Impact of Negative Interest Rates on Equity/Fixed Income markets

Negative Interest Rates

Potential Impact on Equity Valuations / Fixed Income markets

Negative Interest rates – Rising importance in today’s economy

Background

Since the global financial crisis in 2008, central banks have cut benchmark interest rates around the world to provide loans at a cheaper rate for stimulating economies. Fast track to 2016, the world witnessed central banks of countries such as Sweden, Japan, Switzerland and Denmark opting for negative interest rates. Although, in theory, this should stimulate economic growth. However, these economies witnessed a weak growth in inflation with Japan still fighting deflation from the past two decades.

Figure 1: Bond Yields vs Stock market indices return during the phase of negative interest rates

Source: Yahoo Finance and Eikon Database

COVID-19 and its role in Negative Interest rates

COVID-19 further contributed to already slowing down of world economy. A decline in interest rates generally stimulates growth. But what if the rates are already near 0.25%? The central banks have no other option but to push rates into negative territory.

Governments started buying bonds heavily to lower the bond yields through quantitative easing. Decline in yields will force investors towards equity market for high dividend paying stocks. Negative interest rates also force commercial banks to lend loans to business, rather than depositing the excess funds with central banks to avoid payment for this service. This in turn aids in achieving targeted inflation. However, quantitative easing will depreciate currency due to its excess supply.

Implications of negative interest rates on Banks

Bank’s net interest margins will take a hit. Banks have to scrutinize businesses/individuals in terms of loan repayment and their distance to default. Though banks will incur certain costs arising due to deposits with central banks, they will find it difficult to push these costs on to depositors, who may redeem cash and leave banks with less amount to lend out loans to businesses.

Potential impact on Fixed Income markets

Mutual Funds and Pension Funds are at a disadvantage as they invest money in government bonds yielding negative returns. However, on the flip side, corporate bonds bought at discount and if held till maturity results in capital gains. They also provide higher coupon payments as these bonds are derived based on asset quality of the companies.

Potential impact on Equity Valuations

Yes, equity markets are at an advantage as companies obtain loans at a cheaper rate to spend on capex for organic growth or on acquisitions for inorganic growth.

However, in case of share buyback, the share price goes up due to less outstanding shares. This act increases Price-to-earnings ratio. This valuation is not entirely accurate as the company’s share price didn’t surge due to organic/inorganic growth. Company pays lesser dividends as number of shares have now declined in the market.

As per figure 1, I believe negative interest rates will cause further turmoil in equity markets for foreseeable future. Currency depreciation will boost exports which could start currency war in international markets. However, this measure will eventually raise inflation forcing central banks to raise interest rates, contributing towards stable economy.

Stock Market Day Trading – What the Advisory firms don’t tell you!!

Stock Market Day Trading – What the Advisory firms don’t tell you!!

Blame game in our country is at an all-time high based on the stock market tips given/received from Advisory firms/amateur day traders. Sometimes, both are to be equally applauded for the skills and commitment they showcase but most of the time must also be held responsible for promising and believing in quick profits.

Competition is intense and ‘it has become a rat race’ is an understatement. The average pay for individuals has increased many folds when compared to earlier times enabling them to look out for better liquid investments. Therefore stock market takes spot among one of the top investing/trading destinations. Therefore, everyone wants a piece of this large cake. Sometimes, among the unwelcomed guests could be a Stock Market Advisory Firm.

Let’s take an example of a Stock market advisory firm named – SureShotTIPS Advisory Services (SST) (Name made up for illustration purpose).

SST is the firm containing different teams such as customer service, HR and Analysis. Their main objective is to attract and retain customers though their Stock Market TIPS on various shares in BSE & NSE.

·         Objective: To acquire clients and retain them

·         Procedure: Provide tips on share movements of various companies and gain profitability on the same

·         Result: Either the client makes profit/loss. If profit is made, it acts as an added advantage for the advisory firm to sell their services. If the client makes loss, they lose out on them

In order to accomplish their objective, they start contacting customers and provide them with tips. But not all the customers are aware of the following incident which may take place.

