Investing

Summary: Major Indices Slip from Highs on Earnings Drag

The US stock market today saw the major indices—Dow Jones Industrial Average, S&P 500, and Nasdaq Composite—snap their multi-day winning streaks. The Dow fell about 204 points (0.5%) to close near 44,633, the S&P 500 edged down 0.3%, and the Nasdaq slipped 0.4% as the rally cooled. Despite a buoyant start to the week driven by robust tech earnings and optimism around global trade talks, a wave of disappointing results from blue-chip stocks weighed on sentiment. Investors kept a cautious eye on the Federal Reserve’s policy meeting and closely watched macro data, while market volatility increased as traders repositioned risk following strong market gains in July. Notably, weakness in healthcare and industrials offset some sturdy pockets in tech and energy, leading to a broadly mixed close.

For a detailed read, sector‑wise breakup, and deep dive, continue below.

In-depth Analysis: Sector-by-Sector Winners and Losers

1. Information Technology

The tech sector, a key US market driver, showed resilience despite some profit booking after previous rallies. Big names like Apple and Microsoft held steady, while Cadence Design Systems surged nearly 10% on a strong earnings beat and raised guidance. However, profit-taking and broad market uncertainty kept gains in check as traders awaited results from Amazon and Meta later this week. The overall optimism for AI-driven growth kept tech sentiment buoyant.

2. Healthcare

Healthcare was the day’s biggest laggard. UnitedHealth Group shares dropped over 5% after disappointing quarterly results and a trimmed outlook, contributing to a 0.4% decline in the S&P healthcare index. Rising medical costs and regulatory uncertainty spooked investors, negating gains in biotech where Sarepta Therapeutics jumped 36% after FDA approval for its gene therapy. Defensive sectors like healthcare saw less appeal as growth and risk appetite increased elsewhere.

3. Consumer Discretionary

Consumer discretionary stocks underperformed as well, pressured by cautious outlooks from major retailers and soft guidance from Whirlpool and UPS. UPS shares fell over 10% due to lower package volumes and lackluster earnings, reinforcing demand concerns in the retail supply chain. However, e-commerce and travel names generally outperformed, reflecting mixed consumer trends.

4. Financials

Financials traded sideways. Big banks and insurers struggled for traction after reporting solid capital ratios but facing margin headwinds from a steady rate environment. Insurer Brown & Brown swooned over 10% despite better-than-expected earnings due to margin concerns. The prospect of the Federal Reserve keeping rates unchanged kept a lid on enthusiasm for the sector.

5. Industrials

The industrials sector lagged as mixed earnings from bellwethers Boeing (down 3.7%) and Procter & Gamble (flat) tempered sentiment. Ongoing global trade jitters, even amid positive rhetoric out of US-EU and US-Japan tariff negotiations, created choppy performance among larger industrial names. This unevenness carried over to logistics, where companies like UPS weighed on the overall sector.

6. Energy

Energy was a rare bright spot. Despite recent price swings, the sector gained over 1% thanks to firming oil prices and better-than-expected quarterly results from mid- and upstream firms. Ongoing global recovery hopes and geopolitical tensions provided tailwinds. This sector bucked the broad profit-taking trend evident in other risk assets.

7. Consumer Staples

Consumer staples were little changed. Procter & Gamble posted earnings in line with expectations but offered a cautious outlook on organic growth, reflecting ongoing macro headwinds for consumer brands. Investors rotated out of staples toward more cyclical names, with traders eyeing upcoming quarterly reports from key beverage and food producers later in the week.

8. Real Estate

Real estate trailed the pack as Treasury yields remained steady and REITs struggled to attract fresh inflows. The sector declined by about 1.7% following profit-taking in property names and subdued investor appetite ahead of inflation and jobs data later in the week.

9. Utilities

Utilities also slipped, falling over 1% as traders shifted away from defensive sectors. With the Federal Reserve expected to keep rates steady, low-volatility utility stocks were less attractive amid resurgence in cyclical and growth names.

10. Materials

Materials fell by 1.5%. Commodity players reacted to mixed economic signals and tariff policy speculation, with traders wary ahead of the GDP release. Despite a global trade truce, uncertainty about demand from China and domestic recovery hit basic material stocks.

