FREE EDUCATION

*India's future like China's past! India transformed in less than a decade; different from 2013: Global investment banking firm Morgan Stanley report* https://www.google.com/amp/s/m.timesofindia.com/business/india-business/india-transformed-in-less-than-a-decade-different-from-2013-morgan-stanley-report/amp_articleshow/100642315.cms *In a short span of 10 years, India has gained positions in the world order with significant positive consequences for the macro and market outlook.* *India's Decade of Transformation:* *Forex* ◆ 2014- $285 Billion ◆ 2023- $603 Billion *Corporate Debt as % of GDP* ◆ 2015- 65% ◆ 2023- 50% *Foreign Direct Investment:* ◆ 2013- $22 Billion ◆ 2023- $46 Billion *Mutual Fund Investment:* ◆ 2013- $100 Billion ◆ 2023- $500 Billion *Electrified Railways:* ◆ 2013- 4,100 kms ◆ 2023- 28,100 kms *Corporate Tax Rate:* ◆ 2013- 33.9% ◆ 2023- 22% *RBI CPI Inflation:* ◆ 2013- 10% ◆ 2022- 4.7% *Direct Benefit Transfer:* ◆ 2013- $0.89 Billion ◆ 2023- $32 Billion *National Highways:* ◆ 2014- 25,700 kms ◆ 2023- 53,700 kms *Airports* ◆ 2014- 74 ◆ 2023- 148 *Digital Transaction as % of GDP* ◆ 2016- 4.4% ◆ 2023- 76.1% *No. of IITs* ◆ 2014- 16 ◆ 2023- 23 *No. of IIMs* ◆ 2014- 13 ◆ 2023- 20 *No. of IIITs* ◆ 2014- 09 ◆ 2023- 25 *No. of Institutes of National Importance* ◆ 2014- 75 ◆ 2023- 149 *No. of AIIMS:* ◆ 2014 - 7 ◆ 2023 - 25 *No. of Medical Colleges* ◆ 2014 - 385 ◆ 2022 - 693 *Consider that household debt/GDP in India is just 19% vs. 48% for China and that only 2% of Indian households have life insurance. Manufacturing and services PMIs have rallied consistently since the end of Covid restrictions in contrast to the rapid fade seen in China. As well, real estate transaction volumes and construction have broken out to the upside.* *Global investment banking firm Morgan Stanley, which has downgraded China while upgrading India in its list of emerging markets in Asia, is of the opinion that India's future looks to a significant extent like China's past.* *The path taken by India since 2014 reveals that India is likely to get the tag of the third largest economy in 2027 (or FY28) based on actual GDP data as on March 2023, a movement of seven places upwards since 2014 when India was ranked tenth and two years earlier than our previous forecast of 2029.*

Key Events This Week 1. Existing Home Sales data - Tuesday 2. US Services PMI data - Wednesday 3. New Home Sales data - Wednesday 4. Core Durable Goods data - Thursday 5. Initial Jobless Claims - Thursday 6. Fed Chair Powell Speaks - Friday Volatility is officially back.

Money Times Talk - August 19, 2023 Shilp Gravures, leader in electro mechanical engravin, notched 359% higher Q1 EPS of Rs.6.3, which may lead to FY24 EPS of Rs.20+ from Rs.12.7 YoY. Four big HNIs hold 6.86% of its equity. Debt Free dividend paying trades at a P/E of 7.5x and P/B of 0.86x. Add for 30% gains. Nath Bio-Genes, an agritech company, posted an excellent Q1 with sharp growth in sales & profits. Its stock is trading at a PE of 11x as against industry average of 30x. Keep it on your radar. Ruchira Papers posted 87% higher Q1 profit of Rs.21.76 cr. with an EPS of Rs.7.29, which may lead to FY24 EPS of Rs.29. Its share trades at a P/E of 4.45x cum 50% dividend and the promoters are likely to raise their stake. Buy as paper price are set to rise. Universal Starch-Chem into starch products catering to food, pharma, textile, paper etc industies posted 158% higher Q1FY24 EPS of Rs.10.21 cr. Its share trades at a P/E of 7.2x. Keep a watch.

