An Equal World - Reality or Just a Dream?

On February 05^th, 2019, Anand Mahindra had tweeted something different - different from what he normally tweets about. I am sharing the tweet here -

He makes a very pertinent point about how working-women have to do a lot more than their male counterparts to have a career and also succeed in that. He also added an image, which describes this much better than any words could ever do.

I came across this image a long time before Anand Mahindra tweeted it. But it caught traction only after his tweet. In fact, it has been circulated so much since then, that I got it in multiple Whatsapp groups in the last 24 hours. And believe me, when I say that I am not part of many such groups. Also, in this particular instance, it did not stop with just a forward. In fact, there were discussions around this tweet and people were appreciating women for managing all of this so well.

I have been reading about working women facing this struggle on a day-to-day basis, not just in India but throughout the world, trying to strike a balance and also move ahead in their careers. This got me thinking. Why do working women face these challenges? Why are they running a race with so many hurdles while men run the same race with no hurdles at all? Is this how the world is supposed to function? Or is this another one of those things that we talk about wanting to change, but don’t do anything to actually change? What is ailing the women of today’s world that is creating so many hurdles that they can’t think of having a successful career for themselves?

What is ailing the women in today’s world is what many people call the ‘super-woman’ syndrome. The women are expected to be superstars in everything they do. By themselves. They should not settle for anything less. They cannot settle for anything less. They will not settle for anything less. But is this how it should be? Should they be the superstar everywhere? Can’t they just be the normal person that a man is? These are things that need to be discussed, addressed.

To begin with, I believe men love to tag women ‘super-women’ so that they do more while the men can laze around. This needs to change and it has to begin at home. It has to start with the very men who attach that tag.

The only way to achieve that is by giving women a hand - in taking care of the kids, in the various random day-to-day chores. If men did their part, things would be a lot easier for women. They wouldn’t have to hurdle over so many things as the image shows. If the women can be ‘super-women’, why can’t the men be 'super-men' too? Why can’t they also take care of a few things at home while continuing to rock at work?

Sometimes I feel that women have brought this upon themselves. By accepting this as normal. By taking on all these additional tasks on themselves. By doing all this without complaining. Also, by not supporting one another. 

This should happen. This should happen yesterday. But it isn’t happening. Not because it is impossible, but because this requires a behavioral change - a behavioral change from both genders. Any change is hard but a behavioral change is the hardest. It might be hard to change this generation of men unless they realise it. Most men choose not to realise. Unfortunately, so do most women. It is hard to change such people.

I don’t expect big changes to happen with our generation, but what we can do is to teach the next generation. Tell our kids the value of being normal. Teach them the value of doing things together, in partnership. Most importantly, teach them that chores have no genders. Let them SEE the importance of everyone in the family contributing to the chores at home. Get our sons to do more chores at home. Get our daughters to do fewer chores (because we inherently get them to do more).

Baby steps have definitely been taken in this direction. I know of people from both genders who already do this – kudos to them! They have set the benchmark. Hopefully, others will follow.

This will just be the beginning. Change will not happen overnight. But I am hopeful that if we start doing our bit, our future generations will find this world a more equal place. Here’s three cheers to those who want to start working towards it now!

Radio City - Bajate Raho... Khareedte jao...

I should have done this first. But I was more excited about the D-Mart IPO that this one went on the backburner and I couldn’t come around until now to review this one. The IPO opened today and will close on 08-Mar giving it a couple of days to apply, if found to be a good opportunity. Music Broadcast Limited (MBL) has come out with their IPO that opened today. The application shall be made in a lot of 45 shares or multiples thereof. The IPO is priced in the range of Rs. 324 to Rs. 333 per share and aims to collect about INR 4.88 Billion.

The IPO involves issuing fresh shares to the tune of INR 4 Billion while the rest of the issue is offer for sale by the promoters. The proceeds from the issue will be used to pay of all the debt of the company making it debt free. This is excellent news from the company’s perspective and will also reduce interest costs of the company.

The company operates radio stations under the brands Radio City and Radio Mantra in 37 cities. Though this is a national player, it is still behind its listed competitor, Entertainment Network India Limited (ENIL) which operates in 43 cities. The company is starting radio stations in 2 other cities in the near future taking its tally to 39 cities. The company’s radio channels have a total of 4.9 million listeners in 23 different cities. The company also has the highest viewers in the top cities that include Mumbai, Delhi and Bengaluru.

This business has a very strong retail connection and its shows are very popular amongst the audiences. The company is also trying to move into core radio broadcasting business by creating events like ‘Gig City’, ‘Radio City Super Singer’ and ‘Radio City Freedom Awards’. This has helped the company tackle competition well especially since Radio Mirchi moved to these segments earlier.

