Jesus replied: “ ‘Love the Lord your God with all your heart and with all your soul and with all your mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’ All the Law and the Prophets hang on these two commandments.” Matthew 22:37-40

25 Mar 2016


Two sectors that Angel Broking is positive on The government's focus on the roads sector is likely to pay off rich dividends for companies that are into road constructions, says Mayuresh Joshi of Angel Broking.

Rupee is likely to sideways to negative: Angel Broking According to Angel Broking, Rupee is likely to trade sideways to negative after two regional Fed presidents said that they would support the Federal Reserve raising interest rates at its next meeting which will keep the DX positive. 
Does Billionaire MA Yusuffali’s Stock Pick South Indian Bank Signify Revival For Banking Sector Stocks?
MA Yusuffali made billions from backing the right businesses at the right time. His latest stock pick South Indian Bank suggests that the time is ripe to buy banking stocks
MA Yusuffali is a savvy businessman-cum-investor from Kerala who is settled in Abu Dabhi. He owns the Lulu Hypermarket chain. He is a recent (2013) entrant in the Forbes Billionaire’s list with a net worth of $1.6 Billion (Rs. 8,400 crore)
M. A. Yusuffali yesterday bought a chunk of 3 crore shares (2.23%) of South Indian Bank at Rs. 21 each, for a total consideration of Rs. 63 crore.
All indications at the ground level suggest that the time is opportune to start buying banking stocks. For the first time since several quarters, inflation is showing signs of cooling down. The CAD has also come down marginally and the rupee has remained stable. All this suggests that the RBI might start the slow but inevitable process of lowering interest rates.
When the market gets a whiff that interest rates are being reduced, banking & NBFC stocks will just fly. Before you know it, they will be up 20-40%. So, you have to position yourself in these stocks in advance.
South Indian Bank is one of the top rated banks. It has a strong regional presence and good technology network. It has a strong deposit franchise, robust loan growth and improving asset quality. It is also a possible acquisition for a big bank wanting to expand. It was first spotted by Raamdeo Agrawal and he made quite a packet from it in the heydays when banking stocks were in favour. Even Rajan Shah of Angel Broking made aquick buck from South Indian Bank.
Then, when South Indian Bank got subdued due to the high interest regime,Renuka Ramnath of Multiples Equity got interested. She bought a chunk of 20 million shares at a price of Rs. 22 per share via a QIP issue in September 2012.
Incidentally, MA Yusuffali has a number of other banking stocks in his portfolio such as Federal Bank, Dhanlaxmi Bank and Catholic Syrian Bank. He holds a massive chunk of 315.77 lakh shares of Federal Bank (3.69%) worth a whopping Rs. 264 crore. He bought the shares in July 2013 and is its’ single largest shareholder. He has 52.90 lakh shares in Dhanlaxmi Bank (4.88%) worth Rs. 20 crore. He also has a 4.99% stake in the unlisted Catholic Syrian Bank.
If you are looking for banking or NBFC stocks, you have a wide choice. Personally, I am in favour of the dominant blue chip powerhouse stocks because they will be the first ones to surge when the trend changes. You can see that even in a difficult environment, these stocks have shown CAGR earnings of 20-30% & you can imagine what they will do in a benign environment.
HDFC Bank, for instance, is a terrific pick at the moment. It is a blue chip growing at 25% CAGR with stable asset qualityMotilal Oswal has a convincing report on why the time is ripe to grab HDFC Bank. Its’ valuations are at the lowest in 11 years, the report says.
Another dominant player with ambitious expansion plans is IndusInd Bank.Ramesh Sobti of IndusInd went on record to say that the worst was behind them and that things would improve from April 2014. Emkay made it clear that “Massive expansion plans, adequate capital, proven track record and sound management put Indusind Bank in strong position to ramp up its growth when macro turns favourable”.
Yet another option is Bajaj Finance, a top-quality NBFC vying to be a bank. Bajaj Finance’s management has stated that it will end the year with a 25% growth. Daljeet Kohli of IndiaNivesh called its Q3 results “Stellar performance continues with stable asset quality”. The valuations at 1.9x and 1.6x P/ABV for FY14E and FY15E respectively are attractive, he said.
One of the other contenders that you can look at is Repco Home Finance which comes highly recommended by Basant Maheshwari of Basant Top 10fame. Basant Maheshwari has given very convincing reasons why Repco Home Finance is destined to become a multibagger like its illustrious peer Gruh Finance.

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