How to Choose Your DTH or Digital Cable TV Channels Optimally? (TRAI Channel Selector & Optimizer)

Note: Be sure to read till the end of this article to understand the new system thoroughly. This will really help you save some money on your cable bill. You may skip to the Channel Optimization section, if you already already know how the new TRAI regulation works.

The Government of India (TRAI) has come up with their new tariff policy for the DTH and Cable TV operators in India. This new TRAI regulation enforces uniform pricing all across India for the paid channels or broadcaster packages. We, the consumers (subscribers), are supposed to be empowered with this new move as one just needs to pay for what is chosen. However, the reality is far from that ideal world. The monthly subscription fees of most subscribers have shot up dramatically while some channels have disappeared in many cases!

One of the main reasons behind this issue is the lack of awareness on how to optimally choose your channels or packages! This post is an attempt to make you – as a DTH or Digital Cable TV subscriber – understand what to do in order to get the most bang for your buck! At the end of this article, I am sure to save you some money on your monthly TV subscription charges.

What is the New TRAI Regulation all about?

The following list outlines the rules by TRAI which are to be complied by all broadcasters and DTH / Cable TV providers. For the sake of brevity, I am mentioning only the most important points that are applicable to most of us as consumers.

  • All DTH or Cable TV providers (e.g. Tata Sky, Hathway) must provide an easy selection mechanism to their subscribers. This can be via apps, websites, manual forms etc but should help consumers choose the channels they want to watch
  • All providers should at the least offer a base bundle of 100 FTA (Free To Air) SD channels, in all geographies in the country. This base package will be charged uniformly at Rs.130/- plus GST (18%) across India. This comes to Rs. 153.40 with GST
  • The above base bundle must include the set of 25 Doordarshan channels that are mandatory. The consumer has the right to opt out of the other 75 free channels to make room for their other choices. These choices can be either Free or Pay Channels. Unfortunately, This is a rule that’s being violated by many service providers till now and hence cheating the consumers!
  • In addition to the base package, the providers can offer any number of customized packages for their consumers. These bundles too must include the mandatory DD channels
  • The base charge of Rs.130/- (153.40, with taxes) is called the Base NCF (Base Network Capacity Fee). This’s the minimum amount any subscriber has to pay to remain as a customer. Even when he/she hasn’t selected any additional channels, that is
  • For every additional 25 channels, above 100, a Network Capacity Fee (NCF) of Rs 20/- + GST will be added to your bill. For example, if you have chosen 110 SD channels from your provider, your total charges will be the Base NCF + NCF 1 = 130 + 20 = (150 + GST)
  • For calculating the network capacity, each HD channel will be treated as equivalent to two SD channels. For example, in the calculation above, if you add another 10 HD channels to your list, this will be treated as 20 SD channels. Hence your total will be now 100 Free channels + 10 SD channels + 10 HD channels x 2 = 130 Channels (Not 120). Accordingly, one more NCF charge will be added for you (as you crossed 25 limit of NCF 1)
  • If you opt for any pay channel, the subscription fee of that channel will be added to the above total. TRAI has ruled that no pay channel can charge more than Rs.19/- per month
  • In addition to the free to air (FTA) channels, and individual pay channels (a-la-carte channels), the broadcasters (e.g. Zee, Sony India, Star Network, Times Network etc) can provide packaged products known as Broadcaster Bouquets. A bouquet is nothing but a bunch of channels bundled together for a fixed price – which is usually much less than the total prices of the individual channels in the bundle.
    For example, the Times Network has a bundle called Times Bouquet 3 which contains 5 x HD Channels and 3 x SD channels and they have priced this bouquet at Rs 20/-

In short, a consumer has the option to choose either a package (usually not very optimal) from the provider or pick and choose what he or she wants to watch. In either case, a typical consumer will end up having a combination of the following:

  1. Mandatory 25 Doordarshan Channels
  2. Zero or more free to air channels (Usually it’s never zero)
  3. Zero or more a-la-carte (pay) channels
  4. Zero or more broadcaster bouquets

The billing amount has three components: (1) The NCF charges, as explained above, (2) The total price of the paid channels and broadcaster bouquets you opted for, and (3) 18% GST on the total of the above two.

How to Shortlist Your Channels?

Now, this is where things get trickier. If you decide to continue with all those 100s of channels you have been receiving till now, your new subscription charges are sure to shoot through the roof. But then the question is ‘have you ever watched all those free channels that have been aired your way?’

Hence it’s time to write down only those channels that every member of the family actually watch. I mean all those channels that everyone – from the Pogo toddlers to the Aastha oldies – watch on a daily basis, and not once in a blue moon.

Now, you may scrutinize this list once again before submitting the same to your provider (or use their website or app or other subscription means). Typically, your list now should contain 20 to 30 channels in most cases, or say 50 or so in the worst case.

If you are going ahead with this list right away, you are not going to like the final bill amount that your provider may came up with! With all those Base Charges, NCF, Paid Channel charges and GST, you are likely to pay a few hundred rupees more than you were actually paying till now!

