Identifying Multibaggers: Yes bank replaces Suzlon Energy in TheEquityDeskXI

Print Page | Close Window

Yes bank replaces Suzlon Energy in TheEquityDeskXI

Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Identifying Multibaggers
Forum Discription: Discuss specific attributes that investors could look at while choosing multibaggers. Also point out certain factors that investors tend to overlook while finding multibaggers.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=1223
Printed Date: 07/May/2025 at 4:41am

Topic: Yes bank replaces Suzlon Energy in TheEquityDeskXI

Posted By: basant
Subject: Yes bank replaces Suzlon Energy in TheEquityDeskXI
Date Posted: 18/Sep/2007 at 8:56pm

I had been thinking of replacing http://www.theequitydesk.com/forum/forum_posts.asp?TID=233 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=277 -

Yes Bank is a story on whether you expect Rana Kapoor to pull it off or not. It is something like betting on Raghav Bahl and Kishore Biyani so while these two have demonstrated some execution capacity the management at Yes is still being tested. If you know and can bet on the management the stock is good to hold and it is certainly not a PE or Price to adjusted Book valuation stock.

-------------
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Replies:

Posted By: s_praharaj
Date Posted: 18/Sep/2007 at 10:46pm

Basant,

Though I am happy with your decission to exclude Suzlon now from TED-XI, I am not very sure, whether Yes Bank will be able to perform as per our expectation. You have correctly analyse Yes Bank, as a poor play on fundamentals, rather a very strong play on enterpreneurship of Mr Rana Kapoor and the able professionals with the pool of knowledge they have.

Of late I notice that they have slowed down in their aggressiveness. This quarter is a very important quarter, as like the previous quarters, they don't have many clients with foreign acquisitions.They are redefining some traditional concepts of Banking. Traditionally we think, retail banking is profitable, but they are still showing nice profits with wholesale Banking.

There is no doubt about the quality of the Bank, its leadership and its strength in some niche areas of Banking, but still I have a feeling that this is not the right price. I will be comfortable at 140-150 range.

I bought some shares, just after its public issue and still hold half of it.

-------------
Shashi Praharaj

Posted By: smartcat
Date Posted: 18/Sep/2007 at 11:58pm

Couple of observations -

- The only engineering stock Suzlon is now outside the TED XI

- Another midcap replaces an existing large cap. The midcap tilt of TED XI is quite visible now. It was not so before when we had AB Nuvo and Suzlon.

- We have now 3 proper financials (HDFC, HDFC Bank & Yes Bank) and 2 pseudo financials (Future Capital via Pantaloon and Commodity exchange via Fin Tech) in the TED XI.

- With the removal of Suzlon, TED XI is 100% into the 'India growth' story (rather than outsourcing/exports story).

Posted By: xbox
Date Posted: 18/Sep/2007 at 5:22am

With the removal of Suzlon, TED XI is 100% into the 'India growth' story (rather than outsourcing/exports story).

----------

I guess 'India growth' means 'domestic consumption story'. India story includes all export & import stories also.

Posted By: basant
Date Posted: 18/Sep/2007 at 7:40am

SUzlon's business model stil seems OK but the results do not show. I think that by the december quarter the conmpany should report improved earnings but the problem is about being in uncertainity.

Yes, India is a domestic growth story and that is where most of the money will be made.There are a lesser number of variables affecting domestic consumption rather then compared to the export/import sectors.

Posted By: gcpradhan1
Date Posted: 18/Sep/2007 at 8:20am

Finally it's nice to see YEB Bank on the TED XI board. Hope this player will contribute to the team strength as it's predecessor Suzlon and go long way for the Teddies...

Posted By: Vivek Sukhani
Date Posted: 18/Sep/2007 at 8:53am

although the chart is a wonderful trending one, yet the counts are giving me some interesting inputs. My next target is 186, 205 and 236-237. 186 is almost there...and hence it will be jolly well taken out, but it appears the stock has completed 5 sub waves of the primary wave 1 and is now into sub-wave B of primary wave 2. If 205 be taken out with conviction, that will lead to the negation of the entire count studies and in that case the target of 236-237 will be very much on the anvil.

Posted By: smartcat
Date Posted: 18/Sep/2007 at 11:52am

The problem with Suzlon is not stock price performance or even the 4 quarters of shocking results for that matter. It was the management that always gives out a rosy picture (We stand by our guidance, 200 MW is stuck in transit - it will show in the next quarter etc).

Tanti could take a leaf out of INFY's book by giving a conservative guidance and beating its own guidance by a wide margin. Or better still, not give any revenue/profit guidance at all.

Posted By: basant
Date Posted: 18/Sep/2007 at 11:58am

Originally posted by smartcat

The problem with Suzlon is not stock price performance or even the 4 quarters of shocking results for that matter. It was the management that always gives out a rosy picture (We stand by our guidance, 200 MW is stuck in transit - it will show in the next quarter etc).

Tanti could take a leaf out of INFY's book by giving a conservative guidance and beating its own guidance by a wide margin. Or better still, not give any revenue/profit guidance at all.