Top Gainers & Laggards Across Sectors

• Sarepta Therapeutics (+36%): Rocketed after FDA nod for its gene therapy product in biotech.
• SoFi Technologies (+11%): Jumped on strong revenue growth and bullish guidance.
• Cadence Design Systems (+10%): Outperformed on earnings and optimistic forecast.
• Carrier Global (-11%): Led S&P losers on reduced full-year growth outlook.
• UPS (-10%): Disappointed with soft volumes and ambiguous forward guidance.
• UnitedHealth (-5%): Weighed heavily on the health sector after missed earnings.

Market Sentiment, Trading Patterns, and Fed Watch

Today’s market reflected “cautious optimism”—traders moved quickly after strong July gains, rotating between growth, defensives, and cyclicals as new macro inputs arrived. Downbeat earnings from several blue chips led to profit-taking and heightened volatility. Investors are now laser-focused on Wednesday’s Fed meeting: consensus expects no rate change, but forward guidance may swing sentiment. Traders balanced hopes for an eventual dovish tilt with risk of continued hawkish language, especially as inflation and jobs data loom.

Outlook & Upcoming Events

• Federal Reserve Meeting (July 30-31, 2025): Market consensus is for rates to remain steady. Chair Powell’s comments will be dissected for clues on the interest rate path and inflation outlook.
• GDP Release: Second quarter GDP is due, with forecasts calling for a sharp rebound to around 2.3% annualized growth after Q1’s slowdown.
• PCE Inflation Data (Aug 1): Market’s preferred inflation gauge will shape rate expectations and risk positioning for August.
• Corporate Earnings: Tech heavyweights Amazon, Meta, and Apple report this week, which could set the tone for market leadership into August.
• Labor Data: Thursday brings initial jobless claims and employment cost index figures—both could sway sentiment on US economic resilience.
• Trade Talks: Fresh negotiations with China and tariff deadlines may introduce volatility in industrials and multinational stocks.

Investors can expect more two-way action as the focus shifts from earnings-momentum to macro and policy drivers. A dovish Fed surprise or blockbuster big tech numbers could reignite July’s rally, but lingering inflation or hawkish central bank commentary may provoke more defensive rotation heading into late summer.

Final Thoughts

While the US stock market today drew a breath after a record-setting July, underlying resilience in tech and energy illustrated the ongoing appeal of high-quality growth. Earnings volatility will remain center stage, especially as traders digest critical Fed signals and macro releases. For active investors and market-watchers, flexibility and diversification could be vital as the rally pauses and new catalysts emerge.

Quick Summary

Hey folks! If you blinked today, you might’ve missed some action—because the Indian stock market was on the move again. After three straight days of droopy numbers, the markets got a little caffeine jolt. By closing time, Nifty 50 was up 140 points (0.57%) at 24,821.10, and the Sensex gained 447 points (0.55%) to settle at 81,337.95. The Bank Nifty also tried to keep up the party, climbing to 56,222 with a 0.24% gain.

So, what gave the bulls their second wind? Investors decided enough was enough and went hunting for bargains, especially in big names like Reliance, L&T, and some good-old auto and FMCG stocks. The overall mood? Much brighter! Sure, foreign investors (FII) kept selling, but our own domestic institutions (DII) said, “Not today!” and kept buying, helping the markets stay positive.

Major headlines fired up the day too, like talk of fresh IPOs (M&B Engineering and Sri Lotus Developers launching soon) and some strong results from Reliance and Asian Paints. The only dark clouds? The rupee slipped to a four-month low as FII outflows kept pressure on, and everyone kept one cautious eye on those US-India trade deal talks.

For a deeper look, sector stories, and all the action, keep reading below!

