[04:20:26 PM] => Welcome to the live chat session, Mr Nirjhar Gupta will be joining us very shortly
[04:25:26 PM] => DISCLAIMER
[04:26:07 PM] => Mr. Nirjhar Gupta is the Head Research of Prabhudas Liladhar Pvt Ltd. At the time of this conversation / chat, Mr. Gupta may or may not have positions in the stocks mentioned below , although holdings may change at any time.
[04:26:58 PM] => The views expressed by Mr. Nirjhar Gupta is based upon information that he considers reliable, but does not represent that it is accurate or complete, and it should not be relied upon as such. Mr. Gupta, his company and its affiliates, officers, directors, partners, and employees may, from time to time, have long or short positions in, buy or sell and deal as principal in the securities, or derivatives thereof, of companies mentioned herein and may take positions inconsistent with the views expressed. None of the information contained herein constitutes, or is intended to constitute a recommendation of any particular security or trading strategy or a determination that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. You should consult with and rely upon your own advisors whether and how to use such information in making any investment decision.
[04:27:15 PM] => Lastly the views expressed by Mr. Gupta have no bearing whatsoever with that of IRIS Ltd. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website www.myiris.com.

[04:32:28 PM] => Welcome to the chat session Mr Gupta...let's begin

[04:32:56 PM] => Vaidya stock: How will be the market in the next 3 to 6 months and should be the strategy of retail investor?
[04:33:43 PM] => NG: To the extent of one�s equity exposure the market in the next 3-6 months will remain volatile. One�s strategy should be to be with Index based investing or with specific stocks where one could see growth.

[04:35:22 PM] => Pawang: what is the future of J&K Bank. Is it worth buying now? Can u recommend any other bank which can be a potential takeover candidate?
[04:36:26 PM] => NG: No comments on J&K bank. UTI bank, Oriental bank of Commerce are good takeover targets

[04:37:43 PM] => Neha: Which sectors look promising for the current year, which will give atleast returns with safety?
[04:39:08 PM] => NG: I would suggest investing on a stock specific basis rather than sector specific since the economy is still in a sluggish mode and thus strong sectoral performance is unlikely

[04:39:52 PM] => Cherry: what's your view on first quarter financials of tech companies? What growth rate you expect on an average the industry will grow this year?
[04:40:14 PM] => NG: The first quarter FY2002 should see a slowing down of the growth rates. One would expect three main trends
[04:41:30 PM] => a) A Shift to offshore based business, b) Slowing billing rates with some dips possible, c) Lower growth in per employee costs.
[04:41:54 PM] => The industry as a whole has many small companies that were doing body shopping. This segment of Indian exports will take the maximum hit thus the overall growth should be 30-35% but larger and better companies should see 40% growth or more.

[04:42:15 PM] => Jitendra: Is the software sector ever going to see the light of day... Has the sunset on this sector ... Which is the rising sun of the year 2003
[04:42:37 PM] => NG: The software sector remains one of India�s most competitive sectors and thus inevitably the market will value it. However, within this space one would have winners and losers thus one would be advised to stick with strong management even if apparent valuations are high and not go for so called cheap IT stocks.
[04:43:12 PM] => Nandu: Is there anything left to strategies?
[04:43:41 PM] => NG: The markets being more volatile implies that one has to stick to consistency in strategies. One should be clear about one�s post tax return targets, liquidity requirements and one�s ability to take risks and then stick to a disciplined approach.

[04:46:37 PM] => Kpavithra: why is the stock market going through such a bad phase?
[04:47:04 PM] => NG: The stock markets are a function of fundamentals, liquidity and sentiment. Unfortunately the scam and the subsequent investigations have ruined sentiment. The banking sector�s liquidity does not directly flow into the Indian market and thus markets are gasping for breath. The ban on badla has also sucked liquidity from the system thus the indices are at a low.

[04:48:43 PM] => Nilesh Shah: The mechanics of the stockmarket are largely concentrated in around just a handful of stocks apart from the Sensex Stocks. There are so many companies which are doing well and have grown compounded 30% y-o-y basis since inception. Does or does not the market recognize such stocks or everything in this market has to be operator driven? Is honesty no longer a virtue?
[04:49:48 PM] => NG: I would love to know the names of companies that are growing 30% compounded and the market is not looking at them. However, typically a stock market would need liquidity and a distributed shareholding pattern to create larger interest rather than fundamentals alone. However, if the performance is sustained inevitably someone who is large would notice and the stock valuations would get discovered. I would recommend one be patient if one is confident of fundamentals.