It would have been a problem for the company had the outlook for the industry been weak. However, the forecast for the radio broadcasting industry is also optimistic. The revenue growth is expected to be a healthy 17% CAGR up to 2020. This is excellent news for MBL and its competitors. They have a bigger share of the pie to fight for. The company has also been performing well financially. Their revenue has grown at a CAGR of 18.43% between 2012 and 2016. And given that the industry is expected to grow at 17%, we can expect better times for the company. The profit has grown 54.14% in the 3 years ending March 31, 2016. There was a slight dip in the year ending March, 2016. The numbers are expected to be better in the coming years especially with the interest component removed from the P&L. For the six months ending Sep 30, 2016, the company recorded a profit of INR 297 Million which translates into a Net Margin of 21.50%. This is better than the 17.30% realized in March 2016.

Music Broadcast’s consolidated financial performance (in INR Million)
Details	FY2012	FY2013	FY2014	FY2015	FY2016
Total revenue	1248.00	1405.00	1573.00	2075.00	2455.00
Total expense	1265.00	1289.00	1329.00	1604.00	1894.00
Profit after tax	-22.00	116.00	243.00	471.00	425.00
Net margin (%)	-1.8%	8.3%	15.4%	22.7%	17.3%

The company’s EPS stood at Rs. 9.95 for the FY ending March 2016. Looking at the 6 months results for FY 2017, the full year EPS is expected to be Rs.13.20. With these numbers the PE, at the higher band of the IPO price, using the 2016 EPS stands at 33.5 and 25.2, while considering the 2017 EPS. When we compare this with the only listed rival (which is also a bigger one), ENIL is currently trading at a PE of 39.40 on the basis of 2016 earnings. However, ENIL has better margins than MBL. Considering that, the PE at which the stock is being issued sounds about right (considering it should be at a discount for lower margins.).

Considering all these factors, MBL looks a safe bet to invest in. The listing bonus might not be huge (I still expect the stock to list at a premium) but this will be a good company to stay invested in for long term.

D-Mart IPO - Invest with what you saved in there...

The company that owns the D-Mart supermarket retail chain, Avenue Supermarts, is coming out with its IPO next week. The IPO opens on 08-Mar and closes on 10-Mar with an issue price range of INR 295 – INR 299 aiming to raise a total of INR 18.70 Billion. This has been most awaited IPO of 2017. The promoter of the company Radhakishan Damani is one of the best stock pickers and a veteran stock market investor. Even the venerable Rakesh Jhunjhunwala considers him a mentor.

This IPO is the second to come out next week. The first being the Radio City IPO, which opens on 06-Mar. Will this cause lesser demand for D-Mart? I don’t think so. The IPO is already trading in the grey market which indicates the interest levels from investors. But is the IPO priced right? Let us review the company and figure out if this is something that one must invest in.

The big positive about this IPO is that there are no Offer For Sale from the existing shareholders. This means that the promoter Radhakishan Damani will continue to own the 100,000 shares in the company. All shares that are being issued are new and the proceeds will be used to partially repay some debt and NCDs (Non Convertible Debentures) while at the same time build some new stores. D-Mart currently has 118 stores across Maharashtra and Gujarat and planning to expand to other states. The focus of D-Mart has been to identify and build a story in a densely populated location and cater to lower middle, middle and aspiring upper middle class audiences. They have built a reputation of a company with tight cost controls and low priced products in the retail space. They have also been aggressively working on their margins and have been improving it year on year. They have improved the margin from 2.70% to 3.70% in 4 years from 2012. Retail is not a margin-intensive industry and runs on real tight margin. Therefore to improve the margin by 100 basis points (which is a 37% increase compared to the 2012 numbers).

Avenue Supermarts’ consolidated financial performance (in INR Millions)
Details	FY2012	FY2013	FY2014	FY2015	FY2016
Total revenue	22,224.0	33,551.0	47,023.0	64,577.0	86,061.0
Total expenses	21,340.0	32,142.0	44,574.0	61,343.0	81,139.0
Profit after tax	604.0	939.0	1,614.0	2,117.0	3,212.0
Profit margin	2.70%	2.80%	3.40%	3.30%	3.70%

The revenues have grown from 22 Billion to 86 billion in 4 years (CAGR of 40.28%) while profits have increased from 0.6 Billion to 3.2 Billion in the same period (CAGR of 51.86%). The EPS for the period ending 31-Mar-2016 stood at INR 5.86. With that EPS, the company is valued at a PE of 52.60 at the price at which it is being offered. It does seem a tad high especially given that the margins are pretty tight. However, when we look at the likely annualized EPS for FY 2017 (INR 9.20), the PE reduces to 32.50. There is only one listed company, Future Retail, which can be looked at for comparing D-Mart’s PE and this company trades at a whopping 393.2 PE (looking at 2016 EPS) but this comes down to a decent but still expensive PE of 37.50 when we consider the expected 2017 annualized EPS. Another thing to consider is that the margins of Future Retail are half of what D-Mart is achieving. All of this makes D-Mart or Avenue Supermarkets an incredible buy. But there is likely to be a lot of demand for this IPO and the chances of being allotted are slim. But still, go for it. You may get lucky. :)

Not All Men! But Yes All Women!!!

