The rapidly growing e-commerce industry is becoming a job generator, with 1 lakh temporary jobs being added in the quarter ending December 2014 vis-a-vis 30,000 last year. In addition, there has been an up to 100% jump in salaries of temporary workers in certain entry-level roles in this sector compared with last year, according to the top staffing companies in India.

Staffing companies expect that for the next three years, the hiring of temporary workers will grow at a steady 60%. With around 70-80% of volumes or sales occurring in the weekends or in the festive season, e-commerce companies rely greatly on temporary staffing.

"As the volumes of these companies grow, the temporary staffing numbers are expected to grow in tandem," says A G Rao, group managing director, ManpowerGroup India.

According to India Staffing Federation, the number of temporary jobs added last year in the same quarter was at around 30,000. Staffing companies like ManpowerGroup, Teamlease, Randstad, Kelly Services, Global Innovsource, are all cheering this trend as they are the first to benefit. Further, they are closely watching this space for more players like Alibaba to make an entry as they expect the demand for temporary staffing to further rise with growing competition.

Flipkart, Jabong, Amazon, Snapdeal and Caratlane are among many e-commerce players hiring temporary staff, according to Suchita Dutta, executive director, Indian Staffing Federation. The requirement for temporary staffing in e-commerce is mainly for delivery, warehouse, online marketing and customer services.

"The salary offered to field staffers is at around Rs 15,000. A project based back-end staff 's salary is up to Rs 50,000 while temporary staffers in functions like HR, finance and IT (all at junior levels) earn about Rs 55,000. The salaries across all these functions at the junior level have moved north by up to 100% when compared to the beginning of calendar 2013," she adds.

The salaries of delivery boys and staff for project based back-end at the entry level have shot up by 100% while the paychecks of the remaining temporary staffing workforce catering the e-commerce has gone up by 60%.

Kelly Services vouches that e-commerce players have been the highest users of temporary staffing in the past two years. This staffing company has just closed an order of 2,000 delivery boys for a leading e-commerce player and another 600 delivery boys for yet another player in the same space. "We are hopeful of closing more such partnerships for providing staffing as we are in talks with other players too. This festive season itself the demand for staffing is likely to rise more than 50%," says Kamal Karanth, managing director, India & Malaysia, Kelly Services. Seeing the potential of the e-commerce, Kelly Services has put together a separate dedicated team where a dozen professionals from e-commerce and related fields have been roped in.

Another staffing firm, Randstad, is looking at yet another aspect of delivery. The company observes a very high attrition of as much as over 100% in delivery. "If 100 delivery boys join this January then next January all are sure to be gone," said Aditya Mishra, president staffing, Randstad India.

The company is trying to address the high attrition from two ends. One, it has started a real job preview for the potential hire for delivery where in the candidates are given a preview of the new job. At the customer end (e-commerce players), Randstad is trying to help them in streamlining their operational processes. "As these delivery boys are sent to new localities every day , their burnout rates are very high. However, if they are sent to same areas then their efficiency will surely rise and end attrition," says Mishra. Randstad sends out 65,000 people as flexible staff to various sectors each day.

Within e-commerce alone, Global Innovsource Solutions, has placed 2,500 temporary workers. The company has further received orders from half-a-dozen e-commerce companies for a requirement of 5,000 people in flexi-staffing, according to its COO and director, Raja Sekhar Reddy.

The flexi-staffing industry in India is around $3 billion to $4 billion in size and is growing at 15% year on year, says Rao.

Jabong has temporary staffing for most of its functions like buying, sourcing, warehouse, HR and technology. "In peak time, most of the warehousing work is handled by a temporary staffing company," says Ashu Malhotra, HR head at Jabong. While e-commerce will not impact all of the retail sector, jobs may shift from organised retail.

"The societal upside of this shift is that most jobs in e-commerce are not at the front end so they do not require more advanced skills. That means that labour market outsiders (people from small towns, less skilled or women looking to re-enter the labour force) will get greater opportunities," says Manish Sabharwal, co-founder and chairman of TeamLease.

A website for many a start-up is the first link with the customer, much like windows in brick-and-mortar stores that are designed to attract potential buyers, and the feedback on these sites helps these companies fine-tune their strategies.

Restaurant listing startup Zomato, for instance, has a global 'blog us your feedback' contest, offering every legitimate entry a goodie bag. The most constructive and critical feedback will get an iPhone 6 this year. The company talks about its work culture and its employees discuss life at Zomato, global pizza shortage and other issues on the website. "We also continue to re-evaluate the end-to-end user experience and design of our key pages every few months to ensure that we stay ahead of the curve and keep it fresh for our users," said Namita Gupta, chief product officer at Zomato. "Using Zomato should let one feel like they are interacting with the people behind it, and not just a website or a mobile app," she added. The company introduced a few months ago theme-based city listings called 'Collections' and information such as petfriendly restaurants in the city.

