About Deepak Shenoy

Deepak Founded Capital Mind, which mines financial data and provides analytics. Deepak is part of the core team that helps build, grow and keep our data platform up to date. He lives in Bangalore. Connect with him at deepakshenoy@capitalmind.in.

Infy: The Impact of Results on the Stock In The Past

As we approach Infy Results, we see that markets have been relatively benign about the company in recent times. While the stock shot up over 5% in Jan (after Dec qtr results) it is comparatively little compared to earlier times, where a 5% move was a bit on the lower end of the spectrum.

 

image

Today, for the first time in a long time:

  • Infy isn’t the first Big IT company to announce results: we have seen TCS results (30% Year on Year down on profits), HCL Tech (YoY profits up 3.6%), Wipro (YoY profits up 2%)
  • Infy is releasing results mid-day instead of at 9 AM. So markets will not really move so much the previous day.

The stock is on a medium term downtrend, at a support level of the […]

By |April 24th, 2015|Categories: Infosys|Tags: |0 Comments

Macronomics: Foreign Investors Are Slowly, But Steadily, Exiting Indian Markets

We write about the actions of Foreign investors in the Indian Debt and Equity markets. This post is for Capital Mind Premium subscribers only.

By |April 23rd, 2015|Categories: Premium|Tags: |0 Comments

Government Says Let the Courts Decide the MAT Issue for FIIs

The government has refused to budge on the FII tax issue, it seems. Recently, the tax department had started to issue notices for Minimum Alternate Tax (MAT) on gains made by foreign institutions (Read our post) after an Advance Ruling by the tax department that capital gains made by such investors, regardless of the tax treaty with Mauritius, is subject to MAT.

MAT is applied so that people who use loopholes to avoid taxes will still pay at least a certain minimum tax amount. It’s only for companies though.

Till now, companies didn’t include non-Indian companies (those who don’t have a base in India). But some ruling established that an FII –  a foreign based institution that invests in Indian stocks – is taxable in India, even on capital gains on shares. Such gains are otherwise untaxable because the Mauritius/Singapore treaties don’t allow them to be taxed in India, but the MAT concept is that if you don’t […]

By |April 22nd, 2015|Categories: Commentary, FII|5 Comments

Who Bought Those SunPharma Shares?

After that insane 20,000 cr. volume in Sun Pharma yesterday as Daiichi sold a whopping Rs. 20,000 cr.  worth shares, who really bought them?

Turns out the buyers weren’t named Dilip Shanghvi (the promoter of Sun Pharma). While we don’t know the identity of all other buyers, we do know from NSE’s Bulk Deals reporting that three big investors bought into Daiichi’s selling. Here they are: […]

By |April 22nd, 2015|Categories: Stocks|Tags: |5 Comments

Trade Deficit Widens in March 2015, Total Trade Growth at Lowest Ever!

India’s Trade Deficit widened to $11.8 billion, which is the highest of the last four months (since November). Total imports fell 13% but exports fell over 20% in USD terms.

 

image

And the big help was oil imports which have fallen over 50% as a result of the price drop in crude oil, our largest  import. However, non oil imports seem to have gone up by about 11%. This is not a bad thing, as India’s economy relies largely on imports, and an increase in import growth indicates that there is consumption demand within India.

[…]

By |April 21st, 2015|Categories: General|Tags: , |1 Comment

Macronomics: Three Sectors Showing Signs of Revival in Industial Production Data

Macronomics Header

[…]

By |April 21st, 2015|Categories: Premium|Tags: |0 Comments

Daiichi Loses 20% on Selling Its Stake in Sun Pharma; Larger Questions on Market Liquidity Too

Sun Pharma has fallen 10% to 940 as Daiichi prepares to sell its stake of 214 million shares, on the stock exchanges. Daiichi acquired Ranbaxy at the price of Rs. 737 per share in 2008, and recently, Ranbaxy was merged into Sun Pharma for a ratio of 8 Sun pharma shares to 10 Ranbaxy shares.

This transaction may not involve the exit of Daiichi completely, as they might retain some stake, and they have continuing business with Ranbaxy. But it ends their nearly-seven-year ordeal with the Ranbaxy stock during which the company was subject to many FDA reviews, humiliating and financially hurting import bans from its Indian plants and a solidly profitable company moving to a loss making one.