SUMMARY OF FOMC MINUTES ⚠️ 1. Vote for raising by 25bps was unanimous 2. The Fed will remain data dependent ultimately at future meeting, remaining non-committal about future hikes/pauses 3. MOST Fed members see significant upside risk to inflation that may warrant further rate hikes 4. SOME felt there could be significant downside risk to inflation forecast and that the Fed essentially may have already overdone it, seeing significant downside risk to the economy and upside risk to unemployment 4. No recession forecasted by the Fed anymore but slower growth through both 2024 and 2025 5. The staff judged that asset valuation pressures remained notable. In particular, measures of valuations in both residential and commercial property markets remained high relative to fundamentals. • Sounds like they basically called out a real estate bubble 6. Some signs of credit quality deterioration in commercial real estate (CRE) but delinquencies remain at low levels. The change in work patterns (work from home) that have happened post-pandemic may be permanent. If this is the case then this may lead to further troubles ahead for CRE and deterioration in credit quality. 7. Core services ex-housing inflation is yet to show significant progress 8. The Fed have no idea about how long the lags of monetary policy take to fully filter into the economy or to what extent the full effect of monetary policy changes will have 9. By 2025, total PCE price inflation is expected by the Fed to be 2.2 percent, and core inflation expected to be 2.3 percent. 10. Below trend growth and softening of labor market is needed to bring inflation to target of 2% 11. GDP growing at modest pace in 1H23. Consumer spending remains resilient but policy tightening expected to slow this down. 12. When the Fed finally decide to cut interest rates this does not necessarily mean they will stop shrinking their balance sheet (QT) 13. The Fed discussed how the reverse repo had been drained somewhat (around $390 billion) by money market funds pulling funds to invest in the short term Treasuries that Yellen has been issuing to refill the TGA 14. Credit (lending) availability tightened for businesses. The most cited reason in the SLOOS for this was economic uncertainty. 15. Credit conditions in consumer credit markets remained generally accommodative, with credit available for most consumers - TLDR: Inflation too high. Most members think inflation risk is skewed to upside and may need more hikes. Some feel they may have already done enough. They'll remain data dependent. Credit conditions are expected to tighten further. They are very unsure about the lags of monetary policy. Real estate prices are elevated above fundamentals. CRE is getting hit by work from home and tightening credit standards. If this continues there could be deterioration in credit quality. More job losses/labor market cooling needed and slower economic growth to reach inflation target.

Money Times Talk - August 6, 2023 COSCO INDIA is available at a market cap of Rs.100 cr. only. It exports products to over 35 countries and is the exclusive distributor of Adidas, Reebok and Stiga in India. Technically, its share is poised for a big break out. Add for decent gain. ABM Knowledgeware, pioneer in smart city solutions, boasts of high reserves, big order book, promoter holding of 67% and available at throwaway valuation. Its share trades at a P/E of 15x. Its Q1FY24 results are on 11th August. Keep it on your radar. RTS Power has huge clientele which includes defence, railways, state electricity boards, telecom players and private electricity producers. It is a debt free company available at P/BV of 0.84x. The promoters hold 74% of the equity capital. Add for multi-bagger returns.

Morgan Stanley Upgrades India to Overweight "India at the start of a long wave boom" Morgan Stanley Downgrades China to Equalweight "Take Profits on China"

*Money Times Talk - July 30, 2023 * *ABC India* is a logistics provider available at throwaway valuations, its P/E is just 13x, MCap /sales is 0.3x. Its Q4FY23 EPS was Rs.3.62. Its promoter holds 65% and Adani group also holds stake in the company. Buy for hefty gains. *Hindustan Tin* is available at very low valuations. Its P/E is just 7x and P/BV is 0.60x. It is also plans to set up an additional plant. It is technically and fundamentally very strong. Add. *Solitaire Machine Tools* has an exclusive licensee of Cincinnati Milacron of USA and an arrangement with Bocca and Malandrone Sunebo SPA Italy. It is expanding capacities by setting up a new plant at Halol. A big positive. Add for 50% gains. TARC a group company of Anantraj likely to post excellent results in FY24, due to big boom in realty sector. Keep it on your radar

Money Times Talk - July 23, 2023 Jaysynth Dyestuff cum 25% dividend is going cheap. It trades at a P/E of 11x and P/B of 0.68x and notched FY23 EPS of Rs.6.50. It is enhancing capacities by internal accruals. Keep it on your radar. Dhanalaxmi Roto trades at a P/E of 5.6x and P/B of 0.98x. It RoE, RoCE and RoA are 28.86%, 39.71% and 16.76%. Its NP grew 81% fetching an FY23 EPS of Rs.17. Add for hefty gains. XT Global has commenced a new development center spread over 3 lakh sq. ft. with a seating capacity of 2000 employees in a prime location of Vizag. Keep it on your radar.