Other e-commerce companies are also increasingly devising ways of keeping the customers hooked to their websites for more than just their products. When Abhishek Agarwal, managing director of Bold Kiln, which provides solutions to startups and entrepreneurs, assisted a startup of tea sellers with their website, he helped create a knowledge base of tearelated articles. The startup roped in writers to discuss different types of tea, food that goes with different flavours and the infusers that should be used with tea, like silver and stainless steel, among other topics.

Similarly, taxi service company Taxi For Sure has chalked out maps catering to the young consumers and large expatriate population of cities like Bangalore. "Our design and content team created a Brewery Hopping Infographic, giving best breweries of Bangalore, with time, beer, snacks and money for each. It became quite popular in the city, and after couple of weeks, we converted that into a package," said Abhishek Mishra, head of content marketing for the start-up.

The cab icons are replaced with those related to a festival. For example, the app icon during Ganesh Chaturthi was a mice and it will be different around Christmas. Then there are blogs on the website, which discuss haunted places to visit in a city. Besides, articles laced with humour on 'odd questions asked by customers to the taxi drivers' have a place too. The common thread in all such content, of course, is travelling that requires cabs.

Consumer research team of LocalBanya focused on three types of customers — those on their desktops, ordering from home; those who use tablets/laptops and those who order via mobile phones. "The idea is when people are on their screens, what they take away apart from the ease of shopping. It's after the initial stage that the customer gets voyeuristic and starts looking for deals and other interesting stuff," said Amit Bhartiya, cofounder of LocalBanya.
The company takes a relook at its website every six weeks, giving three weeks to introduce changes in colour or visual elements. For example, they have done away with the logo on home page that most companies have. This step was taken after the feedback showed their mascot was strong enough to communicate the brand name. "Our typical audience is women in the 24-35 age group. We try to know the pulse of our audience, start looking at vibrancy, humour, content which is relevant or contextual, recipes, content which is festival focused, topical," added Bhartiya.

The company, which has four-five people looking after its website, is also looking at introducing a mobile app which will simulate the experience of pushing a shopping cart and picking up products.

Then there is the startup Hector Beverages, which is weaving "memories" through its websites to engage with consumers. The makers of energy drink Tzinga and ethnic Indian flavoured drink Paper Boat ask the consumers to talk about their childhood memories, games they played and flavours tasted when they were young. The websites are also connected to the company's profile on social networking sites and hundreds of customers share many a forgotten memory. "This helps us connect with our customers, they share recipes with us and memories are integral to the theme of our products," said Neeraj Kakkar, CEO of Hector Beverages. There are short stories on the website that talk about growing old, family holidays, wrinkled skin of the wizened and consumers talk about their experiences of the same. Kakkar has an internal team that works on ways to communicate with the masses via websites and social networking sites.

Faaso's Food Services, a growing fastfood chain with presence in four cities, has pumped up its e-commerce efforts. "Our customers, along with delicious food, also look for convenience. Our website and mobile app are designed to give them just that," said Soumyadeep Barman, head of the company's digital marketing unit. "In just a few clicks, one can choose their favourite dishes, apply discount vouchers, or even tell us how one wants the food made. Using the best tools the digital market has to offer, today we advertise, remarket offers and engage our customers all over the digital space," said Barman, adding that the company uses high-end tools to analyse customer flow through the website, thereby tweaking it and the mobile app to give the users the best possible experience.

Sales from the company's e-commerce wing have consistently grown at 20% every month and account for 40% of its delivery orders, he added.

There was an uneasy feeling in the meeting room called Gabbar — named after the famous dacoit played by Amjad Khan in the movie Sholay. Sachin Bansal, the chief executive of Flipkart, was not a happy man that Monday evening.

Unlike in Sholay, in which four people beat Gabbar's army of dacoits, in less than 24 hours, an army of online buyers were going to come crashing through the gates — hoping to lay their hands on a few thousand Xiaomi phones that were on sale. For Flipkart, the company that is up against the techsavvy Amazon, it was more important than ever to prove that they could handle the influx. Hugo Barra, a former Googler who is now a top executive at Xiaomi, was in the room. The flash sales model had worked very well for Xiaomi in other markets and they'd picked Flipkart for the sale in India.

While Flipkart was prepared to handle the spike in traffic, a couple of its core services had buckled under stress the previous week during the flash sale. Amod Malviya, Flipkart's engineering head, and Sameer Nigam, vice-president of engineering, were also present.

At about 8 pm, Bansal asked Malviya if he could rework the selling process for the flash sale that would last a few seconds next day. "It was almost like rewriting all of what we had created in the last three years in 15 hours," recalls Malviya.

Buyers were waiting for the Xiaomi sale for days and the clock was ticking away. Frenzied Flipkart engineers geared up for the last-minute code rejig. And then dawned the big day.

On Tuesday the same day Flipkart announced that it raised a massive $1 billion in funding — thousands of people hit the site at 2 pm to reserve 10,000 Xiaomi phones that were up for grabs. The sale lasted all of 5 seconds. "It seemed surreal that everything was gone. So we sat down to figure out if it was a mistake," recalls Sameer Nigam, vice president of engineering. Thankfully for Flipkart, it had not.

