DONT loose Hope in fear of Rupee depreciation

Strength in dollor giving sleepless nights to emerging markets and for investment community this is not a new phenomenon.
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Even in 2013 we have seen ruppee depreciation.
Increased trade deficit
Increased interest rate in USA
Reduced export
Increased import thanks to crude prices rise and drought
Fear of Poltical instability
All these factors contributing to ruppee depreciation.

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Economies and markets cycle up and down.
Whichever direction they’re
going at the moment,
most people come to believe that they’ll go that way
forever.
This thinking is a source of great danger since it poisons the market ,
sends valuations to extremes, and ignites bubbles and panics that
most investors find hard to resist.
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Likewise, the psychology of the investing herd moves in a regular,
pendulum- like pattern—
from optimism to pessimism;
from credulousness
to skepticism;
from fear of missing opportunity to fear of losing money
and thus from eagerness to buy to urgency to sell
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But as an investor this kind of economic situation always prevails.
EACH year you have seen something big danger for investors being broadcasted over business channel but still many people made money, even some of you have made.
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In such situations what to do
Investors can invest in export oriented companies
Investors can invest in sectors which growth depend on domestic market
Like consumption, Nbfc, infrastructure and its ancillary sector.
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The swing of the pendu-
lum causes the herd to buy at high prices and sell at low prices.
Thus, being
part of the herd is a formula for disaster, whereas contrarianism at the
extremes will help to avert losses and lead eventually to success.

THE WORLD IS NOT AS BAD AS YOU THINK

WHY CASH FLOW IS IMPORTANT

WHY CASH FLOW IMPORTANT

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Suppose Atul is an entrepreneur who stalls a Panipuri shop near a park, where lots of people gather morning and evening.
Initial capital provided by a friend Nirmalji
THEN BALANCESHEET
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ASSET

Cash :Rs 1000
Inventory (means pani, pakodi, masala etc) :Rs 500
Kitchen equipment :Rs 500
TOTAL :Rs 2000
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LIABILITY AND EQUITY

Nirmalji Debt(interest free) : Rs1900
Atul (Own savings) :Rs100
TOTAL :2000
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First day Atul manages to sell 200 plate Panipuri @10, while cost per plate Rs 1
So he manages to get profit of Rs 9
Per plate.

ACCRUAL INCOME STATEMENT

Sales:Rs 2000
Cost of Sales: Rs 200
Profit: Rs 1800

Since Atul wanted to get market share so he allows customers to pay on credit next day when they come.

90 out of 200 plate are purchased by such people who don’t carry cash while visiting park.
So even if Sales 200 plates the actual cash comes around 110*10=Rs 1100 Only.
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CASH FLOW STATEMENT
Cash Sales: Rs 1100
Cost: Rs 200
Net Profit :Rs 900
So while in accrual accounting net profit is Rs 1800,
The real profit is only Rs 900.
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If the people who purchased on credit didn’t come next day then it would be written off in accounts.
So if this type of business to be continued then a time will come when business faces financial distress.

Thats why CASH FLOW STATEMENT MOST IMPORTANT FOR A BUSINESS.

HOW OUR MARKET WORKS

HOW OUR STOCK MARKET WORKS
By Graham
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Imagine that
you are partners in the ownership of a business with a
crazy guy named Mr. Market.

Mr. Market is subject to
wild mood swings. Each day he offers to buy your share
of the business or sell you his share of the business at a
particular price.

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Mr. Market always leaves the decision
completely to you, and every day you have three choices.
You can sell your shares to Mr. Market at his stated
price,

you can buy Mr. Market’s shares at that same
price, or you can do nothing.
Sometimes Mr. Market is in such a good mood that
he names a price that is much higher than the true worth
of the business.

On those days, it would probably make
sense for you to sell Mr. Market your share of the busi-
ness.
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On other days, he is in such a poor mood that he
names a very low price for the business. On those days,
you might want to take advantage of Mr. Market’s crazy
offer to sell you shares at such a low price and to buy Mr.
Market’s share of the business.