Ok, this is the first thing I am writing about in 2017. This is definitely not the first thing I wanted to write about this year but here I am writing about this! But the internet has been talking of nothing else for the past 48 hours or more. The trigger, of course, was the 2 incidents in Bangalore. One where there was mass molestation in CBD and the other where a woman was molested close to her house and was captured in CCTV.

There has been a lot of talk post these incidents. Women calling out challenges that they face and how they have been molested/groped/raped by men. Men defending themselves by saying that only a few are black sheep while the vast majority are not molesting/raping/groping women. They, in fact, went ahead and created a hashtag #NotAllMen to just prove their point. Thankfully, many men were sane enough to call out the immaturity of the hashtag. They failed to understand that  what the women were talking about was not about men. But what they have been going through every single day.

To counter the #NotAllMen, women started their own hashtag #YesAllWomen to talk about how all women have been molested/groped/raped at least once in their life. It killed me to read their experiences. So. Many. Of. Them. After having read those experiences all that I wanted to do was to sit in a corner and cry. Nothing else.

There were notes from 2016, 2006, 1996 and backwards as well. This is not a new phenomenon. This is how it has been all the time. This is how it will be for the foreseeable future as well. Instead of being defensive and saying I don’t do this. Why not stand up with the women and acknowledge the challenges that they go through, day in and day out? Why not stand by and support them unconditionally? Why not take the lead and bring the guilty ones to justice?

Why not take the lead and bring about a change? Why not take the fight to the street? Why not educate the kids so that the future is secure for the women? But no, we can’t do any of this! Because we are busy defending ourselves! Defending ourselves that we are not like a few! Well, guess what? It is not just a few people! It is a whole lot of us!

Most times, it is men that are familiar to the women like the fathers, uncles, in-laws, cousins! All the so called decent people! People who are educated! People who are family! Worst are the family members who don’t want to rake up the issue! How can they just ignore such acts when the victim comes and shares it with them! Where the fuck is the support?! How can we expect things to change if we don’t stand by the victim and confront the predator? Is the family tradition/respect/or whatever fuck it is called more important than the victim’s pain? Is that more important than the victim’s peace of mind? Is that more important than saving the several other victims?

If this is our culture, then we are better off without this fucking culture! If these are our traditions, we are better off without our fucking traditions! If this is how we should live, we are better off not living at all!

L&T Technologies - Silver Lining amongst the gloom??

Another of L&T’s subsidiary opened its IPO yesterday. This time around its L&T Technologies going for an IPO, which opened yesterday and will close on 15-Sep-2016. The company being a fully owned subsidiary of L&T will offer 10.4 million shares on sale with a price range of INR850-INR860 per share. The issue will be ‘Offer of Sale’ by L&T. Shares can be applied in lots of 16 shares and the retail investors will be allotted 35% of the total issue. The company will not get any proceeds from the IPO as promoters are selling a stake from the company.

This company was incorporated only towards the end of 2013 even though it has existed for a long time before that. Prior to this incorporation, the company was part of L&T and L&T Infotech as 2 different divisions. Following the restructuring of the organization in 2013, they were merged as a single entity and the new company was incorporated. The company offers engineering R&D in the fields of manufacturing, technology and process engineering industries in the verticals of Transporation, Industrial Products, Telecom and Hi-tech, Processing Industry and Medical Devices. The first 2 verticals account for 55% of the total revenues.

Almost 95% of the revenues for 2016 for L&T Technologies are from repeat businesses (it was about 99% in 2015.) Top 20% of the customers account for about 54% of the company’s revenues whereas the company has more than 200 clients in its roster.

L&T Infotech’s consolidated financial performance (in INR Million)
Details	FY12	FY13	FY14	FY15	FY16
Total revenue	NA	NA	NA	26438.00	31427.00
Operating Profit	NA	NA	NA	4239.00	5966.00
Net Profit	NA	NA	NA	3109.00	4166.00
Net Profit Margin	NA	NA	NA	11.70%	13.20%

Since the company was incorporated only in late 2013, there are no financial performances available prior to FY2015. Based on the last 2 years’ performance, the revenue has grown by about 19% while profits have grown by about 34% in FY 2016 compared to the previous year. The profit margin has also grown by 150 basis points to 13.20% in 2016. This is a definite plus. The company’s RONW is also high at 38.85% on par with Tata Elxsi. The company also has a very strong balance sheet (0.18% is the Debt-Equity Ratio).

