Bought CRISIL at Rs.6000
Debt free business
Low capital requirements
High entry barrier - only two big players in this space CRISIL and ICRA. CRISIL is a better brand, higher credibility
Their KPO business is very interesting - Irevna, Pipal Research. I see a lot of potential for outsourced analytics and research. A company like CRISIL has the processes in place to do this well.
More rating revenue will come to them due to Basel norms. Rating revenue is a function of growth i corporate loans.
Can I get a 15% return per annum on this, with zero risk. I think I should at this price.
Tuesday, December 28, 2010
Thursday, September 16, 2010
Economists in engineering
Interesting stuff..
http://www.theregister.co.uk/2010/09/14/preston_mcafee/
http://www.theregister.co.uk/2010/09/14/preston_mcafee/
Saturday, July 17, 2010
behavioral investing
Liked this book on the subject. Its the application of psychology to investing
http://www.amazon.com/Little-Book-Behavioral-Investing-Profits/dp/0470686022
http://www.amazon.com/Little-Book-Behavioral-Investing-Profits/dp/0470686022
My wish list
These are the companies that I really like and would want to invest in at the right price
1. 3M India - big fan of 3M's innovation model.
2. CRISIL - great business. Doesnt need capital, no competition (ICRA is way behind!!!) and companies need ratings. Stock is expensive.
3. Indian Hotels - good brand. Intangible brand value and the business has high entry barriers. The financials dont look very great though !!!!
4. Tata Beverages - I like the health beverages business. Lot of potential to build brands there. Downside is that big companies like Pepsi and CocaCola, who have a lot of money, are also eyeing that.
1. 3M India - big fan of 3M's innovation model.
2. CRISIL - great business. Doesnt need capital, no competition (ICRA is way behind!!!) and companies need ratings. Stock is expensive.
3. Indian Hotels - good brand. Intangible brand value and the business has high entry barriers. The financials dont look very great though !!!!
4. Tata Beverages - I like the health beverages business. Lot of potential to build brands there. Downside is that big companies like Pepsi and CocaCola, who have a lot of money, are also eyeing that.
Bharti Airtel investment
I invested in Bharti Airtel about two weeks ago at Rs. 265/-
Rationale:
1. Valuation - at 12 times current earnings the risk reward ratio is favourable.
Risks:
1. Have they paid too much for spectrum?
Difficult to say. People thought the same about mobile licences when they were announced first.
I would imagine people will lap up broadband.
2. Airtel will borrow a lot of money.
Yes, a concern. I hate companies taking debt!!!
Airtel should get debt at a good interest rate though given how awed our banks and institutions are by big names.
Returns
1. Can it grow profits at 15% per annum.
Some things that need to be in place
a) Average revenue per user needs to stabilize - it will once the industry consolidates.
b) Investments made in broadband need to yield return - means consumers have to adopt broadband. This is not a demand issue but a pricing issue. Existing players who cover the fixed line, mobile and DTH space will crack this market. The technology is there, products are good.
Airtel is very smart with packaging so I expect they will be among the first to make money in this space.
c) its ventures overseas need to make money - remains to be seen. They have never done a merger before.
Rationale:
1. Valuation - at 12 times current earnings the risk reward ratio is favourable.
Risks:
1. Have they paid too much for spectrum?
Difficult to say. People thought the same about mobile licences when they were announced first.
I would imagine people will lap up broadband.
2. Airtel will borrow a lot of money.
Yes, a concern. I hate companies taking debt!!!
Airtel should get debt at a good interest rate though given how awed our banks and institutions are by big names.
Returns
1. Can it grow profits at 15% per annum.
Some things that need to be in place
a) Average revenue per user needs to stabilize - it will once the industry consolidates.
b) Investments made in broadband need to yield return - means consumers have to adopt broadband. This is not a demand issue but a pricing issue. Existing players who cover the fixed line, mobile and DTH space will crack this market. The technology is there, products are good.
Airtel is very smart with packaging so I expect they will be among the first to make money in this space.
c) its ventures overseas need to make money - remains to be seen. They have never done a merger before.
Subscribe to:
Posts (Atom)