‘HOLD’ was our decision on Lincoln Pharma when we last reviewed the stock in February 2024 as the market price then (₹690 per share) was slightly higher than our estimated fair value. Major headwinds perceived then were the persistently slow pace of earnings growth, sluggish capital allocation, and mediocre working capital management. Now six months … Continue reading Lincoln Pharma: Despite Recent Gains Odds Seem Favourable
Contentment about our investments and money matters is determinant not of what is on the outside but of what happens inside of us. The underlying motivation behind most of our investment endeavours is not just the money but the plethora of opportunities that money opens for us. The bigger house, faster cars, better neighbourhoods, and … Continue reading Finding Contentment in Your Investment Journey
I was positive about Control Print when we last discussed it in February 2024 after its Dec. 2023 quarter results, however, I discouraged buying the stock due to its elevated price. The stock was trading at ₹968 per share then; it now trades at ₹800 per share – down 17.35 per cent in six months. … Continue reading Control Print: Earnings Slowdown a Major Headwind
The prolonged period of low market interest rates led to risky financial behavior and accumulation of risk in the financial system, particularly evident in the high growth of unsecured retail loans by NBFCs. These easy times, with low interest rates and high credit growth, have raised concerns about financial stability. The push for rate cuts amidst robust economic growth and high inflation may exacerbate these excesses and make the system more fragile.
In the midst of a stock market boom, PPAP Automotive stands out with poor financial performance. Its stock price has stagnated while its competitors have thrived. The company's costs have outpaced revenue growth, leading to declining profitability. Its capital allocation and cash flow are also concerning, indicating a bleak future. It is advisable to avoid investing in this stock.
Briefing The stock of Vishnu Chemicals has gained at an annual rate of 80 per cent over the last five years – from ₹22 per share in July 2019 to ₹418 per share now. Meanwhile, its net worth grew at an annual rate of 29 per cent*. After remaining unchanged during the five years of … Continue reading Vishnu Chemicals: Quality Stock, But Low Prospects
Despite a sombre financial performance in FY24, TCPL’s stock gained 43 per cent during the financial year. The valuation expanded to a PE of 19.55 and a PBV of 3.72. Normally, a stock’s price is expected to underperform during periods of declining operating profitability, unless the stock is undervalued. In other words, it is reasonable (and justified) for a stock to deliver superior returns even during periods of declining profitability if the stock was undervalued in the first place.
The purpose of the financial system is to support the ‘real’ economy by facilitating transactions, majorly through credit and money supply. But on certain occasions, the financial system would dissociate from its principal purpose and start functioning for its own sake – its expansion and survival. Unfortunately, the financial system gets seized by many ill effects if dissociated from its primary purpose. Precariously high asset prices, credit booms, capital misallocation, and financial fraud are a few of the ill effects.
This edition of our analysis, dated 19 June 2024, discusses the investment prospects of these stocks: Dynemic Products, RACL Geartech, and Kovai Medical Center.
"Interest rates play a crucial role in shaping economic and financial conditions, influencing spending, saving, and investment behaviour. As we transition from ultra-low interest rate environments, it's crucial to consider the long-term consequences of these changes on asset prices and the overall economic prosperity."
AMN CAPITAL 