HIT 2710 PORTFOLIO

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hit2710
Senior Member

Joined: 15/Jun/2009
Location: India
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Posts: 4013

Posted: 03/Feb/2012 at 10:12am

Originally posted by manish_okhade

IDFC is up from low of 90 by 50%. Do you feel it will fizzle out after Q3 on 10 Feb?

IDFC has broken the pattern of lower highs and lower lows this week by crossing earlier swing high of 136. So if the results are okay then it might continue its uptrend.

Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.

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koolvalue
Senior Member

Joined: 30/Apr/2011
Online Status: Offline
Posts: 379

Posted: 03/Feb/2012 at 11:14am

Hit Sir I read a recent post from you on international
travel house.I also think that company has very good potential.Present marketcap is just 150 crs and considering
opportunity it can very well reach 1500 crs.

Also please have a look at jubilant ind.Present marketcap
is 150 crs but again considering parentage and opportunity
huge scope of marketcap expansion.(I bought this at 150 levels and sold it when it appreciated to 220 levels as I
could not find any research reports giving buy call on this
share)

Please throw some light on these two shares

Thanks

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zulfi
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Joined: 28/Jan/2011
Location: India
Online Status: Offline
Posts: 206

Posted: 03/Feb/2012 at 11:34am

sir, i can't find your post on international travel house, can u please send me your post? regards...

U CAN WIN A HORSE RACE BUT U CANNOT WIN RACES

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koolvalue
Senior Member

Joined: 30/Apr/2011
Online Status: Offline
Posts: 379

Posted: 04/Feb/2012 at 3:08pm

Originally posted by manish_okhade

Originally posted by hit2710

Bought some Page inds with a view to add more in a staggered manner. In a visit to their jockey store I was quite impressed with the newer (or may be i have not seen them too closely before) tracks, socks etc. I think this is one stock which could some day become a large cap looking at its offerings and market potential. I see a lot of patients with "andar ki baat" and surprised to see so many jockey labels even in so called non affording class of people.

PAGE is valued at 2.9K today. Now you are mentioning above that it could become a large cap or say someting like 20-25K+ MCAP? It looks astonishing for me. If PAGE has the potential to reach in large cap league then soon it will attract the competition and i guess Relaince will become serious to roll out large format chaddi store to eat the pie

. They may say that buy one Chaddi and get one socks free in their inaugaral offer.

Well jokes aside, Can you pl elaborate how come a Chaddi player grow the MCAP to such a high level? Any fundamental analysis will help.

Hit Sir,
120 cr people are wearing something below their pants even today.So for page growth will come from people who
wear unbranded stuff switching over to jockey.But this
category is very price sensitive and they carry zero
brand loyalty and buy just what is cheap.
Those who can afford jockey are already wearing it.Hence
I feel that we are overestimating growth potential.
Even if we assume very high growth potential for sector
on whole it would be improper to assume that any single
player will benefit from it in linear proportion.In 2007-08 similar claims were made about power sector and BHEL/L&T valuations reached unrealistic levels.Most
of the orders were bagged by chinese and bhel/L&T corrected to realistic levels.
So while estimating future growth we have to consider some external factors also and should not go by linear
correlation with sectoral growth

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hit2710
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Joined: 15/Jun/2009
Location: India
Online Status: Offline
Posts: 4013

Posted: 04/Feb/2012 at 5:55pm

Originally posted by zulfi

sir, i can't find your post on international travel house, can u please send me your post? regards...

intl travel house

Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.

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hit2710
Senior Member

Joined: 15/Jun/2009
Location: India
Online Status: Offline
Posts: 4013

Posted: 04/Feb/2012 at 5:59pm

Originally posted by koolvalue

Hit Sir I read a recent post from you on international
travel house.I also think that company has very good potential.Present marketcap is just 150 crs and considering
opportunity it can very well reach 1500 crs.

Also please have a look at jubilant ind.Present marketcap
is 150 crs but again considering parentage and opportunity
huge scope of marketcap expansion.(I bought this at 150 levels and sold it when it appreciated to 220 levels as I
could not find any research reports giving buy call on this
share)

Please throw some light on these two shares

Thanks

Intl travel house I have posted link in response to zulfi's query. I think there is a valuation gap here which could provide some upsides. Potential is huge but I think management lacks the drive to grow fast, looking at the progress of the company.

About jubilant inds, it is a group of businesses under one company. In all these kind of companies SOTP-- sum of the parts valuation is applied which usually is on conservative side. True value is never unlocked in these companies. Plus another problem they face is that while one business does well there is another which is suffering some or the other problems. In jubilant's case, the retail business is going to create losses for foreseeable future and hence one does not know what kind of valuations markets will offer to the consolidated entity.

Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.

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hit2710
Senior Member

Joined: 15/Jun/2009
Location: India
Online Status: Offline
Posts: 4013

Posted: 04/Feb/2012 at 6:23pm

Originally posted by koolvalue

[QUOTE=manish_okhade] [QUOTE=hit2710]Boug
120 cr people are wearing something below their pants even today.So for page growth will come from people who
wear unbranded stuff switching over to jockey.But this
category is very price sensitive and they carry zero
brand loyalty and buy just what is cheap.
Those who can afford jockey are already wearing it.Hence
I feel that we are overestimating growth potential.
Even if we assume very high growth potential for sector
on whole it would be improper to assume that any single
player will benefit from it in linear proportion.In 2007-08 similar claims were made about power sector and BHEL/L&T valuations reached unrealistic levels.Most
of the orders were bagged by chinese and bhel/L&T corrected to realistic levels.

First of all you need to interview people wearing jockey to understand brand loyalty. From friends, relatives etc I have come to understand the brand loyalty of jockey.

Comparing bhel/l and t with page is like comparing apples and oranges. Just look at capex needed to sustain growth in both sectors and you will get my drift. Page requires very little capex and does not suffer any cost overruns, neither is it affected by govt decisions or delays etc which holds true for bhel or lt or other similar companies.

Valuations accorded to Page is another matter altogether and decided by markets. So there one has to take one's own call. But as a business Page has a fantastic business and excellent management and dividend payouts.

Regarding gaining market share etc, you can have a look at fruit of the loom and hanes which have been trying hard to compete with page to snatch market share but have not yet succeeded. Another factor to consider is migration of non branded users to branded products like Page due to higher incomes and bcos of page being leader it will benefit more as compared to others.

Its not about brand loyalty only. Distribution network etc also matters. That is where there is huge visibility for Page.

Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.

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S.Varghese
Senior Member

Joined: 12/Jul/2011
Location: India
Online Status: Offline
Posts: 329

Posted: 04/Feb/2012 at 11:14pm

I think a valuation of 25-30 though not low, but is realistic for a very good cash flow, high ROE & ROCE and high yield business and companies like HUL, ITC, P&G has been doing it for a long time.

Now for China competition, I don't know how it is going to affect Page. I don't know if it is representative, but when it comes to food, clothes, cosmetics, etc we have a rule in our house - go for the best and most respectable brand. We cannot afford to forfeit our health at the altar of a few rupees. This may not be a representative case, but it will take a good deal of effort by any company to change my brand of clothes and food - and doubly so for any Chinese brand.

So even if the high growth tapers off in 3-4 years, we will still have Page going at P/E of 20-25% and yield of 3% and a reasonable predictability of earnings - growth will be like (inflation + economic growth + productivity gains) 15%. Why should we be worried so much?

Fools rush in where angels fear to tread.

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