This is where TRAI has come to your rescue by providing a Free Channel Selector and Optimizer that will help you choose some bouquets optimally so that you can save a lot on your cable TV bill.

How to Optimize Your Cable TV / DTH Bill?

With the channels list that you have got now, you may visit TRAI Channel Selector portal https://channel.trai.gov.in/

Trai Channel Selector

Scroll down the page and click on the Get Started button.

It now shows some 5 steps. You can skip through all these steps by clicking the Skip button on each page, till you land on the ‘Choose Your Pay Channels’ page. I mean, you don’t really need to provide your personal information, state, language preferences, and interests at any point as requested in these 5 steps.

You will already notice that your minimum charges of 153.40/- is mentioned on the yellow bar on top.

You can now search (from the Search Box with a Lens image) for the channels you want and keep adding them to your selection. For example, you can see in the image below that I have searched for NDTV and chose NDTV 24×7 – from the three channels appeared as search results – by selecting the checkbox against it.

trai pay channels

Using the same method, you can now search and add all those Pay Channels for your family needs.

If you don’t find any channel there, you may search for the same by clicking the ‘Free To Air Channels‘ menu item on the top of the page. You can switch between this menu item and the ‘Pay Channels’ menu item any number of times before you finish choosing all your channels.

As and when you select more channels, you can see that your subscription fee along with GST gets updated in the yellow box.

To review your list, you can choose the menu item ‘My Selection‘ and click the + (Plus) buttons against each sub section (Pay Channels, Free Channels etc). You can see that in my case, I have chosen 25 pay channels, 5 free channels and the application has automatically added the 25 mandatory DD channels. My total bill as of now stands at Rs. 450.76/-

TRAI Channel Selector - My Selection

Once the list is confirmed, it’s time to optimize your choices. By optimizing what the app does is to reduce your cost by suggesting certain bouquets instead of choosing each channel individually.

You can optimize your bill by clicking the ‘Optimize’ button on top right corner of the page. You have to again click the green ‘Optimize’ button and confirm the action on the resultant page. Once it’s done with optimizing, it throws a screen as given below.

trai optimized channel list

You can see that, in my particular case, my monthly bill is already reduced by about 50 rupees by optimizing. What the TRAI Channel Selector app has done is bundling a few of my channel selections into one or more Bouquets. You can review this by clicking the + sign against the Bouquet Channels.

As you see, my NDTV individual channels have been replaced with an NDTV South Life bouquet. Similarly, HBO, Cartoon Network, CNN International etc have been bundled into Turner Family HD Plus Pack and so on.

trai optimized bouquets

You can keep adding or deleting your choices and keep optimizing until you meet your family’s requirements and based on your budget.

Please note that your savings from this optimizing process can be much more if your channel needs are higher. Once you are satisfied with this optimized list, you can send these details to your local provider. Or you can choose these optimized bouquets, paid channels and free channels by yourself using their online sevice. There is also an option to Save your selection using your mobile number and OTP. This didn’t quite work for me so far. I actually manually copied my optimized channel content for choosing my final package.

Please also note that the optimization process, at times, increases the total number of channels than your original list. But the app keeps in mind your total price including NCF charges etc during the optimization process. Hence you are only going to gain from this tool, even when the channel count goes up.

That’s pretty much about the TRAI Channel Selector and Optimizer app.

Fraudulent Activities by Service Providers

There have been numerous complaints from the consumers who are not complying with the TRAI regulations. Service providers like Hathway, Siti Cable Networks, Den Networks etc are the main culprits here. I am a victim of this rogue attitude from Hathway whereby the local service provider is messing with the rules. He is unwilling to remove the 100 free FTA channels that I don’t want and blames the system for that! These channels are mostly low quality local channels that are bundled with annoying ads. Basically, the service providers are forcing these channels on us so as to protect their revenue stream. Essentially they want to bloat up your total bill by adding these trash channels via the NCF slabs. I am still fighting this out and spreading awareness till my DTH service provider complies.

Please refer to this ToI news to understand what I am talking about. You may share your experiences on this issue using our comment section below.

There are also cases where the service provider only allow us to add more channels but not to drop unwanted channels. This is another way of charging more than what the customer actually consumes. In other case, no customer support is provided for customizing the channels or addressing the issues. Some of these issues are being addressed by TRAI as per this news link.

That’s pretty much about this topic. Things are improving with our systems. But the Government and the service providers need to come with a more proactive approach to solve the consumer concerns.

Let me know your opinion on the new TRAI regulation and its impact on your family’s TV routine!

Zerodha Review and a Look at their Online Trading Tools

It is almost two years since I signed up for my online trading account with Zerodha Discount Brokerage service. Before this, I have had a long 17 years of relationship with ICICI Securities for all my investment purposes. This was my primary account to meet my early retirement objectives. Well, I still have that account and a big chunk of my retirement investments still sit there. But then their brokerage charges were and continue to be way too high! Looking into my last ten years’ trading history, I see that I had paid ICICI a whopping 2.40 Lakhs in brokerages – And all that for a mere gross profit of only about 6 Lakhs from trading alone! That’s when I decided to have a look at cheaper trading solutions, found one and hence this Zerodha Review.

zerodha review

Why Zerodha or Similar Brokerages?

