June 28, 2005

Induction and memories of home....

Had an amazing induction... Was awake non-stop for 3x24 hours... a new record by my standards. Had a host of activities ranging from crazy ones to some really good ones too. but most of all liked the outbound exercises a lot.

BSchool life is much different from what I expected. Hope it keeps me sane through the two years I have to spend here.

Miss home a lot... and also the long evening walks with Audrey. Miss Siemens and all colleagues there... miss Orlem and the great crowd there...

Class starts 30th June...till then its zzzzz....

June 22, 2005

Settling in....@ MDI

So finally dreams are coming true. Had the first feel of BSchool. Landed here after a short time in Karnal with my aunty. The nuns were very hospitable and stuffed me, mom and sis with good food. liked the place. Left from there to come to Gurgaon today. Landed at SBI, did the loan stuff. Got my photo clicked (the bank manager wanted it to adorn his noticeboard!!!)...landed at the hostel. got the room allocated and settled in.

Has been a bit tough to come a long way from home. Missing Audrey and home terribly. Plan to go home in December. Long time to go for tht.

June 16, 2005

Wanna 'do' IIM??

Last week i've come in contact with many people who have asked me "How to 'do' IIM?". I was like, "You wanna 'do' IIM.??!!!" What exactly do you want to 'do' to an IIM?. This is just another example of how the IIM brand has come to define management edcation in India. I a going to MDI, Gurgaon. Yet people think that I'm 'doing' IIM. The IIMs are in the illustrious league of companies like Xerox and brands like Velcro, Sun-Mica etc.

But before the IIMs rejoice, what does the future hold for them? The lower IIMs like Indore and Kozhikode have stiff competition from the 2nd rung BSchools. Lucknow has even greater competition from the top tier institutes like MDI, SP Jain, FMS, etc.

This is not to say that the top 3 guys don't have competition. The gap between the top IIMs and other top institutes is diminishing by the day. Questions are being raised on the credibility of CAT to screen students, where students are tested on just verbal and analytical skills. With a huge sample of around 150,000 students vying for the 1,300 odd seats less than 1% make it through. The difference between a 99 and 97 percentile position will hardly be a couple of marks.

The government has planned to build some more IIMs to meet demand. But will the new kids on the block be able to piggybank on the brand of A,B and C? I know many guys who gladly join 'others' than go to K and I. I had 98.48 percentile in CAT 2004. The guy with 99.1 was just 2 marks ahead based on % scores in the scorecard. In short, the difference in quality of students across the top BSchools doesn't vary much.

Slowly but surely brand IIM will be on par with the 'others'. Till then, if you are doing a management course you can say you are doing "IIM"!!!

June 4, 2005

An Underpriced Stock!!!

I have found myself a hot stock...A bank owned by the Hindujas of London, and grossly underpriced even if i take into consideration last fiscals earnings. Whats more, it is heard that GE wants a stake in the bank. Thats already caused a lot of interest on the counters on the exchange.

The earnings per share have been as follows:
2001-02 ---> 3.17
2002-03 --->7.59 (Gain of 139% over last year)
2003-04 --->11.90 (Gain of 56% over last year)

Even at last years EPS and the current P/E of 8.4 which is pretty much the average for the banking industry at present the value of the stock is (11.90 x 8.4) = 99.96 ~100 bucks. At the time of writing this the stock is hovering around 66.50.

At current P/E ratio of it translates into an EPS of 7.91 which is highly unlikely.

This is of course the conservative estimate. Even if we assume that the earnings of the bank have flattened out and on reducing trend if we assume the bank to have a 25% gain in its EPS that will make the stock worth (1.25 x 11.90 x 8.4) = 124.95 ~ 125.

All this makes it a very attractive stock in an overvalued market. So before you pester me into revealing the name of the stock, here it is; its IndusInd Bank.