Param Subramanian

Boring bonds may deliver better than equity over next 2-3 years. Assumptions for base case 1. Corporate ROE and margins have peaked for the cycle, profits allign with Nominal GDP & Revenue growth 2. Nominal GDP growth = 5-6% real growth (last 10 year average at 5.5%) 3-4% inflation (current run rate of core)= 8-10% 3. Fiscal deficit is shaved off by 50bps further over next 12m. After that same. 4. CAD plateaus (.5-1%) 5. Capex to GDP flatlines at current level. Policy output 1. Real rates drop to zero (RR-core inflation, at 3.5% today) 2. Re-liquify system = RR moves to RRP. System liquidity goes back to 1% Valuation output 1. Equity valuation mean reverts to LT average (18x over forward earnings) 2. 10 year IGB gets to 100bps over overnight funding rate. Risk In the interim, USD strengthens. Leading to tight fin conditions in India. Hurting bonds and equities both. https://lnkd.in/dKv9NX-i

195

8 Comments

Nifty 50 is hitting all time highs but still there is no bubble. Nifty is trading at a PE Ratio of 23 and 1 Year Forward PE of 21. The PE Ratio is trading close to long term average. The bubble is in Mid, Small, Micro and SME. If you are worried with equity markets valuation then you can consider moving money to Large Caps. According to me, this is not the level to be out of the market.

81

10 Comments

Reliance Industries has failed to break the ₹3050 price range, but is it heading towards ₹2600 ⁉️ (No reco; Views are personal) 🚨 Fundamentals: M-cap: ₹18.76L crs CMP: ₹2773 PE: 27.3 {Ind PE comparison is absurd} PB & Book value: 2.36 & ₹1173 Debt & D/E: ₹4.58L cr & 0.58 1Y ROE vs 5Y ROE: 9.25 vs 8.73 Q1FY'25 EPS: ₹22.37 EPS TTM - ₹101.6 PEG ratio - 2.28 Shareholding Pattern: Mar'18 Promoters - 47.45% Jun'24 Promoters - 50.33% Mar'18 FIIs - 24.46% Jun'24 FIIs - 21.75% Mar'18 DIIs - 11.23% Jun'24 DIIs - 17.30% Total No. of shareholders: Mar'18- 22.66L Jun'24- 34.93L Reliance Industries has been having a bumper run since Oct'17 after the stock made a 9Y breakout in price at the ₹740 range which was previously seen during Jan'08. Since Oct'17 there is no turning back to this stock as it has found multiple value unlocks which have exploded its business & stock price too. Even in the pandemic period during 2020 COVID, the stock failed to go below ₹780 range which resonates its strong brand & business reputation. A few months ago, during July'24 before its quarterly earnings release the stock hit a new all time high above ₹3200. However, since it's highs the stock has corrected up to ₹500 or over a 15% fall 🥵 But, is the fall a temporary one or will there be a pump & dump lies the true question! Also, one interesting thing to note down is that last Friday (Sept'27) the stock tried to go above the ₹3060 price range, however in a matter of 4 trading sessions of this week it has had a huge price slump of over 8% as well as it is taking a strong support from its June 5th lows of ₹2770 🔥 In the long term value investment perspective, entering right now at the CMP would not be an ideal entry considering its technicals in my POV. Also, since the stock is having a Bonus 1:1 ratio we can maybe* expect some more dip and fresh entry can be made over or below the ₹2650 price range with some cautious approach. In addition to that, the best price to buy this stock would be around or below ₹2400, but a fall to that price in a short term is least likely to happen for Reliance Industries! Reliance Industries Limited #Reliance #India #Nifty50 #Stockmarketnews

107

46 Comments

Big: Whatfix announces $58 Mn liquidity event for employees & investors => Second-largest liquidity event of 2024, following Swiggy's $65 Mn => This comes soon after Whatfix's $125 Mn Series E from Warburg & SoftBank => Its valuation jumped to $900 Mn from $600 Mn in Series D

54