Sector Stories – Winners and Losers

• Winners—dancing at the front of the pack:
  • Realty: Top performer! Realty stocks rose over 1%. Cheaper home loans and strong sales hopes got people dreaming (again) of that second home in Goa. Why not, right?
  • Pharma: The doctor is in! Good Q1 results from companies like Torrent Pharma kept this sector healthy and happy.
  • Energy & Oil & Gas: Up strong on renewed demand and some fresh buzz over oil prices. Reliance Industries was in the spotlight, pulling the sector up.
  • Auto & FMCG: Everyone’s refueling! Solid rural demand and steady earnings drove names like Eicher Motors and Varun Beverages higher.
  • Midcaps & Capital Goods: Tata Chemicals and Bosch zoomed up, powered by upgrades and solid results, making midcaps the cool kids for the day.
  • Paints & Chemicals: Asian Paints, after announcing steady results, gained 2%. Some bright colors on the board here!
• Losers—don’t worry, there’s always tomorrow:
  • Banks & Financials: Even as Bank Nifty went green, some heavyweights—like SBI Life Insurance and Axis Bank—struggled. Blame it on worries over FII outflows and not-so-hot quarterly numbers.
  • IT: Tech stocks took a breather as valuation concerns lingered. TCS slipped to a 52-week low. Oof—rough patch for now.
  • Defence: Stocks like Mazagon Dock saw profit booking after their earnings, ending the recent rally (can’t go up every day, right?).
• Top Gainers (from big to small):
  • Jio Financial Services (Financials, thanks to buzz about fundraising plans!)
  • Larsen & Toubro (Construction, on buying ahead of results)
  • Reliance Industries (Energy, solid results helped)
  • Asian Paints (Paints, after sturdy earnings)
  • Eicher Motors (Auto, strong demand and revenue growth)
  • Tata Chemicals (Midcap rocket—7% up on brokerage love)
  • Varun Beverages & Bosch (Beverages/Consumer, both with over 5% jumps!)
• Top Losers (don’t feel bad, there’s always tomorrow!):
  • SBI Life Insurance and HDFC Life (Financials—hit by FII selling and earnings blues)
  • Axis Bank (Banking sector lagged, a bit heavy today)
  • TCS (Tech—valuation and weak global cues = not today, friend)
  • Mazagon Dock (Defence—profit booking after a big rally)
• FII and DII trends: FIIs played the grumpy guest, pulling money out (which also made the rupee slip to its lowest in four months). Lucky for us, DIIs were the reliable chacha at the party, buying and supporting stocks—especially in Power, Auto, and FMCG land.
• Company news and macro triggers: Key results rolled in today, like Reliance and Asian Paints looking good. IPO talk was everywhere, with new listings right around the corner. And all this while, everyone kept checking for any India-US trade deal updates—no big breakthrough yet!

What’s Next?

Looking ahead? Here’s what might spice up the market masala in the next few days:

• Q1 results are still coming—Biocon, Page Industries, and some auto majors drop theirs next week. Expect action!
• IPOs are launching—M&B Engineering and Sri Lotus Developers hit the markets, with plenty of investor FOMO.
• Macroeconomic Updates—GST collection numbers, global commodity swings, and US market mood will all matter. Will Wall Street’s mood rub off here? You bet!
• Policy Watch—All eyes on Reserve Bank of India’s next move. With FIIs selling and rupee falling, any hint from the central bank could cause a stir.
• Volatility Alert—With FII outflows and global jitters, things could get choppy. If you’re trading, maybe don’t go “all in”—this is “check the water before you jump in” territory!

So—keep your tea handy, and maybe don’t get too comfy. Markets are feeling better, but always ready to do their own thing. That’s the fun (and the headache, sometimes).

That’s a Wrap!

And there you go! Today’s Indian stock market was like a fresh bowl of tadka dal—simple, hearty, but with a little kick at the end. If your portfolio danced today, congrats! If it stumbled, no worries—every drop usually has a comeback brewing. We’ll be back tomorrow with all-new drama, so stay tuned and don’t touch that refresh button too much!

Is Tesla in Turbulence?

Tesla, the pioneering electric vehicle (EV) manufacturer, has long been a leader in the industry, boasting innovation, cutting-edge technology, and a dedicated consumer base. However, recent challenges, including production issues, regulatory hurdles, and mounting competition, have raised concerns for investors. Understanding these factors is crucial in evaluating Tesla’s stock trajectory and making informed investment decisions.