[04:50:16 PM] => Sada: What is the terminal valuation of tech companies
[04:51:05 PM] => NG: The terminal value is dependent on the ability to grow at perpetuity adjusted for the cost of capital. Most large US IT service companies like EDS have grown at 10-15% compounded average. In the longer run, IT service companies will growth slightly ahead of general economic growth as IT remains an important tool to increase productivity. Companies that can increase their own productivity within this universe will continue to enjoy above average multiples.

[04:51:32 PM] => Agarwalvikas: What is the future of technology shares
[04:51:58 PM] => NG: Answered earlier.

[04:52:48 PM] => Sngayen: Is there any chances to appreciate the debt instruments in a span of two to three month hence as there is rumour of further slashing interest rate
[04:54:29 PM] => NG: One can buy into a debt Mutual Fund that is fully invested and sell it after the expected downward movement in interest rates. However, transaction costs will affect your net returns although NAV should reflect the change in interest rates.

[04:55:57 PM] => Rajshrie: what is rolling settlement?
[04:57:40 PM] => NG: When stocks purchased on a day have to be paid for after a fixed period say 5 days and stocks sold have to be delivered to one�s broker also after a fixed period then it is termed a rolling settlement. In this case one has to settle for each day and cannot take advantage of weekly, fortnightly settlements without taking delivery.

[04:58:50 PM] => Rakesh hindustani: why are mutual fund so poor in india?
[04:59:42 PM] => NG: Mutual fund history in India is just a few years. Typically, equity investments outperform other forms of investment over two or more economic cycles. In India we have yet not waited long enough to say MFs have failed. Also, if one looks at Sensex movements from 1992 to now we are at almost similar levels thus it has been a difficult period for MFs.

[05:02:10 PM] => Ayan: what is the outlook for Tata Tea and Tisco
[05:02:48 PM] => NG: Positive for both. We expect better tea prices to help drive Tata Tea. Tisco should do better as its Cold Rolling Mill contributes despite lower steel prices. Also Tisco after a very long time has no large capex plans and will generate free cash flow, always a positive for stocks.

[05:05:26 PM] => Ashit koti: Should Retail Investor participate in Derivatives or stick to Cash segment? What is the trend in US and other developed countries?
[05:06:28 PM] => NG: One should trade in Index futures as they would be relatively liquid. Else, it will be better for derivatives themselves to have reasonable liquidity before one actively trades with them.

[05:07:18 PM] => Pahadiya: What do you think the status of technology stocks at this point of time? are they worth investing for 6-12 months. Time frame, specially Visualsoft at this level?
[05:08:44 PM] => NG: I would invest selectively in IT with good managements. Visualsoft is a good technology company but being exposed to products is facing slowing sales and thus is more dependent on a recovery in US technology spending.

[05:09:59 PM] => Ashit Koti: Should RI should look at discounted MF's Units in Equity Scheme or make fresh investments in MFs Equity Schemes
[05:10:56 PM] => NG: Investment should be made in an existing fund if one likes the current portfolio. A fresh portfolio has that much more uncertainty of the stocks may not matching your own criteria or expectations. I would thus prefer existing funds.

[05:14:03 PM] => Gita Parikh: Do you expect a recovery in the markets & is it the time right to invest in equities
[05:14:35 PM] => NG: Yes, it would be wise to invest in equities as after a general slowdown the markets should improve led by lower interest rates and improving fundamentals. I would recommend Index funds as one would gain irrespective of which stock moves up. Sectoral trends are less strong presently and thus Index investing will be a safer route.

[05:15:19 PM] => Ashit koti: Should I invest in the sunrise industry like Biotech or IT-enabled Sector.
[05:15:53 PM] => NG: Yes, the sectoral opportunity is good but one has to careful while selecting the stocks.

[05:16:13 PM] => Mona goyal: What is your view on the higher provisioning done by most of the private as well as public sector banks
[05:16:47 PM] => NG: My view is that higher provisioning was needed as an industrial slowdown has led to defaults from Industry that take some time to get reflected. Also VRS provisioning has been significant for some banks. Provisioning is a prudent policy and avoids shocks that can be crippling to a nation if the banking sector faces problems.

[05:18:44 PM] => Sanjay: What is the market level you expect after 2nd July ?
[05:19:52 PM] => NG: Market will enter this phase for the first time and thus outlook is uncertain. However, despite higher volatility I would expect gradual improvement over the coming months.

