We have seen world markets falling down in the last month and our own market have seen terrible month. Nifty 50 has fallen down by almost 9% and market participant are still anticipating more hiccups to come in the future.

It is time to focus, don’t let price to be your master. It is a time to stay calm and collected and this is what we at Valueoperations are practicing. The price is what you pay and value is what you get. This means the volatility is the best friend of value investor.

For example, the Nifty 50 is composed of 50 biggest businesses in India and their market capital today is about approximately 5,300,000 crore (US$80 billion) and a month back they were trading at approximately US $90 billion. These businesses still earn revenues, make profits and also generate cash flow for their shareholders. Nothing has changed in those fundamentals, however, the best thing to do now is to calibrate the values of these businesses looking at their results and prospects of those businesses. These businesses are today trading at $US 10 billion less and value investor can search for the opportunities within them.

So let us wrap up with our views on the following businesses and their first quarter results that we track out of our universe. Maybe you might find few opportunity within them.

Axis Bank:

Axis bank is one of the fastest growing business in the private sector. The interest receipts grew by 20% compare to first quarter last year and profits too by 20%. Coming to the valuations, we never thought it is cheap above Rs 500 and we have shared our views in regards to this over here.

We do own this stock in our portfolio and any downside in this stock will trigger us to buy more.

HDFC Bank:

Leader in the private sector bank, HDFC Bank had also witnessed the similar figures as Axis Bank with very less NPA’s on its book compare to other banks. The profits are growing by 20% which are substandard compare to what HDFC Bank had always reported.

This happens with all the good businesses and as competition grows the competitive edge fades away and this is what happening with HDFC Bank. We still think this business is expensive and it might take few more quarters for market participants to digest that HDFC Bank can only grow its profits by 20% and not by 30% any more as they have done in last decade. We did shared our views over this bank in detail over here.

We do own stocks of this business in our portfolio.

JK Bank:

In the midcap banking business we like this business the most. But the numbers do not support that story. Most analyst expect its earnings to grow by 20% in 2016 -17 year. At the moment we are seeing operational margins improving and have witnessed profits growing by 20% which is substantial. The NPA’s have also jumped up but we expect them to go down in next three to four quarters.

We think it is trading at substantial discount and we do own this stock in our portfolio.


Mindtree’s revenue grew by 16% in its first quarter of 2016 and profits by 7%. The cost of employees did dented its operational margins and the management have some work to do in regards to it.

From value perspective we still think Mindtree is expensive and we do own this business in our portfolio.

Swaraj Engine:

Swaraj engine will witness pressure on its revenues and profits for this financial year as agricultural sector is facing shortage of rainfall. But we do hope that this business is worth part of your portfolio and has a potential to grow its earnings in the range of 15% – 20% in long run.

We think this business is trading at discount today and we do own shares of this business in our portfolio.

Tata Motors:

Tata Motors is in very bad position from our point of view. There is a lot of work that management has to do. They have blown away their Balance sheet, overall revenues are expected to be flat or in negative as growth in China is fading away, cash flow is negative and Indian businesses are making loss.

We do think this business is cheap but it has lost its quality rating.

Amar Raja Batteries:

Amar Raja reported a growth of 14% in its revenues and also 15% in its profits. But we still think Amar Raja is very expensive to buy today. Amar Raja had almost fallen 14% last month but still we are not convinced to invest our fresh funds more into it. We do own this stock.

Jubilant foodworks:

This business has reported a growth of 20% in its revenues compare to last year first quarter and profits have grown by only 6%. The biggest expense that blew its operational margins this quarter was the cost of employees.

The growth story has not faded within this business but penetration of more imported brands have started giving serious competition. We still think this business is expensive as it is still trading at 40 times to its expected earnings for 2017.

We will continue this post with few more businesses in our next post.

Happy Investing.