Jitendra Kumar Gupta's blog

T he growth of the capital goods or engineering sector is closely linked with the economic growth and capital expenditure in various industries. Due to this, Indian engineering companies have remained in the limelight in recent years, on the back of strong economic growth. Huge expenditure undertaken by the government and the private sector helped many of these companies to benefit immensely. Capital goods could prove to be a promising space over the next several years if economic growth remains robust. Here are some indicators investors could watch for before investing in such companies. BUSINESS MODEL An engineering company could be a pure product company or supplying equipments needed by user industry. But, many Indian companies also provide complete solution, called engineering-procurement-construction (EPC). In EPC, companies not only supply equipments but also procure other components required for a project and construct or execute the project. Typically, a pure product comp...

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Harvesting profits Jitendra Kumar Gupta / Mumbai February 8, 2010, 0:36 IST The demand-supply imbalance in food articles provides an opportunity to invest in companies operating in the agriculture value chain. There is a saying that if people in China and India put together start consuming a particular commodity, it could fast lead to an imbalance situation. This is not impossible given that the two countries account for almost 40 per cent of the world population wherein their per capita consumption is lower than the world average leave alone that of the developed world. Positively, the situation is not as daunting in the near-term. Investment gurus believe that though India and China are among the fastest growing economies, they are still small to make any major impact on the world’s consumption of food and agriculture output in the near-to-medium term. But, they believe that the impact will definitely be seen in the long run as the supply of food articles remains limited whereas dem...

One reason why most countries, after the economic downturn last year, announced huge stimulus packages for infrastructure projects was because this would directly increase employment, boost demand and lift the sagging economies. According to data from the World Bank, every 1 per cent increase in infrastructure assets adds another 1 per cent to the gross domestic product (GDP) growth. OPPORTUNITIES In India's context, the opportunities are huge. Its poor infrastructure remains a major concern for its required economic growth. However, this is also an investment opportunity, given that if more money is ploughed into this sector, many companies will benefit immensely. This will ultimately translate into more value for shareholders in the long run. Opportunities Sectors Xth Plan ($/bn) XIth Plan ($/bn) Sectoral Share (%) % Chan...

If one had invested Rs 1,000 in sugar companies in the year 2003, it could have become Rs 25,000-35,000 by 2006. During this period, Balrampur Chini witnessed its share prices moving up from a mere Rs 11 to Rs 197; Dhampur Sugar went from Rs 10 to Rs 257. Over the past 50 years, India's consumption of sugar has grown 3.5 per cent annually. However, irrespective of demand, the pattern noted earlier is what generally happens in cyclical industries. At the bottom of the cycle, share prices trade at a very depressed level and at the top, they command significant premium, leading to bumper profits. The sugar cycle may take six to seven years to complete a full round from boom to bust and boom again. Timing is important for investing in such companies. Typically, a boom starts when there is less sugar cane, low sugar production compared to consumption, followed by lower inventory or stock, higher imports and higher sugar prices, leading to bumper profits. But, once prices reach high le...

'The US dollar is in trouble' Legendary investor Jim Rogers is probably the last word when it comes to investments in commodities. Along with George Soros, he co-founded the Quantum Fund in 1970. The fund went on to deliver absolute returns of 4,200 per cent in the decade that followed, while the S&P 500 delivered only 50 per cent during that period. Rogers correctly predicted China's resurgence as an economic superpower way back in the 80’s and that crude oil will touch the $100 mark. His last two books, ‘A Bull in China: Investing Profitably in the World's Greatest Market’ and ‘Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market’ have been well received. Rogers was in Mumbai on the occasion of the launch of the Birla Sun Life Commodity Equities Fund. At the conference and in an interview with Jitendra Kumar Gupta , he shared his outlook on commodities and the world economy. Excerpts: How can one identify the start of an upward or do...

'Markets may not rise or fall in a linear fashion' Jitendra Gupta / Mumbai 25 Jan 10 | 02:51 PM Be the first to comment Link http://www.smartinvestor.in/market/expt-exptspks-18235-exptspksdet.htm Addison Wiggin, executive publisher of US-based Agora Financial, which is into financial forecasting and advising speaks with Jitendra Gupta about the market trend and liquidity among other things. Addison Wiggin is a well-known figure in the financial markets who had warned investors about the impending credit crisis in the US. He has authored books such as “The Demise of the Dollar&" and co-authored books “Financial Reckoning Day Fallout&" and “The New Empire of Debt&". You had recently said that the Indian markets might correct by 8-10 per cent. After the recent decline what is your view on the Indian market? The markets are not expected to go up or down in a linear fashion. The Indian market has been rising consistently for some time but it has a tendenc...