Amod Malviya, the engineering head, climbed on to a desk placed in the middle of the floor and cheered the team while Hugo Barra shot a video of it. But something bigger was around the corner and Malviya knew in the back of his mind that it would be nothing like they'd done before: the Big Billion Day sale on 6 October 2014.
READY FOR THE LONG HAUL

Armed with over a billion dollar in venture capital, Flipkart is readying its engines for the long haul in the Indian market. As smaller competitors snap at its feet, the threat of Amazon's quickly growing muscle in the market also looms on the horizon.

Malviya knows that if there is one thing that will be key to Flipkart's success, it is the technology being built and the team of engineers who are working round the clock to keep the site running.

After finishing school in a small town in Uttar Pradesh, Malviya went to study engineering at IIT- Kharagpur. The engineering college is the alma mater of some of India's best minds — from Sundar Pichai, the rising star at Google, to former RBI governor Duvvuri Subbarao. He graduated in 2002 and moved to Bangalore to work for various technology companies.

In 2010, he joined a 3-year-old startup called Flipkart, barely known outside the book-loving community in Bangalore. The company founded by former Amazon employees Sachin and Binny Bansal had managed to raise $1 million from Accel Partners. Fast forward to 2014, and Flipkart is leading the charge in India's ecommerce revolution. As of August, the site had over 6 million visitors and was shipping over 5 million products a month.

When a user lands up on the company's website, over 150 services need to run in a carefully orchestrated manner to make sure that the user not only buys the product but also gets it on time. Services need to make sure that the user finds what he is looking for, gets great recommendations, pays without a hitch, gets products delivered on time, is able to return a product, track it and that no one is trying to scam Flipkart.

In the technology world, the software architecture that Flipkart uses is called a service-oriented architecture — successfully implemented by its rival Amazon many years ago. The idea is to have different services performing different tasks, drawing from a single database so that it is easier to scale up parts of the whole system without disturbing everything else.

Of the 14,000 people who work for Flipkart, nearly 800 are in the technology team. Six months ago, there were only 400. By March next year, there will be 1,200 engineers working for the company.

Just a few days before the Big Billion Day, Flipkart had moved into a larger building a few kilometers away from its old office. About 500 of the engineers had been working hard to make it happen. Like a startup, there were mattresses, pizzas and round-the-clock activity in the new office.

"There was as much chaos as there was energy," recalls Malviya. The Big Billion Day was at least 10 times bigger than the Xiaomi sale. Once again, a lot of services had to be built from scratch and each of them had to be tested to see if they worked well on a big scale. "We had never done something like this before," said Malviya. The team had identified nearly 80 things that could go wrong. And sure enough, a few did go wrong.

A BILLION HITS

On the day of the sale, which was preceded by heavy marketing by Flipkart, there was a surge in traffic. It spiked at about 8 am and stayed that way until evening. Flipkart said it saw more than a billion hits across its properties.

In a few minutes, one service that was written from scratch had started to rot. In programming parlance, software rot or bit rot is the slow decay of software that eventually renders it useless. "The good thing is that we had a contingency plan. Otherwise, we would have found it difficult to recover from the initial issues," said Malviya.

Around 25-30% of the times, the service which was to act as the single source of truth for all of Flipkart's product data was faulty. During the time, customers would see error messages. All this meant only one thing: there was no time to stop and if something went wrong, it would have to be fixed on the fly.

"The plan was that a set of people would keep the service alive in some way or the other and another set would focus on finding the root cause," said Malviya. At about 11.30 am, the service was permanently fixed.

Meanwhile on social media, customers had gone on an overdrive--complaining mostly that there weren't any great deals as advertised and occasionally about the errors on the website. The next day, Sachin & Binny Bansal apologized to them for not living up to their expectations. Flipkart, however, had created ecommerce history in the country. Goods worth $100 million were sold on that day, the company said.

"With a game of these high stakes, it is easy to cave in but our engineers kept calm and stuck to the playbook," said Malviya. "We did end up stumbling, to be honest," he said.

To be fair, Flipkart's main rival Amazon has had its share of outages too. In January last year, Amazon was reportedly down for 49 minutes and again in August for 25 minutes. According to estimates, the Seattle-based online retailer has over 80 million monthly visitors.
MIXED FEELINGS

He recalls going through a mix of emotions throughout the day, finally being left with a sense of relief and enough lessons for the next few months. "It was excitement, then a tinge of fear, disbelief, a sense of pride and a bit of disappointment," said Malviya.

A week after the Big Billion Day, Malviya and his team are busy analyzing the issues that cropped up and how they can be avoided the next time. He pointed out that having set out with a goal that was too ambitious was probably the right thing to do when it comes to technology. "Setting ambitious goals helps us grow exponentially," he said.

For Malviya, the biggest lesson was to always plan for failure. "If we hadn't done that, the whole day would have been a disaster." While keeping the site running without a hitch is one of the things that takes much up his time, said Malviya, who is investing heavily into what he calls the "data engine," and "systemic intelligence."