The company’s business is dependent on North America and Europe with them contributing to 80% of the revenue especially with North America contributing 60% to the total revenues. This is definitely a concern as there are various risks associated with too much dependence on a single territory.

The company had a diluted EPS of Rs. 32.1 per share for the year ending March 2016 giving a PE (Price to Earnings) range of 26.8 higher spectrum of the issue price. There are 2 listed companies that operate in the same space as L&T Technologies, Cyient and Tata Elxsi. The former trades at a PE of 14.7 while latter trades at a PE of 37.8. L&T Technologies stands mid-way between the two.  

L&T technologies seem to have good robust growth story and engineering research as a business model seems to get strong as time goes by. That said, the current environment in India doesn’t distinguish this from the other IT services. Also, the overall IT climate seems to have a bearish outlook for the next couple of years. Considering all these factors, go for it if you are willing to take the risk of the listing at a discount else wait until it lists. I am willing to take this risk. :)

RBL Bank IPO - Getting higher credit...

RBL Bank (formerly called the Ratnakar Bank) is coming out with an IPO which opens on 19-Aug-16 and closes on 23-Aug-16. This is going to be the fourth IPO this year which aims to raise more than Rs 10 Billion at the markets. The issue hopes to collect Rs. 12.13 Billion through this issue which is priced at Rs. 224 – Rs. 225 per share. Of the 12.13 Billion that the issue will raise, Rs 3.81 Billion will go to the promoters as part of Offer to Sale while the company will raise Rs. 8.32 Billion. Shares can be applied in lots of 65 shares and its multiples. The retail investors will not get any discount in this issue though 35% of the issue is reserved for retail investors. The bank expects to use the proceeds to maintain the Capital Adequacy Ratio as required by RBI.

RBL Bank started in 1943 as a small regional bank with branches in Sangli and Kohlapur. It continued to be a small bank until 2010 when the current management took over. The current management, professionally managed with Vishwavir Ahuja at the helm, needs to be credited for bringing the transformation in the last 6 years. It moved away from being a small player in Maharashtra to being a mid-sized bank primarily focusing on micro financing. It also acquired the retail operations of Royal Bank of Scotland in 2014. RBL Bank also offers one of the highest interest rates on deposits and uses the money to acquire some stake in some of the best micro finance lenders.

While we look at the financial performance of the company, the interest income has grown at a CAGR of 47% and other income has grown at a CAGR of 57% between FY2012 and FY2016. The profits have also grown at a CAGR of 46% in the same period. The margins have been consistent around the 9% mark though it was at 12% in the year 2012. For the year ending March 2016, the Gross NPA of the bank stands at 0.98% and its Net NPA stands at 0.59%. This is exceptional especially considering the rapid increase in the NPA numbers for other banks.

RBL Bank’s financial performance (in INR Millions)
Details	FY2012	FY2013	FY2014	FY2015	FY2016
Total revenue	5322	10057	16125	23564	32348
Total expenses	4182	8461	14338	19963	26924
Profit after tax	651	928	926	2071	2924
Net profit margin (%)	12.2%	9.20%	5.70%	8.80%	9.0%

The company’s RONW (Return on Net Worth) has also more than doubled in the 2 years from 2014. It now stands at 9.79% in 2016 compared to 4.60% in 2014. The company’s ROA (Return on Asset) (which is the best indicator to assess the returns for a banking institution) has also increased from 0.66% in 2014 to 0.98% in 2016.

The company had a consolidated diluted EPS of Rs. 9.43 per share for the year ending March 2016 giving a PE (Price to Earnings) range of 23.75 and 23.86 at the lower and higher spectrum of the issue price. Considering that RBL Bank is a mid-sized private bank, it would be fair to compare their valuation ratios with other listed mid-sized private banks. The table below provides details on the valuation ratios for RBL’s peers:

Banks	FY 2016
	PE Ratio	P/BV Ratio	RoNW
RBL Bank	23.9	2.4	9.80%
Yes Bank	19.6	3.6	18.40%
Indusind Bank	29.1	4.0	13.20%
Kotak Mahindra Bank	40.4	4.2	10.40%
City Union Bank	16.9	2.5	14.60%
DCB Bank	14.7	1.6	11.20%

Compared to its peers, RBL’s RoNW is the lowest but is expected to improve in the years to come given the rate at which they are growing. The PE ratio is a tad higher than a few banks while it’s far lower than a couple of others. The higher PE ratio is justifiable because of the quality of the assets and low NPAs. Only DCB Bank has a lower P/BV ratio than RBL Bank. Another reason that makes RBL attractive.

Subscribe to the issue if you are looking at a long term investment for there might not be a lot of listing gains to be made from the issue. I am definitely investing in this issue.