Be it trading or investment, it is all about how much returns you get on your investments. To maximize your returns, you should not only buy low and sell high but also minimize the related expenses. The following table lists some actual stock trades that I did in ICICI in the past and the brokerage charges paid. The third row here roughly completes the Zerodha vs ICICIDirect comparison based on what actually I would have paid had I used the former.

Brokerage Charges – Delivery based

(For 25 shares of HCL Technologies)

Broker Buy Price Sell Price Buy Comm. Sell Comm. Profit
ICICI 930.68 1073.10 170.01 201.87 3188.62
Zerodha 930.68 1073.10 23.93 28.07 3508.05


You can see that I paid about Rs.372/- in brokerages for ICICI Securities for a particular transaction. But I would have paid only Rs.52/- had I done the exact same trade using Zerodha. Please note that, for Zerodha, there is no brokerage for stock investments (i.e. delivery based trades). What you pay is only towards taxes and cess levied by the government, which works out to be around 0.1% in the above case. For ICICI, it is about 0.75% including taxes.

Intraday Trading Brokerage Charges

Intraday trading is really cheap in Zerodha whereby the above trade would have costed me only Rs.15/-. ICICI would be roughly Rs.190/- for the same trade. It’s actually 0.01% or Rs 20/- per trade, whichever is lower, for Zerodha intraday trades.

For more information on how cheap Zerodha Trades can get, please check out the Zerodha Brokerage Calculator.

The other valid reason for me to go ahead with a cheap brokerage service was that I wanted to learn a bit of technical trading as well. Zerodha trading platform and apps are designed for traders who can tap the opportunities by understanding the price movements. This is something that first generation online trading platforms like ICICI was completely lacking. Please note that by trading, I am not referring to intraday trading alone. Trading using trends and charts can be for any duration – be it intraday, a few days, weeks or even months. Accordingly, you may call it intraday trading, swing trading, positional trading etc. I must admit that, after I started using Zerodha’s simple trading interface (as well as their advanced charts), I have really started learning a bit of Technical Analysis.

By the way, I must warn beginners in trading not to get puzzled by the chart view. It is absolutely optional and one can use Zerodha without seeing any chart as well. But if you are into serious trading, it’s good to understand a bit of charting and trend analysis via Zerodha Varsity (mentioned below)

Also, when I wanted to sign up with a Discount Broker service, I wanted it to be a brand that is established and have a sound technology backing them. Zerodha now is the Number 2 stock broker (behind ICICI) in India and they are ahead of HDFC, Sharekhan, Axis, Kotak etc.

Zerodha Account Opening Procedure

Account opening procedure was a breeze with Zerodha. The following were the logical steps involved in getting started with your account:

  1. Visit Zerodha online and click “Open An Account”
  2. Fill in your personal details and complete the signup procedure online with Aadhaar verification
  3. Pay Rs.700/- online towards account opening charges (with Demat account)
  4. Download the signed up form, print, paste your photo and sign it
  5. Have a Zerodha agent to pick it up for you along with copy of address proof and PAN card
  6. Your account will be operational within a week

With the above steps, you can start transferring money from any of your bank accounts and start trading in about a week. Having said that, you still have the possibility of doing steps 2 to 6 offline by having a Zerodha agent visit your home.

Zerodha Online Trading Interfaces

Trading on Zerodha is mostly done via a browser interface called Kite and its counterpart – Zerodha Kite Mobile app – for online trading. The web and mobile interfaces are very similar and easy to use. In fact, there are very few tabs in the user interface, namely Home or Dashboard, Orders, Holdings, Positions, Funds and Apps.

zerodha kite web

Basically, you start by adding the stock scrips of your interest by to the common area on the left called Marketwatch (Click the above image for a clearer view). You can add up to 20 scrips per tab and maximum 5 such Marketwatch tabs are allowed. The buy and sell orders are executed either from the Marketwatch itself or from the Positions, Holdings, Order windows or even the chart. Positions lists your trading positions yet to be delivered into your demat account and Holdings show your investments or delivered stocks. Funds tab is where you add the money from your bank account or withdraw the profits.

zerodha kite mobile home
It also offers a powerful Desktop trading app called Zerodha Pi for advanced trading. Pi provides a number of features like custom alerts, and ways to back test your trade strategy via scripts etc. Pi also provides advanced charting tools. I did have my experiments with Pi and Tradescripts but reverted to Kite as I am not too much into Algorithmic style of trading. I must add that it is not exactly an Algo trading solution as placing of orders are still manual. It just provides alerts based on your script conditions and you need to place your orders then manually. More details on Pi is beyond the scope of this post as well as for beginners in trading.