"We've just started exploring some of these themes. It is early...but this is very exciting to me," said Malviya, who is a fan of technologist Stephen Wolfram, the maker of Wolfram Alpha and chief architect of Mathematica, a software widely used by mathematicians, scientists and engineers.

A data engine is much like an automotive engine. Only here, data is the new oil. In simple words, the engine needs to be fed with data to be able to generate more business. To build one from scratch is no mean task.

Computational engine Wolfram Alpha, which sifts through data sets that can produce answers to questions such as what was the weather in Bangalore during October 2013, comprises of over 15 million lines of code and uses more than 10,000 processors.

Flipkart has data on its customers (26 million), the products (20 million) it sells and data that come from its supply chain which is one of the largest in the country already.

With customer data, Flipkart can tell if you are a parent or not. Or if you are an impulse buyer or not. The online retailer has 500-1000 data points about each user coming to the site. To use it effectively, the data engine needs to be capable of correlating seemingly discrete information and trigger actions that can make the customer's life easier and help him buy more.

UNDERUTILIZED RESOURCE

Malviya feels that data are an underutilized resource in most businesses including ecommerce. Commerce data include information about customers and their behaviour, their likes and dislikes both offline and online. "We are probably the only company which is marrying offline and online insights," he said.

Marrying product attributes with customer behaviour tells him why a customer did not buy a particular phone or why he did. In all, Flipkart generates between 5-10TB of data every day. That is about a petabyte of data every three months. All the data Flipkart generates goes into what they call the Bigfoot, a single source of data for its different services.

The bigger idea is that of creating systemic intelligence. In other words, creating a system that learns on its own. While intelligent systems aren't easy to make, Flipkart has started taking baby steps towards creating them. Take, for instance, the process of searching for something on the website. "We are currently trying to interpret the query better. That is, what is it that you want to search for," said Malviya.

The idea is to figure out the user's intent behind the search than to just use the text filled in by the user for searching. Malviya has put two of his best men on the job: Kaushik Mukherjee from Yahoo! and Parag Dhanuka, who started his career at Google.

The other areas where Malviya wants to build systemic intelligence are fraud detection and recommendations. Detecting fraud is a big priority for ecommerce and payments companies. For instance, in 2008, PayPal acquired Israeli company Fraud Sciences Ltd $169 million. "People will game the system if I talk too much about it," said Malviya.

As Flipkart grows, the scope to use data grows with it. "The problem space keeps growing. The sheer size of the landscape makes me salivate. It's beautiful," said Malviya, who spends most of his free time learning about new technologies. "We have solved some problems but there are a lot many more to solve," he said.

In May, four days before the election results were announced, super bull Rakesh Jhunjhunwala announced that India is witnessing the mother of all bull runs. Four months later, with a majority Modi government & falling crude prices, he is double bullish. 'This is just the trailer he says...picture abhi baaki hai...promises the big bull.

Jhunjhunwala is a partner in his asset management firm, Rare Enterprises. A recent newspaper article said that over the last year or so, he had made close to Rs 35 lakh every hour. That is how successful he has been in this market over the last 12 months or so.
In an exclusive interview , he ponders over things, global and domestic,  that is transformational for Indian market and economy.

Rakesh Jhunjhunwala

Below is the transcript of Rakesh Jhunjhunwala's interview.

Q: I am going to ask you about two things I think that have changed dramatically between the time we last met which was May 12 and today. One is that we met a few days before counting since then of course the Bharatiya Janata Party (BJP) won, Mr Modi has become Prime Minister (PM) and that in itself has been a fairly transformational thing for the Indian economy. The second one is what has gone on with crude prices, which again has several layered impact on the Indian economy. First up how would you assess what you have seen the Modi government do so far?

A: First of all it is too short a period to assess. Second thing is my comment is that India has to undergo a change. We live in a democracy and change has to be slow. For everything that has to be changed, every decision has to be considered. So to think that Mr Modi and his government could show some miracle in six months would be childish. But I have no doubts that there will be miracles over a period of time and I will at least give a further period of 18-24 months; that's when you will see the burst of all these actions taking place.
Also I would like to add that as far as crude prices go, in crude or commodities, what has happened, you have had one of the largest bull markets in commodities in the last 15-20 years. Now, I think it is not -- people are saying that commodity prices have come down only because the consumption has gone down. I think consumption reduction is very marginal. What has happened is that there was so much super profits in commodities that investment was attracted. I think the super cycle on the commodities boom is over. Now we are going to go through a deep correction and maybe a bear market in commodities. I personally think oil prices will settle somewhere between USD 70 per barrel and USD 80 per barrel and will stay there for a long time maybe bottom at USD 75 per barrel or top at USD 85 per barrel that is what my expectation is.

Q: How does an investor play something like this?

A: I have not done a detailed analysis.

Q: One sector group of stocks or companies that will invest the most are oil sector, public sector companies because they have been strangled virtually by the lack of any kind of freedom in pricing?

A: There is a very big misnotion that Hindustan Petroleum Corporation Ltd ( HPCL ), Bharat Petroleum Corporation Ltd ( BPCL ) and Indian Oil Corporation ( IOC ) were not bearing any part of the subsidy and they were having market related prices including margins and profit.