Let us assume there is a good level of technical support for State bank of India (SBIN) share at 330. The SST calls 100 customers to provide their view on SBIN. Out of which, they call up 50 customers and ask them to buy the Shares of SBIN as it has a strong technical support at 330 and remaining 50 customers are asked to go short (Sell) at 330. Let us look at the two cases which could emerge:

Case 1: If there is a rise in share price of SBIN

Looking at the above statement, it is given that those who bought the shares are sitting on nice profit and would also like to liquidate their positions, which means they will be selling and booking profit. Once this is done, they will be called again and SST makes sure to sell their services with an advisory fee of 3000 per month. Let us assume even if 20% of these clients get converted, they make an amount of 30,000/- per month. Those who shorted the stock are making losses and will never be getting a call.

Case 2: If there is a fall in share price of SBIN

If this happens, it is a vice-versa of the above explanation. Those who shorted are in profits and those who went long (BUY) are in losses who will not be hearing from the SST again.

The most important factor here is not if someone made profits/losses, but how the advisory firm is conducting its business. They say they have a great team of research, if this is true, why did the other half lose? This can happen with anyone who has a smart phone with a little hope of making an extra amount.

Therefore, one has to have at least a basic understanding of technical analysis such as support/resistance before they even hear to any advisory firm ending up losing their hard earned money. Hope this article helps! Do let me know your thoughts on this and sharing this might help our fellow aspiring retail traders. 

Internet of Things - IoT

Following is a presentation on Internet of  Things (IoT).
This presentation also includes a brief strategy for new entrant.

Mutual Funds - Importance of Debt Mutual Funds

It is very important to understand how to invest your hard earned money. This money in turn can be useful in every other situation if invested properly. Therefore I have created a case study which helps in understanding importance of mutual funds (one of the important investment vehicles) which is as follows:

CASE STUDY

55 yr old man , director for  a leading pharma company. Existing assets include ESOPs from his current and previous employer ( both Pharma companies ) worth 4 Cr. Fixed deposits for 4 Crs, and 40 lacs of equity mutual funds. Survived by two sons who are working and wife who is a home maker.Recommend options that maximize his portfolio returns . He has term insurance for 2 Crs and intends to retire at age 60 . He requires 2 lacs per month for maintenance and expects to survive till 85 yrs.

Portfolio Construction for the Case Study:

Assets currently Owned

ESOPs worth 4 Crores.

Fixed Deposits of 4 Crores.

Equity Mutual Funds – 40 Lakhs.

Term Insurance – 2 Crores.

What the Client requires?

2 Lakhs per month for maintenance.

About the Client

The client is at the age of 55 years. At this age, the risk profiling of the client doesn't allow him to invest a large amount in equity. Therefore the portfolio has to be constructed in such a way that 90% - 95% of his savings have to be under safe investments such as debt investments.

Let’s look at his assets along with the advantages and disadvantages.

Employee Stock Option Plan

Stock Option is ownership in a company which means that client owns a part of company in the form of shares which is an equity component. Given his age, 4 Crores of equity investments involve a high risk. He owns the shares (ESOPs) of pharmaceutical companies (Both his previous and current employer) of worth 4 Crores which is not advisable as the stock of the pharmaceutical companies are very dynamic in India due to the following reasons:

·         Regulatory obstacles

·         Lack of proper infrastructure

·         Lack of qualified professionals

·         Expensive research equipments

·         Lack of academic collaboration

·         Underdeveloped molecular discovery program

·         Divide between the industry and study curriculum

·         Parallel drug in the market (Loss of Market size)

We shall look at the required investment plan later in the case study.

  

Fixed Deposit of 4 Crores

Fixed Deposit is considered to be one of the safest investments in India. The Client has a very minimal risk if he invests in fixed deposits but at what cost?

Assume the Client invests in a Fixed Deposit which yields him 9% on the 4 Crores investment he made.

The amount earned on interest per annum is 36,00,000/- (9% of 4,00,00,000)

Since he falls under the highest income tax bracket he has to pay tax of 30% on the interest income which is 10,80,000/- (30% of 36,00,000)

Bank deducts 10% on the interest income as TDS which amounts to 3,60,000/- (10% of 36,00,000)

Therefore the balance tax paid by the Client as Self Assessment Tax is (10,80,000 – 3,60,000) which is 7,20,000/-

This amount is a big amount and shouldn’t be paid as tax by any individual and in this case, the client who is nearing his retirement cannot lose 7,20,000/- per year in taxes.

Above all the complete amount is locked in for a certain period and includes penalty if redeemed before maturity.