Zerodha Varsity learning center

This is something that no trader or investor should miss at all. Zerodha Varsity is a complete knowledge or learning center for anything and everything concerning equities, trading, futures, options, currencies – you name it. It is the best online learning portal on investment and trading. And it still keeps evolving with more content and answers readers’ comments and doubts pretty promptly in an interactive manner. You MUST Check out Zerodha Varsity to see it for yourself.

So, What’s Good and Bad about Zerodha?

So far, I have been very happy with Zerodha primarily because of their low brokerage charges. About the trading tools – I am now more comfortable with their charts and trading tools than the transactional type of interface that ICICI has (Or other tools that I have used in the past e.g. Kotak’s trading interface long back). Another good thing about the user interface is that whether you are trading stocks, stock futures & options, currency or commodities, the process flow is the same with exact same user interface. By the way, I also did a trade once by calling the Zerodha trade help line. That process was smooth too if you keep your Client ID and PIN handy.

For those want to do highly leveraged trading, there is something called BO (Bracket Order) and CO (Cover Order). These products offer up to 25-30 times margin leverage on your cash, based on your stop loss criteria. This is a great feature for seasoned traders.

Marketwatch is one of the coolest features that I really like. Basically, I add my Portfolio stocks in one view, equities to be invested into in another and pure short term trading bets in yet another tab. In all tabs, I also add the basic indices such as Nifty, Sensex and Bank Nifty. It’s very easy to organize, get a clear view of the market and also get to see the live market pulse.

Getting an year end tax statement (for LTCG and STCG calculation) from your brokers is one of the nightmares of a trader. Zerodha’s tax statement is probably one of the best I have seen. It’s neat, simple to understand excel workbook with all your transactions and taxable figures mentioned in a consolidated form. Your statements and past transactions can be downloaded from their back office tools. Also, for those who want to invest in Direct Mutual Funds, there is a Coin Mutual Funds portal as well.

Zerodha also boasts of a highly interactive discussion portal called Z-Connect, which is another huge plus point.

About the improvement areas – It did have some technical snag in terms of getting the latest quotes for two or three days in the last two years. Zerodha, however, provides the details and reason for such errors on the trading view itself via alerts. Most of the time, it seems to be the glitch from the exchange itself.

One BIG issue I have with Zerodha is that they don’t allow users to simultaneously log on to the Kite app as well as Pi. This is kind of irritating as I would love to see the triggers on Pi and use the simpler Kite app to trade. However, they allow simultaneous sessions on Kite mobile app and web interface.

Also, it’s about time they added some more features such as better trading alerts into the Kite trading app. It’s already part of the Pi Desktop Trading Tool but I would like to see such a feature in Kite as well. There is a new Algo tool called Zerodha Streak under development, but I haven’t used it yet. That said, I need to really write a detailed post on Pi and TradeScript algorithms soon. It’s an altogether different and exciting place as well.

The 60 Day Challenge

This is an interesting proposition (which I actually missed myself while signing up). After your first 60 days of trading, if you are in profit, Zerodha will pay you back all your brokerage charges! This is subjected to a maximum of 6,000 Rupees that they will pay. Still it’s an excellent deal and many people have taken up trading as their profession after taking up the 60 Day Challenge.

That’s pretty much about Zerodha for now, although I really have a lot of experience to share. If any of you are Zerodha customers here, please provide your feedback as comments here. Others may consider checking it out along with any of the other discount brokers you have in mind.

Account Opening Link for Zerodha

Some more screenshots

Zerodha Kite Web Interface screens

Zerodha Buy Screen

Zerodha kite chart

Zerodha Kite Mobile App Interface

zerodha kite app buy

zerodha kite app chart

Save Water via Half Flushing Technique

Our cities are reeling under severe water crisis and probably Bangalore city is the worst hit. I am a Bangalorean who is also involved in some activities related to managing water and electricity in our apartment society. Hence, I understand the exact difficulties regarding the water situation in our garden city.

Bangalore’s current supply of water from its utilities board (BWSSB) is good enough to meet only 50% of its demand. Further, the ground water in this region is depleting fast. The fact that even a 1000ft deep bore well doesn’t seem to find any water in certain places explains our current plight. The case is not too different in many other parts of India.

Water saving measures in our Society

In the past, we had undertaken multiple interventions in our community to save water using various available technologies. This included, installing water saving aerators in faucets, shower heads etc and also (non-technical) lifestyle changes of saving water via restricting car wash frequency, drip irrigation methodologies for gardening etc. However, one of the biggest spend item that’s not addressed so far is how we use our toilet flushes.

Like in the case of many 10+ year old apartments in India, even we do not have water saving dual flush systems installed in our toilets. This means that every flush spends roughly 8 litres of water and each person does 8 to 12 such flushes every day. The important thing here is that up to 8 flushes a day are typically used for disposing our liquid waste (urine mainly). This is where, I think, there’s a huge opportunity to save water.

Why Half Flushing?

In order to flush out urine, one just needs to spend 3-4 litres of water or half of what your toilet flush dispenses per flush. While dual flushes address this problem, majority of our toilets are still not dual flush type. Hence, we need to manually do a half-flush while flushing liquid waste and this is exactly the aim of this campaign (non-commercial) that I am trying to run.

