Tough road ahead-EICHER

Eicher motor had a dream run on the stock market, thanks to its two wheeler segment. 

Some of the key driving factors were:

1. A whole generation grew dreaming to own a Royal Enfield. As soon as this lot started earning, non one came in their way to stop them to own this beast. There were multiple product launches from various two wheeler companies but this group remained loyal and went ahead with its buying.
2. The "Bahubali" gang- This forms the second lot of buyer and quite loyal to this brand since ages. Dabang look has to be supported by this machine.

Why its losing the track:

1. Next Generation wants to look "Cool" and not "Manly"- There is a slowdown in Eicher sales and one of the prime reason being-lack of interest from Generation next or it could be various "Cool" bikes which are available. Due to multiple available options and lack of any "first love" with this brand, Eicher is going to lose the craze. It will again become a niche player like it used to be a decade back.
2. Earlier generation has slowly moved to four wheelers. Hence similar demand cant continue in future..

#Eicher #Eichermotors

Update: August 1st:
https://www.moneycontrol.com/news/business/markets/eicher-motors-q1-profit-plunges-22-to-rs-452-cr-subdued-volume-drags-revenue-6-4273821.html


Disclaimer: Please note that these are personal views of the author. All investors are advised to conduct their own independent research into individual stocks or industries before making any decision. In addition, investors are advised that past stock performance is not indicative of future price action.

How to ride the election result tide?

In last couple of months FIIs have been a net buyer in Indian equity market. There are multiple factors including the Indian growth story backed by a stable government, which has led to this inflow. May 23rd results will definitely have an impact on capital inflow(FII and FDI) which by and large one of the critical factor in deciding the future course. Between the two key political group(UPA and NDA), there is no major economic policy deviation however its better to review your portfolio.

A broad level categorization based cash position of investors:

1. All in stocks- This category belongs to those who are already invested with no cash/minimal cash in hand. Is your stock directly getting impacted due to change in government? If the answer is yes then you need to slowly reduce the exposure to minimize the risk. There will be short term selling pressure on these stocks. Its better to switch to blue chip will have minimal impact as compared to small and mid cap. With the current bull run, a short term correction is expected post 23rd May as the market may have factored a stable government. Booking partial profit/keeping some cash is not a bad idea. Market will provide further opportunities.
2. Fifty-Fifty: You fall under the cautious investor group and are waiting for the market to correct for further investment. Again, you can also revisit the portfolio as stated in point 1. Its better to continue your cash position and look for stocks which are looking good post Q4.
3. All in cash: You fall under the most risk averse lot who expect the worst on Election result day. Keep looking for value buys and stocks which are not going to get impacted by government change.

Disclaimer: Please note that these are personal views of the author. All investors are advised to conduct their own independent research into individual stocks or industries before making any decision. In addition, investors are advised that past stock performance is not indicative of future price action.

Do we deserve this?

Multi-lane expressways have become a reality. Next generation, powerful two and four wheelers are very comfortable and have considerably reduced the commuting time.

There was been increase in road accidents as well. Reasons are multi-fold and cannot be attributed to any one aspect:

·         Lack of discipline: Majority of us don’t follow any lanes or traffic rules. With these swanky highways, any small mistake can lead to major accident. Speedy vehicles don’t get much time to react. With more and more high power vehicles coming on road, this is only adding upto the problem.

·         Good roads: Its surprising but I feel this is another reason. Do we deserve such roads when we don’t care about traffic rules and road safety. Airbag is still considered a waste of money and available only in high end versions. Helmets on head is due to fear of paying fines. Bad, narrow roads were blessing in disguise. Due to congestion on narrow lanes, every vehicle will struggle at 30-40 KMPH hence chance of accident and resulting impact was less as compared to multi-lane expressways.

Machines and Roads have developed but we as a human need to match up. We need to be more disciplined and take road safety as top most priority. Otherwise, this boon will remain a bane as far as road causalities are considered. 

Affordable housing- A mirage

Affordable housing is going to be the growth engine in real estate market. Although there has been a constant push from Government to reduce prices, builders have shown their inability.

Input costs have been increasing on a continuous basis. Governments push on infrastructure development is already fueling the demand leading to price rise. Various cartels in these core sectors are making things worse for builders.

With almost no control over the input cost, builders are left with very limited levers to make ‘affordable’ flats a reality. One of the areas which can be worked upon is the open space utilization. Most of the builders are trying to showcase open/green space to attract buyers. Although, this sounds very lucrative to potential customers, builders literally don’t get any penny for this part of the land. These are areas blocked for playground, jogging tracks, tennis court etc. High rise towers help them make money and recover cost for these open areas.

The moment they start generating more revenue per square feet of land, affordable housing can be a reality. After setting aside a certain profit margin, builders will definitely pass on the benefit to customers making affordable housing a reality even in mid and luxury segments.

Big Question- How to make the most of these open space?

1. Utilize the power of association– Most of the renowned builders are under an umbrella of real estate association. They should use this forum to bring consensus on critical things. Have a common open area for a group of builder/townships. Instead of setting aside open spaces in each and every project, builders of a particular locality should jointly develop the open area either through land pooling or cost sharing basis. Net impact would be, more area available for construction leading to more revenue generation. Common open space shared between 3-4 society will have all the sports facilities and a restricted access, pay and use, common maintenance. These intricacies can be dealt later when these builders work together on such plans.

2. Involve local government bodies during planning phase– Most the town planning is not done meticulously hence we hardly find municipal park. It may be available in some areas but with very minimal maintenance. These bigger societies are good source of revenue for Government as property tax collection is high and with almost no defaulters. As a group of builders/society, request local municipality to build play area or at least share the cost. An organized approach will definitely help. These new clusters of townships are often seen as a good vote bank. No one will try to annoy these middle class voters.

The above looks very simple on paper but in reality there will be some hurdles and the biggest would acceptance level among prospective customers. Some may not like sharing the open area if another township people. Cost benefit evaluation will largely depend on how much rate cut a builder is ready to pass on to customer making it a win-win for all.

AAP ke Bandey!

Bala, one of the top contender for CEO post in a big IT firm, has decided to join AAP. 

I am sure this trend will continue and people from big companies join AAP. There is a lot, who has achieved almost everything professionally and want to contribute to society at large. This lot of seniors are financially well secured and their current job does not provide any scope of further growth in professional terms.

Retaining such lot is going to be difficult for employers. They would have never dreamt of such 'poaching' happening from a new 'competitor'.

AAP has provided a platform which such lot was looking for quite some time. Atleast for now, politics is no more a 'Dirty' term in AAP. The road less travelled is always bumpy and I am sure there will be some who will leave politics to join back corporates/ NGOs.  Only time will decide if AAP continue to do politics, the cleaner way.

Very soon you will find employees signing the joining declaration form stating that they can’t join competitors XYZ, ABC and AAP!!!