[05:21:13 PM] => Ami: what is the prospect of pharma companies?
[05:23:20 PM] => NG: Indian pharmaceutical companies are doing very well. This has been led by research results being sold for further development by global companies, generic exports and ability to reengineer drugs and market it aggressively in the domestic market. The outlook remains very positive however, one should know what are the markets specific expectations are and thus invest or divest based on the companies ability to meet those expectations. One should not invest and forget as valuations are relatively high

[05:25:41 PM] => Sanjay: What do you suggest to people whose tech mutual funds are lying at Rs 3 to4 . Should he sell hold average?
[05:26:31 PM] => NG: Any investment should not be judged by absolute price but by potential to appreciate. If you like the companies that the Mutual Fund has invested in then stick to it else exit. The decision has nothing to do with its current NAV.

[05:28:09 PM] => Sanjay: could you tell me how do you find VSNL, ITI ltd, Ranbaxy at these levels ?
[05:28:50 PM] => NG: VSNL is doing well in volumes growth currently although the net rates it gets from international traffic are headed down. The valuation today reflects more what one expects the strategic investor to pay for a stake and then make an open offer at the same price. Thus the stock being dependent on this factor primarily is a high risk bet. No views on ITI. Ranbaxy remains well positioned to gain from higher generic sales and results of its research efforts and offers good value having corrected from its price a few months back.

[05:30:57 PM] => Myiris: Sorry friends, due to time constraints Mr Gupta will not be able to answer any more new questions

[05:40:08 PM] => JF: Cummins India has reported a good performance during difficult times for the Capital Goods Industry.. It also has excellent management. Your thoughts ?
[05:40:37 PM] => NG: Cummins export orders have picked up recently, however higher diesel prices are affecting sales for new engines and spares domestically. It is well poised for the next few quarters but unless old prices retract and allow diesel prices to fall or competing fuels should become more expensive, the longer term outlook remains neutral

[05:41:21 PM] => Sachin dot: Sir, should retail investors give more importance to fundamental analysis or to technical analysis. What do you feel
[05:41:50 PM] => NG: Depends on your time horizon. Fundamentals take time to get reflected in valuations, while technicals are more successful in predicting short-term movements. A judicious mix with a consistent strategy should give you best results.
[05:43:03 PM] => R Panikar: Do you see recovery in industrial output and particularly in the automobile sector?
[05:43:20 PM] => NG: Low investment activity is worrying. Industrial output is increased if past investments lead to growth or a very strong growth in consumption. Since both factors are slow I expect IIP numbers to continue to show a weak trend
[05:44:01 PM] => Automobiles in particular are facing competitive pressures thus margins are under pressure for most segments. The first two months data is certainly not encouraging for topline as well.

[05:44:37 PM] => Ashu: Market today gained 51 points despite having Rs 293 crore outstanding do you feel something is wrong with the market
[05:45:08 PM] => NG: The market in this case the Sensex is a net reflector of net buying in Sensex stocks. It is likely that buying outstripped selling in Sensex stocks thus allowing the market to rally.

[05:45:37 PM] => Sarma: What is the outlook for Dr.Reddy Labs and HDFC Bank?
[05:46:05 PM] => NG: DRL has repeatedly announced excellent positive news. Its research molecule was licensed at very high valuations and now news talks of older molecule moving to the next clinical stage. Clearly research strengths have shown through. The outlook is positive but valuations are demanding thus keep a close watch on results and news lest one is caught napping.
[05:46:24 PM] => I haven�t closely tracked HDFC bank.

[05:48:53 PM] => Bhompu: Should one enter the equity market now or wait for some more time?
[05:49:20 PM] => NG: One should start investing in Index if one is unsure of stocks and sectors. Markets are likely to remain volatile but the trend would be up.

[05:52:46 PM] => Nilesh Shah: Thank you for your reply. Heritage Foods is one such company that has grown more than 40% compounded y-o-y basis. Please advise on my remaining invested in the same
[05:53:02 PM] => NG: I have no specific research on Heritage Foods

[05:53:25 PM] => Shekhar: Where the markets are heading with no liquidity provision after removal of Badla
[05:53:51 PM] => NG: The fact that liquidity will be reduced makes the outlook in the immediate period uncertain but relative valuations are low thus an improvement is inevitable if one is patient.

[05:55:04 PM] => Myiris : That's all for the day friends, Thank you very much Mr. Gupta for a very informative chat session and sharing your views with us

[05:56:06 PM] => NG: Thank you all the participants for the chat and to myiris.com for conducting the chat session

[05:57:42 PM] => Myiris: Thank you all the participants for your response and participation, do join us for the next chat session on 2 July, 2001 with Mr Ved Prakash Chaturvedi - CEO - Cholamandalam Cazenova Mutual Fund

[05:58:28 PM] => Thank you all and Bye for now