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How MRF Stock is Beneficial for Long Term Investment?

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Madras Rubber Factory (MRF), India’s largest tyre maker has been creating in the buzz in the stock market owing to high share prices. In April 2018, the company’s share hit a lifetime high of Rs.80,000. In August 2001, the price of the share was in the level of Rs.500. This essentially means, the investors who own MRF shares have received amazing increase of a whopping 15,800% since August 2001. In the past 17 years, the shares have multiplied 50 times from Rs.1,218 in January 2001. The price of the share as on 29 June 2018 is a little over Rs.75,300. Owing to strong annual revenues since past few years, the stock of the company has performed well as the company bagged some important landmarks. According to a couple of analysts, the MRF share price is expected to hit the six-figure mark of Rs.1,00,000. MRF forayed the stock market in  September 1996 and has since then seen a remarkable increase in the stock prices. It has become the most expensive stock on the indices. In the past over 15 years, MRF has delivered superb returns annually. As on 29 June 2018, the market capitalisation of the company is Rs.31,700 crore. In FY 2018, the tyre behemoth recorded a 25% drop in its net profit for the fiscal ended March 31, 2018 to Rs 1,092.08 crore. MRF’s total income (net of excise duty) saw an increase of 11.22% to Rs 15,104.40 crore for fiscal 2018. Meanwhile, the company’s profit before tax (PBT) stood at Rs.1,601.91 crore for the year.

Currently, MRF’s earning per share (EPS) is higher than its competitors such as Apollo Tyres , JK Tyre and CEAT. The company’s share price is trading at twelve-months price-to-equity ratio (P/E) of 22.32 times, which is lower than the industry PE of 23.15 times. The share price has been quite stable and is projected to be stable as the company is expected to multiply its earnings over the next few years by over 50%. Hence, it is safe to say that MRF has a majorly optimistic future going forward. As a result, the company could witness a more robust cash flow that could eventually lead to an increase in the share value. At a market cap of little over Rs.2500 crore, MRF announced a capex in excess of Rs.6,000 crore.

As per experts, MRF is a very strong band and cannot be treated as a commodity. Another reason for an increase in the stock price is the comparatively small equity base. MRF has a total of nine manufacturing facilities across India and exports to over 65 countries. At present, the market leader in tyres, manufactures over 8-9 lakh tyres per month across these facilities.

By the year 2020-21, MRF Tyres plans to increase its revenue to around Rs 20,000-22,000 crore. The company is looking forward to invest around Rs.800-1,000 crore every year on products and brown field expansion. In addition, the investment will also be used towards automation, expansion of existing manufacturing facilities, research & development (R&D) and others.

Automobile sales in India have been expanding thanks to an increasing demand by a record two-wheelers and truck volumes. The company is expected to continue its strong performance and garner better revenue growth thanks to the stability in rubber prices. MRF has also expanded its portfolio beyond tyres and have made a mark in other business such as conveyor belts, toys, tubes, and paints, and others. Last year, MRF introduced PERFINZA, a new luxury and premium range of passenger car tyres which is aimed at serving high-end automobiles.

The stock has seen a major jump of nearly 48% between January 2016 and March 2017 alone. It was at Rs.40,546 in 2016 and touched the Rs.70,000 mark in 2017. As mentioned earlier the share price of MRF touched Rs.80,000 in April this year, which suggests an increase of Rs.10000.  In FY 2017-18, the company also recommended a final dividend of Rs.54 per share. It had already paid two interim dividends of Rs.3 per share for the financial year ended 31 March 2018.

Investing in stocks needs patience and you can get great results only if you invest them for a longer time. The share price of MRF has shown a tremendous increase in over the years and it has a great potential to grow further. However, it is strongly recommended to do thorough research while investing in stocks as they are volatile in nature and there is a possibility that you will lose your hard-earned money due to a poor judgement or lack of research. There is ample amount of literature available on the websites like Bankbazaar.com about various kinds of stocks. Going through them can help the investor a great deal.

