Dart & why??
Ramesh S Damani : Clearly the Rolls-Royce is blue dart however Gati is a good cheap small cap.
MoneyMaster : Sir u say investing is an art then does it mean that no one can teach it to u step by step and that u must learn by trial and error?
Ramesh S Damani : Pretty much, no surefire formula.
HiRDamani : I HAVE A LARGE NO. OF SHARES IN MY PORTFOLIO AND I WANT TO REDUCE THEM... WHICH IS THE BEST EXIT BET OUT OF TISCO/GOLDIAM/NELCO/LOGIX/HINDUJA TMT. I CAN HOLD THE REMAINING SHARES FOR 2 YEARS TIME FRAME
Ramesh S Damani : I would hold the large caps that offer promise. Goldiam is good yield.
Kiran : I guess technicls are clear that we will be entering into bear market. Are you still bullish on market?
Ramesh S Damani : Technically maybe, but my head tells me to be bullish. So I am.
kans : when the market is up one tries book profit. However there is a tenedancy to reinvest in the inflated marked, thus making the gains vanish. What is your advice when one books profit.
Ramesh S Damani : That is a very sensible observation and an important pointkeeping the gains of a bull marketare very very imp.
nrnPRIMEMINISTER : Sir, why is McMillan Swinging b/w 240-275 ranges? Any technical analysis please
Ramesh S Damani : No particular reason. They should have a good year on the BPO side.
siddhi : sir most of the midcap stocks like mcdowell etc had came to the level they did quote when the index was 3000 . do youstill feel its a bull run when do you think the markets would bounce back if we are still in a bull run
Ramesh S Damani : It should and the index should cross 5000 decisively.
sudhir : sir what about macmillan with regard to the block deal that took place last week. are you worried that reliance mutual fund sold a part of their stake. is it good for the shareholders of macmillan
Ramesh S Damani : It should not matter.
a shah : Sir After Gati's spend on online traking system I have heard from lot of small industry owners about using Gati as there cargo mover specially for valued shipments..May be we shareholders now are in for benefit time...
Ramesh S Damani : That is nice to know. RFID is the technolgy of the future. they might be susing that.
SHUBHNAKERGHOSH : SIR! LAST TIME YOU HAVE TOLD ME THAT MY TECHICAL INDACTIORS ARE NOT WORKING .. I HAD TOLD YOU THAT IF YOU REQUIRE TECHICAL SUPPORT I WILL PROUD MY SELF TO SERVE YOU...
Ramesh S Damani : Thanks, if I need some support I will call on your services.
vvinay : SIR,I was studying the returns generated by various co in last fifteen years I came to conclusion to make money in the market one should invest in common/known companies with good management and invest at bottom when major growth is going to happen in next five years some companies satisfying the criteria were bharti/wipro/e-seve/telco/tisco/hdfc bk/maruti etc and they were clear winners sir, what could be possible companys which could be potential winners of tomorrow
Ramesh S Damani : Take a look at Colgate and see if it meets your criteria.
Kiran : Ramesh, let us say if a person bought stocks during BULL run and suddenly market crashes and enters into bear market,then what he has to do? Either to exit the mrket with loses or to wait for another bull run which may come after 4 or 5 yeras?
Ramesh S Damani : If you invested wrongly or in wrong sector you should. In 2000 say you bought K-10 stocks you should book losses. Hence choose wisely. That is the moral.
stockwatcher : I don't know why we always keep eye on DOW & Nasdaq everyday/ Don't u think now a days we should think about the inner strength of specific script? Also let me know where to get the data for A group script for Bita Analysis. Regards.
Ramesh S Damani : Generally BSE India or a chart provider. Many factors are important in a market.
HiRDamani : I KNOE U R BULLISH ON ITC AND GILLETTE.... WHICH ONE IS BETTER
Ramesh S Damani : Gillette.
jhakaas : media & business tend to take a blinkered view of the stock markets... if a bull market indicates that all's well in a country, then why did the NDA lose the general elections inspite of sending the sensex up from 2828 to 6250 in year 2003-2004 ???
Ramesh S Damani : Clearly India was not shining for all Indians. Thanks and see you all next week.
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