Production Challenges

Tesla has faced notable production bottlenecks, particularly in scaling up manufacturing capacity to meet global demand. The company has encountered supply chain disruptions, semiconductor shortages, and logistical delays, which have hampered output. Additionally, production ramp-ups at new Gigafactories in Texas and Germany have taken longer than anticipated, leading to delivery shortfalls. These constraints have slowed revenue growth and raised questions about Tesla’s ability to sustain its dominance in the EV space.

Regulatory Hurdles

Governments worldwide have intensified regulatory scrutiny on EV manufacturers, and Tesla has not been spared. Safety concerns, recalls, and investigations into Autopilot and Full Self-Driving (FSD) technology have put the company under regulatory pressure. The National Highway Traffic Safety Administration (NHTSA) has launched multiple probes into Tesla’s driver-assistance features, raising concerns about safety compliance. Additionally, emissions and battery recycling regulations in Europe and China could force Tesla to modify its operational strategies, potentially affecting profit margins.

Mounting Market Competition

While Tesla was once the uncontested leader in the EV market, competition has surged dramatically. Legacy automakers like Ford, General Motors, and Volkswagen have intensified their EV production, offering competitive alternatives to Tesla’s lineup. Meanwhile, emerging players like Rivian and Lucid Motors are pushing innovation, attracting consumers and investors alike. Chinese automakers, including BYD and Nio, have also gained ground, leveraging government support and lower production costs. This rising competition puts pressure on Tesla’s market share, pricing power, and long-term growth projections.

Impact on Tesla’s Stock and Investor Sentiment

These challenges have led to increased volatility in Tesla’s stock. While the company continues to post strong revenue figures, concerns over slowing deliveries, regulatory risks, and competition have resulted in a more cautious investor approach. Analysts remain divided on Tesla’s valuation, with some citing strong brand loyalty and innovation as reasons for long-term optimism, while others warn of overvaluation and growing industry risks.

Final Thoughts

Despite the headwinds, Tesla remains a formidable force in the EV sector. The company’s aggressive push in AI-driven autonomous driving, energy solutions, and international expansion could help mitigate short-term setbacks. However, investors should closely monitor production efficiency, regulatory developments, and competition trends when evaluating Tesla as an investment. As the EV landscape evolves, Tesla’s ability to adapt and innovate will be the key determinant of its future success.

TESLA TSLA – Last 5 years, tesla has performed well and raked up more than 570 percent returns.

Guys from India can participate in TESLA growth story by investing In tesla using a platform called Vested. It is simple to use and straight-forward. It lets you purchase fractional shares too. Please follow this link to do so.

Creating a passive income stream is a goal for many, and investing in dividend-paying stocks is one of the most reliable ways to achieve it. By strategically selecting dividend stocks, reinvesting dividends, and utilizing specific strategies, you can build a steady flow of income over time. In this blog post, we’ll explore how to choose the right dividend stocks, the importance of reinvesting dividends, and strategies to maximize your income. Additionally, we’ll explain key concepts like face value, dividend yield, and how to use tools like Moneycontrol.com to screen stocks by dividend yield.

What Are Dividend Stocks?

Dividend stocks are shares of companies that pay regular dividends to their shareholders. A dividend is a portion of the company’s earnings distributed to investors. These payments provide a steady income stream, making dividend stocks a popular choice for investors seeking passive income.

Selecting Dividend Stocks

Choosing the right dividend stocks is crucial to building a reliable income stream. Here are some key factors to consider:

1. Dividend Yield: This is a key metric that shows the annual dividend payment as a percentage of the stock price. A higher dividend yield indicates more income per unit of investment. However, it’s important to consider sustainability; very high yields might not be sustainable over the long term.
2. Dividend History: Look for companies with a history of consistent and increasing dividend payments. Companies that have steadily increased their dividends over time are often more stable and financially sound.
3. Payout Ratio: This ratio indicates the percentage of earnings paid out as dividends. A lower payout ratio suggests that a company retains enough earnings to reinvest in its growth, making its dividend payments more sustainable.
4. Company Stability: Invest in companies with strong fundamentals, such as consistent revenue growth, profitability, and a solid balance sheet. Companies with stable earnings are more likely to continue paying and increasing dividends.

