Doing It Smartly

Smart Profit is a part of the Jainson Group of Industries, a market leader in the manufacturing of electrical and engineering products, hydraulic products, etc. The company is also into infrastructure and construction, finance and film production. Smart Profit takes on consultancy projects in equities and derivatives too. We recommend equities mainly on a fundamental basis after carrying out profound, well-scrutinised research on a company before recommending the same to our investors. We also keep a close look at the government policies, amendments and world economy and undertake thorough industry analysis and its relation with the Indian and world economy. Our extensive research also includes interaction with the company’s management, studying the financials and analysing the future prospect of any company. We make recommendations primarily for long-term investment.

We started Smart Profit six years ago with a select group of clients. Over these years we have grown manifold solely because we provide a high standard of services to our clients on a personalised basis. We recommend with the motto that no client of ours should suffer any kind of financial losses from the market. Fortunately we have been substantially successful in doing so and that explains our good growth rate and the miniscule rate of attrition.

We charge Rs 2,000 as a one-time life-long registration fee and Rs 10,000 per annum as consultancy charges for equities. In derivatives we work on a profit-sharing basis which is 10 per cent of the profit made. According to the industry norms, we charge a modest fee while our returns have been far better than the industry average. Apart from recommending equities we also advise our clients about how to hedge their investments. We recommend only those companies whose performance has been good but the stock prices are down because of market forces. We have always believed that investing in such companies’ stock turns out to be a good bet as they will eventually attract the right prices because of their performance.[PAGE BREAK]

Over the last decade the BFSI sector has evolved as a dynamic, efficient and customer-centric industry. No doubt it will remain a sunrise segment for years to come. The fact that people can now put to use technology in a very user-friendly way and thus avail of world-class services at low cost is what has created a revolution in the BFSI segment in India. The policy-makers and the related government and financial sector regulatory bodies have made several notable efforts to improve regulation in the sector. It now compares favourably in terms of growth, profitability and non-performing assets (NPAs). Some of the players have established an outstanding track record of innovation, growth and value creation. This is reflected in their market valuation. However, improved regulations, innovation, growth and value creation in the sector remain limited to a small part of it. The cost of BFSI intermediation in India is higher and its penetration is far lower than in the other markets. India’s banking industry must strengthen itself significantly if it has to support the modern and vibrant economy which India aspires to be. While the focus for this change lies mainly with the managements, an enabling policy and regulatory framework will also be critical to their success.

How tough is the competition getting in the financial services space in India? What kind of value-added services are you planning to provide to be in the competitive league?

Despite very tough competition in the financial services segment we have managed to create a niche for ourselves. New client acquisitions, improving our services and providing value-added services on a personalised basis have enabled us to strengthen our company and take it to another level. We make it a point to achieve maximum client satisfaction. 

What is your team structure like?

We have a highly experienced and qualified research team. Our expert analysts are  pivotal in our success as they come up with very good recommendations after conducting in-depth  studies of the different companies. They are the ones who suggest the buy, sell or hold elements for any scrip. My daughter, Ankita Jain, heads the research team. She is also a director of our company.

What are your plans for diversification?

We are not looking at venturing into commodities or forex as we feel that we don’t have enough competency in that market though we do recommend selling in commodities if the rates shoot up to 6-9 times more than the actual price and buy if the prices go down less than one-third. We are planning to invest in companies which are doing good business and where the annual growth rate is more than 25 per cent consistently. We also help them go public. It is more or less like venture capital funding. We also take various new projects into consideration if we feel that they have the right potential. We then arrange for the financing of such projects.[PAGE BREAK]

We are planning to take our footprint across India and improve our client base, especially the small investors. We are therefore working on establishing Smart Profit as a brand. This is through all forms of campaigning that includes the print media, electronic media, online promotions, e-mailers and SMS. We are also using the new formats of brand promotions such as blogging on social websites, Facebook, Orkut and financial websites. We are also planning road shows to create investors awareness. We are at a growing stage and are developing our infrastructure to cater to all types of clients across India and in time also clients from other parts of the world. We are now planning to launch a magazine which will mainly cover the financial interests of the readers and also probe into how one can lead a healthy and good life. In other words the magazine will cover wealth, health, body and soul.

What are your other main business interests?

Apart from our core business we also invest in land. We buy barren land, carry out the leveling and bring in the entire basic infrastructure like approach roads power, etc. and then develop it as a prospective residential, commercial or industrial zone. Once developed, we do the plotting and sale the land in plots. Till now we have done such plotting in Tamil Nadu, Maharashtra and Gujarat. We choose the land in areas where new IT or other industrial areas are being developed so that there is enough guaranteed potential for growth. This investment has a gestation period of three to five years but leads to handsome returns later.

What are the investment guidelines you generally recommend to your clients?

My first and foremost advice is to always invest only 25 to 30 per cent of your total investment capacity on shares and never borrow to invest in them. We then guide our customers on how to hedge. For this, we recommend investing a part on A-grade shares of an established company for constant returns where these will be in the range of 15-20 per cent and a part on fast-growing small and mid-cap shares which generally bring handsome returns in the range of 50-100 per cent. We try to balance these two types of investments in such a way that our client can average a minimum of 20-30 per cent returns. We recommend only those small and mid-cap shares in which we find the potential for future growth through our extensive research.

What is your message for new investors?
I would like to suggest the general and the up-and-coming investors who do not have the requisite knowledge about the stock market to leave the job to professionals. In other words, they must invest either in mutual funds or ULIP. If they want to participate directly in the market they must either learn how the stock market functions and how to choose a good share or get the right advice from experts before investing. One other thing that I want to convey to investors that they should always make informed investments and never work on tips from amateur friends or strangers. If you follow these small things you won’t lose money. Informed investment ensures that the losses, in case the market becomes volatile, are contained to the minimum. It is always good to invest in the scrips of established companies because these can fetch good returns in the long run.