The Art of Appraisal

Big Boss: This year your performance was good, excellent and outstanding. So, your rating is "average".

Kumar: What? How come 'average'?

Big Boss: Because...err...uhh...you lack domain knowledge.

Kumar: But last year you said I am a domain expert and you put me in this project as a domain consultant.

Big Boss: Oh is it? Well, in that case, I think your domain knowledge has eroded this year.

Kumar: What???

Big Boss: Yes, I didn't see you sharing knowledge on Purchasing domain.

Kumar: Why would I? Because I am not in Purchasing, I am in Manufacturing.

Big Boss: This is what I don't like about you. You give excuse for everything.

Kumar: Huh? *Confused*

Big Boss: Next, you need to improve your communication skills.

Kumar: Like what? I am the one who trained the team on "Business Communication", you sat in the audience and took notes, you remember?

Big Boss: Oh is it? Errr...well..I mean, you need to improve your Social Pragmatic Affirmative Communication.

Kumar: Huh? What the hell is that? *Confused*

Big Boss: See! That's why you need to learn about it.

Kumar: *head spinning*

Big Boss: Next, you need to sharpen your recruiting skills. All the guys you recruited left within 2 months.

Kumar: Well, not my mistake. You told them you will sit beside them and review their code, and most resigned the next day itself. Couple of them even attempted suicide.

Big Boss:*stunned* (recovers from shock) Err...anyway, I tried to give you a better rating, but our Normalization process gave you only 'average'.

Kumar: Last year that process gave me 'excellent'. This year just 'average'? Why is this process pushing me up and down every year?

Big Boss: That's a complicated process. You don't want to hear.

Kumar: I'll try to understand. Go ahead.

Big Boss: Well, we gather in a large room, write down the names of sub-ordinates in bits of paper, and throw them up in the air. Whichever lands on the floor gets 'average', whichever lands on table gets 'good', whichever we manage to catch gets 'excellent' and whichever gets stuck to ceiling gets 'outstanding'.

Kumar: (eyes popping out) What? Ridiculous! So who gets 'poor' rating?

Big Boss: Those are the ones we forget to write down.

Kumar: What the hell! And how can paper bits stick to ceiling for 'outstanding'?

Big Boss: Oh no, now you have started questioning our 20 year old organizational process!

Kumar: *faints*

The Art of Appraisal

Big Boss: This year your performance was good, excellent and outstanding. So, your rating is "average".

Kumar: What? How come 'average'?

Big Boss: Because...err...uhh...you lack domain knowledge.

Kumar: But last year you said I am a domain expert and you put me in this project as a domain consultant.

Big Boss: Oh is it? Well, in that case, I think your domain knowledge has eroded this year.

Kumar: What???

Big Boss: Yes, I didn't see you sharing knowledge on Purchasing domain.

Kumar: Why would I? Because I am not in Purchasing, I am in Manufacturing.

Big Boss: This is what I don't like about you. You give excuse for everything.

Kumar: Huh? *Confused*

Big Boss: Next, you need to improve your communication skills.

Kumar: Like what? I am the one who trained the team on "Business Communication", you sat in the audience and took notes, you remember?

Big Boss: Oh is it? Errr...well..I mean, you need to improve your Social Pragmatic Affirmative Communication.

Kumar: Huh? What the hell is that? *Confused*

Big Boss: See! That's why you need to learn about it.

Kumar: *head spinning*

Big Boss: Next, you need to sharpen your recruiting skills. All the guys you recruited left within 2 months.

Kumar: Well, not my mistake. You told them you will sit beside them and review their code, and most resigned the next day itself. Couple of them even attempted suicide.

Big Boss:*stunned* (recovers from shock) Err...anyway, I tried to give you a better rating, but our Normalization process gave you only 'average'.

Kumar: Last year that process gave me 'excellent'. This year just 'average'? Why is this process pushing me up and down every year?

Big Boss: That's a complicated process. You don't want to hear.

Kumar: I'll try to understand. Go ahead.

Big Boss: Well, we gather in a large room, write down the names of sub-ordinates in bits of paper, and throw them up in the air. Whichever lands on the floor gets 'average', whichever lands on table gets 'good', whichever we manage to catch gets 'excellent' and whichever gets stuck to ceiling gets 'outstanding'.

Kumar: (eyes popping out) What? Ridiculous! So who gets 'poor' rating?

Big Boss: Those are the ones we forget to write down.

Kumar: What the hell! And how can paper bits stick to ceiling for 'outstanding'?

Big Boss: Oh no, now you have started questioning our 20 year old organizational process!

Kumar: *faints*

Yet another Yen-Carry-Trade?

