Can you please share your latest portfolio?
Posts in category Value Pickr
Shivalik Bimetal Controls Ltd (SBCL) (08-08-2024)
The law of lower price => higher volumes has nothing to do with product mix. And if I get paid less while I sold more (whether 1 product or a basket); price / unit (single or blended) was reduced. That cannot happen if demand was “resilient”.
If share of one of the two reduces from 57% to 52%, it does not mean volume has dropped by 5%. Volumes could also have gone up, and the volume for the other went up faster. Similarly drop in share of value is not drop in value.
Revenues / Volumes do indicate nothing about margins. So you cannot conclude the above.
Multi-Disciplinary Reading – Book Reviews (07-08-2024)
Every now and then’ I come to this thread to check out latest book recommendations by you:
Zomato – Should you order? (07-08-2024)
I am unable to estimate the market size of business of zomato. Some say it’s the total size served by restaurants and mess services (also now they are planning to deliver on trains).
But I argue that these people will not pay for such commission fees and delivery charges then they say “I am willing to pay extra for convenience”. Personally, I never want to pay for commission bcz I can get another chicken piece or a can of red bull with my food for the price of commission.
Thus, zomato is only for people who don’t care about commission which reduces the market size significantly. I am pretty sure only upper middle class (and richer then them) would order from zomato on regular basis. People who buy from dominos or starbucks every week are real customers of zomato. Others might order only once in month or bimonthly.
Also not to forget the cart food sellers in every nook and corner of the city. If someone need cheap food instantly then they will buy it from nearby dosa or egg roll or momos cart.
I am very enthusiastic about e-commerce and a big customer of amazon and flipkart (almost one parcel every week if i take average with per order spending more than Rs1500 on average). Meanwhile I have only ordered from zomato twice in last two years with order value of 500 and 1000 resp.
Looking at the revenue of dominos, cafe coffee day, barbeque nation and other food franchises and taking commission of 20-30% of revenue I have estimated the profit of zomato that can be generated from commission is around 2500Cr at saturation (considering 50% market share). Lets say they get another 500Cr from ads, subscription, etc. So for a PE ratio of 30 the valuation becomes 90,000Cr (11 Billion dollars).
Also blinkit is a total waste of money in my opinion. There are kirana stores everywhere for instant small purchase. For bulk purchases there is dmart. People will get out of their house for buying milk, bread and eggs anyway so they will also visit kirana stores also. Rich people have servants for this purpose. I don’t see blinkit anywhere in this. This business will is only an expense which will reduce the above estimated figures.
What do you guys think on estimation of market size for zomato.
Why dumb Mr. Index is so tough to beat? Let’s discuss it’s alpha (07-08-2024)
hi,
Which is the best index fund/etf?
regards
Rain Industries – An oversold de-leveraging play (07-08-2024)
Highlights of the few positive business updates which will drive their sustainable growth in future, largely the negatives are bottomed out. We Might see positive developments in financials as well starting from first quarter next year from Q1 2025. The latest business update regarding their focus on developing Energy Storage Materials can work as a shift from negative sentiments to positive side for this company. Excited to see how it pans out.
Infibeam Avenues – A Fintech Play (07-08-2024)
Infibeam Avenues Q1 FY25 Analysis : Key takeaways!!
Infibeam Avenues delivered strong Q1 FY25 results with double-digit year-over-year growth in net revenue (20%), EBITDA (25%), and PAT (59%). The company’s focus on improving take rates in payments has paid off, with net take rates increasing to 11.2 basis points, up 33% YoY. Management is optimistic about future growth, particularly in value-added services and international expansion.
Strategic Initiatives:
- Acquisition of Rediff (dot) com: Infibeam plans to acquire a majority stake in Rediff (dot) com to leverage its large user base (55 million monthly visitors) for cross-selling financial products using AI.
- AI Focus: Creating a new subsidiary for AI operations, focusing on fraud detection and prevention in fintech.
- International Expansion: Intensifying focus on international business, aiming for 12-15% contribution to net revenue in the next two years.
- TapPay Launch: Introducing CCAvenue TapPay, a new payment device for merchants.
- Value-Added Services: Expanding into financial product distribution, aiming for 2-4% revenue contribution this year, growing to 7-10% in coming years.
Trends and Themes:
- Increasing focus on AI and cloud services in fintech
- Expansion into value-added financial services
- Emphasis on improving take rates rather than just transaction volumes
- Growing importance of data localization and regulatory compliance
Industry Tailwinds:
- Rapid growth of digital payments in India (70% in 2023, estimated 45-50% in 2024)
- Government and regulatory support for digital payments and less-cash economy
- Increasing adoption of UPI and other digital payment methods
Industry Headwinds:
- Intense competition in the digital payments space
- Regulatory challenges and compliance requirements
- Data localization mandates in different countries
Analyst Concerns and Management Response:
-
Concern: Slow growth in TPV (Transaction Processing Volume)
Response: Management emphasized focus on profitable growth and improving take rates rather than just TPV growth. -
Concern: GeM (Government e-Marketplace) revenue recognition
Response: Management stated that GeM continues to use their platform, but revenue recognition is pending due to ongoing arbitration. -
Concern: Rationale for Rediff acquisition
Response: Management highlighted Rediff’s strong brand, large user base, and cloud capabilities as key synergies for Infibeam’s growth strategy.
Competitive Landscape:
The company faces competition from other payment aggregators and fintech players. However, management believes their focus on improving take rates, expanding into value-added services, and leveraging AI will differentiate them in the market.
Guidance and Outlook:
For FY25, the company projects:
- Revenue growth of 25-30%
- EBITDA growth of 10-20%
- PAT growth of 20-35%
Capital Allocation Strategy:
The company is investing in strategic acquisitions (e.g., Rediff (dot) com), AI capabilities, and international expansion. They are also focusing on improving profitability through better take rates and value-added services.
Opportunities & Risks:
Opportunities:
- Expansion into value-added financial services
- Leveraging AI for fraud detection and new product development
- International expansion, particularly in the Middle East
Risks:
- Regulatory changes affecting the fintech sector
- Intensifying competition in the digital payments space
- Execution risks in new ventures like AI and international expansion
Regulatory Environment:
The company has obtained a payment aggregator license from RBI, which provides a strong competitive advantage due to high entry barriers. They are also complying with data localization requirements in different countries.
Customer Sentiment:
Management reported strong merchant acquisition, adding 230,022 new merchants in Q1, averaging 2,550 merchants daily. This suggests positive customer sentiment towards Infibeam’s offerings.
Top 3 Takeaways:
- Strong focus on AI and cloud services to drive future growth
- Strategic acquisition of Rediff (dot) com to expand user base and cross-selling opportunities
- Emphasis on improving take rates and expanding into value-added services to drive profitability
Lemon Tree Hotels – Market leader in mid-priced hotel sector (07-08-2024)
Lemon Tree Hotels has opened a new franchised resort in Somnath, Gujarat, marking its seventh property in the state. The resort offers 52 rooms, a restaurant, and recreational facilities.
RSS feeds (07-08-2024)
Any update on RSS feeds for this forum
You need only a few charts to decide (07-08-2024)
Hi, the idea looks very interesting. Can you please share the link of the raw excel?