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Swaraj Engines

Discussion in 'Technical Analysis' started by chaitanya_mella, Jun 8, 2018.

  1. chaitanya_mella

    chaitanya_mella Contributor

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    With normal monsoons being predicted, would Swaraj Engines have a good run? Considering they generate bulk of their revenues from M&M, it could mean both steady income generation and over dependence on a single customer. Any views?
     
    chaitanya_mella, Jun 8, 2018
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  2. shabbir

    shabbir Administrator Staff Member

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    I am never good at playing the seasonal plays using the upcoming news. It is best to use technical analysis and as of now I see in consolidation.
     
    shabbir, Jun 8, 2018
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  3. chaitanya_mella

    chaitanya_mella Contributor

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    Do we wait till it starts it’s up move?


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    chaitanya_mella, Jun 8, 2018
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  4. shabbir

    shabbir Administrator Staff Member

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    Ideally yes because the wait can be a long and boring for traders. If you want to consider investment for the period of few years, the things are all different.
     
    shabbir, Jun 8, 2018
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  5. shabbir

    shabbir Administrator Staff Member

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    Traders buy high and sell higher where as investors buy low and sell high.
     
    shabbir, Jun 8, 2018
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  6. chaitanya_mella

    chaitanya_mella Contributor

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    chaitanya_mella, Jun 8, 2018
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  7. shabbir

    shabbir Administrator Staff Member

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    Investments shouldn't be based on if the monsoon will be good or not. It should be based on how the business will flourish few years down the line. I know we tend to think 6 months as a long term investor but that is a myth. No business can change or move forward in such a short span of time.
     
    shabbir, Jun 8, 2018
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  8. chaitanya_mella

    chaitanya_mella Contributor

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    So buying into companies like Swaraj Engines and M&M are an avoid? They sort of rely on monsoons. Though not entirely.


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    chaitanya_mella, Jun 8, 2018
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  9. shabbir

    shabbir Administrator Staff Member

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    No this is not entirely true either. You are trying to invest in a company then you should be investing based on its growth prospects in next couple of years time. Not based on its sales will increase for a seasonal aspects. If you wish to play the season, go for technicals and then play for the news.
     
    shabbir, Jun 8, 2018
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  10. chaitanya_mella

    chaitanya_mella Contributor

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    Sorry. I wasn’t clear enough. With the season being good, it is likely to trigger an up move after moving back and forth for long. While it’s ROE and ROCE have been consistently good over the years. The fundamentals seem to be on sound footing.


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    chaitanya_mella, Jun 8, 2018
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  11. shabbir

    shabbir Administrator Staff Member

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    Yes that seems to be very likely. M&M holds 33% of the stake in the company and they have increased their stake by 0.1% So that is a good point of promoter is accumulating. One more additional point to consider the stock.

    Yes it had good consolidation and so it is likely candidate for accumulation.
     
    shabbir, Jun 9, 2018
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  12. nirajshah

    nirajshah Champion

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    I think Swaraj Engines is more of a value discount play. Promoters are M&M and so if the stock of M&M is available at a discount, Swaraj should be also at a greater discount. If M&M rises swaraj should be a good to enter into with same awesome management.


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    nirajshah, Jun 9, 2018
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  13. chaitanya_mella

    chaitanya_mella Contributor

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    chaitanya_mella, Jun 9, 2018
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  14. shabbir

    shabbir Administrator Staff Member

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    Quite true but the patience of investing for 30 years isn't very easy. So going by that metrics, M&M has ROCE of 43%, Swaraj 36% and Maruti 103%.
     
    shabbir, Jun 10, 2018
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  15. chaitanya_mella

    chaitanya_mella Contributor

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    chaitanya_mella, Jun 10, 2018
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  16. nirajshah

    nirajshah Champion

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    nirajshah, Jun 11, 2018
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