Dear friends, please watch the following video and make sure that it reaches your contacts living in the Indian cities – especially apartment dwellers. We together can save millions of litres of water via disciplined measures such as half flushing technique. Typically, one can save up to 15% on your overall water consumption via this method alone. Hence please act today!

If the video doesn’t appear on this page, please click this direct link

And, if someone is interested in knowing about numerous practical ways to save water and cut down on your water bill, please feel free to contact me. This is completely free and I have no business interest whatsoever when it comes to conservation of water. I can just share a few tips with you that worked well for our apartment community.

Please start saving water today via optimizing your consumption!

Long Term Portfolio Stocks in India – Best Stocks to Invest in India for Long Term

‘Growth or appreciation’ is the primary goal of any stock investment regardless of your time horizon and risk profile. Dividends, buyback opportunities, merger-demerger benefits etc are secondary, although still significant in providing additional advantages to your equity portfolio. But when it comes to the best stocks to invest for long term, you need to be choosy. More importantly, you need to be aware of exactly where you want to put your hard-earned money into.

Just going by that primary definition of ‘appreciation’ let me explain an easy way of picking safe and sure-shot long term portfolio stocks. I have two objectives here – first, to explain this simple methodology of picking steady growth portfolio stocks and second, to share a portfolio of 12 solid large cap stocks that one can blindly invest and forget for the next 10 or 20 years to build massive wealth. Well, I am not talking about lump sum investment here but one can keep buying these twelve stocks at every market correction opportunity OR at regular intervals (SIP) in order to build long term wealth. This is also an attempt answer some of the queries that I keep getting from the readers of this blog regarding steady portfolio stocks for long term.

The Method of Picking Steady Growth Stocks or Best Stocks to Invest in India for Long Term

Now, over to the methodology – It’s actually a pretty simple technique and no rocket science. Please follow the following steps to arrive at your final list.

Step 1: First you have to make an initial list of about 50 stocks from multiple sectors/industries. This initial list can be easily made by taking all 30 Sensex stocks plus say 20 big names from the NSE Top 100 list. If you are confused here, start with the list of top 100 stocks in NSE itself.

Step 2: Now, since our aim is price ‘appreciation’ in the long term, we need to have a look at the long term chart of these companies. You can use Yahoo finance, Money Control or NSE / BSE charts to see the 10 year or 15 year chart of the companies shortlisted from Step 1. In this step, you have to pick all those companies which have a steadily upward going chart (which of course indicates price appreciation). E.g. the charts of HDFC Bank or Asian Paints look exceptionally good and not that of SBI or ONGC. Discard all those companies that don’t have a smooth upward looking price journey and you will be left with 15 or 20 good growth stories (price-wise or chart-wise)

Step 3: This list, of say 20 companies that have great looking charts, has to be further scrutinized for good growth parameters. Here, I simply look at the RoE (Return on Equity), RoCE (Return on Capital Employed) and Sales and Profit parameters of these stocks. I usually use the Screener site to check these parameters. For long term growth stocks, a steady RoE of say above 15 (preferably 20+), RoCE of above 20 (Preferably 25 or 30) and a positive sales and profit growth in double figures is more than enough. Don’t be surprised if you notice companies with an RoE of 50 or RoCE of 200 plus.

Step 4: Most of the stocks with from Step 2 and 3 may be having good growth parameters. Now, to drop a few more, please take a look at their Debt / Equity ratio, again using Screener. Here, for long term stocks, I would drop all those companies that have a Debt to Equity ratio of more than 25% (0.25). Ideally, one should pick zero debt companies here or the ones with Debt / Equity ratio as zero or nearly zero. Please note that in the case of Banking, Financial and NBFC stocks, one shouldn’t look at this ratio, as their primary business itself is borrowing and lending

The above four steps would leave you with a dozen or so stellar performers that you can invest in for solid long term gains.

Good and Not-So-Good long term charts

Here’re some examples of typical charts to go for, as discussed in Step 2. Please note that one has to look into the 10 or 15 year chart and NOT 2 or 5 year charts while hunting for potential long term portfolio stocks.

Exceptional growth stocks with great charts

Asian Paints

HDFC Bank

HUL

Pidilite

Decent companies with poor long term charts

Well, these are still portfolio stocks for historic reasons but they don’t necessarily fetch you the desired price appreciation. On the other hand, just by looking at their charts, one can figure out that they are good for medium term trading point of view whereby they offer many up and down cycles in the long term charts.

ONGC

SBI

My list of 12 Buy-and-Forget Long Term Portfolio Stocks

Based on the above screening, the following would be my list of the best stocks to invest in India for long term. Ten of them are index stocks while two others are high growth non-index stocks with proven track record and continuous growth in the future as well.