Equity Mutual Funds

Investments in Equity Mutual Funds is one of the best things to earn a super normal profit but only for those people who fall in the age between 20-27 (age may vary few years depending upon the person’s goals and responsibilities). More returns are possible in equity investments because more risk is being taken (though it is not the only reason) but even if the person lost the money, he can recover himself from the loss given his age. But the client at the age of 55, having equity investments of worth 45,00 000/- which is not advisable because  it’s a risky investment.

Term Insurance

Term Insurance of 2 crores is a very good plan by the client which adds security for his wife and children. One more thing the client has to do is to take a medical insurance policy so that he will be covered. This medical policy which the client takes, its premium can be funded from the cash obtained through ESOPs (converting ESPOs into debt scheme and returns from debt schemes).

Suggestions for the client:

Mutual funds are one of the best investments which can be considered and most importantly debt mutual funds in this case.

Therefore client should opt for the following funds:

·         HDFC High Interest Fund – Dynamic Plan (G)

·         Axis Capital Protection Oriented Fund - Series 2 (3 Years) (G)

HDFC High Interest Fund – Dynamic Plan (G)

This is an open – ended long term debt fund provided by the HDFC Asset Management Company. The following reasons are considered for the selection of this debt fund:

·         CRISIL rating agency rated this fund with 5 Stars.

(This shows that the fund has invested in bonds which are safe as it gets)

·         It’s an open – ended fund.

(This means client can enter and exit anytime he wants with no entry/exit load{exit load=0.5% if redeemed within 3 months})

·         It is a debt fund

(This states that the fund operates on a very low risk)

·         Assets under Management (AUM) is 17,354.7 crores.

(This helps in understanding the liquidity of fund and the client doesn't face problem regarding withdrawal as it is highly liquid and the cash is readily available)

·         The fund’s benchmark is CRISIL Composite Bond Fund.

·         The return on fund is 15.3%. The average of similar debt funds is 11.6% and this fund has performed better than the average with exceeding the returns of 3.7%.

·         Expense Ratio is 1.57%

(The cost for the mutual fund to run the scheme is low)

Current Net Asset Value of the fund is 48.103

The fund has invested a large amount in GOI bonds which are safe.

Following is the pie chart which depicts the fund structure:

Fund Managers

Anil Bamboli

Anil Bamboli is working with HDFC Mutual Fund. He has 16 years experience in the mutual fund industry has been in area of Research and Fund Management. Previous to HDFC AMC, he worked from May 1994 - July 2003 with SBI Funds Management Pvt. Ltd. Last Position held - Asst. Vice President.

Shobhit Mehrotra

Prior to joining HDFC AMC, had worked with Templeton AMC as AVP and Portfolio Manager (Fixed Income). He was Business /Investment Analyst, Member Executive Rating Committee.with ICRA

The client can invest in the HDFC High Interest Fund – Dynamic Plan (G). The client should sell ESOPs and convert it into cash and put the entire amount in the above mentioned fund. Then he can opt for SYSTEMATIC WITHDRAWAL PLAN. This plan, if opted, funds the client’s account weekly/monthly/ yearly with the amount desired by the client which is 2,00,000/- in this case and the rest of the amount will remain invested in the above fund earning an interest.

The tax on capital gains is low when compared to the taxes levied on bank’s fixed deposits. The minimum lock in period for the fund to avoid tax on capital gains is 3 years. As the client has 5 years of service, he can relax by putting this amount and by the time he retires, the 3 year lock in period will come to an end and tax on capital gains will be much lesser. Till then, he has his salary to fall back upon.

According to the current NAV of this fund, the number of units the client gets is (40000000/48.103) which is 831548.97

The Client has to withdraw 4157.74 units every month for his monthly maintenance.

One thing the Client has to understand is that the fund is a long term debt fund and bears the risk of interest rates. For example: If there is a BOND A with 9% of interest rate in the year 2015 and BOND B with 10% interest in 2016 then, the value of BOND B will fall because investors will opt for BOND A so that they can pay less interest. Therefore, there is always an inverse relationship between bonds price and interest rates. If interest rate rises, the bond rate falls and vice versa.

From the fixed deposits which client has, he is mostly looking for the preservation of the capital. The biggest disadvantage of the FD is taxed levied on it as mentioned with an example earlier. Therefore the amount present in FD can be transferred into a capital protection scheme mutual fund such as:

Axis Capital Protection Oriented Fund - Series 2 (3 Years) (G)

The main reason for selecting this fund is because it provides the protection for capital and a very small amount is invested in equities for capital appreciation.