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Finance

Rising Credit Card Debt? Apply a Personal Loan to Pay it off

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Credit cards are one of the most popular means of paying for transactions. The ‘buy now pay later’ concept of the card makes it quite attractive as individuals having a shortage of cash can also use the card for making transactions. Moreover, the card also allows you to pay a minimum amount due and revolve the remaining outstanding balance to the next month if you are in a financial crisis. Though this revolving credit facility seems like a good way to delay paying your credit card bills, what you overlook is the high-interest charges which are applicable. Revolving credit facility incurs an interest on the entire outstanding balance. The interest rate goes up as high as 40% and you inevitably rake up a high credit card debt. If you have multiple credit cards, the debt becomes too high to pay off. But, there is a solution to the mounting credit card debt you face. You can take a personal loan and pay off the entire debt in one go. Yes, a personal loan helps you to pay off your credit card debts. What’s more, it also has various advantages. Do you know what? Let’s find out –

You can consolidate the entire debt and pay it off in one go

When you take a personal loan for paying off your credit card dues, you get the benefit of consolidating the outstanding balances of all your active credit cards. You can sum up the total debt outstanding to your name and then pay off the debt by availing a personal loan online. Since the debt is consolidated and paid off you are freed from the task of remembering the due dates of multiple credit card bills. You just have to remember the EMI payment date of the personal loan which you availed. You can be freed up of that too if you automate your EMI repayments through Standing Instructions or ECS facility in your bank account. So, a personal loan brings together all your debts under one head and makes it convenient for you.

You save a fortune on interest payments

Do you know that credit cards have the highest interest rates associated with them? Interest rates on your credit cards go as high as 40% per annum. Therefore, your credit card dues multiply because of the incidence of the high-interest rate. Personal loans, on the other hand, have very low-interest rates compared to credit cards. The interest rate for personal loans ranges from 10.75% to 22% depending on your eligibility. Thus, by substituting your credit card debts with a personal loan you lower your interest outgoes considerably.

You can control your EMI payments

When you opt for a personal loan, you have complete control on your EMIs. You can increase or decrease the loan tenure to arrive at the EMIs which would be most affordable for you. Credit card debts don’t give you this control. Under your credit card,you have to pay the minimum amount due to carry forward the remaining balance to the next cycle. This amount might not entirely be affordable especially when you are in a cash crunch. So, take a personal loan and control the EMIs which you pay for your debts.

You can improve your credit score

Even though revolving credit facility is available on your credit cards, the facility, when availed, reflects badly on your credit score. It depicts that you are not paying your credit card dues regularly and are building up debt. This depiction hampers your credit score and lowers it. In a personal loan, the EMIs payable are a part of the loan. They, therefore, have no effect on the credit score. Thus, when you repay your credit card debts with a personal loan your credit score improves as the dues are not revolving every month. Availing a personal loan in place of a credit card has no effect on the score because you substitute one type of unsecured loan with the other.

So, personal loans are the best bet to repay your credit card debts. They do not require any collateral security and are allowed easily. You can take a personal loan online and consolidate your Credit Card debts. So, don’t increase your credit card dues any further. Avail a personal loan and clear them off.

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How Does a Home Loan EMI Calculator Works?

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Are you planning to apply for a home loan and are worried what the EMIs will be? Well, you need not worry about this at all as the home loan EMI calculator will calculate the EMIs for you in seconds. The home loan EMI calculator is a simple, fast and reliable source of information to calculate your  EMI’s. Moreover, you will be well-informed about your loan even before you approach a bank.

Here are the few advantages of using a home loan EMI calculator:

  • Saves your precious time
  • Gives you accurate results
  • Helps you to plan your finances
  • Offers a list of housing deals just for you

Home loan EMI calculator computes the EMI according to the details entered by you in the calculator. It works on the following inputs:

• Loan Amount

• Tenure of home loan

• Interest Rate

Loan Amount:The amount of money that you borrow to purchase a house is the home loan amount. The amount that can be borrowed depends upon the cost of the property and your repayment capacity. The lenders generally give 80% of the property value as a loan (the rest 20% is to be paid as a down payment). Keep all these things in mind to have a better idea of how much loan amount you need to apply for. Do your calculations correctly in order to get the correct value of your EMIs. Also, enter an amount keeping in mind that EMI or monthly installments cannot account for more than 40% of your monthly income.

Tenure:Once you have decided the loan amount, choose the tenure for the repayment of your loan. Home loans are long-term loans with long repayment tenure of up to 30 years. You can choose the loan tenure as per your choice, but remember the longer tenure you choose the more interest you will have to pay. However, you can modify the tenure on the EMI calculator and arrive at a tenure that works for you.

Interest Rate:After entering the loan amount and tenure on the home loan EMI calculator, you need to enter the interest rate offered by your preferred bank. You can check the home loan interest rates by visiting the bank’s website or through the website of different financial aggregators.

Amortisation Details: The home loan EMI calculator also has the option to display the amortisation details of your home loan. These details help you understand your principal home loan amount, interest paid and the outstanding loan details on monthly, half-yearly or annual basis.

