Synopsis of the 9^th TED meet of Mumbai Pune Chapter held at Oberoi Mall, Goregaon (east) on 14.04.12.

14 investors attended the Meet. 4 travelled all the way from Pune in a dedicated car,  Mr. Parag Desai came from Surat and Mr.Akbar Khan came from Goa. Mumbai Pune chapter specially thanks all the outstation  members for the special interest they take in the meet. Their presence is an honour to all of us.

The meet did not follow any prescribed agenda but did have introduction of every member and pointing out of one’s favourite picks and the rationale for the picks. Below is a brief synopsis of what transpired at the meet. The synopsis  are unstructured and are not exhaustive as no formal notes were taken of the proceedings. I am also not describing the ultra bullishness of at least half the members sitting at the meet on some of the much discussed, loved and outperforming TED stocks like Hawkins, Page , Titan or Jubilant Foods as majority of the members are even otherwise fully aware of their respective strengths and stories.

Mr.Manish Madnani ( Jaishrikrishna) is bullish on Bajaj Auto and has great expectations from its 47 % stake in Ducati. Free flow of discussion on the subject led to various other intangibles going in favor of the company being pointed out including of its proposed launch of a four wheeler (not a car but a four wheeler primarily in substitution of a 3 wheeler auto rickshaw)  as also how Rajiv Bajaj is a superior business manager and owner than his father Rahul Bajaj.

Mr.Vijay Gawde has possibly the highest concentrated portfolio of only 2 stocks, both, TED favourites: Titan and Page. He articulated the advantages of such a concentrated portfolio and how he resists the temptation to go on accumulating many other potential lures in the market.

Mr.Naik (rapidriser) talked about his fancy for Pharma stocks besides , of course, Hawkins which has been a multi bagger for him. He talked of potential multi bagger in Wockhardt based on his expectations of the sale of Nutracuticals division of the company for almost Rs.2500 crores. This cash flow is expected to cure various of the  present ills of debt, lack of adequate profitability etc.  corroding  the valuation of the company. While Mr. Madnani seconded his thesis, Mr. Vijay Gawde cautioned by expressing his discomfort in investing in a company which has not done anything really great in last 15 years. Some of the members seconded the latter view point but believed that if the expectations are correct, it could be a one off opportunistic purchase, not necessarily for good but for exploiting the expected spike. Mr.Naik is also bullish on Divis Labs and Ipca labs.

Mr.Rahul Paliwal (Abhadya) talked about Cravatex and how it has been already a 3 bagger for him. He is expecting  more rosy days for the company in the times ahead. He lucidly explained his logic for investments in the company. Mr.Paliwal is  perturbed and puzzled at the low valuations accorded to Central Bank of India in which he has invested. One of the explanation for the bullishness for him for the bank was its low market cap, extensive branch network and a sterling legacy of a Parsee bank besides the extensive real estate belonging to the bank at next to nil valuations in the bank balance sheet vs. the real market value of hundreds and thousands of crores. Members discussed the pros and cons of psu vs.pvt.sector banks and talked about the woes affecting psu banking in the present environment including the near impossibility of monetizing the surplus real estate for productive use due to political and staff constraints.

Mr.Vikas Singh was aggressively  bullish on Insurance sector in India in for next at least 10 years . He presented his thesis of the low existing penetration of insurance with the tremendous potential of the sector in next few years which are also likely to be seeing the unlocking of value of various companies with Insurance investments like Max India, Icicci Bank, HDFC etc. The point of the latest entry of Mitsui Sumitomo  Insurance Co. Ltd.  in Max New York Life in place of New York life Insurance Co. was discussed . The meet also debated whether for the company, the old jv partner could have brought in more value or whether the new one would be a better choice. One opinion floating around was noting down the general  inability of Japanese Investors to make either timely entry or not to pay too high a price for acquisition  was also discussed.

Mr.Parag Desai is bullish on Swaraj Engines and he explained his rationale for the investment. Members were divided whether a  auto ancillary unit which has to supply to OEM can avoid the squeeze of margins by the industrial customer. It was noted that the promoter pedigree is impeccable and the house of Mahindras have indeed rewarded the shareholders well in past.

One of the participants was bullish on Jyothy Labs expecting great things to come out of Henkel acquisition as the management is competent and debt could be easily repaid in 3/4 years.

Mr.HM Shah and Mr.Vipul Patel pointed out that they were relatively new to the markets and accordingly focused more on the live proceedings . Mr.Bhupan and Mr. Ashish Agarwal made significant points which I would request them to update themselves on this thread as I have not been able to delve on their contribution.

Mr.Rajiv Shah (Guest) was bullish on Spicejet primarily on the strengths of very low valuation and the opportunity of market size. There were enough members doubting the ability of the sector to generate long term wealth while opportunistic acquisitions during certain patch of times could be rewarding if one were to be correct on entry and exit times.

The undersigned (snehaldani) shared his views on new generation pvt.sector banks and Pharma companies. He is bullish on Yes Bank, Kotak Bank, Lupin, Ipca etc. He also mentioned of a study by Mr.Nandan Chakraborty of ENAM on attempting to identify the entrepreneurs who have higher probability of creating significant value and wealth over a period of next 10 years. For this, Mr. Chakrabotrty  studied the lessons from the past, both in Western world as also in India and arrived at a broad conclusion that a right, visionary entrepreneur in the Golden Age range between 40 to 50 is able to create lot of wealth if other factors including luck favour him. Based on the historical data, he tried to bracket such young leaders presently and zeroed in on the likes of Mr.Rajiv Bajaj, Mr.Sanjeev Bajaj, Mr.Glen Saldhana, Mr.Mukesh Ambani, Mr.Anil Ambani,Mr.Gautam Adani, Mr.Kumar Mangalam Birla, Mr.Narendra Murukumbi, Mr.Kushagra Bajaj, Mr.Uday Kotak , Mr.Anand Mahindra , Mr.Rana Kapoor and a couple of more.

The undersigned opined that if we have to focus on creating long term wealth , we should focus on young visionaries capable of flawless execution and in the right age bracket duly surrounded by base resources to carry on their dreams and vision.. Of course, age is not sacrosanct and the range can be flexible but the urge to do something big wanes once one is close to 60 and more and one is more comfortable in playing safe. Of course, enough examples of exceptions can be given leading with the example of Mr.A.M.Naik or Mr.Ratan Tata. But one should not be too dogmatic on any theory.

The Meet was sprinkled with lunch at “ Cream Centre”, a popular eatery of Mumbai and ended with coffee at one of the Coffee Outlets.

Please note that this is not an exhaustive synopsis. In fact, I have missed out on some of the very good ideas of quite a few members as during the meet, I was disturbed on cell phone repeatedly due to something else equally important happening simultaneously. My apologies for the same with the request to the concerned members to please update some of the missing points themselves on this thread as addendum to this synopsis.

Finally, let me Cheer and Applaud the Key Organisers  of the Meet Mr.Vijay Gawde and Mr.Manish Madnani on behalf of all the members and guests who attended the meet and benefited a lot from the same.

Happy Investing to Everyone.