Past Week

Largecap indices have closed positive for the eighth week in a row. Sensex & Nifty ended marginally positive on weekly basis at 17693.39 & 5291.10 respectively with more action shifting to mid-caps and small-caps. Firm global trends, robust FII inflows and hopes of a strong rebound in the economy were the key for the underlying bullish momentum in the market. There are speculations that another round of Yen-Carry-Trade has begun. Realty stocks were the top gainers during the week followed by Consumer Durables and Metal stocks. IT stocks were the major losers this week on account of rising rupee against dollar. Rupee was at 18-month high to its strongest level since September 2008 on speculation that the nation’s pace of economic growth is attracting overseas funds to local equities. DQ Entertainment and ILFS Transportation got listed on the exchanges this week with significant gains.

WEEK AHEAD

We expect a stock specific action next week wherein quarterly corporate results will dominate the market sentiments. Forecast for the southwest monsoon for 2010, Greece and other Euro-zone countries’ fiscal woes, global trends and FII inflows will be the other triggers for the market.

TECHNICAL VIEW

During the week nifty has crossed its previous intermediate top of 5303 but failed to sustain decisively higher above respective level. All short to medium term technical indicators are still showing positive trend to continue in the coming days. However, the rally may be terminated around 5400 levels due to profit booking and tiring of the bulls.

We advise caution and profit booking around 5400 levels.

Have a great week ahead.

LISTING OF PERSISTENT SYSTEMS LTD - GREY MARKET PREMIUM

Shares of Persistent System are going to be listed on 06.04.2010. The current Grey Market premium is said to be around Rs.100.00 per share.

NTPC – AN INTERESTING OPPORTUNITY

The stock is has broken a long term downtrend and closed just above the 50-day moving average. However, the break-out has not been decisive and one requires following up the stock action in the next few days. If there is any decisive technical break out, NTPC may move towards its next targets of 215, 225 and 235.

As per the technical chart, NTPC is in an interesting point.

The stock is having a strong support around 185-196 levels and one can keep stop loss limits around these levels.


With best wishes

Areva T&D India Ltd - Technical Break Out

The Company belongs to Electric Utilities Industry. It has given an important technical break out in the last week.

DQ Entertainment – Listing on 29 March 2010

Allotment in the Block Buster IPO stock DQ Entertainment has been done last week and the listing is to be on 29.03.2010. There are strong expectations of a good amount of premium on listing. Grey market websites indicate a premium up to Rs.60.00 per share.

With best wishes

Persistent Systems Ltd – IPO – Invest at Cut-off

Persistent Systems is a pure play Outsourced software Product Development (OPD) services company. The company is different from other IT companies as it caters to Independent Software Vendors (ISV) as well as smaller product development companies. Persistent Systems offers its customers OPD services that help them reduce time-to-market, better the quality of their products, improve predictability and reliability of the engineering process and helping them lower their over-all product engineering costs. As a result, client stickiness is higher than other IT companies.

Investment Arguments

Healthy balance sheet

Aggressive expansion plans

Continued interest from VC firms

Dedicated client base

Key Risks

Dependence on US market

Expiry of tax holidays


I feel that the company has the management expertise and the necessary cash to pave the path for aggressive growth in the years to come. Persistent Systems continuously spends in R&D to better its technical skill sets. It appears to be attractively priced considering the potential upside due to capacity addition and earnings in the long term. Even from a long-term perspective also, the company can provide significant returns.

I feel that one can invest in this company at cut-off price (Price Band Rs.290-310)

NMDC LTD – SUBSCRIBE AT LOWER BAND PRICE

NMDC Ltd, a navaratna Public Sector Company, has come out with a Follow-on Public Offer. The issue details are hereunder.

Issue Period - March 10, 2010 to March 12, 2010
Issue Size - 33,22,43,200 Equity Shares
Issue Type - 100% Book Building
Face Value - Rs. 1/-
Price Range - Rs.300 to Rs.350
Tick Size - Re. 1/-
Market Lot - 20 Equity Shares
Minimum Order Quantity - 20 Equity Shares
Maximum Subscription Amount for Retail Investor - Rs.100000
IPO Market Timings - 10.00 a.m. to 5.00 p.m.

The pricing is considered to be aggressive and the market would have been happier had the price been fixed in the range of Rs.250-Rs.300. There has been a poor response for the issue so far.

I am of the view that one can look into the issue with a long term perspective and bid at the lower band price considering the facts that NMDC is a low cost producer of Iron Ore having strong competitive advantages and the prospects of the iron ore industry which will benefit from a strong economic growth. The company is having a high RoNW and consistent growth in earnings. Future plans of NMDC to indulge in steel and power production, though associated with risks, may add to the earnings of the company.

Happy Investing

Disc: The ideas on market are for sharing purpose only. Investments should be done on own risk.