Do it yourself

In past few days there has been heightened activity in stocks of the companies which are perceived to be beneficiaries of the "war" (trade or military) with China. My fellow small investors are lapping stocks making defence equipments, telecom equipments and missiles, as if there is going to be an attack on China tonight. The stock prices of many such stocks have risen by 10-25% this week. The stock price of a public sector power equipment manufacturer gained on the assumption that the government might ban Chinese competitors and the order book of this company may swell. Some pharma, chemical and agro chemical companies also witnessed action based on assumption of trade restrictions with China. The businesses dependent on imports from China witnessed selling pressure, while the businesses considered to be the alternative to the Chinese impost saw extra buying interest. I would like to request my fellow investors to exercise some extra caution and restraint while ju...

The public sector capital goods bellwether company Bharat Heavy Electricals Limited (BHEL), reported its earnings for the fourth quarter and financial year ended on 31 March 2020. The numbers were poor and quite off the mark from what the equity research analysts had forecasted. For the quarter 4QFY20, the company reported total revenue of Rs50.5bn (vs Rs103.7 yoy); and for the full year FY20 the company reported revenue of Rs210.9bn (vs Rs304.41bn yoy). The revenue for the quarter was down ~51% yoy; and for the full year it was down ~29% yoy. The research updates on BHEL by various brokerages raised three points in mind, which I find are critical for investors (especially the smaller one like me) to assimilate. I would like to share these points with the readers as follows: (a)    In the notes to account, BHEL reported that in 9 days of lockdown (23rd March to 31 March) Rs40bn of revenue was lost. This is appx 39% of the 4QFY19 revenue and 13% of the full year FY19 rev...