Are we growing at 20% annually?

20% annual growth rate…. Why is it required?

The world around us is growing at above 20%, while the inflation is at 7%.

Consider the price of some very essential daily use products in the last 12 months.

Milk has gone up from Rs. 25.00 a liter to Rs. 30.00 now – up 20%.

Price of a loaf of bread is Rs 24.00 now, while it was Rs. 20 earlier – up 20%.

Simple coconut, which was at 14-15 each is now at Rs. 20.00 – up 25%.

Education at B level schools is up 30%.

Medical inflation is pegged at 18% in official estimates.

So everything around us is growing at 20% or above. Would this make sense that we have to grow our income by 20% minimum? If not, over a period of 5 years from now, all the income we generate will only be enough to meet of food and clothing requirements.

Now, where is this 20% growth available. The recently published ET500 list, the list of companies that form our economy, has only 70 companies that have grown above 20% on both their sales and earnings. The 3rd quarter results that have come out so far, out of 88 companies only 6 have growth above 20%. This clearly gives an indication that big time growth is a matter of past, at least for the present situation.

I made a small survey of small and medium size companies, more than 80% of respondents complain of lower sales, squeeze in their margins and it has been a challenge for them to meet the enterprise expenses. When asked about expansion in their respective businesses, so that they have income to match the required expense, almost everyone are scary that any new investments at this moment will only add up to more challenges. None are confident to have above average growth rates from new investments.

Some real life examples are from INFY and Reliance, both these companies have cash reserves of more than 30000 crores. They have not deployed this excess cash into their existing businesses because the current numbers from these companies clearly show that they are growing at less than 5%. There are neither giving back the cash to the shareholders, as they know very well that, once given they cannot get it back. They have clearly lost investor confidence to mop up capital.

Entrepreneurs just say that, when our businesses are not giving the income that is matching the economic price increase, where do we invest and how to meet the growing expenses?

 What will be the answer for this situation?

Whether we earn according present requirement or not, our expenses are sure, going to be growing at faster clip.

All these situations ask for the requirement to find avenues of investment that grows more than 20%. Our savings should be invested in such assets that have the capacity to grow to the level we need or beyond the 20% real inflation rate.

Investing in stocks of companies that are growing at more than 20% will be one great idea. But, does everyone have access to find such wonderful investment opportunities on a regular basis? It requires in depth research and dedicated time and effort, which most of us don’t have. We need to have a reliable source which can provide us such great investment opportunities.

BraViSa Templetree’s research facility does this exclusively for those who need it. Our research identifies growth stocks well before they become so called blue chips. Some of the stocks that we had identified in the past like HCL Technologies, Accelya, Auro Pharma, Eclerx, Escorts etc., have given more than 50% annualized returns. On a regular basis we identify stocks that have strong growth, by investing in them our clients have made more than 30% average returns on their investments.

One important trait of research houses is that, they do identify growth stocks, if not in the early stage, still at levels where they have some steam left in them to give above average returns, but, they abruptly fail to identify where to exit and cash in on the profits, in the process letting great investments to end up with below average returns or even loses at times.

Whereas at BraViSa Templetree, we give equal importance to exits at the right time, so that we capitalize major chunk of the profits these new Blue chips provide.

Invest wisely, get in at the right time and be out cashing in your profits at the right period. To get more information about the present and upcoming growth stocks write to info@bravisatempletree.com.

Happy investing.