If the price named by Mr.
Market is neither very high nor extraordinarily low rela-
tive to the value of the business,

you might very logically
choose to do nothing.
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EXAMPLE

Stock market is Mr Market

If ALUFLORIDE is trading 100 per share

You have 3 choices

Either you can buy @100 or sell @100
Or do nothing.
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If You think ALUFLORIDE is 150 worth stock
Then you could consider to buy it from Mr market @100.

Thats because of MARGIN OF SAFETY

If you think ALUFLORIDE is really worth Only 80 per share
You might decide to sell to mr market@100.

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If you think each share of Alufluoride is worth between 105 t0 110
You may decide to do nothing.

YOU Only comes into action when prices looks either extremely high or extremely low.

PROBLEM IN MANGALAM DRUG

MANGALAM DRUG INVENTORY % OF SALES

SALES
2015: 220.58 Cr
2016: 295.02 Cr
2017: 302.89Cr
2018: 279.95 Cr

INVENTORY
2015: 57.34 Cr
2016: 47.34 cr
2017: 37.25 Cr
2018: 67.95cr

Inventory percent to sales
2015: 25.99%
2016: 16.04 %
2017: 12.29%
2018: 24.37%

RECEIVABLES
2015: 44.25 cr
2016: 30.14 cr
2017: 39.75 cr
2018: 45.37 cr

RECEIVABLES TO SALES

2015: 20.06 %
2016: 10.21%
2017: 13.12%
2018: 16.20%

RECEIVABLES PLUS INVENTORY TO SALES

2015: 46.05%
2016: 26.25%
2017: 25.41%
2018: 40.57%

CONCLUSION :
MANGALAM DRUG lowest PRICE in 2015 was 20,but in 2015 quarters some signs of improvement market observed then after it was re rated in 2015 and 2016.
But mangalam management missed out
When whole pharma sector was under pressure in 2016 and 2017
It expanded capacity which resulted inventory pile up Along with increasing debt and pledge,which resulted stock price going towards same level as was in 2015.

SOME FACTS ABOUT BHAGYA NAGAR INDIA

Some financial facts about bhagya nagar india

1:BHAGYA NAGAR india is a part of surana group, dealing in ferrous and non ferrous metals.
Surana group in past have been slapped penalty for insider trading, and fraud
Which easily can be found on google by typing (fraud by surana group)
Link here
Sebi slaps Rs 10 lakh fine on Surana Industries, 3 directors /article/pti-stories/sebi-slaps-rs-10-lakh-fine-on-surana-industries-3-directors-114093000963_1.html

2: Company products include copper related which is used in telecom, power sectors, solar industry, auto ancillary.

3:surana group has very poor performance, and loss making entity, never have shareholder friendly approach, never paid any dividend even if profit.

4:BHAGYA NAGAR india gross margin was 25% in 2012 which is now 12%
Currently, it’s clear that company has no bargaining power with customers.

5:IF you see result of bhagya nagar, you will find that other income always more than main income, means if we reduce other income then company will be in loss for each year.

6:EACH QUARTER promoter shareholding keep changing as if promoters trading in their own stakes.

7:Some hidden facts may be in annual report which i didn’t see but will check later.

Disclaimer :I HAVE NO HOLDING IN BHAGYA NAGAR NOW.
INVESTORS CAN DO THEIR OWN RESEARCH BEFORE MAKING INVESTMENT DECISIONS

Pledge is a curse in bear market

In bull market when every company playing upper circuit game, pledging by promoters becomes a routine work,
Whatsoever motive behind pledging.

But real test start when market takes reversal then those pledged companies start showing their real colour.

HOW problem start let’s see

Suppose a company stock price is 200
And it wanted to create pledge.

Then financial institutions can give 60 or 70% amounts of the stock price on creation of pledge
Means pledged prices would be 140.

If stock prices falls upto 140
Then financial institutions ask for either
FRESH creation of pledge or sell at 140
To reduce loss.

This will create pressure on stock prices and it will fall further.
Thats why falling prices with increased pledge is very very bad.