Understanding Face Value and Dividends

The face value (or par value) of a stock is its original cost as listed on the stock certificate. While it’s not the same as the market value, it plays a role in calculating dividends. Dividends are often declared as a percentage of the face value. For example, if a company declares a 10% dividend and the face value of its stock is ₹10, the dividend amount will be ₹1 per share.

What is Dividend Yield?

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. It is calculated using the formula:Dividend Yield=Annual Dividend per ShareCurrent Stock Price×100\text{Dividend Yield} = \frac{\text{Annual Dividend per Share}}{\text{Current Stock Price}} \times 100Dividend Yield=Current Stock PriceAnnual Dividend per Share​×100

For instance, if a company pays an annual dividend of ₹2 per share and its current stock price is ₹50, the dividend yield would be 4%. This metric helps investors understand the return on investment they can expect from dividends alone, not accounting for potential stock price appreciation.

The Importance of Reinvesting Dividends

Reinvesting dividends means using the dividends received to purchase more shares of the same stock. This practice is crucial for building wealth over time due to the power of compounding. When you reinvest dividends, each new share purchased also earns dividends, leading to exponential growth in both the number of shares you own and the dividends you receive.

Strategies for Maximizing Income from Dividend Stocks

1. Diversification: Don’t put all your money into one stock or sector. Diversify your portfolio across different industries and geographies to spread risk.
2. Focus on High-Quality Stocks: Invest in blue-chip companies that are leaders in their industries and have a strong track record of dividend payments.
3. Keep an Eye on Dividend Growth: Look for companies that not only pay dividends but also have a history of increasing them. Dividend growth can significantly boost your income over time.
4. Use Dividend Yield as a Screening Tool: Websites like Moneycontrol.com offer tools to sort and filter stocks by dividend yield, payout ratio, and other financial metrics. This helps you identify potential investments that meet your income goals. You can use these tools to compare dividend yields across various sectors and find the most attractive opportunities.

How Websites Like Moneycontrol.com Can Help

Websites like Moneycontrol.com provide comprehensive financial data on stocks, including dividend yields, payout ratios, historical dividend payments, and more. Using these tools, investors can:

• Screen Stocks by Dividend Yield: Find stocks that offer attractive dividend yields, helping you identify potential income-generating investments.
• Track Dividend History: View a company’s dividend payment history to assess its consistency and reliability in paying dividends.
• Analyze Financial Health: Access key financial ratios and reports to evaluate a company’s overall stability and ability to sustain dividend payments.

Conclusion

Investing in dividend-paying stocks is a proven strategy for building a passive income stream. By carefully selecting high-quality dividend stocks, reinvesting dividends, and using tools like Moneycontrol.com to analyze and monitor your investments, you can create a reliable and growing income stream. Remember to focus on companies with a strong track record of dividend payments, sustainable payout ratios, and stable financials to maximize your success in dividend investing.

Happy investing!

You can start by opening a trading and Demat account with Zerodha if you are from India.

Exchange Traded Fund

In this blog, we will briefly discuss about the ETFs and their different types with a comparison to Mutual Funds.

What are ETFs?

• They are created to replicate an Index.
• ETFs are listed and traded on the Stock exchanges.
• There is option of putting limit orders.
• We get the Delivery of ETFs in our Demat account.

Types of ETFs

• Index ETF — Track the benchmark like NIFTY & SENSEX.
• Gold ETF — Tracks precious metals like gold, silver, etc.
• Sector ETF — Invests in stocks specifically in 1 sector.
• Bond ETF — Invests in bonds like treasury bills, corp, etc.
• Currency ETF — Gives exposure to foreign exchange (forex).
• Global ETF — Invests in global stocks like Apple, Tesla, etc.

ETFs vs Mutual Fund

Few ETFs

• Nippon India Etf Nifty Bank Bees
• Nippon India Nifty 50 Bees Etf
• Icici Prudential S&P Bse Sensex Etf
• HDFC S&P BSE Sensex ETF
• Nippon India ETF Nifty Next 50 Junior BeES
• Nippon India Nifty Infrastructure Bees Etf
• Motilal Oswal NASDAQ 100 ETF
• Mirae Asset NYSE FANG+ ETF

In this blog we will break what all constitutes fundamental analysis. Fundamental analysis is usually used by investors and is a useful skill to master.

