hi everyone welcome to today’s video so let me start today’s video by asking you a very simple question the question is why do you think that banks or the banking sector is bailed out when any major crisis happens for example in 2008 when financial crisis happened it is called as financial crisis because there was massive demerits and the banks end for example there were investment banks like jp morgan goldman sachs which did some really bad stuff right i’ll make a separate video on it but we all know that these banks acted really badly they can participate in certainly shady pleasures they suffered big losses their valuations went down but still the us government rushed in and bailed them out right similarly in india there are still innumerable instances when the government hops in and bails out failing banks so why is it that several sectors be it power b transmission be it auto be it chemicals government tell these sectors flunk but on the other hand banks why is it that government needs to save banks so please type out your response in the comment section i will give the answer towards the end of this video let me move on to the agenda of today’s video so today i am going to talk about equitas regarding this is one of the key stocks that i hold in my portfolio and this furnish “ve been given” nearly 90 percent return in less than a year and i have been very confident about this talk and have spewed in a lot of capital as you can see from this chart so please listen to this video there are very important readings that i would like to share with you about profoundly analyzing a inventory and why i have been super bullish on small-time finance bank and whether or not you should also start investing your money in tiny finance bank in this bull range okay so please stay till the end of the video unusually very important i am going to speak in five points that’s it i is not complicate anything even if you are a beginner you will get it but please stay till the end of the video otherwise you will understand half the things and then you will execute half the analysis so i will show you how i do fundamental analysis and i use a implement called a sticker tape i absolutely enjoy the concoction therefore they are the knowledge partner of this video and i will show you how i have been using ticker tape to my advantage to deport fundamental analysis also would request you to delight check the description box so stage one is that whenever you are looking to do fundamental analysis of any capital you need to understand the fundamentals fundamentals of different industries right different industries and then pick the best industry out of it where you want to pour in your fund or a set of three four best industries so many of my regular onlookers might be aware that i have been super bullish on which industry on big finance bank manufacture right so this is the industry that i am trying to analyze and learn more about so what i would do here very simple that i would look at what are some of the small finance banks in india for example there is even small finance bank right bajaj finance can also qualify as tiny finance bank so to say right because they do small-time financing not technically a bank per se right then there is equitas nursing and cluster of other different banks right so equitas nursing the stock that i am going to talk about today even before mounting into these talks i was only do a careful study on what tiny finance bank is what is its scope and i will try to do this analysis so whenever i am trying to do a fundamental analysis of any type of industry what i would do is that i would go on the website of these two three large-hearted actors and i will try to read all the financial information and any key points that the government has included on their annual reports so let me show you some of the key points from there so here i am at the equitas website right and all these websites do present their annual reports right so you are eligible to literally run scroll down and then you can look at the equitas hampering limited annual report so let’s speak the latest ones right now what am i trying to do here i’m not trying to go through the company fundamentals i’ll do that separately but i’m just trying to get a feel of the industry so there were a couple of really good points that i could decipher here which i just wanted to point out and why i have been so optimistic on this industry now if you go to page 23 of this report you will predict something quite interesting right it contributes an overview of the small finance bank industry right so it says that hey literally like small-minded finance bank manufacture in the last three years so 2016 is when tiny finance bank 2015 2016 was its first year when rbi started pushing tiny finance banks and they started making a lot of inroads so look at the growth of these banks so resource under handling stretched at a compounded annual growth rate of 26 claim this is 26 proliferation per year this is a massive expansion digit for any kind of industry so and this is a fact that is available that has is to be found since 2016 2017 that every year the industry has been growing at a big gait right so this is a unusually very important phase for you to observe that this industry has a big growth rate it has been growing at a massive gait so this is the first key point that you need to understand that hey which industry should i collect my pots on so i am picking my entreats on big finance bank manufacture ev manufacture this is another industry that i have been very bullish about i relation the video here why right but these are some of the industries that i have been very bullish about right so this is the present trend of this industry right present or historic veer right much of times what we do is that we look at the present trend we look at the historic trend and we are done no that is a very wrong habit you need to move on to step two you need to understand that hey what will the future tendencies ogle because that will dictate from where the stocks of these industries will shoot up to right so here there is very good data presented right again on the annual report you do not need to do anything so all you need to do is that you merely need to look at some of the factors that are driving the growth of small-scale finance back industry and use your brain as to heal do these things appear rational so let us go point by level so lack of formal banking services for a significant section of india’s population this is absolutely true now if you are from a rank 3 city or if you are from a tier 3 town or a small village you will understand that banking and going credit is a massive sorenes for rural beings majority of the times what are the