Capital Speculation

[capitalspeculation]

Sun TV losing sheen? Sunset time for Maran?

Constant struggles of this once unrivalled satellite TV empire are getting more and more apparent. Dubbed as the Murdoch of South India, Kalanithi Maran couldn’t go wrong when he launched one satellite channel after another catering to different vernacular genre across South India. Of late, there’s been a reversal of fortunes with not just direct competition with deeper pockets from the likes of Zee and Star intensifying but also from the not so direct OTT players like Hotstar, Netflix vying for prime time. Ad revenues have been flat from the last year and this seems like it’s only a precursor to an impending steep fall.

None would forget that Maran’s prowess or acumen had always been overstated as they actually built their empire on the back of their association with DMK in Tamil Nadu through petty tactics like browbeating competition using their cable distribution clout from their family-owned Sumangali Cable. Now that DMK is in a downward spiral without winning an election for over a decade and is rife with the inter-family power struggle that clout is well gone.

Maran is out fending off competition on his own merits and that’s when his hyped-up entrepreneurial talent is getting exposed. Once considered a pioneer, Sun TV is now forced to do follow-ups with copycat shows from other rivals. BAARC ratings show they’ve already lost the battle in GEC, News segments in all languages barring Tamil GEC where their lead is only marginal and may give way anytime. Their beefed-up second GEC Sun Life also doesn’t seem to be helping much as the languish continues unabated.

Even assuming Sun TV makes the transition to OTT through their Sun NXT platform fairly successfully that’ll still not help them get back the past glory. Whereas Sun was the platform in the earlier avatar that content producers chose to showcase their works, in the new phase Sun will be reduced to a content producer and may have to share revenues with platform providers like Google Play or Apple store and worse still if they were to move to a platform like Youtube their share will be even lower.

Maran should only hope that someone of the nature of Netflix doesn’t turn their eyes on the vernacular medium yet as that’ll only accelerate the descent without providing any breathing space. Investors should check out as soon as possible unless they’ve got a compelling DCF valuation model based on high dividend payouts.

It’s no longer a growth story nor does it have any moat to sustain for long. Sunset time for Maran isn’t very far.

[capitalspeculation]

RBI’s tech illiteracy worrying?

While the Reserve Bank of India may feel happy that they have retained the conservative management tag despite a rockstar governor Raghuram Rajan at the helm there is an entire area they may be floundering where conservatism is frowned upon. 

Yes, it’s about technology where RBI’s blissful and gross ignorance is worrying :P And it comes from the very top when Raghuram Rajan exhibited sheer lack of understanding of how technology works and contributes to the economy in an interview to NDTV when he dismissed Twitter as of not much use. For Christ’s sake, Twitter is a $32 Billion market cap company almost two third value of India’s darling crony corporation Reliance Industries.

Ask anyone how beautiful and seamless the experience of using Uber was through hassle free payment from linked credit card before the activist RBI intervened and screwed up the experience for consumers and Uber alike. Has any Reserve Bank governor ever used Uber before and after their activism?

Well, the Uber thing may just be one thing while there are other areas like Payments where there is revolution waiting to break out like Contactless Payments and so forth where RBI could prove to be the show stopper.

Seen in this context one can only wonder if the Internet Economy finds any place at all in RBI’s planning and actions. Would the RBI need something like a Monetary Policy Committee (MPC) independent of RBI to manage the Tech aspects of Banking? (adsbygoogle = window.adsbygoogle || []).push({});

[capitalspeculation]

Is Bajaj Auto making an existential error?

At a time when even SUV makers like Mahindra & Mahindra have set their eyes on the Scooters market that's growing at a scorching pace one is left wondering what the pioneers of the Scooters market in India are smoking.

Product based companies like Bajaj in the Automobile industry would do well to spot trends and predict things well in advance. That's true for any product company be it technology or automobile and failing to do so have left many in limbo. 

Honda Activa is eating the lunch of even mighty Hero Splendor that's been the iconic motorcycle for more than a decade now. That's a true example of scooters cannibalizing motorcycles as more and more buyers prefer easy and comfy rides. 