For example: If the Client invests 10,000/- in a capital protection scheme with 10.725% interest rate for four years. Only 7,000/- amount can be invested in the capital protected scheme and remaining 3,000/- can be invested in equities. The 7,000/- amount with interest rate comes up to 10,000/- in four years along with the 3,000/- amount invested in equities. Here, the capital is preserved anyways and if there is any appreciation on the equity component, the client is at an advantage.

The AUM for this fund is 7.94 Crores.

Therefore, the client can preserve his capital under this fund and also have an equity advantage if he invests in this fund with the amount which is invested in FD. There is a lock in period for three years and tax advantage as well when compared to fixed deposits.

(Please note: The information of this fund is not given in the internet websites and due to this difficulty, I couldn’t perform more analysis on the same. I just wanted this idea of capital protection to put forth.)

The 45lakhs which he has invested in equity mutual funds is also a risky investment. Looking at the current scenario of the stock market and Nifty performance, the stock market will fall further more as the Nifty P/E multiple is at 22.4. The Client can be asked to wait and watch till the market corrects and then start investing in a debt fund through SYSTEMATIC TRANSFER PLAN (STP). STP helps the Client to transfer money from equity fund systematically into a debt fund.

Conclusion

Client should create an investment plan for his wife in case of any unforeseen situation so that she can be secured with a monthly income generation for her as well.

The client also must understand the longevity of his survival and must manage the same by parking some funds in case he starts surviving for more than 85 years.

Finally, the client must understand how much amount he is receiving from all the debt / capital protected schemes and write a will which includes his wife and after she is no more, the amount and property whatever available goes to his sons as per the client’s desired proportion.

Disclaimer: The investment advise above is just an example and doesn't hold for every other investor. These are completely based on my opinion and I would request you to seek advise from an Independent Financial Advisor before investing.

Infosys announces bonus shares – What should Investors look for?

Infosys (INFY) is the India’s second largest IT services exporter multinational company. The recent announcement of issuing bonus shares was an interesting point which the firm put forth. The reasons for announcing the bonus shares might be:

·         To improve the liquidity of shares in the market.

·         To help investors understand that the firm is looking positive and has many future plans under its belt.

·         To expand the equity of the company.

What the investors should understand:

·         Issue of bonus shares doesn't increase the value of shares.

o    For example: Consider a firm whose share is valued at 200 and it announces a bonus share of 1:1. i.e. for every one share that the investor possesses, he is given an additional share. The point here is the value of share is halved in this case which brings down the share value to 100 and as the investor has two shares now, his overall capital invested is 200 again which is same as the value of single share before the bonus share announcement.

This is one of the important points that investor has to understand. No doubt, this in turn increases the liquidity in the markets with respect to the firm.

Should the investor go ahead and invest for a long term in Infosys?

The quarter results announced by Infosys did not beat the street estimates. The bonus issue should have given the investors’ confidence in the firm but one can see that there has been a sell off of about 6% on the Infosys stock on the same day when the announcement was made.

Let’s get into little fundamental and financial analysis.

Profit Before Interest and Tax & Profit After Tax

Figure 1

(The values are in crores)

As we can see from the above graphs that the PBIT and PAT are decreasing year on year while the profits of industry competitors have been increasing. The reasons might vary such as financial conditions in US markets, rupee appreciation and economic factors etc.

Certain factors which made Infosys lose its prior sheen are as follows:

·         High attrition rate despite of two wage hikes in last one year which rose to 18% from 16%.

·         Over the last 12 months, Infosys has lost several board members such as its BPO’s head, sales head and two presidents who resigned from the board.

·         Researchers say that Infosys is over-dependent on the North America for revenues.

·         The growth has not been consistent as per the figure 1 above.

The capital used for the issue of bonus shares is from the firm’s reserves and surplus which again decreases the reserves and surplus amount.

Few ratios to understand for long term investment

Days sales outstanding (DSO)

This ratio helps in understanding how quick any firm can collect its revenue after a sale has been made. The lower DSO states that the firm takes few days to collect its revenue which is a good sign, the higher DSO on the other hand states that the firm is lagging in collecting its revenue. The DSO for Infosys is given below.

