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Any opinion on the following:

- Motherson Sumi
- Bharat Forge
- Ashok Leyland
- Escorts
- M&M
- Force Motors

Bharat Forge and Force Motors were doing well, but went into a slump, with no sight of significant recovery.

thanks
Srini

Dear Sir

Tata Motors, go or no go? I am having a father of itch in my hand since at least 2 months, what you suggest if I keep a time frame of 2-3 years in mind with an investment ranging anywhere between 1 lac to 4 lac?

Here I am talking about putting a lot of eggs in a single basket.

Not an expert. But, I would ask myself these questions:

• Is the Harrier a runaway hit? No!
• Are Hyundai/Kia/MG Motors coming out with good looking alternatives to make the competition tougher? Yes!
• Are the JLR woes in China over? No!
• Is Brexit a big risk to JLR? Yes!

I had your itch too. But, decided the current up move is most likely a short covering bump rather than a structural change.

Rest your call. :)

Best way to monitor a company is via Google Alerts. Market crash takes down all stocks - it is just that falls in some stocks are steeper. That does not help you decide which stocks to sell when.

I have a simple rule - if a company's reduces dividend payout below 15% threshold, I get out. But before I exit, I do check the annual report to see what rationale the management gives for slashing dividends. Management slashes dividend payout (as a percentage of profits) to conserve cash - and this is "leading indicator" of trouble.

Large billion dollar acquisitions and rising debt levels are other red flags.

PVR is trading at a P/E ratio of 47. That makes it expensive. However, this is a consumer facing business growing its revenues at 25% per year. Markets are willing to pay for such growth. I'm not! :)

Both M&M and Ashok Leyland are trading at very low valuations. Not very sure about long term fundamentals of Escorts & Force Motors. I would buy them only a ultra low prices. Motherson Sumi and Bharat Forge are strong companies, but expensive.

For me, it's a no go. I want to see the debt levels go down before I consider investing.

My nephew aged 16 years is showing keen interest in technical analysis and investing, he has access to zerodha account and has built an fantasy portfolio. He is good in maths and can grasp basics of accounting, company financials... even though its a hobby at this phase, I want him to read some good investment books ideal for his age without overwhelming him, can you all suggest some good books which can I recommend?

And Tata Motors through JLR is rumoured to want to acquire a major taxi company called Addison Lee in the UK. Unless, they are planning to dump Hexa's as taxicabs in the UK, I see no business sense for this acquisition

I would start him off with readings on money management and position sizing before getting into either fundamental or technical analyses. Good traders and investors are math agnostic :) one just needs to have a clear head. Psychological aspects like emotion regulation matter more than having technical and fundamental knowledge. Ofcourse they are necessary for both trading and investing success but the key to success is more psychological.

The TAMO stock looks battered. Based on the technical charts, I would not be too surprised if it touches 150/140 in the coming few weeks. Never catch a falling knife is my motto :)

Whats happening with Motherson Sumi?

The stock doesnt seem to hit rock bottom and is still on a free fall!!

Motherson Sumi has Eicher Motors for company - both are seeing major selling. Unlike Tata Motors, the financials of these two companies are fine. Also, no point in trying to find a reason for fall in price when the overall index is dropping rapidly.

Considering the overall financials of the company coupled with the current price, is it a good time to buy either of these stocks in your opinion, SmartCat?

Whether buying into a new stock or averaging down a stock that is already there in your portfolio, I recommend that you have certain "rules" or filters.

Eg: I would recommend buying marquee stocks like Maruti, Eicher, Motherson Sumi at a PE<20. Right now, all the stocks are 15 to 20% above the PE Ratio filter I recommend. So I'd recommend that you wait till stock price falls a bit or for earnings growth to pick up (If EPS grows, PE Ratio falls).

Tata is mighty pissed off. This came in at 2200 hours last night:

Hi All, wanted to ask if anyone can share numbers on ROI over the lifecycle of a car project - that includes capex and opex? In general I wanted to ask how fast ( in how many years) does a company starts earning profits (not operational profit) on a car project?

Car makers don't publish these numbers, and it is easy to understand why. Most models these days have parts carried over from previous generation models (Eg: engines, chassis).

Your best bet to arrive at some numbers is to do some research on Tata Nano because most data points are available.

- How much was invested by Tata Motors to develop the Nano?
- How much was invested by Tata Motors into the Sanand plant?
- Average ex-factory price of Tata Nano

You need to make some assumptions about raw material costs (eg: 80% for small cars like Nano), depreciation rate of fixed assets in Sanand plant, interest on loans taken for the plant, debt to equity ratio of the project etc.

Basically, a car like Nano would have generated decent returns only at full capacity (20,000 per month) because of low price. Returns on a car model is directly proportional to volumes sold.

Thank, you thats a superb suggestion.
Any ball park figures of any Indian car/ bike from inception to market success, what was time taken for the project to recoup all investment costs ?