That is what irritates me about Tanti. He talks like he is heading a software company. All these 2nd tier tech guys are bundles of positive energy.

Posted By: Vivek Sukhani
Date Posted: 19/Sep/2007 at 12:33pm

Although Yes is a good buy but it could have better had the purchase been deferred for the next quarter. Corrective waves may impact the quarterly stock price performance but then the primary trend is still up. And yes, long term appears to be nice but then suzlon should have been replaced by a manufacturing company as this replacement has made the portfolio a bit too tilted in favour of service sector stocks.

Posted By: kulman
Date Posted: 19/Sep/2007 at 12:49pm

On a lighter note, Vivek bhai should create two identities to post messages. For a old man like me it becomes very difficult to understand whether tech Sukhani or Funda Vivek is talking...!

Now don't respond like that famous Deewar dialogue between Shashi Kapoor & Amitabh: "Bhaaaaai.....jab tak ek Bhai bol raha raha hain ek Bhai sun raha hain....jab ek mujrim bolega ek Police Officer sunega !!"

-------------
Life can only be understood backwards—but it must be lived forwards

Posted By: basant
Date Posted: 19/Sep/2007 at 12:50pm

Never been convinced with the balanced portfolio structure. If Retail will do well I will put 50% of my money in retail. SInce I have the luxory of deciding the constituents of the TED XI I wanted to put in stocks which I could really understand.

For example there is a stock Vimta Labs which I initiated a discussion because someone wanted it now since he is gone Vimta is lying like an orphan. It is also down some 20% in one year!!!

Posted By: italics
Date Posted: 19/Sep/2007 at 1:03pm

"Never count on making a good sale. Have the purchase price so attractive that even a mediocre sale gives good results"

Warren Buffet

"The entrance strategy is actually more important than the exit strategy".

Eddie lambert.

The point of those two heavy quotes is quite simple: Are we picking a good price to pick up Yes bank for TED XI? Sure it's a very good company in a great sector, but is this the right price? Basantji would be nice if you could give us your opinion on this and how you see Yes Bank performing over the next 1 to 3 years.

Posted By: blazingstar
Date Posted: 19/Sep/2007 at 1:12pm

Somehow I have been circumspect of Suzlon. I am not yet convinved of the long term viability of wind power. Plus it seems like a fancy idea where many successful people would like to invest to show concern for environment. Plus I read somewhere how every bull run throws up alternative energy companies.

Yes bank has been doing good and could be a good replacement. Basantji, have you looked at Centurion Bank of Punjab?

I have a suggestion. Why not include one thoroughly researched micro-cap/small cap which could prove to be the real kicker for the portfolio? I know selecting one such stock is not easy and it will involve quite a amount of guesswork and hope. Just a suggestion.

tnx.

-------------
Will come up with one shortly.

Posted By: basant
Date Posted: 19/Sep/2007 at 1:35pm

CBOP is more speculative in nature and as xboxsays is more of a takeover story rather then anything else.

Yes bank could stay at these levels for some time because it is expensive but in the long run it should beat the markets. Let's see!!!

Posted By: vivekkumar_in
Date Posted: 19/Sep/2007 at 10:10pm

Basantji,
How do you weigh Kotak Bank making entry in Equity XI ?

I am sure you must have considered both Kotak & Yes Bank for a good financial play in the Equity XI. Can you share the thought process of what inspired you to choose Yes Bank over Kotak ?

Regards,
Vivek

-------------
Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
P Lynch

Posted By: basant
Date Posted: 19/Sep/2007 at 11:34pm

Just wanted to keep the focus on smaller capitalised companies because in ted XI HDFC and HDFC Bank do provide stability but K Bank is more stable because it has an accomplished record while Yes Bank is one of promise.

Posted By: vivekkumar_in
Date Posted: 19/Sep/2007 at 1:19am

Okay Basantji.. The other day in one of your posts you had quoted that there are some concerns with Kotak, can you please elaborate that when you can..Thanks !

-------------
Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
P Lynch

Posted By: basant
Date Posted: 19/Sep/2007 at 8:19am

I sent you a link on that. Kotak's bread and butter brokerage business is seeing a pressure. That does not make Kotak a bad investment but it does indicate that Kotak's streak of a 60% CAGR could be under pressure. Please read this link:

http://www.theequitydesk.com/forum/forum_posts.asp?TID=946&PN=2 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=946&PN=2

Posted By: deveshkayal
Date Posted: 19/Sep/2007 at 11:58am

I think Praj Industries was a good choice for replacing Suzlon Energy but as Basantji finds it difficult to understand the business in detail , Yes Bank fits the bill perfectly...though when to enter is debatable.