1. Asian Paints Ltd
2. Bajaj Auto Ltd
3. Bajaj Finance Ltd
4. HCL Technologies Ltd
5. HDFC
6. HDFC Bank Ltd
7. Hindustan Unilever Ltd
8. Lupin Ltd
9. Maruti Suzuki Ltd
10. Pidilite Industries
11. Yes Bank Ltd
12. Zee Entertaintment Ltd

Now, all those who are looking for multibagger recommendations, from a few months point of view, may ask yourselves the following question. Would you put your hard-earned money in risky multibagger stocks OR in safe, established businesses that can return 10 or 15 times over a ten year period?

Happy Investing!

(Standard disclaimer: I am not a qualified investment advisor. Do your own research before investing or consult a certified financial advisor. I personally hold some of the above stocks in my long term portfolio)

3 Potential Multibagger Stocks that are Turn Around Stories

In the last bull run, so many Indian companies took their ambitions abroad in an effort to grow faster inorganically by acquiring foreign companies. Easily available loans and FCCBs made their dreams instant reality as lenders were ready to shell out money on these companies that had good brand value, niche technologies or product line up, steady revenue stream and consistent net profits too.

However, things began to go wrong for most of these companies as the perceived benefits of acquisitions didn’t really result in increased profits. On the contrary, adverse market conditions and integration issues played against them and they started piling up debts much faster than they could have ever imagined. Tata Steel, GMR Infrastructure, Suzlon, Lanco Infratech – the list goes on.

subex suzlon bilt

In this post, we will talk about three such companies (and their penny stocks) that made such oversees acquisitions. While they failed at that, they seem to have realized their mistakes, corrected them (or in the process of doing so) and now on the way to turn around themselves into profit stories yet again. Needless to say such company stocks can turn into multibaggers for any investor with high risk appetite! Of course, these are not portfolio stocks and hence one shouldn’t blindly invest all their money into them but a retail investor can consider a small exposure on risk-reward potential basis.

The stories of Subex, Suzlon and Ballarpur Industries

The turn around stories – and hence potential multibaggers in India – we are going to talk about today are Subex Ltd, Suzlon Energy Ltd, and Ballarpur Industries Ltd (Note: Read updates below).

1. Subex Ltd

Company website: http://www.subex.com/

History: Subex was founded by Subash Menon and Alex PJ (hence the name SubEx) in 1992. They initially dealt with fiber optics cables but shifted focus to niche Telecom software – primarily fraud management systems and revenue assurance software.

The company was steadily growing since its inception. However, in the boom that followed the DotCom fall they decided to acquire many small Telecom software companies abroad. Initially, all acquisitions were funded by cash and equities but then they started borrowing and raising funds via FCCB (foreign currency convertible bond) route as well. During this time, one of the founders and promoter left the company making it more like a family run company by promoters with questionable intentions. The debt of the company started piling up and the stock crashed from its high of 700+ to 20s in a matter of two years.

Investment rationale: After their original promoters were unceremoniously packaged out for all that went wrong in their hands, the new management took control over Subex in an attempt to clean up the company’s balance sheet. And they have been quite successful at that in just three years.

At the moment, the company is almost debt free and it’s on the growth path again. With a market cap of 500cr, annual sales figures or 300cr and a debt of just 50cr, and 100cr in free cash, it looks like an investment grade company again.

At the time of writing this post (May 2016), the stock is trading at around Rs. 10 and the book value is more than 5 rupees. The interest outflow is very negligible now and hence it really looks like a turn around story to me and a potential a multibagger.

Risks: With almost negligible debts, the only potential risk for this company is any adverse market conditions for Telecom players in Europe and Latin America.

2. Suzlon Energy Ltd

Company website: http://suzlon.com/

History: Suzlon is another great company that went from steady growth path to huge losses after their acquisition of the German company Senvion in 2007. This wind energy company reported their last profit in 2008-’09 and it has been steadily declining since then as they couldn’t manage their debt bill. The debt kept mounting at an alarming pace and when it hit more than Rs. 17,000 cr they had no other go but shelve off the German subsidiary, and it finally happened last year (2015).

Investment rationale: After exiting Senvion, the company still has a debt of around 8000Cr, however, only 4000Cr of this is long term debt an it’s payable only in 2019. There’re further FCCB bonds that may get converted into equities by 2023 and hence there’s no further equity dilution in the next seven years. Of course, there is still interest burden but it looks manageable as the company’s operating profit is steadily climbing since the Senvion sale. Further, the operating profit margin (OPM) on the standalone basis is climbing rapidly as there is no major expense or capital expansion taking place.

Last year, the Sun Pharmaceuticals’ Dilip Sanghvi acquired 23% stake in Suzlon Energy and this makes Dilip Sanghvi and Tulsi Tanti (original promoter and founder) – two big and reputed names – the main promoters of this company. With the NDA Government’s increased focus in the renewable energy (1,75,000MW in next 7 years) sector, Suzlon has also diversified into Solar Energy which is cheaper to produce and implement than wind energy. They intend to deliver 15,000MW installed capacity in India in the next five years, off which they already signed a 4000MW project recently with Andhra Pradesh government. The manufacturing capacity of Suzlon is now 4000MW per year with no new investment required. They now have enough working capital as well after exiting Senvion and hence there’s no need to borrow anything in the near future. Overall, things look great again for Suzlon and hence a potential multibagger over the next few years for patient investors.