The only thing was that government was paying them late. So they are biggest beneficiaries in terms of interest cost in normal terms of profit.

Q: But someone like an Oil and Natural Gas Corporation (ONGC) would benefit because the subsidy burden that ONGC had to bear as an upstream company hopefully will come down dramatically or reduce to zero technically if the diesel price deregulation persists?

A: Let me first of all say that I am long  ONGC, I am very bullish. Please take advise from a financial adviser, I am extremely interested, I am long ONGC. I feel the biggest beneficiary of this will be ONGC and Oil India .

Last year ONGC’s realisation was USD 41 and my personal opinion maybe in 2016 or in the Budget after that, the government is going to abolish all this and the entire subsidy is going to be borne by government of India. That is what my judgement is, I deserve the right to be wrong. So the real beneficiary of this oil fall - it is a big dilemma that ONGC -- if the government of India abolishes the subsidy -- is the largest beneficiary in the world of falling oil prices.

Q: So there is a multifaceted set of benefits that India draws from that kind of price region for crude?

A: I think that is one of the small -- that is a big benefit --but there are bigger benefit. In a meal, that is like a chutney, it is not the main vegetable and the main roti.

If you look at the world today, countries are facing two kinds of challenges. Some are facing structural problems which include the entire western world, Japan and China. Then there are countries which are facing cyclical problems where I include the developing world and there are countries which is on upturn both cyclically and structurally and India would fall in that category.
Q: I am saying what we expected on May 12. A Modi government is what you anticipated at that point in time. Yes of course this majority was unanticipated but we have got that and that bolsters your expectations. Did you expect crude prices to be at USD 80/barrel?

A: It bolsters the reality.

Q: But there is a double good whammy here because we have also had crude prices come down. Does this double whammy of good factors make you a double of a bull than you were in May is the question I was trying to get?

A: If you talk to me about India’s bullishness I cannot express how bullish I am. When I came to the market in 1985 the index was 150. I feel India as a country is at 150. People may call me anything, mad bull, big bull but these are my feelings. And when I think about the factors involved it is the thought I get. Because we are underestimating, we have a cyclical upturn, we have the best structural upturn in the world.

I envisage that post 2017-18 India will grow double digit I don’t know for how many years.

Q: I want to connect what you have said about the Modi majority if I may call it that, the bear market in commodities and what is going on in the rest of the world with regards to central bank policy because it has been most confusing in the last month, right?

A: Structurally the richest countries of the world have never faced the problem they are facing today. With commodity prices going down, inflation — people are talking of deflation— why should interest rates go up and even if they do, then by what measure?  I am told deposit rates in Singapore are 20 bps. Suppose those deposit rates become 1 percent, what difference is it going to make? Are you coming to India to earn 1 percent? So all this is overhyped.

So I am of an opinion that what happens in the world could affect us may be for a week, 10-15 days or one month. But I don’t think interest rates will go up aggressively. I think they wont go up. Even if they go up, the quantum of rise will be one which is not going to affect sentiment towards India.

Second, India is going to be the best performing economy, I am not saying market, amongst the developed and developing world for a long period of time. Also there are a lot of investments waiting to come into India, which needed change in policy which is happening.

Q: All bull runs go through corrections at various points in time. We did see a lot of volatility in October. We also saw our markets come off their peaks by about 3 percent or so which was probably the mildest of corrections relative to how other markets did. Are we therefore in imminent danger of an impending correction over the next few months given how much we have run up?

A: We had a nonstop rise from 5200. In August 2013 the market bottomed. In August 2013 I said the mother of all bull markets is ahead of us. In December 2013 I said I believe the bull market has already started, in May 2014 I said this is the mother of all bull markets. This is just a trailer, you just watch the action movie.

We had a rise from 5200 to 8200, a 3000 point rise. Correction can come anytime but I don’t think especially the last two days the screen is indicating any correction. And it is my feeling and opinion and I deserve the right to be wrong that if any serious correction will come, either it will come post December and finish before the Budget or it will come post Budget.

Q: When you say a very serious correction what would the depth of that correction be roughly?

A: It could be 33 percent of the rise. You go from 5200 to 9200, you always lose some points. I am not sure when it will start but corrections are part of market.

Q: So would it be fair for me to assume that you are still long on your trading portfolio?

A: I am bullish.
Q: Have you changed your trading strategy over the last month or so?

A: I do not make a strategy. I watch the screen, buy-sell, so there is no detailed planning, analysis.
Q: That is very self-effacing. I do not believe?
A: Want can I do if you don’t want to believe me. I have no conference with my people at 8:30. I come to the office at 11:00. I give orders at 9:15. I do not consult anybody.

Q: But your orders would be based on some analysis?
A: It is based on my intuition and my understanding which is not preplanned.

