Thursday, December 27, 2012

Are we really in a Digital Age?

Most of us use either a blackberry or other android phones,we talk heavy tech and love to buy gadgets with the latest specs.But do we really use all the Apps that we download?Use the extra memory/RAM or bits that our gadgets have built into them?

Speaking for myself - NO.Almost 80% of the applications used as a sales pitch by the guy in the corner store who sold me that stuff never got used.Maybe it gave me a good feeling to have a phone or laptop with more features than Mr Jones,but did I use them all?

Sadly No.

Most CFOs,CEOs,senior executives that I speak with can hardly operate more than the basics and most simply do not have the time to learn.

There is an inherent contradiction in India.Most companies still have not harnessed all the power and information that the new digital age has brought on our doorstep.Offcourse there is my friend Basil D'souza sitting in Bengaluru tinkering with data for Hindusthan Lever on which part of the country buys which specific shampoo etc

But clearly that is a miniscule audience other than the IT cos that use 'data mining' or develop applications for the Fortune 500

Yet the average Indian CEO is loth to spend on esoteric programs that might lead to a better understanding of consumer behaviour or in prioritising leads or even the use of social media in marketing.They simply cannot see beyond the spend on maintaining networks!

A time comes when in addition to a CEO and CFO we will necessarily need a CDO(Chief Data Officer) to handle the streams of data information flowing through systems on a daily basis relating to clients,vendors,distributors etc

I know of CEOs who recieve 5000 emails as a matter of daily routine.Who separates the wheat from the chaff?How can their attention span encompass such volume of data or help them to decide the merits of each piece of information?

That has been my fundamental reason for being bullish on the Indian IT scenario where the high number of consultants who today do outsourcing for global companies will turn their attention inward and bring the much needed efficiency to various stages of production or sales.The cost savings in terms of manhours and doing the right sale to the right segment will mean a direct addition to the bottomline of diverse balancesheets.

We underutilize the data at our command and it will take a few years before Indian companies start clamouring to have their data analysized on a 'conveyor belt' basis.Till then the Sales Manager is totally dependent on the feedback derived from his team,how close to fact that feedback is,depends on the absolute judgment of the asset on the ground.

Something to think about in the new Year!


Wednesday, December 19, 2012

Fiscal Cliffs and White Christmas...

Its being quoted by analysts on the idiot box as one of THE events of the year.The tax cuts approved by president Clinton will get taken out to impact the middle class taxpaper.

The Obama administration's plan to increase taxes for thos earning above $2,50,000 has drawn fire from the Republicans.Here you have people like Buffett and some CEOs of fortune 500 companies screaming that they be taxed more yet the senate cannot decide.

The trillions of $ of deficit may not be halved if the rich are taxed,but it will have some impact unlike the Republicans argument.Strangely they agree that if the tax cuts lapse then any increase in tax for the middle class as well as on investments will have a negative affect on investments and growth.

Whatever may be the case,Indian equities have given a 30% return,not bad for a year in which most analysts asked investors to stay away from-India,equities...in that order.
Suddenly the Yuletide spirit has swamped Indian markets from increased FDI inflows to the positive move in metal counters over the last week.
Even the world seems to be a more joyous place notwithstanding the internecine battle in Syria,political unrest in Egypt,nucluer missile tests by North Korea etc
The hard landing envisioned for China has not happened and commodity demand should pick up.Asian Regional index fell fom a 16 month high on Fiscal cliff and a stronger Yen but we certainly seem to have a brighter dawn ahead in 2013.
Short term support for Nifty is at 5850 and stcoks to watch - Tata Global(read my earlier post),Hitachi Home,LIC Housing Fin,Sterlite for 20% gain in 6 months.Merry Christmas and a very happy,profitable New Year!!

Wednesday, December 5, 2012

Tata Global...High on Tea

For all those who love their morning cuppa brew here is a reason to cheer...
Tata Global formerly known as Tata Tea is a Kolkata headquartered subsidiary of the Steel to retail  Indian behemoth Tata Group.
It is the second largest manufacturer and distributor of tea and a major producer of coffee.It is India's version of an MNC with strong presence in the non-alcoholic beverages space.It became a recognisable name with the $430 million buyout of Tetley Tea of UK.In 2012 it formed a 50:50 JV with Starbucks for entry into India with flagship starbucks opening in Delhi and Mumbai.
I feel it has the potential to go much higher than CMP 165.A midterm target of INR 250 is quite possible given the growth trajectory followed.Jubilant Food-the master franchisee of Domino's Pizza and Dunkin Donuts for India,Pakistan,Sri Lanka,Bangladesh and Nepal has a market cap of 8000 crores with stock price of INR 235 whereas Tata Global has a market cap of 1000 crores?

5Year stock price movement

It means that the profit from the starbucks franchisee comes free for the investor who invests at the current market price of TGL(Tata Global).

The Book Value(BV)per share as of march 2012 was INR 35.74,adjusted EPS INR 3.55,GPM of 10.79% and a Dividend Payout Ratio(net profit) of 50.76 as per information available in the public domain.

For the serious investor who eschews the esoteric,the exotic new ideas,TATA GLOBAL happens to be an ideal investment for 2013.