90%Got multibegger returns 10% Got Multibagger returns

CNXMIDCAP DATA IN 5 YEARS
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1:20/05/2013: 8253
29/08/2013: 6550
DOWNSIDE 26% IN JUST 3 MONTH
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2: 14/08/2015: 14166
FROM 29 August 2013 to 14 August 2015
Next 2 years mid cap index given 116%
Return but unfortunately wiped out investors wealth in 2013 in just 3 month fall.
However Looser were only those investors who thought market and everything going to end.
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SECOND CASE
MID CAP INDEX WENT DOWN from 14166 in 14/08/2015 to 11825 in 18/02/2016 giving 20% negative returns in just 6 months.

Again many retailers out from the market
But the investors who hold patiently got multiple returns in coming years.
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THIRD CASE
MID CAP INDEX
13/10/2016: 15973
From low of 11825 almost giving 35%
Returns in just 8 months.
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FOURTH CASE
18/01/2018: 21707
21/05/2018: 18571
GIVING NEGATIVE RETURN 16% IN just
5 months.
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Again Looser are small investors who have no guidance
Who only tracks stock prices
Either up or down but never think of
Why to buy
Why to sell.
CONSIDERING past the more mid cap index fall, the more return it has given.
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The worst was in 2013
But then after the best was from August 2013 to August 2015.
EXCEPT these many times mid cap index fall and recovered.
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90% got multibegger return
10% got Multibagger returns
I M FULLY OPTIMISTIC AND INVESTED BECAUSE I HAVE GOT BEST BUSINESS AT CHEAPEST PRICES GETTING HUGE MARGIN OF SAFETY.

SHILPI CABLE A FINANCIAL FRAUD WHICH CAN BE DETECTED EARLIER EASILY

SHILPI CABLE 5 YEARS EPS VS CASH FLOW PER SHARE CLEARLY SHOW ACCOUNTS FRAUD.

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2013: 15.43
2014: 11.39
2015: 16.20
2016: 15.92
2017:(-75.46)
TOTAL EPS: (-16.48)
AVG EPS :(-3.29)
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CASH FLOW PER SHARE IN 5 YEARS
2013: 8.29
2014: 4.24
2015: (-4.55)
2016: 1.95
2017: (-12. 09)
TOTAL CASH FLOW PER SHARE :(-2.16)
AVG CASH FLOW PER SHARE :(-0.43)
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THERE IS BIG DIFFERENCE IN EPS AND CASH FLOW PER SHARE WHICH CLEARLY INDICATES MANIPULATION IN ACCOUNT.
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IT CAN BE DETECTED EARLIER BY CHECKING
2013: 15.43 VS 8.29
2014: 11.39 VS 4.24
2015: 16.20 VS(-4.55)
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EPS AND CASH FLOW PER SHARE WHICH WAS HAVING BIG DIFFERENCE
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THEN HOW STOCK PRICE SHOULD RISE.
THATS WHY I NEVER POST ANY JUNK STOCK AND NO ONE FOLLOWING ME FACED STOCK LIKE SHILPI, GITANJALI, VAKRANGEE TYPE TRAP EVER.
BUY HOW ANALYST FAIL TO FIND SHILPI CABLE AS TRAP BECAUSE MANY ANALYST RECOMMENDED IN THOSE PERIOD.

PARAG MILK FOOD INTRINSIC VALUE

Parag milk AVVTAR ANALYSIS

CHEESE 300 PER KG *24= ₹7200

Casein per kg 2000*3=₹6000

Which resulted 1kg of Whey protein of ₹2650

Total:7200+6000+2650= ₹15850

Raw materials 205 ltr milk required
Costing @40/ltr=8200

Profit
15850-8200=₹7650 per kg whey protein

PARAG MILK FOOD
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INTRINSIC VALUE 2018

BENJAMIN FORMULA

V=EPS*(8.5+2G)

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PARAG MILK FOOD
CURRENT EPS:10.87
GROWTH RATE:10 TO 15%