Q: I am curious to know because I know a lot of your followers would be keen to know how is it that Rakesh Jhunjhunwala pick stocks, does he do hours of financial analysis, does he talk to managements ahead of time before he puts his money into the stock to find out what the integrity of the management is, whether he agrees with their vision, their expectation. How do you pick stocks?
A: I am more a big picture investor rather than analysis and there are so many factors. Investing in a sense requires intuition of so many senses but I look at the big picture and when I am convinced I do not listen to anybody and I have been wrong, wrong, wrong many a time. I am luckier than I am smart, let me tell you that.
Q: Do you talk to managements of the companies before you invest in them to get a sense of what their vision is?
A: Sometime there is a value that when you invest don’t investigate later. I met the promoter of DHFL on the airport by chance. He told me I should look at his stock. It was at ridiculous valuation. When I saw it was at Rs 110. I told him that I will look at the stock and talk to you. I first bought those shares then I called him. Therefore, at certain valuation it’s now invest and not investigate later.

Q: But that is a chance meeting with the promoter of a company. Do you otherwise consciously try and call if a company looks interesting to you from financials or valuation point of view do you call the management?

A: I do not have much money to invest, whatever you think. I do not have trading income every year and that’s the only thing I can invest and I do not want to take debt beyond a point and I do not want to rotate my portfolio constantly. I want very little turnover in my portfolio. Therefore, I am not looking very minute eye and nowadays I do not want to invest in small companies.

Q: Why? Small companys means smallcaps, midcaps companies like what we traditionally know as smallcap, midcap?
A: It is difficult to buy, difficult to sell.
Q: Aren’t these what market call multibaggers?
A: Rather than a hunt for the multibaggers now if I get 21 percent return on my stock I will be a king. If I will get 24 percent, I will be an emperor.
Q: Why is it this that you moved away from aspiring to want to identify the next 10 baby multibaggers?
A: When I bought  Titan first time, I thought the price will be Rs 200. I bought up to Rs 120. The price is Rs 8,000. So it’s not easy. Lot of people ask me give us the next Titan. If I will know it I will tell you.
Q: On May 12, you told me you were long software and pharmaceutical but that you have also started building big positions in cyclical. Do cyclical still look very appealing to you?
A: Depends on which one because there are lot of cyclical.
Q: You had mentioned a few stocks then I am taking the liberty to mention those stocks. You had said Dewan Housing Finance Corporation  (DHFL) at that point, Escorts at that point – those were some of the stocks you spoke of.
A: With a time horizon of five-ten years, any Indian company with good corporate governance, good allocation of capital, good return on equity, unutilised capacity I am bullish on.
Q: Financials, industrials.
A: Everything but these are – going to a sector also you look at the criteria of companies; what is the profile, what is the problem but one thing is there in cyclical the rewards are going to be very good but you have to have patience.
Q: Have you been adding financial stocks to your portfolio?
A: I am adding financials.
Q: What is it within financials that appeals to you, are you looking at some of the more non banking financial companies (NBFCs) kind of companies or are you looking at private sector banks or public sector undertaking (PSU) banks. I am not asking you for specific names. I am asking you for larger areas that might interest you?
A: I am not looking at PSU banks and from investment angel I am not buying any PSU banks. According to me the public sector banks profitability will go up, there will be upturn but the problem is they need so much of equity. I keep selling every year, keep selling every year. Actually my request is for Government of India to decide for five years what is a disinvestment for three years and do not disinvest a company every year. If you sell Oil and Natural Gas Corporation ( ONGC ) today then make a pledge that for 24 to 36 months we will not sell ONGC. If you respect the equity, the market will respect your equity. So, India to get better valuation of public sector stocks whether banks or otherwise need to have a planned disinvestment programme for the next three years.
Q: In industrials are the specific areas that look interesting to you, more interesting or more promising because the last set of earnings that we went through last quarter, not this time, there were quite a few expectations that took a hard reality check or knock if I could say so on industrials.
A: For trading I sold all my cyclical, most of them and not all and my economy related immediate economy related stocks just one or two months into the rally in June-July because there are lot of expectation built in which is going to take time. If you want to buy, buy with a three-five year horizon.
Q: You sold and you rotated your money into what?
A: I am talking of trading positions.
Q: I am talking of trading positions only?
A: I won’t tell you what I bought.
Q: Not stocks but sectors?
A: I don’t want to talk companies; I do not want to talk sectors.
Q: In May, you had told me that Infosys  was still some time away from a turnaround. Now with a change in leadership, do you believe that that company and therefore the stock by extension look more interesting?
A: This is the first quarter - I do not know, I am hopeful and it could be a very good turnaround. They have underperformed TCS  and there is no doubt about it by leaps and bounds. So let us see what happens and I think they could and they could not, I do not know.
Q: We have seen USL  go through a fairly rough patch over the last few quarters, a delay in announcing its earnings. There is a cleanup going on there. How confident do you feel about the USL story?
A: Over the next 15 years.
Q: Hopefully two-five years? Who has seen 15 years?
A: I have bought USL and at this moment I think that if I have 50-53 percent of India’s liquor market and I have Diageo’s skills and corporate governance; the short-term maybe a little cloudy but the long-term is - you cannot imagine. You have 50-53 percent India’s liquor market, you have the world’s largest company owning it, you have the highest corporate governance, you have the highest skills in running spirits business, I think it’s a lethal combination.
Q: What about e-commerce valuations? Is there some way you are looking at playing what is going on the e-commerce space?
A: I think it is crazy.
Q: I asked Ramesh the same question and he said I am approaching the proxy for me because most of these companies are unlisted are logistic players, supply chain players.
A: Do I have to participate in every party in the world. I want to ask you one thing, JustDial  has got Rs 700 crore cash in the balance sheet.
Q: JustDial was one of your big investments.
A: I sold it. He is going to raise Rs 1,000 crore for what? What is he going to do with Rs 1700 crore cash in his balance sheet, how is he going to use? We will have inorganic opportunities, okay. So there is no respect for equity. Anyway, in the short-term, the price could be Rs 10,000 but I know entrepreneurs who give respect to equity, give returns to its investors.
Q: Do you think some of these start-ups like Flipkart etc have diluted way too much, way too quickly?
A: They could grow but how much the investors will earn, I have a doubt.
Q: I want to ask you one stock specific question. There are two - Your interest in MCX  and your interest in GSFC .
A: I have a position in GSFC, it is a trade, it is not an investment.
Q: And MCX?
A: I made an investment in MCX and I am very bullish.
Q: On the exchange business?
A: No, the exchange business - because I think it is like in 1999 when I bought CRISIL , everybody wanted a play on the financials in the Indian market. I thought CRISIL is the best proxy for financials. It is unique. If I want to have an investment in India’s financials, MCX is best because unique. It is a play on the trading and the hedging and the liquidity and the growth of Indian markets. To establish a near monopoly with 85-90 percent market share in commodities, I think it is unassailable position.
Q: If your expectation is that we are set at the beginning of a bear market in commodities, do you expect that to play out in any fashion on trading volumes for an exchange like MCX?
A: Consumption is not going to go down and once all this trading, once you are habituated - in India, where is the hedging? Where is the development of the financial markets in the attitude?
Q: Is this five-year investment for you, ten-year investment for you?
A: Who knows.
Q: But it is an investment, it is not your trading portfolio?
A: It is an investment.
Q: GSFC?
A: I am bullish.
Q: Let me ask you what would your message to fellow investors in the Indian equity markets be on this auspicious occasion of Diwali?
A: I will say be bullish, ride for longer-term, there is a lot of money to be made in the stock markets but invest what you can afford or invest with an idea that there could be risk also. So invest what you can afford easily, don’t be cynical about India. It is going to be the greatest opportunity we ever had and the next - India is going to be a bull market, which will surprise you even five years later, ten years later, fifteen years later and twenty years later. I deserve the right to be wrong, believe in India, happy investing.