Particulars	2013-14	2012-13	2011-12	2010-11	2009-2010
DSO (days)	60	63	63	61	56

As we can see from the above table that DSO in 2009-2010 was a good number and it slowly increased and maintained the same which is not good for Infosys as it means that Infosys is unable to maintain lower DSO which in turn hampers its cash flows.

Current Ratio

Current ratio measures the current liquidity of the firm. It helps investors in understanding whether the firm is capable of meeting its short term liabilities. The formula for current ratio is given as

Current Ratio = Current Assets / Current Liabilities

Current assets include cash, marketable securities, account receivables, inventory, deferred tax assets etc. Current liabilities include short term loan payment, account payables deferred tax liabilities etc. For current Ratio to be more than 1, the Current assets must be more than current liabilities. The following table shows the current ratio for Infosys:

Particulars	2013-14	2012-13	2011-12	2010-11	2009-2010
Current ratio	3.83	3.82	4.72	5.05	4.46

The Current Ratio was at its best for the firm during 2010-2011.  The current ratio kept decreasing from the year 2012 to 2014 which is a negative sign. This implies that Current Liabilities are more than Current Assets and there is a decrease in working capital which is given as the difference between Current Assets and Current Liabilities.

Earnings per Share (EPS)

This ratio speaks about how much every common share holder earns per every share he holds. The more the EPS the better the value of firm. The formula for EPS is given as:

EPS = (Net Income – Preferred Dividends) / Weighed Average Outstanding Shares Available

In case of Infosys, the number of shares in the open market has increased and this will lower the EPS as increase in number of outstanding shares (denominator) in the EPS formula will bring down the value of the EPS.

Apart from fundamental analysis, rupee appreciation also plays a vital role in determining the profits for the firm. As and when the rupee depreciates to dollar, the Firm has more profits and vice versa.

As previously mentioned, the firm depends more on North America for its revenue purpose. Therefore the economic and political factors of North America have to be good so that the Infosys performance can increase and remain positive.

Conclusion

As far as I am concerned, I would say that it would be wise to do a thorough fundamental analysis before going for a long term investment in Infosys. A part of fundamental analysis and other analysis is given above. Mere increase of shares and decrease in the value of share may not increase the value of the firm as the quarter results are weak along with the fundamentals.

Vishal Sikka (CEO & MD) of Infosys will have a tough time ahead in alleviating the above mentioned problems. He was with SAP as one of the board director earlier which is a Software Development Company and Infosys being a Software Services Company is a challenge for Dr. Sikka as his prior experience is not into software service.

Infosys sits on a pile of cash and the debt in the capital structure of the firm is very low which is an advantage to the Firm.

Overall, any Investor should be very careful in investing in Infosys right away. They shouldn't invest  just on the basis of bonus shares announcement. A complete fundamental analysis should be done before taking any decision.

Why GE opted for Buyback of shares

I just happened to read through an article on GE on buyback of its shares. I thought to put my thoughts as to why this decision has been made.

One of the biggest decisions which any firm has to make is to consider the option of buying back the firm's shares. The following points make firms to opt for a buyback:

1. If the Firm is sitting on pile of cash.

2. To make their stock look attractive.

3. Change the structure of their capital (Debt/Equity).

4. To project a better financial ratios.

Let us consider GE in this case. GE has to buyback its shares due to the poor performance of its subsidiary firm GE Capital. GE Capital suffered due to recession which took place in the year 2008. It invested in many alternative investments. One such investment is real estate. The credit markets froze due to the falling prices of real estate and GE couldn't fund its day to day operations. The result of this is the drop in day to day activities, layoffs, profit margins etc. Due to the recession, the financials of GE have taken a hit and eventually led to drop in share price.

How does buyback help GE

·         Buyback of shares increases the key ratios of GE. Earnings per share of GE will increase since the number of outstanding shares in the markets goes down which in turn increase the value of EPS.

EPS = (Net Income – Preferred Dividends) / Outstanding number of shares

·         Return on Assets (ROA) will also increase since cash is considered to be an asset and GE has to pay existing shareholders with the cash to complete the buyback.

ROA = Net Income / Average total assets

·         P/E ratio is considered to be attractive when it is low. Due to the buyback, the EPS will increase which in turn decreases the P/E ratio of GE.

