Byju's was founded in 2011 by Byju Raveendran and Divya Gokulnath and has revenue was Rs. 2800 cr as on FY20.

The education sector in India has offered tremendous growth potential on the back of favorable demographics, rising income levels and increased preference towards quality education.

However for investors, it has not been a pleasant ride as none of the listed education companies have not really made any real money for investors.

But here we are with Byju’s, which is on track to become India's most valuable start up.

In fact it is currently valued more than some of the old and prominent listed names like Tata Motors, Tata Steel, M&M, Tech Mahindra and Dabur.

It is just surprising that none of the traditional education companies thought of this opportunity despite having the best of resources available at their disposal.

Do you agree?

It has been a crazy run-up for the equity markets over the last year as the economy tries to find its way back to normalcy.

It’s like whatever you bought in the last 6-12 months has fetched you enough returns to make you believe that equity markets can make money for retail investors.

But that’s not the purpose of this article, the purpose is to caution investors.

Some interesting stories inside on stocks which have gained strong traction

Read more to find out.

https://monergise.com/why-do-investors-need-to-hold-their-horses/

Indians have traditionally saved in physical assets like Real Estate, Gold or have preferred to keep the money in a bank FD.

However, the trend is slowly and steadily changing from physical to financial assets. This is due to unattractive returns in physical asset, increasing acceptance of mutual funds and equities as an investment.

This is just the beginning and there is huge potential to grow.

Associate businesses that benefit from increase in demat accounts

- Exchanges
- Broking
- Depository
- AMC

Market PE (low interest rates, high eco growth) and sector PE expansion (shift from unorganized to organized, premiumization etc) is largely done.

The only thing that will trigger the rally would be volume growth.

This will decide market's next big move.

- Monergise

Asian Paints used to trade at 15x in 2000 and now trades at 90x.

Returns: ~160x in 20 years without Dividends

Re-rating plays a crucial role for any stock to become multibagger.

Reasons for Re-rating

- Industry growth
- Less cyclical(Decorative)
- Market share gain(Leader)
- Premuimization
- Distribution Expansion
- Innovation & Branding

#investing

- Monergise

Reliance Industries market cap journey from 1991.

1991 - ₹2k cr
1994 - ₹12k cr
1999 - ₹22k cr
2002 - ₹42k cr
2005 - ₹1.2lakh cr
2007 - ₹4.2 lakh cr
2010 - ₹3.5 lakh cr
2016 - ₹3.5 lakh cr
2020 - ₹13.4 lakh cr
2021 - ₹17.8 lakh cr

Stock remained flat from 2010-16. But look at the jump post that.

Reasons for rerating:
Focus on consumer businesses (Telecom, Retail)
Increasing share in profits from consumer businesses

- Monergise

Reasons for recent decline in markets:

- Crude above 80 $
- Dollar above 75
- Weak Earnings
- Expensive valuations

- Monergise

Always remember, for a stock to become multibagger, rerating plays an extremely important role. Before buying the potential multibagger, see whats the scope of rerating from here on.

- Monergise

PAYTM IPO opens today where the company is looking to raise Rs 18,300 cr from investors.

It has done exceedingly well in transforming the payment services industry.

However, it is important to know some of the key risks before subscribing to the IPO.

https://twitter.com/monergise/status/1457353462723739662?t=IVUpo_Y2T6IlOClnjoJJjw&s=19

(Consider following us on Twitter as well)

Current Status: Fed keeps pumping, investors keep minting. Stand at the door when the music stops, or get stuck for long.

- Monergise

#Paytm trades 23% below of its issue price. Some sanity prevails. Only some.

Still the company is valued more than 1 lakh cr in a space which is crowded and are working on thin margins

- Monergise

Blackrock says time to buy China Stocks and trim India exposure

Correction/underperformance looks imminent for Indian Equities as rising commodity prices would further dent demand & margins.

Keep an eye high frequency growth indicators or shift to defensives in the near term.

- Monergise

Some of the large private sector banks looks really tempting at these levels as they have managed NPAs brilliantly and loan growth is expected to revive backed by economic recovery.

But macro headwinds (crude ⬆️inflation⬆️, yield⬆️) seems to be spoiling the party

- Monergise

Reason for today's market decline

Moroever BBC wrote - The concern is this virus is now radically different to the original that emerged in Wuhan. That means vaccines, which wee designed using the original strain may not be as effective.

Real World : In the midst of last stage of unlocking
Stock Market: Pricing in another lockdown

- Monergise

Price hikes by Jio clearly shows that the worse of Telecom pricing war is over. Be ready to pay high prices for data going forward.

Good for investors of RIL and Airtel.

- Monergise

For next few days no fundamental, technical or derivative will tell you where the market is moving.

It all depends on how dangerous the new variant is. Data on virus is key.

- Monergise

Valuation Check

Nifty still trades at around 21x 1-Year Forward Earning v/s 20 year average of 16x.

- Monergise

Asian Paints 10yr net profit CAGR 14% & Stock Price 27%.

Reason: RERATING

Stock traded at 35x in 2011 and now at 90x

Reasons: Industry growth, strengthening leadership, and premiumization.

Retweet for more such content.

- Monergise