-------------
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: vivekkumar_in
Date Posted: 20/Sep/2007 at 5:21pm

Originally posted by basant

I sent you a link on that. Kotak's bread and butter brokerage business is seeing a pressure. That does not make Kotak a bad investment but it does indicate that Kotak's streak of a 60% CAGR could be under pressure. Please read this link:

http://www.theequitydesk.com/forum/forum_posts.asp?TID=946&PN=2 - http://www.theequitydesk.com/forum/forum_posts.asp?TID=946&PN=2

Thanks Basantji ! I had read that post earlier, but did not quite relate it as a concern. I was under assumption if you had some concern from accounting front or management pedigree/aggressiveness front.

But what you say makes sense.. Also Kotak Bank is enjoying a high PE above 100. Though I guess market sees it as a sum of parts rather a PE play.. Do you think we could see some PE contraction in the near future due to growth slackening from 60% to 40%?

-------------
Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.
P Lynch

Posted By: smartcat
Date Posted: 20/Sep/2007 at 5:52pm

I think the moneycontrol P/E number on Kotak Bank is incorrect. Kotak bank is at a trailing 12 month P/E of around 50.

Posted By: basant
Date Posted: 20/Sep/2007 at 7:59pm

Originally posted by vivekkumar_in

Thanks Basantji ! I had read that post earlier, but did not quite relate it as a concern. I was under assumption if you had some concern from accounting front or management pedigree/aggressiveness front.

But what you say makes sense.. Also Kotak Bank is enjoying a high PE above 100. Though I guess market sees it as a sum of parts rather a PE play.. Do you think we could see some PE contraction in the near future due to growth slackening from 60% to 40%?

It trades at a trailing PE of 53 times and will grow at 40% - 50% so the story looks clear on that front.

Posted By: snehaldani
Date Posted: 23/Sep/2007 at 6:31pm

It is not for nothing that Basantji is Basantji. This is not to please Basantji but to point out his ability to see the bigger picture, and the ability to bet on an outstanding entrepreneur like Rana Kapoor. Those who are talking about entry price, high pe , retail absence, poor reach, high PBV are actually missing the tree for the wood.Look at the verve, the vision, the perseverance and passion of the promoter. Look at the business model and its scalability. I fully support the decision to include Yes in TED 11.

-------------
Snehal P.Dani

Posted By: basant
Date Posted: 23/Sep/2007 at 7:09pm

Thank you. I am still a toddler in banking stocks and am trying to look at things outside the HDFC twins. Also I thought that since the mandate of TED is not to mimic the Nifty or the Sensex we could have another financial stock but the lead was provided by X-Box.

-------------
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: mystock
Date Posted: 30/Sep/2007 at 5:04pm

Hi Basant

Greetings!

No doubt Yes bank is a good medium to long term bet.

But removing Suzon is a wrong move.

I think you are thinking too much for the short term performace. Suzlon is a story of a next decade and may take time to evolve.

What you will do if crude touches $120 or even $170 in the next 8-10 months? How you are going to hedge your portfolio....with financial stock?

Suzlon is about renewable source of enegry. Few "goras" are worried about high debt component on B/s, but i think, one needs to look out for long term. As your signature says.....you can't read suzlon by its B/s or quarterly numbers.

Any takers for my view?

-------------
It's a War,between bulls and bears; between smart money and dumb followers.

Posted By: omshivaya
Date Posted: 30/Sep/2007 at 6:09pm

Hi Mystock, how is you? Myself thinking too about yourself viewss totally a lot too..

Thanking all TEDdies for decadent views.

-------------
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

Posted By: basant
Date Posted: 30/Sep/2007 at 9:41pm

Thanks. The best way to play for an oil bulll is go long on crude futures. Indirect plays are always stuck with several variables. WHat if Tanti messes it up in 10 years?

It is tough to take 10 year views on companies that are still in the emerging stage. Who could have taken a 10 year view on ENRON in 1994 and lived peacefully till date? This comparision with SUzlon is more anecdotal then real in nature.But it does indicate the problem of playing commodities through companies vis-a-vis the commodity themselves on a long term basis..

And about short term performance I need to tell you that I am not managing money here. This is a model portfolio but in my real portfolio I have got stocks bought when the index was at 2800 and now it is 17,000 plus so making that comment about short term performance is more apt on the smarter guys who manage other people's money because they have to chase returns and their performance bonuses etc etc!

BTW it is nice to have you with us. Would appreciate if you could introduce yourself on this thread " http://www.theequitydesk.com/forum/forum_posts.asp?TID=17 -

Posted By: kanagala
Date Posted: 08/Oct/2007 at 5:33am

Basant jee,
Great to see Yes bank in starting IX. It was knocking on doors for quite some time. One of those rare superbly managed growth company.

-------------
While one person hesitates because he feels inferior, the other is busy making mistakes and becoming superior.

Posted By: omshivaya
Date Posted: 18/Oct/2007 at 2:35am

Just had a thought suddenly, and hence wanted to share: Some newbies were discussing that most of the TED XI stocks old-TEDdies have profited from and new TDdies don't have much of a choice. These people have a choice to invest in any of the TED XI stocks(which anyway are a 3 year play and not 1 year). And most recently, Yes Bank has been added.

So, newbies can take advantage of this TEDXI stock luckily at an initial stage.

-------------
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

Print Page | Close Window