Stocks
Small-cap stocks rally despite so-so results
Even though the aggregate sales of small-caps on Moneylife’s database declined, the market valuation of these stocks have shot up by over 65% 
 
Companies classified by Moneylife as small-cap (market-cap between Rs100 crore and Rs500 crore) reported a decline in their revenues for the June 2014 quarter compared to the same period last year. The aggregate sales of the 320 small-cap companies declined by 7% to Rs56,050 crore in the June 2014 quarter from Rs60,301 reported in the June 2013 quarter. Despite this, the aggregate market-cap of the companies has increased by 67% over the year as on 28 August 2014 and valuations too, have increased substantially.
 
Moneylife tracks a database of 1,294 companies, of which 1,222 companies have declared their results for the June 2014 quarter. Of these 1,222 companies, 320 are small-caps. Aggregate revenues of the small-caps form a share of 4% of the total revenues of the 1,222 companies
While the aggregate sales may have fallen, as many as 65% of the small-cap companies have reported an increase in revenues in the June 2014 quarter over the same quarter last year. As many as 57% of the companies reported an increase in operating profit and 54% of reported an increase in net profit over the same period. Though the overall profitability margins fell, 53% of the companies reported a higher operating profit margin in the June 2014 quarter compared to the June 2013 quarter and 154 or 48% of the companies reported an increase in the net profit margins. The aggregate operating profit margin for the small-cap sample fell to 6.43% in the June 2014 quarter from 7.18% in the previous quarter.
 
Valuations as measured by market-cap-to-operating profit has more than doubled to 5.6 times as on 28 August 2014, compared to 2.8 times as on 26 August 2013. As many as 252 or 79% of the companies are quoting a higher valuation compared to a year back. In comparison to other cap-wise segments, mid-caps are quoting an MC/OP of 6.9 times and large-caps are quoting an MC/OP of 8.5 times. Mega-caps command the highest valuation of 12.8 times operating profit. Market-cap to sales of small-caps have risen to 1.43 times, up 80% compared to 0.80 times a year ago.

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COMMENTS

sathya cumaran

2 years ago

sathyacumaran dhandapani
After the advent of new BJP Govt do the govt had made any substantial changes that the economy is recovering and what is reason why the stock market is trading its all time high of nifty being 8100 and sensex crossing 26000 points do these say any healthy sign as an international journalist we feel that market is gearing up with terriost black money and other politicians black money with this 100 days of modi govt there is not substantial development the petrol price as well as diesel price on the rise and the inflation is also on the rise once the diesel rise it would pave way for price rise of all the goods and as such this growth in stock market we feel is not an healthy sign as rightly said by Shri Raghuram Rajan that stock market is heading for another crash when is the big question mark

NSEL scam: EOW to summon Anand Rathi and Motilal Oswal?
According to a report, big brokerages, like Anand Rathi, Motilal Oswal, India Infoline and Geojit Comtrade are under the scanner in the Rs5,600 crore NSEL scam 
 
The Economic Offences Wing (DOW) of Mumbai police is set to call Anand Rathi and Motilal Oswal for interrogation in the Rs5,600 crore National Spot Exchange Ltd (NSEL) scam, says a report from Business Standard
 
Rathi's son and daughter will also be called for interrogation, the report added.
 
According to police, broking houses charged 0.2% as warehousing charges, but never gave investors any warehousing receipts (WRs). "Nobody verified the warehouse receipt or whether goods were actually at the warehouse. Some warehouse receipts are said to be authentic as some genuine producers wanted to finance their working capital till their goods were sold. But as nobody verified the warehouse receipts. More commodity traders started producing warehouse receipts against which they received easy funding. Some may have used this money for financing their business, but the rest is anybody's guess," another report from the newspaper had said.
 
In the Harshad Mehta scam bankers were issuing fake bankers receipts or BRs, representing government securities. But while BRs were accepted on the basis of trust, NSEL created the illusion of a 'trade guarantee fund' which has mysteriously vanished.
 
Accoording to the report, around 200 brokers are said to be involved in the scam. Major brokerages, which are under the scanner are Anand Rathi, Motilal Oswal, India Infoline and Geojit Comtrade, the report said.
 
EOW also suspects that broking houses made wholesale purchases for entire days in the morning; this truncated and segregated the amount into the client accounts. The police has maintained that the properties of those involved in the scam would be frozen, the report added.

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COMMENTS

Amiit Gupta

2 years ago

Nice Gripping by EOW Team..

Moneylife Foundation selected for the 10th MR Pai Award
Moneylife Foundation has been selected for the prestigious M R Pai Award. The Award named so in memory of M R Pai, the man who successfully fought innumerable battles for consumers long before consumer courts were set up in India
 
Moneylife Foundation has been nominated for the 10th MR Pai Award, instituted in memory of the man 'Reader's Digest' once called, 'Champion of the Consumer'. Dr Deepali Pant Joshi, executive director of Reserve Bank of India (RBI) would present the award to Moneylife Foundation on 16th September at 5.30pm at IMC in Mumbai.
 
This award, in the memory of well-known consumer activist Mangalore Ranga (MR) Pai, was instituted in 2004 by Punjab and Maharashtra Co-operative Bank Ltd. The Award is given to a consumer activist or consumer organisation each year by the All India Bank Depositors Association, which Mr Pai founded and headed for decades.
 
Previous recipients of the MR Pai Award include Pushpa Girimaji, Manubhai Shah, Dr AV Huligol, Pradeep S Mehta, Dr Ashish Das, Dr YV Reddy (former governor of RBI), Sunita Narain, Self Employed Women's Association (SEWA) and Shirish Deshpande of the Mumbai Grahak Panchayat.
 
During the years of the controlled economy India, when almost all services where provided by a Government-owned monopoly, the services that could be availed by a consumer were either appalling or even non-existent.
 
It was during this time when the term Consumer Rights was yet to gain popularity, that Mr Pai was able to make a big impact. Services offered by the Indian telephones, nationalised banks and airlines, among others, began to face his ire. He started demanding good services for the customer at every available forum.
 
Mr Pai successfully fought innumerable battles for the consumers with the telephone department, banks, airlines and several institutions, long before consumer courts were set up under the Consumer Protection Act, 1986. Thanks to him, thousands of telephone subscribers, bank depositors and consumers across the country benefitted.
 
He was an honorary secretary of the All-India Bank Depositors' Association, through which he published the book Depositors’ Rights and Customer Service in Banks that provided customers of banks, information required to deal with the various problems faced by them.
 
The Indian edition of Reader's Digest, featured him on the cover of their October 1995 issue under the title “MR Pai - Champion of the Consumer.”

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COMMENTS

sivaraman anant narayan

2 years ago

Congratulations to Moneylife for the Award,well deserved!.

Surjit Banga null

2 years ago

It is a small recognition of the crusade launched by Moneylife to protect unsuspecting consumers and to spread financial literacy. Congratulations to Team moneylife!!!

Suiketu Shah

2 years ago

Congratulations.

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