AFTER NEW PRODUCTS LAUNCHES PARAG MILK FOOD GROWTH COULD BE IN DOUBLE DIGIT, CONSIDERING DAIRY SECTOR EXPECTED GROWTH WHICH WOULD BE AROUND 15%.
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THEN CONSIDERING 15% GROWTH

VALUE :10.80*(8.5+2*15%)
VALUE :415 FOR 2018

CONSIDERING 10% GROWTH
VALUE SHOULD BE
:10.80*(8.5+2*10)=307
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EXPECTED SALES GROWTH FOR 2019
CONSIDERING 10% SALES GROWTH
SHOULD BE 1864*10/100=2050

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CURRENT MARGIN FOR PARAG MILK AROUND 5% WHICH SHOULD BE EXPECTED UPTO 6% WHICH MANAGEMENT FOCUSING ON TO ACHIEVE AROUND DOUBLE DIGIT MARGIN BUT WE SHOULD TAKE CURRENT MARGIN ONLY.

THEN CONSIDERING 6% MARGIN
NET PROFIT COMES AROUND 123 CR
AND EPS WILL BE 14.62.

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INTRINSIC VALUE FOR 2019
V=14.62*(8.5+2*15)

STOCK PRICE =562 @15% GROWTH

STOCK PRICE =416@10% GROWTH

OVERALL PARAG MILK FOOD IS A GROWTH STORY.

DISCLAIMER : I M INVESTED
PLEASE CONSULT YOUR FINANCIAL ADVISOR BEFORE INVESTMENT.

Must read this story

एक गरीब किसान (INVESTORS) को उसके एक मित्र ने कुछ बीज(STOCKS) दिये और उसे बताया कि ये बीज बांस के पेड़ की उस प्रजाति के हैं, जो चीन में पाए जाते है. इन पेड़ों की ऊँचाई ९० फीट तक होती है.

किसान ने वे बीज अपने मित्र(GENUINE ANALYST) से ले लिए और उन्हें अपने खेत में बो दिये. उसे आशा थी कि जिस दिन वे बांस के ऊंचे पेड़ बन जायेंगे, उन बांसों को बेचकर उसे अच्छी आमदनी होगी और उसका परिवार एक अच्छा जीवन जी पायेगा.

वह उन बीजों को पानी देता, दिनभर उनकी देखभाल करता और रात में भगवान से प्रार्थना करता कि उसके सपने पूरे हो जाये और उसे इन बीजों से १०० प्रतिशत परिणाम मिले. वह रोज अपने खेत में जाकर देखता कि बीज अंकुरित हुए हैं या नहीं. लेकिन उसे उनमें कोई भी परिवर्तन दिखाई नहीं पड़ता. इसी तरह एक वर्ष बीत गया. लेकिन उन बीजों से अंकुर नहीं फूटे.

अन्य बीज सामान्यतः एक सप्ताह में अंकुरित हो जाते थे और कुछ महीनों में ही फसल आ जाती थी. उस फसल के द्वारा ही किसान के परिवार का भरण-पोषण होता था. किसान सोचा करता कि इस तरह आज तो उसका गुजारा चल सकता है, लेकिन उसके सपने पूरे नहीं हो सकते और न ही उसका भविष्य संवर सकता. बांस के पेड़ों की बदौलत वह अपने सुनहरे भविष्य के सपने देखने लगा.

लेकिन समय बीतने के बाद भी वे बीज अंकुरित नहीं हुए और किसान को अपने सपने और आशायें टूटती हुई नज़र आने लगी. उसके मन में शंका उत्पन्न होने लगी कि कहीं वे बीज सड़ तो नहीं गए हैं.

एक वर्ष और बीता. लेकिन बीज अंकुरित नहीं हुए. दूसरे किसान और गांव वाले (PANIC MAKER) उसका मजाक उड़ाने लगे कि वह उन बेकार के बीजों पर अपना समय और परिश्रम व्यर्थ गंवा रहा है. सबके ताने सुनकर किसान विचलित होने लगा. उसने मन में यह भय समाने लगा कि कहीं सचमुच ही वह अपना समय और परिश्रम ऐसे कार्य में तो नहीं लगा रहा, जिससे उसे कोई प्रतिफल नहीं मिलने वाला है.

