SECTORS TO AVOID CAPITAL WIPE OUT

4 SECTORS TO AVOID FOR INVESTING

DO U EVER COUNT THE NUMBER OF AIRLINES THAT HAVE SHUT DOWN IN INDIA ?

KINGFISHER AIRLINES:
Kingfisher Airlines shutdown its operations in 2012 as losses and debt kept piling on. It was owned by the liquor baron, Vijay Malaya.

AIR MANTRA:
The regional airline, Air Mantra that made its debut in 2012, was able to stay afloat for only eight month. It ceased operations in 2013 — possibly the shorter run for an Indian airline. The New Delhi headquartered domestic airline was founded by Indian conglomerate Religare Group, which wanted a piece of the northern India airline market. The airline was subsequently liquidated after it shut shop citing poor bookings.

PEGASUS AIRLINES:
Another one-hit wonder, the Bangalore-based Kempe gowda International Airport headquartered regional airline, Air Pegasus, suspended its operations in July 2016 — just 15 months after it commenced operations in April 2015. While ceasing operations, the subsidiary of an aircraft ground-handling services company, Décor Aviation, said it was temporary due to technical issues. However, it later revealed that it was facing financial turbulence and had mounting debts. The airline had a fleet size of three and used to serve eight domestic destinations.

AIR COSTA:

The regional airline company Air Costa owned by LEPL Group, ceased its operations in February 2017, until further notice. The company also cited reasons related to financial difficulties regarding the lease of the aircraft. The airline was headquartered at Chennai International Airport in Vijayawada and served nine destinations from Chennai International Airport, with 32 daily flights in 2015.

AIR CARNIVAL:

Air Carnival is another regional domestic airline that was based out of Coimbatore International Airport. The airline initially started with charter flights back in 2013 and later transitioned to passenger operations in July 2016. The airline ceased operations in April 2017 after the airline’s engineers went on a two-day strike for non-payment of dues, resulting in the grounding of its lone aircraft.

JET AIRWAYS:

The Indian international airline, Jet Airways, was based out of Mumbai Chhatrapati Shivaji International Airport. The company ceased its operations in April 2019 after facing massive financial turbulence. Jet Airways was the second-largest commercial passenger airline and enjoyed a market share of 17.8% in Indian aviation before it ceased its operations. The full-carrier airline ran into losses after lowering ticket fares to compete with India’s other lowcost-carriers, such as SpiceJet and IndiGo.

it depends on to what level has the expected growth been already discounted. The truth is that it is really hard to forecast growth in quickly developing businesses. The market always over discounts at some point, but in the meantime trend followers could make a killing. You never know how long or how fast a trend could go.

4 REASONS FOR THE INDUSTRY SUFFERING

1. Exogenous Events Can Suddenly Affect Demand.
2. Reputation for Hassles and Poor Service.
3. High Fixed and Variable Costs
4. The Bottom Line-The bottom line refers to a company’s earnings, profit, net income, or earnings per share (EPS).The term “bottom line” is commonly used in reference to any actions that may increase or decrease net earnings or a company’s overall profit.

INDIAN TELECOME INDUSTRY

Warren Buffett on Pricing Power and Economic Moats

the single-most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by a tenth of a cent, then you’ve got a terrible business. I’ve been in both, and I know the difference.

RETURN ON CAPITAL EMPLOYED FLUCTUATION IN THIS SECTOR

REASONS WHY HOTEL BUSINESSES ARE CRITICLE:

1. LOW ROCE
2. LACK OF PRICING POWER
3. LINKED TOO MUCH TO THE MACRO ENVIRONMENT.
4. ASSET LIABILITY MISMATCH IN THE BUSINESS.

NEWSPAPER BUSINESS

The information consumption pattern of our society is totally changed now.

if u apply PORTERS 5 FORCES model on this business.

1. SUBSTITUTE PRODUCTS
2. BARGAINING POWER OF CUSTOMERS
3. THREAT OF NEW ENTRANTS
4. BARGAINING POWER OF SUPPLIERS
5. RIVALRY AMONG EXISTING PLAYERS

U Will get your answer.