COMPANY OUTLOOK :

Century Enka Ltd.

Demand of NTCF is sustained and both the plants at Bharuch and Pune are operating at full capacities, however duty concessions under FTAs and renewal of anti dumping duty on NTCF will be critical to the survival of NTCF. Margins are under pressure because of surplus capacity in Polyester POY and higher import of NFY. Energy is a major cost component. As a risk managing measure, the Company is pursuing with Maharashtra State Electricity Distribution Company Limited to allow the Company to purchase power under open market operation for it's Pune plant. The neighbouring State of Gujarat, where company's another plant is located, offers such a facility. Introduction of Value Added Tax (VAT) @ 5% on NTCF in Maharashtra and increase in Local Body Tax (LBT) @ 2.4% on all inputs including the main raw material as compared to Oct roi rate of 1.55% for Pune plant will severely affect profit margin.The outlook in near term as well as long term remains cautiously positive.


Sintex Industires Ltd

The Company offers a huge bouquet of products -- from creating housing units to small components that find application in the medical equipment and electrical businesses -- processed at its facilities across India - emerging as the only plastic processing Company with a pan- India manufacturing presence. Revenue from this business grew by 14.88% from Rs.4,729.43 crore in 2012-13 to Rs.5433.19 crore in 2013-14 despite the continued endeavour to gain business exposure in the monolithic construction space, due to prevailing external adversities. This segment contributed 90.87% of the Company's consolidated revenues. EBIDTA moved to Rs.912.40 crore in 2013-14 against Rs.665.95 crores in 201213. Input cost prices and inflation pressured] EBIDTA margins of this business.


PTC India Ltd

It has been another fruitful year in terms of the Agreements signed by Company for the sale of power to the State Utilities through Competitive Bidding Processes. Company, having participated with a cumulative capacity of 4379 MW in bids invited by various State Utilities during last year, has finalized and executed Power Sale Agreements to the tune of 1611 MW capacity with State Utilities such as UP Discoms (751 MW), Rajasthan Discoms (660MW),Tamil Nadu(100MW)on long term basis & with KSEB (100MW)on medium term basis during FY14.The power supply under the a fore mentioned agreements to KSEB and Tamil Nadu shall commence during FY15 and to UP& Rajasthan during FY17.No new Case-1 Biddings processes were initiated by the State Utilities during FY14.As far as performance of your company is concerned,it traded~35BUs (23%increase YoY) of electricity with a market share of~38%(including cross-border). Long- term segment saw the highest growth of 28.5% followed by PX(22%)and ST bilateral trades(~22%). Most of the power traded by us was on Round The Clock (RTC) basis-96%which is three percentage points higher than last year- the remaining power being Peak and other.During the year,we revisited our Power Tolling business and considering risk -reward scenario,convert edit in to long -term PPAs