एक साल और बीत गया. लेकिन बीजों के अंकुरित होने के कोई चिन्ह दिखाई नहीं पड़े. लोगों ने किसान का मजाक उड़ाना जारी रखा. लेकिन किसान ने आंशिक भय (MARKET NOISE) के बाद भी अपने मन में छोटी सी आस बांध कर रखी थी. इसलिए उसने लोगों की बातों को दरकिनार कर उन बीजों की देखभाल करना जारी रखा.

ऋतुयें बीतती गई और किसान एक चमत्कार की उम्मीद में बीजों को रोज़ पानी देता रहा और उनकी देखभाल करता रहा. लेकिन चार साल बीत जाने के बाद भी एक भी बीज अंकुरित नहीं हुए. जिससे किसान की उम्मीदें थोड़ी और कम हो गई. लेकिन फिर भी वह उन बीजों को पानी देता रहा. यद्यपि समय के साथ किसान की आशा कम होती चली जा रही थी. लेकिन भगवान पर उसका विश्वास अटल था. उसका विश्वास(BELIEFS ON INVESTMENT) था कि भगवान उसके परिश्रम का फल उसे अवश्य देंगें.

५ वर्ष बीत जाने के बाद अचानक एक सुबह गाँव के लोगों को उस किसान के चिल्लाने की आवाज़ सुनाई पड़ी. वे सभी अपने घरों से बाहर निकल आये. उन्होंने देखा कि वह किसान अपने खेत के सामने खड़ा होकर खुशी से चिल्ला रहा है. पास जाकर देखने पर सभी गाँव वालों की आँखें फटी की फटी रह गई. किसान के खेत में बांस के बीज अंकुरित हो गए थे. किसान की खुशी की कोई सीमा नहीं थी. पांच साल बाद उसकी मेहनत सफल हुई थी.

वह खेत गाँववालों के आकर्षण का केंद्र बन गया. बांस के पेड़ तेजी से बढ़ रहे थे. (MULTIBAGGER) ५ फ़ीट…१० फ़ीट….२० फ़ीट…..५० फ़ीट……७० फ़ीट…..८० फ़ीट…और ९० फ़ीट. ५ सालों से खाली पड़ा किसान का खेत मात्र ५ सप्ताह में ९० फ़ीट बांस के पेड़ों से भर गया. इस चमत्कार को देखकर सभी दंग थे. उधर किसान खुशी से फूला नहीं समा रहा था. वे बांस के  पेड़ न केवल उसके परिवार का बल्कि उसकी कई पीढ़ियों का भरण-पोषण (WEALTH CREATION) करने वाले थे. वह रह-रहकर भगवान का धन्यवाद कर रहा था.

उसे यह भी समझ आ गया था कि जो सीख उसे मिली है, वह अमूल्य है.

उसने सपनों का बीज बोने और उसे यथार्थ में परिणित करने के लिए रोज़ उसका पोषण और देखभाल करने की सीख मिल गई थी. उसने लोगों की नकारात्मक बातों(MARKET NOISE) पर ध्यान न देने का पाठ भी पढ़ लिया था. उसने अपने भय और शंकाओं से परे हटकर अनवरत परिश्रम करने का महत्व समझ लिया था. साथ ही भगवान पर उसका विश्वास और अटल हो गया था.

किसान ने पूरे गाँव के सामने एक उदाहरण प्रस्तुत कर दिया. जिसके बाद गाँव के अन्य किसान भी अपने खेतों में बांस का पेड़ उगाने लगे और धैर्य से हर दिन उसकी देखभाल करने लगे.

दोस्तों, किसान ने तो अपने सपनों(INVESTMENT) पर विश्वास बनाये रखा. आपका क्या? आप अपने सपनों को पूरा करने के लिए किस हद तक परिश्रम करने के लिए तैयार हैं? आपमें कितना धैर्य(PATIENCE) है

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