Risks: While the company doesn’t need to pay off any of their debts in the next three years, they indeed need to pay interest on a regular basis and also maintain cash generation to pay off their loans in 2019. Another risk is any potential decision in favour of solar power vs wind power due to cost factors as Suzlon is still more than 75% a Wind Power company. The company’s book value is negative as of now and this is one of the biggest risks for any investor.

3. Ballarpur Industries

Update on June 08, 2016): This recommendation has been discontinued as the BILT – Sabah Forest Industries didn’t go through as expected. Read the news at this link.

Company website: http://biltpaper.com/

History: I vividly remember myself investing in this stock (BILT) almost 15 years back and making some money when things were going good for Ballarpur Industries – an Avantha group (that owns Crompton Greaves etc) company and a leading name in the Indian Printing and Writing paper market. It was a very good dividend paying company too at 25-30% dividend paid every year (They still pay dividends, although much lesser).

However, things began to go wrong with the company when it acquired a Malaysian paper company namely ‘Sabah Forest Industries Sdn’ for $260 million. Like many other Indian companies that we discussed above, they too piled up debts that now stands at a whopping Rs.6000 crores.

Investment rationale: BILT has already taken the corrective measures and they are in the process of selling the Malaysian arm. A deal has been finalized with the buyer (Pandawa Sakti Sabah Sdn) for $500 million (Rs.3300 Crore). The sale date is due in May 2016 following which BILT can write off half their debts instantly. This would allow them to focus back on the Indian arm and be the leader yet again. With the interest outflow reduced drastically, I believe that this company will be back on track again and the stock can appreciate from here own and yield significant return for its investors. Further, the book value is still around Rs.25/- per share which is significant higher than it’s current market price (CMP).

Risks: The Sabah sale final date has been pushed three-four times already by the buyer while an agreement is in place. If the deal is called off, just in case, it may be bad for the company.

Disclaimer

I am not an investment advisor but just a retail investor and trader like most readers here. Hence, please take professional help before investing in the stocks discussed here. I have vested interest in most of the stocks that I write about and you can check out my equity portfolio as a disclosure. I am not responsible for any loss or gain that you may make in the stock market after following the articles on my blog. Also, it is recommended that investors take positions in a staggered manner than investing in one shot in any of the stocks for that matter.

(At the time of writing this post, I am invested in Subex since several months and accumulated Suzlon shares recently. I have interest in buying BILT based on the Sabah sale news)

Happy investing!

8 Indian Summer Drinks & Recipes to Beat the Heat

As the mercury rose in an unprecedented fashion as early as in February this year, I have been busy researching on ways to keep my family in good hydrated condition. Apart from drinking plenty of water, what is of importance in summer, is to have a lot of vegetables/salads, fruits and the right amount of salts/minerals added to fluids. Unfortunately, feeding kids with vegetables and fruits is not exactly a successful mission from my experience and hence I thought of trying various juices, shakes and smoothies this time around.

What is given below is not entirely my inventions but mostly influenced by recipes of Indian summer drinks available on the web. However, since I have been making one different drink per day, I got to experiment a lot with various combinations. The theme is broadly around plenty of citrus juices, seasonal fruits and at times with milk products. My favorite flavors like fresh mint leaves and ginger adding that extra punch.

Before heading on to the recipes, please note that, for the sake of brevity, I am not writing these recipes in professional style. Also, unless specifically mentioned all recipes are to serve two people.

So, here you go.

1. Aloe Vera Lime Juice

Last week, we did a round of pruning of our plants (whatever was left there, that is) in the balcony and got plenty of Aloe Vera rinds. While I was wondering what to do with it, I stumbled upon a recipe on the web which I modified a bit to make this refreshing juice.

aloe vera lime juice - summer drinks images

Ingredients: Aloe Vera gel – 2 tablespoons, Juice of two Limes, Salt – ¼ teaspoon, Sugar – 4 to 5 teaspoons, Water – 1½ cups, Ice cubes – ½ cup

Method of Preparation: Pour Aloe Vera gel, Lime juice, Sugar, Salt and about 50 ml of water into the blender jar and blend well for about 20-30 seconds. Add the remaining water and ice cubes and blend further for about 10 seconds. Pour into a glass and enjoy!

Tip: Aloe Vera can be mildly toxic if you do not extract the gel carefully. The yellow part or latex between the skin and the gel contains ‘Aloin’ which shouldn’t be consumed at all. If the gel extract is transparent without any traces of yellow (as shown in the picture below), then it’s very safe to consume it. In either case, do not add more than a tablespoon of aloe vera per glass of juice.

aloe vera gel

2. Double Citrus Juice

double citrous juice - juice drink image

Ingredients: Freshly squeezed orange juice of 2-3 navel oranges, Juice of two limes, Water – 1 cup, Salt – ¼ teaspoon, Sugar – 3 to 4 teaspoons, Ice cubes – 4 to 5

Method of Preparation: Just blend everything together in a shaker or blender and enjoy!