P/E = Market Value per Share / Earnings per Share (EPS)

·         The existing shareholders who are holding shares will have an advantage since GE will buyback the shares at a premium and shareholders who are in favor of buyback will earn good amount of profits.

·         Any long term investor would always use the fundamental analysis as his/her weapon while choosing a long term investment and the fundamental analysis includes these key ratios as well.

·         Once the investors look into these financials they feel all the more attractive towards this stock and keep buying the shares which have now increased in value as the buyback has happened. Once GE gains back the investor confidence again, they can go for a an FPO (Optional) and raise money so that they can payback their debts which in turn increases its working capital efficiency.

·         Since the economic conditions were poor for a period of time after recession , the stock value of GE is undervalued. Buyback will help the stock price to rise and remain competitive.

One important thing to be considered after buyback is the share price. Initially the share price may increase but gradually it might decrease as well. Investors should analyse carefully and then proceed with the investment.

Overall, GE remains a good stock pick for the investors due to varied reasons such as its brand value, diversity in business, long standing history of the firm etc. My opinion for a profitable long term investment for any investor is to include GE in his portfolio of stocks.

Rupee 5 Month High

Rupee at 5 Month High

The rupee hit five months high as there are heavy FII inflows. The appreciation of rupee helps in the improvement of fiscal deficit. But the underlying question is, how far can we expect foreign funds to flow into the Indian system. The FIIs show interest in India as they feel that India is a good destination for investment as the fundamentals are good and the country is showing a good recovery from slowdown. Nifty touching 5700 level also adds up to the statement mentioned above.

What else can the Indian Government do to keep attracting foreign inflows? Firstly, RBI has to decrease the interest rates(Repo Rate), more reforms must take place and the heavy weights of Index such as RIL, INFOSYS, SBI etc must perform to take the NIFTY to the next level. The divestment news that came from ministry is quite a positive one but there are certain factors that may weigh down the Indian markets.

The first one being the RIL KG-D6 block case. The government has not taken any initiative regarding this as the RIL has asked for a price hike in Gas.The most difficult part is the KG-D6 block may get closed in the year 2014-2015 if necessary actions are not taken by the government.

INFOSYS is a very good share to buy but one must understand how the appreciation of rupee would hurt the earnings of the company. Infosys has lot of its business which depends upon US and it makes decent profit whenever there is a depreciation in the Rupee. If its the other way around, the company may face unintended consequences.

SBI has to deal with its Non-Performing Assets as they constitute a major concern for fall in its share price.

These are very few factors but a lot of other factors are present which can degrade the Indian markets. Lets all hope the RBI cuts the rates when it meets this time around. 

Nifty testing 5700 level?

NIFTY at 5700, what's next?

The month of October saw a huge rally in Indian Markets as there were few reforms which took place at the global levels such as ECB bond buying and Quantitative Easing 3 which took most of the global indices to a 52 week high. But the underlying question is, how far are these reforms useful and the answer was quite imminent on the very next week.

The Dow Jones fell around 106+ points and what ever rally that had taken place in all the global indices was due to news but not because of any fundamentals. The same thing happened in Indian Markets too. But Indian markets survived the rally due to domestic reforms that have taken place immediately after the reforms announced by ECB and US FED.

Nifty has reached 5700 level yesterday and it didn't break 5700 level to the downside. The FII money has been pouring in due to the latest reforms such as acceptance of  FDI in single and Multi-brand retail, FDI also in aviation boosted the markets. Airlines which are feeling the debt pressure such as KingFisher Airlines can have a sigh of relief after this announcement. But the biggest question is, who will go ahead in venturing with KFA which has a lot of Debt on its balance sheet?

Since, Diwali is on the cards, we can see uptrend in NIFTY as well as SENSEX. But to maintain this trend, RBI should deregulate measures such as decrease in repo rate which boosts liquidity into the market but the challenge against RBI is INFLATION which is not slowing down.

One can also sense the political turmoil that is taking place at the national level as Mamata Banerjee withdrew support leaving congress on a thread for a while, but the UPA government is very insistent in the reforms such as FDI.

This month we have a hearing from RBI regarding interest rate cuts as well as results from few companies such as Maruti Suzuki. Since there was a lockout at Manesar plant and the production was low, what other factors can keep the profits of Maruti intact should be a wait and watch move.

Above all, this month is supposed to be an action packed one and lets hope NIFTY maintains the current levels or enters into new resistance levels.