Introduction - Fundamental Analysis

Annual Report

1. Qualitative

• Corporate governance
• Moat of the business
• Competition landscape
• Regulatory environment
• Promoter background

2. Quantitative:

• Profit & Loss
• Balance Sheet
• Cash Flow

Mindset of Investor

Trader: Design trade.

Speculator: Gut feel, Friend told.

Investor: Does deep down fundamental analysis.

How to read annual report of a Company

• Download from the company website.
• Includes financial and non-financial.
• Figure out your main area
  1. Management Discussion & Analysis.
  2. General Shareholder Information.
  3. Consolidated Financial Statements.
• Management Discussion & Analysis
  1. Business Strategy of the Company
  2. Growth Prospects of the Company
  3. Risk that the company faces.
• Insight into corporate governance
  1. Director’s Background
  2. Director’s Remuneration
  3. Shareholding Pattern
• Consolidated Financial Statements

Understanding P&L Statement

1. Revenue (Top Line)
   Total Income = Revenue from operation + Other Income
2. Expense: Raw materials + Salary paid to the Employees + Depreciation & Amortization + Interest Payments + Electricity & Rent + Power & Advertisement.
3. Operating Profit = Revenue − Expenses
4. Tax: Profit after Tax (PAT: Final Profit or Bottom Line)
   PAT = Operating Profit − Tax

Understanding Balance Sheet

• Year on Year basis
• Two broad sections: Assets & Liability (Both are sub-divided into Non-current and Current)
• Non-Current Assets
  1. Have a long-term economic benefit to the company.
  2. Includes: Tangible Assets (Like — Property, Plant & Machinery) and Intangible Assets (Like — Trademark, Patent & Certificate, Financial Instruments)
• Current Assets: Economic output within a year time frame.
  1. Inventories: Finished goods ready to be sold. (Dig Deep)
  2. Trade Receivables
  3. Repayment of Loan by others to them
  4. Cash & cash balance held with the Bank
• Non-current Liabilities: Financial obligations which can be fulfilled within a few years.
• Current Liabilities: This should be fulfilled within a year.
• Equity Liabilities: 2 Parts — Share Captial + Reserves & Suplusses(Profit from P&L)

The Cash Flow Statement

• It gives the exact cash position of a company
• Three Activities a company can conduct: Operating + Investing + Financing. Sum total forms cash statement
• Generate or consume cash
• Operating Cash: Represent the core operation of the company.
• Investing: Capital expenditure: New plant, acquisitions.
• Generate Cash: Positive Cashflow
• Consume Cash: Negative Cashflow
• Financing: Borrowing from banks, paying out dividends.

The Connection between Balance Sheet, P&L and Cash Flow Statement

All three are deeply connected.

P&L: Revenue + Significant Expense + Effective Tax Rates+ PAT

Balance: Borrowings +Account receivables + Cash available at hand or banks

Cashflow: Cashflow from Balance + Investing + Financing Activities

Financial Ratio Analysis

Metric that helps in understanding the financial health of a company. It is divided into 3 broad categories — Profitability ratio, leverage (or solvency) ratio, and valuation ratio.

The profitability ratio helps us understand the profitability of the business. Profits are important to expand the business and pay dividends to shareholders. To analyze a company on the basis of this ratio, ensure that the PAT margin and EBIDTA Margin are trending upwards and are stable.