3. Spicy Buttermilk

This is something that we used to make back home in Kerala. I just modified it a bit to suit my current taste (medium spicy and mildly sweetened)

spicy buttermilk - indian spicy buttermilk recipe

Ingredients: Refrigerated curd – 250ml, Water – 150ml, Salt – ½ teaspoon or as per taste, Sugar – ½ teaspoon, Shallots / Sambar onions – 2 to 3, Green Chilli – 1 (small), Ginger – ½ inch, Curry leaves – 7 to 8

Method of Preparation: Blend curd, water, salt and sugar well for about 20 to 30 seconds in a blender / mixer. Coarsely crush pealed shallots, green chilli, ginger and curry leaves in a mortar. Add it to the blender along with the rest and blend for another 3-4 seconds. Refreshing spicy buttermilk is ready!

The color of the buttermilk may vary (light green or mild pink) based on the leading ingredient.

4. Kiwi Smoothie

Kiwi fruits seem to be suddenly cheaper in the Indian markets (due to excess import?). I saw them in the More Supermarket for as low as 14 rupees apiece last week and decided to experiment with the same in multiple ways.

kiwi smoothie recipe

Ingredients: Kiwi fruits – 1 (Pealed and chopped), Chilled milk – 1½ cups, Water – ½ cup, Sugar – 4 to 5 teaspoons, Ice cubes – 5 to 6

Method of Preparation: Blend kiwi fruit pieces, Sugar and water in a mixer or blender for about 30 seconds (or until no small pieces of kiwi fruits are seen). Now, add milk and ice cubes and blend for another 15-20 seconds. Pour into a glass and enjoy the smoothie!

Tip: You can add half a banana, while blending the kiwi, to make it an even richer smoothie with a better flavor. Yes, Kiwi and Banana can go well. In fact, I had made that once but forgot to click a picture

5. Minty Watermelon – Lime Juice

Water melons are indeed the fruit of the season. But did you know that some lime juice and ground mint leaves can turn your humble watermelon juice into an exotic Mocktail?

minty watermelon lime juice recipe

Ingredients: Cut Watermelon pieces with seeds – 5 to 6 cups, Juice of 1 lime, Fresh Mint leaves – 8 to 10, Salt – ¼ teaspoon, Sugar – 3 to 4 teaspoons, Ice cubes – 5 to 6

Method of Preparation: Blend everything together (including the seeds in the watermelon) for about 20 seconds. Pour into a glass and garnish with 2-3 fresh mint leaves and enjoy!

Tip: Try another variant by replacing mint leaves with ¼ green chilli while blending! This has more punch in it.

6. Lime – Ginger Juice

This is one of my all-time favorites and this is what we usually offer to our guests in the summer.

Ginger Lime Juice image

Ingredients: Juice of 2 limes, Extract of 1” ginger piece, Salt – ¼ teaspoon, Sugar – 4 to 6 teaspoons, Ice cubes – 5 to 6, Fresh mint leaves to garnish

Method of Preparation: Blend everything (except mint leaves) together for about 10-15 seconds or until the sugar completely dissolves. Pour into a glass and top with mint leaves. You can try garnishing with crushed mint leaves as well. I usually, chew the leaves after I finish the juice ?

Tip: In order to extract the ginger juice, first crush it in a mortar without any water and squeeze out the juice. Then crush it again with a teaspoon of water to get some more of it squeezed. Filter this extract before adding to the blender.

7. Lazy Lassi

This is our good old Lassi that doesn’t need any introduction.

simple lassi recipe

Ingredients: Curd – 400 ml, Sugar – 5 to 6 teaspoons, Salt – ¼ teaspoon, Edible Rose Water – ½ teaspoon (OR Cardamom powder ¼ teaspoon), Ice cubes – ½ cup

Method of Preparation: Blend everything together for about 20 seconds, pour into tall glasses and enjoy!

Tip: Many Rose water brands (including Dabur) that you see in the market are good for cosmetic purposes alone and hence not edible grade. Hence, double check before buying the same

8. Kiwi – Lime Juice

This is another super-refreshing drink for the summer!

kiwi lime juice

Ingredients: Kiwi fruit – 1 (Pealed and chopped), Juice of 1 lime, Sugar – 4 to 5 teaspoons, Salt – ¼ teaspoon, Water – 1 ½ cups, Ice cubes – ½ cup

Method of Preparation: Blend kiwi fruit pieces, Lime juice, Sugar and Salt along with some 50 ml of for about 30 seconds so that a neat pulp is formed. Add the rest of the water and ice cubes and blend well. Pour into a glass of water and consume immediately (If you are storing in the fridge, mix well before drinking as kiwi juice – just like freshly made pineapple juice – will have the fruit parts floating after a few minutes)

Bonus Tip

Convert it into something exciting: Barring the ones featuring milk products, any of the above drinks can be quickly converted into a summer cocktail by adding 30 to 45 ml of your favorite spirit while blending ?

Make these summer coolers at home and let me know how they turned out to be.