options for villagers what they do they go to loan charis right they charge like 50 monthly returns right on their fund which is very unfortunate and people get captured this happens because numerous poor people do not have access to banking and financing now very recently right i convey literally in the last five or six years janthan accounts have been opened right bunch of other verification has been done why was it done to get more and more people into the formal banking system so this exercise has not been completed hitherto right this exercise has not been completed yet it will continue to happen so this point looks very valid right second unorganized to organize banking this is what it means that rather than parties going to loan maps beings will now move to organized banking right there will be formal banks like would you even small-time finance bank equitas accommodating equidas also has a small finance bank equitas comprising is the holding company it hampers equita small finance bank so yes this is also happening access to funds at cheaper rate absolutely again ties into the first point that i was saying that if i am someone who is living in a village then rather than taking expensive credits from loan shark where will i travel i will go to these small-scale finance banks micro finance academies right so that is what is happening right and this is again a trend very clearly i actually worked on one of the micro finance association campaigns during my meter at dahlberg so i have good understanding about this industry so from that perspective i was quite optimistic from this angle right now bunch of other different supporting parts so i’ll let you read it there is another good information that is given here so you can read it right so this is very very clear that you know what if you use your psyche and if you try to do a future prognosis right future prognosis you will understand that okay or not things examine penalty there will be growth in this industry this is the second key point that i wanted to delve deeper number one look at the past trends look at the present trends number two look at the future veers right at least this trend based analysis should be very clear to you and it should be clear to the point and you should believe in that analysis because when the stock tolls go down you will not sell it if you truly believe that you know what i have acquired the stock keeping a long term vision in judgment you’ll be super glad this is what long term investing signifies it is super boring you have to do a lot of research but this is the way to do fundamental analysis and i am showing you literally opening it up particularly very transparently what fundamental analysis actually intends right please give it a thumbs up it would imply a good deal to me so okay moving on to the third point point number three now we have to decide which broth or which capitals do i need to buy from that industry right so here the question would have been that hey except why did you choose only equitas finance why not something else right so let me now take you to tickertape and this is the analysis that i do and this is the feature that i love about ticker videotape that you can literally do a peer comparing so what do you identify right you see anything called as p e rate right pe rate means what toll to earning right now for a company like bajaj finance we all know that bajaj finance inventory is massive it has become a rocket in the last 10 15 times it has given massive returns now essentially price to earning indicates what so expenditure to earning means that hey you have to put in five rupees to make one rupee right if the toll to earning is let’s say eight then you have to put in eight rupees to make one rupee right so now this is the first interpretation of rate to earning this is what all the specialists will tell you and which is cool but there is another way you can look at price to earning ratio what it simply means is that hey you look at price to earning and if a company is commanding very high price to earning right very high price to earning for example bajaj finance it indicates that people are speculation very high on its growth rate right so essentially price to earning also indicates growth rate so firms that have a very high price to earning parties are believing that hey this is a very high growth company once right for example if you put your coin in bajaj finance right now it’s rate to equity or rate to earning is 83.63 now this rate to earning ratio will not become like 500 freedom that is highly unlikely right such raise does not happen but if you are putting your coin on a small company or a company where the rate to earning ratio is 9.23 can it become 85 yes it can right for that the company will have to become eight times nine nine nines eighty one it is therefore has to become nine meters right now if the company becomes nine meters to get to bajaj finance it can technically do that this indicates that you know if i am putting one rupee i will essentially prepare nine rupees right from that asset right this is a very different way of looking at price learn i am telling you this proficiency because this is a technique not what countless beings “ve been thinking about” right this is no longer very easy to understand this has a lot of numbers so i will request you to rewind and watch this part again but essentially what i am getting at is so some companionships where the premium to earning is low right now it does not indicate that hey this fellowship is bad right it just simply could mean that hey there is a big buying opportunity right there might be a massive buying opportunity in this stock so now how do you decide right because you can interpret this low price to earning ratio in two ways right you might say that here or not bajaj finance is 83.63 parties are speculation on its expansion here people are not even speculation on its increment right therefore it’s 9.23 so probably it’s a bad share to buy okay so let me now make you to fundamentals of the company or the financial analysis of the company because you need to take a look at the finance and how much revenues is the company preparing so you need to see toll to earning ratio in situation to the financials is it a growing companionship or not why because price to earning was indicating the rise right if you take a look at the total revenues of the company right it has been an increase right it has been an increase massively if you take a look at net income this is where the wizard happens right in literally three years time how much it has become right it became very 30 40 35 seasons right 35 occasions the profits have increased for equitas financing and the information collected has been available since 