Bajaj's lack of focus needs to be seen in this context and it might well spell doom if the scooters market grows at this pace eclipsing motorcycle sales. They'd be left without any product whatsoever in such a huge market with this strategy when the likes of Hero, M&M and TVS Motors would at least help battle for their share. 

To be fair to Bajaj, the've had the vision and extreme foresight to sense the need for a premium motorcycle segment and came up with their crazy successful Pulsar that's unmatched in it's category. 

It's time to show their magic again and time will tell what would happen! From an investment point of view, I think one would do well to buy Hero Motocorp or TVS Motors if they want to ride the great Scooters growth story! 

Discl - No investments in any of these stocks but might add TVS Motors sometime down the line. 

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[capitalspeculation]

Show over for TCS?

TCS' less than stellar results a sign of things to come? For a while though it appeared nothing could stop TCS from posting strong numbers when their peers global and local alike were struggling to show even modest growth. 

The likes of IBM, Accenture, Infosys, Wipro all paled in comparison all this time. The model of using lower and lower cost labor in the region of hundreds of thousands may be ageing and giving way to Automation and Artificial Intelligence. But not sure though....

What now for all the institutional investors who were bullish? Don't think they'll take money off immediately lest be termed to be in too much of a knee jerk mode. Especially, Aberdeen Asset Management must be watching this with an eagle eye!

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[capitalspeculation]

Kovai Medical as predicted.....

A while ago had predicted that Kovai Medical would be a multi bagger soon but never knew that day would come so soon with the stock up four fold in a matter of months...

Not sure thought if there's further upside left to ride. 

Discl - Had to cash out holdings as there was a personal need even before the run up but might add again. 

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[capitalspeculation]

Closer look at IT?

Always wondered how different TCS and the rest of the laggards in the pack like Infosys, Wipro are despite following similar cost advantages and clients.

This time though the buzz is that Wipro would beat Infy and TCS. It’d be interesting to see how they fare as even others in the sector like IBM and Accenture are supposed to report muted numbers. Another champ in the sector CTS also needs to be closely watched.

Or should we just ignore the big boys altogether and focus on niche product specialists like Persistent Systems? What about Tech Mahindra? Time will tell.

Discl -Might start nibbling if there’s a dip.

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[capitalspeculation]

Pre Election rally on full steam?

Recent across the board rally points that the pre-election rally is in full steam and this I think could go on till the first week of May after which the results would come out. Some names still languishing towards their all time lows are Akzo Nobel India and Karur Vysya Bank that could see some run up. 

Discl - Invested in both and could add more!

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[capitalspeculation]

Can anything beat Equity in wealth creation?

An interesting article on Business Standard shows the kind of value creation by a host of companies from 1991. It goes as high as 4000 times in the case of Infosys! Well that’s staggering indeed!

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[capitalspeculation]

Will Reliance Jio ever launch?

Another day another network sharing deal... This time it's with the Viom networks to share their infrastructure for Jio's launch. It's been like this for a while but still no clue when it'll launch. If it was an asset light model should it take 4 years to even forge these partnerships?

Couple of doubts still linger about how their digital content and cloud based services like Jio Play would fare against the global behemoths like Amazon, Google Play and iTunes as these biggies keep pouring billions of dollars to capture this space. Another question is about how their brand stands amidst the plethora of entrenched names like Vodafone, Airtel and the like. Will they survive the competitive intensity with a brand that comes with the Reliance baggage especially when their pricing plans point to a not so radical attempt compared to their earlier Monsoon Hungama like schemes with their Reliance Infocomm avatar that was by all means revolutionary. 

Only time will tell!

Discl - Have short term investments in RIL

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[capitalspeculation]

Kovai Medical a Multibagger?

A multi-bagger hiding in plain sight is Kovai Medical a hospital that's based out of Coimbatore. It's real estate assets alone would account for the current market cap and not sure why it's quoting such low valuation while stocks like Apollo Hospitals have a very high PE. 

Discl. Invested and accumulating periodically.

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