Stock Shastra

ACC Ltd. has been a pioneer and trendsetter in cement and concrete technology in India. Its pan india presence, alongwith a marketshare of 10.83% provides it with economies of scale. Increasing margins and an efficient working capital management present a rosy picture. Also, ACC has a unique track record of innovative research and product development making it one of the most preferred brands of cement in India.

However, the oversupply situation in the cement sector may result into falling demands for the company. This alongwith rising input costs will negatively affect the company’s margins.

Considering this, should you invest in the company?

There’s an age old adage saying ‘Bet on the Jockey, not on the horse’. Modified to the investing world, this adage would read as – ‘Analyse the company’s management before investing in it!’ Of course, one needs to be sure of the business prospects, but it is equally important if not more to be sure that your hard earned money is in the hands of trustworthy people who will grow your money and not destroy it.

Our new tool ‘Management X-RAY’ helps you do exactly this and puts the people who wear suits and travel in chauffeur driven cars through a stringent test.

So, let’s find out how you can put the ‘Management X-Ray to best use?

The volatility in steel prices is well known. And this volatility leads to highly volatile margins of steel companies. However, Tata Steel has a distinctive edge in this respect. The captive sourcing of its raw material protects it from this volatility and this coupled with its high efficiency has helped it enjoy higher margins.

However, the high debt due to the Corus acquisition, high dependence on European operations and fluctuating macro-economic factors are reasons of high concerns for the company. Considering this, should you invest in this company?

Many of us diligently check the financial performance of a company we wish to invest in – an important step in selecting a stock.

But wait! Are you sure you are getting the correct picture of the company’s financial performance? It is quite possible that you might be overlooking a very important part of a company’s financials.

So, what is this part we are talking about? And how do you know whether the financial performance of a company is ACTUALLY good?

Many of you may be aware that we are initiating a new series of Company Shastra, which will cover safe stocks having favorable future growth opportunities. Our first pick for this series is Biocon- the leader in the biotech sector.

Biocon is an integrated healthcare company manufacturing biopharmaceuticals and providing research services. A highly innovative company, it has strong R&D capabilities which have resulted in creating potential blockbuster products in its research pipeline. While its contract research services are picking up pace, it is also well placed to benefit from the Biosimilar opportunity in key regulated markets with products going off-patent in 2014-2018E. However, higher R&D costs (as the product pipeline advances) are expected to act as a margin dampener for the next few years. Considering this, should you invest in Biocon Ltd.?

However, higher R&D costs (as the product pipeline advances) are expected to act as a margin dampener for the next few years. Considering this, should you invest in Biocon Ltd.?