Some of the Profitability ratios are:

1. Operating Profit Margins (OPM)
   Percentage of profit a company produces from its core operations. Calculated by calculating the EBITDA (Earning before Tax, the interest cost, depreciation & amortization) of a company.
   EBITDA = Total Income − Total Expenses
   OPM = EBITDA ÷ Revenue from operation
2. Net Profit Margin
   Calculate the percentage of profit a company produces from its total revenue.
   PAT Number ÷ Total Income
3. Return on Equity (ROE)
   The ratio measures the efficiency with which a company generated profits from each unit of shareholder’s equity or capital invested.
   The higher the ROE, the better it is (>25%). A company should not have much debt as it can skew the ROE number.
   It is different for different sectors. Like IT company has a very high ROE as they don’t have to re-invest more as compared to a manufacturing company which has a low ROE.
   ROE = Net Profit after Tax ÷ Shareholder’s Equity

The leverage in the context of the balance sheet refers to the debt that a company has taken from the bank to run its operation. It is also called the Solvency ratio. This ratio measures the operational efficiency of the business. Some of the leverage ratios are:

1. Interest Coverage Ratio
   Helps us understand how much the company is earning wrt the interest burden it has.
   This ratio determines how efficiently a company repays interest on its outstanding debt.
   Higher the better(>1).
   Interest coverage ratio = EBIDTA ÷ Finance Costs (Interest Obligations)
2. Debt to Equity Ratio
   D/E = DEBT ÷ EQUITY
   A measure of the total debt of the company against the total shareholder’s equity in the company.
   Minimum the best. Lower than 1 is better.

The valuation ratio compares the stock price with the valuation of the company to get a sense of how cheap or expensive a company’s stock is. Popular valuation ratios are:

1. Price to Sales
   Helps to compare the stock price of the share with the sales per share. Higher associated with PAT margins.
   Ratio = Current Share Price ÷ Sales per share
2. Price to Book
   Book value = Tangible Asset − Liabilities
   It is simply the amount of money that is left on the table after a company pays off all its obligations.
   Book value = Total Equity ÷ Total Outstanding Shares
   PB = Share Price ÷ Book value
   A higher price to book value ratio signifies that the firm is overvalued wrt the company’s equity/book value.
   A lower price to book value signifies that the firm is undervalued wrt the company’s equity/book value.
3. Price to Equity
   Earnings per Share (EPS) = PAT ÷ Total Outstanding Shares
   PE = Share Price ÷ EPS
   For every unit of profit that a company generates the market participants are willing to pay PEx (times) more to acquire the share.
   Compare to industry-specific.

Compare the financial ratios of a company to its peers to have a better understanding.

How to value a company

Very elaborate process. The different techniques used

1. Intrinsic valuation
   Discounted Cash Flow analysis Model (DCF): It considers Free cash Flow and Growth rate of cash flow and risk.
2. Relative valuation
   Used when there is no positive free cash flow.
3. Option based valuation

Investing Checklist

Gross Profit Margin > 20.

Revenue

EPS

PAT

Debt

ROE = 20–25 %

Business diversity of a company

Be reasonable with your expectations.

New Fund offers in mutual funds are like IPO for shares, where the fund houses come up with an investment proposal and public can subscribe to it.

What are NFOs?

• An NFO or New Fund Offer is offered by Asset Management Company (AMC).
• It is an invitation to the investors to subscribe to the units of a newly launched fund.
• These are launched to introduce a new investment theme that any of AMCs existing funds do not offer.
• A contribution is made to the pool of investment that is yet to be invested by subscribing to NFO.

How to Analyse an NFO (Checklist)

• Asset Management Company (AMC): Good experience (At least 10 years), Good growth in its Asset Under Management (AUM), Lower expense ratio, Good portfolio of existing funds.
• Fund Manager
• Investment Strategy: Does the offering meets your investment needs (theme).
• Load: Different funds have different exit loads.
• Risk and Return Potential.

What are pension funds? How are they useful?

Have you ever thought of what you will do after your retirement from work generally at the age of 60? This question will have different answers for many people. Some people will just stay away from any work and enjoy the time with their families, children and grandchildren. Some will keep running small errands to earn their living and the rest might have to depend on their children for their various needs that might arise in their old age.

Nevertheless, whatever the answer might fit your case, it is always better to remain financially independent even after the retirement.

National Pension Scheme(NPS) was started in 2004 by the Govt of India for the Govt Employees but in the year 2009 onwards it was thrown open to all the individuals who are in between the age of 18-60 years. It is regulated by the Pension Fund Regulatory and Development Authority.

For more information on regulations you can check out here – NPS