After entering all the details on the EMI calculator, press the ‘Calculate EMI’ button. You will get your monthly home loan EMIs in seconds.

Conclusion:Using a home loan EMI calculator can help you manage your finances better. In addition, it saves a lot of time and gives you accurate results. It is more reliable and easy to use as compared to the mathematical formula.

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Finance

How to Start Business Support Services?

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Even if you are in a technological startup, there are many techies’ tasks you will probably need to outsource. Budgets are tight, and every startup employees are famous for being forced to wear a number of hats. However, employing a DIY approach can sink a startup faster than an investor who pulls out funding at the last minute. The best approach is budgeting for business support solutions so that the founder and employees can focus on their own jobs.

The size of the market for business support services in Darwin is difficult to estimate for a number of reasons. The primary reasons are the providers, services and customers who are constantly evolving with technological advances. For example, the secretarial service of the 1960s and 1970s were the good electric typewriter was pretty much all you needed but now it’s get off the ground today’s businesses. And who knows what technology will be able to do in 30 to 40 years from now?

To understand the future perspective, take a look at how the industry has evolved over the span of the 20th century. The administrative demands of doing business have grown tremendously, creating a need for clerical support. With the introduction of desktop computers and increasingly sophisticated office equipment, the skills and knowledge requirements of employees have also increased.

At the same time, the general business landscape has changed radically. Big business is looking for ways to streamline their operations, and one popular option is a farm out, where they retain another company to provide a service that may have traditionally done by employees. Small business companies want to stay lean and profitable; even they are turning into outsourcing rather than fattening up their payroll.

Combine the obvious need with new ways of operating in the business world; you have a dynamic young industry wide open with opportunities: business support services. In fact, there are so many opportunities that if you don’t have a clear plan, target market, and specific services, your chances of success are low. With a lot of thought and preparation and a minimal amount of cash, you can quickly be on the road to profitability.

Types of services

You can offer a wide range of services; the following list encompasses the kind of services you can offer. The most important thing listen to your clients, they will let you know what they need and then you can decide if you can provide it.

  • Taxation
  • Accounting
  • Bookkeeping
  • Business improvement and automation solutions

Taxation

Taxation is very important for business support services because it helps you for the preparation of tax return for individual and companies and trusts.

Bookkeeping

The biggest advantage of bookkeeping is that remote bookkeeping solutions can go paperless. By using your Smartphone you can have a secure portal into your accounting software. The stressing of filling and fear of losing your receipts is not an option for you.

Business improvement and automation solutions

As technology improves and industries become more competitive, many businesses want to remain profitable. With new software applications being developed daily you can take advantage of technology to increase productivity and reduce administrative costs. There are many affordable technical solutions available that suit your business needs.  Through the implementation of business support, you can roll out new software system and processes.

Accounting

The manual processes and diverse data and legacy system used financial reports must provide accurate and timely information. The processes should be the standardized and efficient workflow that enables your organization to capture and share accurate financial data across the enterprise.

Target market

You have three broad markets for business support services in Darwin.

  1. The general public
  2. Small commercial and home-based businesses
  3. Large corporations.

General public

By “general public” we mean the individual person who is not into businesses. The two largest segments of this market are people with college or school students and housewives.

Small commercial and home-based.

The majority of your clients will fall under this category. These are companies that require administrative support but do not have the money, space or need for the full-time employee. They may prefer to outsource specific tasks rather than invest in the talent and equipment necessary to get a job done right. Hiring temporary employees can be more costly than small businesses needs demand.

As the number of small businesses continues to grow, so does your potential market. The list of services they use is limited only by your imagination and personal preferences. As you develop a relationship with small businesses, you will be in a position to make a suggestion that will increase volume and expand the scope.

Large corporations

Large companies also use business support services when their own staff members are unavailable for certain reasons like vacations or illness. They may not actually need a temporary staff they just need someone to come in and be present in the office. Sometimes they may need someone who can handle all or part of the work of the absent staff.

Marketing

Marketing is an area where your creative side can shine. It is something many people don’t like to do it it’s very essential if you are going to build a successful and profitable business.  Don’t get discouraged if your marketing efforts don’t produce an immediate response. You will have to put together a professional and attractive information package. It is not unusable for a sales contact not to generate a response for months or even a year.

Advertising

Advertising is a great way to bring new business, but choosing effective media may take some experimentation. The single best place to advertise is your local newspapers because that’s the place where people look when they need a service and don’t know who to call. Don’t limit yourself with local newspaper; try to put ads on a radio station and news channel. You can place ads in the university newspaper classified section and get a good response from that.

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