Dredging Corporation Of India Ltd

Dredging Corporation Of India Ltd. is a premier and the only PSU dredging company in India. Company is also the preferred dredging company for Major Ports and the Indian Navy. Company has been in this business since 1976 and has been catering to the dredging requirements of the major ports/ Indian Navy since then. Owing to the long association with the Major Ports, Company is the most preferred company for dredging requirements of most of the Major Ports and the Indian Navy.

Diwali Special Picks - 2014
Buy Axis Bank Ltd For Target Rs.480 CMP 401.60
Buy Ipca Laboratories Ltd For Target Rs. 870 CMP 686.35
Buy Lupin Ltd For Target Rs.1645 CMP 1347.15
Buy Marico Ltd For Target Rs.365 CMP 300.85
Buy Wipro Ltd For Target Rs.700 CMP 565.90

Axis Bank Ltd
Buy Axis Bank Ltd For Target Rs.480 CMP 401.60
• Axis bank aims to increase its share in the financial services sector by continuing to build a strong retail franchise. The segment continues to be one of the key drivers of the Bank’s growth strategy, encompassing a wide range of products delivered through multiple channels to customers.
• The bank has been consistently delivering better-than-industry growth due to its strong retail focus. The performance of the bank was led by strong increase in margins, higher loan growth and improvement in CASA and expense ratio. The bank expects its loan growth to be 20% higher than the industry growth. The stressed loan accumulation may lower than forecasted as the economic conditions improve from here.
• The bank expects that corporate fee income to pick up in H2FY15 on account of increasing demand for corporate loans.

Ipca Laboratories Ltd
Buy Ipca Laboratories Ltd For Target Rs. 870 CMP 686.35
• IPCA Labs posted strong financial numbers in Q1FY15. Its Sales grew by 16% to Rs 935.96 crore (YoY). The growth in sales was broad based on the back of good growth in formulations and APIs. PAT grew by 103% to Rs 145.49 crore (YoY).
• Growth in US market is the major driver for its business and it expects high growth in the next couple of years. Though the company has approval for 18 products from 38 Abbreviated New Drug Applications (ANDAs) filed so far, it has commercialized only 7 and planning to launch few more in the next 3-4 months.
• The Company expects that this year its domestic branded business to grow by 15-17%. The Domestic API business is also expected to grow by 12-13%.

Lupin Ltd
Buy Lupin Ltd For Target Rs.1645 CMP 1347.15
• The US is the largest market for the company accounting for nearly 40% of its revenue. It is planning to improve its share to 50% by developing new limited competition therapies, such as oral contraceptives, dermatology and respiratory care drugs.
• The company plans to maintain an annual launch rate of around 20 products a year and looking at 25% growth in the US generic market. The company is also expanding its footprint in Japan and expects to file 15 new products in the country over the next two years.
• The Company has a pipeline of 116 products (including products approved but not launched) that address a market opportunity of close to USD 80 billion. Of these, 29 ANDAs are first-to-file opportunities addressing a market size of close to USD 15 billion. The Company has 12 exclusive first-to-file opportunities addressing a market opportunity valued at around USD 2 billion.

Marico Ltd
Buy Marico Ltd For Target Rs.365 CMP 300.85
• The company plans to double its revenues over the next four years driven by a mix of organic and inorganic growth. It plans to become an emerging market MNC with focus on Asia and Africa in key categories of hair care, skin nourishment and male grooming.
• During 12 months ended June 2014, Parachute along with Nihar increased its market share by 50bps to 56%. Parachute's share in the rural markets, in the range of 35% to 40%, is lower than that in the urban markets, thus providing potential headroom for growth.
• Saffola Oats, has emerged as a strong no.2 brand in the oats category with a value market share of 17%. Focus on value added offerings in the oats segment has enabled the company to capture 51% share in the flavored oats market.

Wipro Ltd
Buy Wipro Ltd For Target Rs.700 CMP 565.90
•  Wipro’s consolidated sales grew 16% to Rs 11245.50 crore on YoY basis for the quarter ended June 2014. Its net profit jumped 30% to Rs 2103.2 crore. On the back of strong wins and healthy deal pipeline the company expects growth rates to improve from 2Q onwards.
• Wipro signed many large deals recently. The recent deal wins would help improve sequential growth rates from Sep'14 quarters and thereby lend visibility. Further a pickup in tech spending in the domestic IT market could aid revenue growth in H2FY15.
•  The Company sees a significant rise in business confidence in developed markets as well as India. It is expecting strong demand in the verticals of healthcare and life-sciences, manufacturing and hi-tech. However, weakness in retail continues and the company sees problems in this area persisting for another quarter.