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subu76
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   Posted: 27/Sep/2008 at 8:12pm |
Originally posted by Vivek Sukhani
The thing is, these service companies dont have the strength of the assets which manufacturing companies. Perhaps the only asset strength I can visualise is that of net cash on the balance sheet, something which an INFY and a TCS, has lots of it. Is APTECH, very rich on net-cash basis?
In this kind of a market, asset-poor companies can get lynched to death.....so, mid-IT and small-IT and ITES companies may be in for a very tough ride and its only the promoters who can save the stocks from getting the company knocked out...... |
Vivek Sir, Are you referring to the replacement cost of assets as a cushion for the stock price of manufacturing companies?
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Vivek Sukhani
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Posted: 27/Sep/2008 at 8:43pm |
Yes.....in some ways, yes.
I am meaning the disposal value of assets, in case the need be. At the end of the day, book value is nothing but market/realisable value of assets-External liabilities. So, we have to take into account that those companies which dont have marketable asset which can fetch better than the historical cost on the balance sheet, will get a crueler punishment.
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Jai Guru!!!
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subu76
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Posted: 27/Sep/2008 at 9:23pm |
I get it. Thanks a lot for clarifying.
Do you think the numerical strength of a "commodity" ITES company and it's existing client relationships would give a downside cushion?
Afterall these would be the criterion based on which an acquirer would look at a BPO operation.
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Vivek Sukhani
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Posted: 27/Sep/2008 at 10:03pm |
Are you meaning the bench-strength, typically called seats?
Dont know, but in bad times, they become a liability.Actually, I am talking in terms of knock-down scenario, not just a normal depressed scenario.
as far as client relationship is concerned, that may be a strength, but in bad times retaing client is far more difficult than retaining employees.
Service Sector will be butchered till the last drop of blood, in case those who are to be served decide not to be served.........
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Jai Guru!!!
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subu76
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Posted: 27/Sep/2008 at 12:52pm |
Originally posted by Vivek Sukhani
Are you meaning the bench-strength, typically called seats?
Dont know, but in bad times, they become a liability.Actually, I am talking in terms of knock-down scenario, not just a normal depressed scenario.
as far as client relationship is concerned, that may be a strength, but in bad times retaing client is far more difficult than retaining employees.
Service Sector will be butchered till the last drop of blood, in case those who are to be served decide not to be served......... |
Thanks for the replies Vivek Sir.
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tigerz_style
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Posted: 29/Sep/2008 at 12:13pm |
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Did anyone had a chance to watch rakesh Jhunjunwala's interview on NDTV's Mind of the Market
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tigershark
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Posted: 29/Sep/2008 at 2:27pm |
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can anyone paste it here?
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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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omshivaya
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Posted: 29/Sep/2008 at 2:40pm |
Yes, saw that interview. He said almost the same things he said on CNBC-TV18. I searched on net, and the link to that interview is here. Seems there is an error in that link from the NDTV website itself.
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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it
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