Reliance Capital - A play on Financial services

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Topic: Reliance Capital - A play on Financial services

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CHINKI
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Joined: 07/Feb/2007
Location: India
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Posts: 2827

Posted: 12/Sep/2007 at 4:16pm

Originally posted by smartcat

So you all get fed nicely at home? All you have to do is sit in an armchair and eat? This is too good to be true.

Pehla shaadi karlo. Baad me patha chalega mufth me us samay kya milta hai

aur pehle kya miltha tha???

TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO

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basant
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Joined: 01/Jan/2006
Location: India
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Posts: 18403

Posted: 12/Sep/2007 at 4:47pm

Originally posted by smartcat

andar ki baat yeh hain ke.. I am envious of your freedom actually

I knew this had to be a trap.

Morgan murga bana raha hai

hmm true. Doesn't Morgan Stanley have a SELL on Pantaloon? Or is it some other suit boot waley FII?

What is the easiest way to calculate CAGR? I use this 'formula'-

(1/Number of years)

(Higher Value)

[ ----------------- - 1] x 100

(Lower Value)

Is there a quicker way to calculate CAGR?

Yes, that is the formula but it could take 5 years to get the answer through that. use the excel sheet for a quicker way through; I use the financial calculator.

'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

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Mohan
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Joined: 09/Feb/2007
Location: United States
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Posts: 1855

Posted: 12/Sep/2007 at 12:14pm

Originally posted by basant

This comes to a CAGR of ONLY 25%. Morgan murga bana raha hai

Basantji,
It would be an interesting exercise to run the CAGR of individual stocks in EquityDesk XI and see what price targets we get.

Be fearful when others are greedy and be greedy when others are fearful.

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smartcat
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Joined: 29/Mar/2007
Location: India
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Posts: 4243

Posted: 13/Sep/2007 at 3:41pm

Reliance Cap is one of those stocks which make you say "I wish I had bought more when the market was down". It is up 40% in the past 2 weeks.

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kulman
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Joined: 02/Sep/2006
Location: India
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Posts: 9319

Posted: 13/Sep/2007 at 3:58pm

Does it, at this level, qualify for Mohnish Pabrai's concept of "Heads I win, Tails I don't lose much!" ???

Life can only be understood backwards—but it must be lived forwards

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smartcat
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Joined: 29/Mar/2007
Location: India
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Posts: 4243

Posted: 13/Sep/2007 at 4:04pm

At this level? I don't know. But investors seem to be taking the quickgun 'Murugan Stanley' report very seriously.

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deveshkayal
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Joined: 04/Sep/2006
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Posts: 3903

Posted: 16/Sep/2007 at 6:54pm

A look at the report says much more upside from their target price of 1530.

Consumer finance business is not included in the Target price. MS project a loan book portfolio of Rs.200 bn by FY09. At 1.3% ROA, this could command a valuation of 1.5-2x BV on our estimates. At 1.9 BV, this would add Rs.120/share to our target price.

Management is targetiing new business premiums of Rs.45 bn by FY09, that would imply a valuation of US $5.7 bn or Rs.930/share. Currently, they have valued it at Rs.697.

They are valuimg AMC @ 6.2% of AUM. Considering Rel AMC is the leader in this space, it warrants 7% of AUM.

Unlisted Investments are not included in the target price. Considering many of its investments will go public in FY09, little upside from the same is seen. Listed Investments are valued at current market price. It will go up with time.

PE of 15x FY09 for Brokerage business compared to 30s of its peers.

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

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deveshkayal
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Joined: 04/Sep/2006
Online Status: Offline
Posts: 3903

Posted: 18/Sep/2007 at 10:55pm

To the surprise of everyone, Rel Cap has delivered 50% returns in 3 and half months since we started the thread...Many brokerage MOST, Sharekhan,Morgan Stanley and Prabhudas came out only after we started discussion on TED...

If i am not wrong, Rel Cap has outperformed most(or every) stock discussed on TED

Having said that the stock can go down to 1200...Who knows !!!!!

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

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