Currency Hit: Daiichi Still Lost 20%

They paid around Rs. 20,000 cr. to acquire Ranbaxy.

At the time of their acquisition, the Yen was 2.5 to a rupee. The purchase in Yen terms was 500 billion […]

By |April 21st, 2015|Categories: Ranbaxy|Tags: , |9 Comments

Rupee Falls to Nearly 63 to USD as FIIs Sell Volumes Get Serious

The Rupee fell to an exchange rate of 62.91, which is nearly the lowest rupee value in the year after a few odd days in early Jan.

image

This is a secular move across all currencies. In Jan 2015, the dollar went up against all other currencies and that’s why the rupee fell. This time, it’s not so = check out the upward move in the last few days across every single currency, meaning they have appreciated against the rupee:

image 

10 Day Cumulative FII Volumes Are At A Low

Foreign Investors are selling. Both debt and equity, it seems. Instead of looking at daily data, which is very squiggly, we add […]

By |April 20th, 2015|Categories: ChartOfTheDay, ExchangeRates, FII|4 Comments

Premium: When Is A Good Time To Exit A Stock, Fundamentally Speaking?

CapM Premium Header

When is the right time to exit?

There are no good answers to this question, because there is no universal truth. Wait, that was more profound than it was intended to be. Let’s leave the larger philosophy of truth aside, and focus on the specific, earthly, mundane question: When do you get out of a stock?

Let’s qualify our answer.

[…]

By |April 20th, 2015|Categories: Premium|0 Comments

Reliance Mar 2015 Results in Charts: Massive Revenue Drop, High GRMs Give Profit Growth

Reliance Industries has announced kinda sorta okay results. Revenues are down 33% in the quarter to 70,000 cr. but profits are up, because their costs have fallen too (lower crude prices as crude is their largest input)

image

EPS growth has taken a big hit as the stock’s 12 month EPS growth is at 4.7%. At current EPS of 80, the stock trades at a trailing P/E of about 11.5x with the price at about Rs. 926.

image

Debt levels have gone up considerably, with new capex in place for everything (from petrochemicals to refining to even Reliance Jio and Retail)

[…]

By |April 20th, 2015|Categories: Reliance|4 Comments

Optionalysis: When Buying Straddles Fail – TCS Fell 4% But Option Sellers Still Took Home The Moolah

Optionalysis Header

[…]

By |April 18th, 2015|Categories: Premium|Tags: |0 Comments

Is The TCS Bonus a Way To Show Their Severance Payouts? Slowest Headcount Growth in a While, Stock Falls 4% on Falling Revenue Growth

We first thought the TCS results were okay. They made a profit of 5773 cr., they said, which looked okay over the previous year’s number of 5358 cr. (same quarter last year). But here’s the detail:

image

The little * there is: * Figures are excluding One-time Special Employee Reward of Rs. 2,628 crore in Q4.

TCS has paid out Rs. 2628 cr. as a special bonus for the 10th anniversary of its listing. This means a week’s salary for each year served. Which will obviously help the longer term employees (and senior folks) a lot more than others.

Why should a company pay employees a bonus for the 10th anniversary of a listing? If it was symbolic, they should have declared a special dividend, one thinks. And ooh, there is no “special” […]

By |April 17th, 2015|Categories: TCS|5 Comments

FIIs Get Hit by Minimum Alternate Tax Demand of 40,000 Cr. for Thinking Capital Gains Were Tax-Free

Foreign institutional investors must be perplexed. After this government came about and said “No retrospective taxes”, it does the most astounding things ever. The latest in the kit is to hit FIIs with back-taxes.

The history

In 2012, a Mauritius entity called Castleton Investment Limited (CIL), a Mauritius entity, asked an interesting question of the Income Tax Authority for Advance Rulings (AAR, where you can say, Look I’m doing this thing, will you tax it?)

CIL owned shares of Glaxo Smithkline India, since 1993. But it wanted to transfer these shares to a Singaporean group entity. Since it owned shares for 20 years, it should technically have not paid any taxes in India (long term capital gains tax in India is zero). Plus, India has a double taxation treaty with Mauritius.

But the AAR said something weird:

By |April 16th, 2015|Categories: FII, IncomeTax|13 Comments

Portfolio: Adding An Old Pal, And Replacing Two Slowing Stocks With Smart Movers

CapM Premium Header

[…]

By |April 16th, 2015|Categories: Premium|Tags: |0 Comments