Quick recap
Piyush emphasized the importance of understanding current trends when investing in quality companies across different industries, and reviewed Tata Consultancy Services' (TCS) financial results with the team. He also discussed TCS's financial projections and valuation, and reviewed financial results and estimates for various companies, including TCS and SBI. The discussion concluded with Piyush reviewing the financial performance of a bank and discussing financial companies similar to Ireda, focusing on renewable energy financing.
Next steps
All attendees to update the current trend for their companies before the next meeting.
All attendees to analyze and prepare for upcoming company results, particularly for HDFC Bank, Havells, Hindustan Unilever, L&T Technology, and Maruti.
Ajay to continue updating and refining estimates for SBI and IREDA based on new data and results.
All attendees to practice making data-oriented decisions confidently based on company results and trends.
Piyush to update a new episode with additional information tomorrow.
Summary
Understanding Trends for Informed Investment
Piyush discusses the importance of understanding current trends when investing in quality companies across different industries. He emphasizes that analyzing trends helps investors anticipate risks, make informed decisions, and maintain confidence during market fluctuations. Piyush also highlights the value of studying recent financial results, such as those of TCS, to gauge the overall industry performance and make appropriate investment choices.
TCS Financial Results Review
Piyush reviews Tata Consultancy Services' (TCS) financial results with the team. He highlights that TCS is the leading profit-making company in India, outperforming other major companies like Reliance Industries and SBI. The team discusses TCS's quarterly performance, noting a 5.4% revenue growth in Q1 2024 compared to 6.8% in the previous year. Piyush asks the team to evaluate whether TCS's performance is as expected, with most team members agreeing that the results are in line with expectations.
TCS's Financial Performance and Future
Piyush discusses TCS's financial performance, focusing on export earnings and currency fluctuations. He notes that TCS's constant currency growth for the year was 4.2%, lower than the previous year's 6.8%. Despite a drop in growth rate, Piyush mentions that TCS's results are still better than some competitors. He also points out that while sales grew by 5.3%, profits increased by 7.8%, and TCS has declared a dividend. Piyush expresses optimism about the company's future performance and share price.
TCS Financial Projections and Valuation
Piyush discusses TCS's financial projections and valuation with Ajay. They estimate a 6% sales growth for the next year, with a profit margin of 19.1%. The expected EPS is calculated to be around 150, leading to a fair value of 3,992 for TCS shares. Piyush notes that the current share price is at a lifetime high and suggests that long-term growth prospects for TCS are around 13.4%, driven by emerging technologies like AI and cloud computing.
Financial Results and Market Trends
Piyush and Ajay discuss financial results and estimates for various companies, including TCS and SBI. They review growth rates, profit margins, and employee data. Piyush emphasizes the importance of making proper estimates in advance and updating current trends. They also touch on geopolitical factors affecting business growth, particularly in the US market, and the Indian government's efforts to promote technology investments.
SBI Financial Performance Analysis
The discussion focuses on financial performance metrics, particularly for SBI (State Bank of India). Piyush and Ajaykumar analyze various aspects such as advances, deposit growth, sales growth, and profit margins. They note that while advances were favorable, sales and profit were less than estimated. The conversation concludes with an observation that SBI's margin has been declining, moving from 13.9 to 12.7 and then to 12.4 in the most recent quarter.
SBI Financial Performance and Profit Projections
Piyush and Ajay discuss the financial performance of SBI, focusing on margins and profit. Piyush estimates a 12% sales growth and 12% margin for the company, projecting a profit of 58,000 crore, which represents an 8.7% increase. They anticipate that sales growth may be muted but profits will rise, potentially leading to negative sentiment among retail investors. The discussion concludes with a brief mention of SBI's NPA (Non-Performing Assets) decreasing and interest rates increasing.
Bank Financial Results Review
Piyush reviews the financial results of a bank, noting that advances have increased by 28.17% to 76,000 crore, while total income has grown by 36%. The net profit has risen by 31% to 1,699 crore, slightly underperforming compared to advances and sales growth. Piyush also mentions that the Non-Performing Assets (NPA) have decreased to 2.45%, which he considers good news. He concludes that as interest rates decrease, more people are taking loans, leading to growth in advances, profits, and a reduction in NPAs.
Renewable Energy Financing in Financial Companies
Piyush discusses financial companies similar to Ireda, focusing on renewable energy financing. He mentions REC and PFC as key players in the sector, noting their government support and permission to finance renewable projects. Piyush explains that Ireda receives a premium for prioritizing renewable energy financing. He also advises on estimating company performance based on sales and profit growth, emphasizing the importance of checking quarterly results and creating estimates for owned companies.
Data-Oriented Decision Making and Motivation
Piyush discusses the importance of data-oriented decision-making and staying motivated. He plans to update a new episode tomorrow and expects everyone to review the current trends of their assigned companies. Piyush mentions several companies including HDFC Life, Tata Elxsi, and Maruti, emphasizing the need to analyze their results and trends. The group will meet again next Tuesday to check results and discuss major costs. Piyush encourages everyone to work confidently and move forward