2018 title this is a big big massive massive enhance now if you pick this up and combining it with the low p e that is existing i totally experience no reason for price to earning ratio of equitas so let me take you back now i see no reason why the toll to earning ratio of equitas will not become something like bajaj finance right so therefore the stock has grown up massively right so this is like one key good point about equidas finance so this is the first key point i will analyze second i will look at some of its most important parameters because big finance bank as we predict on the report it’s a deriving industry right it is very recent thing right so does it have tone checks the default probability is it low-toned are is it is the quality fine are the growth constants there right so this also indicates so we can give it another whiz right so now let us move on to analyzing the fact when we should buy the stock so for this we do something called as technical analysis now let us figure out that hey should we when should we buy the stock now this is what we need to do we need to do the technical analysis now lot of people will tell you that you know what cup and treat structure is forming accumulation is happening all that is cool i am not against it do that i also i myself do that as well but now this is a fundamentally driven stock so you need to keep that in sentiment a stock that be given the opportunity from going to 9x in terms of p2e price to earning to 81 x right it will give growth right that is what i have been betting on and that is the reason why i have moved in so much money right on this asset so this is what you need to do right now what did i say one of the principles that i had given you on earlier class was that if a company is at its highest ever profits right and it is not trading at its highest highest ever toll you should go and buy that capital right who handed this principle i have showed it earlier please comment would really appreciate it i would understand that you are learning from my videos so let’s see so it was trading at somewhere around 188 and now it is trading at 120 125 ish heights so if you take a look at the last five year performance let’s look at that so again like one same thing right it was trading at nearly 200 that’s the highest level now it’s trading at 120 728 grades right so if we if we actually take a look at the current price and liken it to its highest ever expenditure again good strong fundamentals complete reading at good cost it has not reached its highest ever potential hitherto so i am quite confident that from here it will at least reach to 200 in the upcoming years when will it reach i don’t know maybe three months maybe six months maybe one year perhaps two years i am altogether okay bracing it for the long term so essentially very quickly recapping how did i do the analysis right number one i looked at industry right manufacture i looked at past plus current trends on the industry right i looked at future trends in the industry right that was the first key piece of information that i looked number two i did peer analysis right to figure out hey which stocks might drew in the future right then i gamble large-hearted on equitas grips from that slant and obliged massive returns right close to 28 lakhs in advantage already and i would continue to hold this stock for a significant future i am quite happy with it i do see this industry originating further this produces us to the fourth part that hey what am i going to do on this talk so number one i am going to continue to hold this broth for the long term right what do i mean by long term i don’t know i am supporting a tier of around 200 if the stock ten-strikes 200 that’s what long term means for me because i see it growing to 200 levels this is not an investment advice please do your own due diligence i am just telling you my methods number two i am going to continue to buy this capital on troughs now you might say that i have gradations this is very scary you what do you necessitate by plunge right you are saying that the stock will reach to 200 status and now you are talking about plunges yes so on this journeying from 120 to 200 of course there will be troughs it might go down to 70 80 90 also i don’t bother because in the long term i still see small finance bank manufacture originating and equita is viewing germinating with it right so therefore i’m fairly bullish and i’m okay right buying more capitals on this plunge right now what are some of the risks that i see so one of the risks or one of the only threats that i see in this talk is that this is a highly regulated industry if tomorrow rbi gives more licenses to big finance bank there will be more competition if tomorrow there is some issue that goes on with equitas regarding some monetary regulatory issue of course these are news driven components i’ll remain a lookout for this i will continue to monitor all these different attributes on ticker videotape because it presents tone knowledge right so i’ll store a track of it this is one of the key possibilities that i see so to summarize i’m quite optimistic on the stock i’ll continue to accumulate and i’ll regard it for the long term and followed up with originate massive advantages this fetches us to the end of the video so i asked you a question at the start of this video that hey why is it that governments have to save banks right why is it that they can’t cause the banks die the answer there is twofold number one banks are systematically very important for any economy because the flow of the approval happens from the banks for example if banks go down tomorrow if hdfc ic i say all the banks shut then businesses cannot get credit right so banks have to be saved from that direction number two rationalization is that banks are interconnected with each other for example if any systematically important bank goes down which is a very big bank for example htfc goes down then along with it icici bank will likewise go down why because there is a lot of interlending between the banks right so therefore the government cannot give any major bank fail in any economy right that is literally the signal of an economic gate-crash that if a bank if a major bank goes down in a country it can lead to a lot of troubles so therefore i am generally optimistic on the banking sector in entirety and specially i am bullish about small-scale finance plan because they are available at an handsome valuation so i hope you enjoyed the video this is how i do fundamental analysis delight check the link in the description box and being given it a like it would convey a good deal to me thank you so much and i’ll see you the next time[ Music]
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