Positive news: Andhra Pradesh has allowed procurement of liquor from the likes of Tilaknagar industries, United Breweries etc. AP is a very big market for liquor and its effect can be visible from next quarter.
Technical analysis point of view
Posts in category Value Pickr
About the Investing Basics Q&A category (29-07-2024)
Hey there I’m investing since the past 3 years. How do I calculate the XIRR of my portfolio of stocks in groww. I think they only show the absolute percentage. Is there any tool to do the same. Thanks
NPST – Technology Provider for UPI Tech (29-07-2024)
TAM itself growing @ 100% CAGR for next 2to 3 years. Management guidance for this year revenue growth 75% to 100%. 1 year’s forward revenue= 380 core. With latest EBIDTA margin 35%, PAT can be anywhere around 100 crore and 1 years forward PE=53. A business growing at 80% CAGR and 1 year’s forward PE = 53. To understand growth driver, Check in your surrounding about use of UPI payment growth. Beside the UPI growth they are creating new product as future growth driver. Their peers are not listed and they are mainly in specific segment of UPI ecosystem. But NPST is creating complete solution which will enable them to serve most of the segment of UPI ecosystem. AI is going to be embedded in all their product and solution. Current growth is coming from product they have developed earlier. Currently they are developing product for future growth. I could not decipher their con-call to fully understand their product solution. however above is my basic understanding after going through their conalls. Disc. Invested and biased.
Heritage Foods Ltd (29-07-2024)
Notes from the concall:
- Quarterly revenue crossed ₹1,000 crores for the first time in history.
- FY’28 target : sustain 17-18% growth YoY with 7-8% EBITDA margin for next three years. 9% EBITA achieved in this quarter is kind of peak for near term. Looking to grow in high teens, with 5-6% from price increases and 12-13% from volume growth.
- Expect growth to come from both volume expansion and revenue increase.
- Focus on shifting towards value-added products to drive revenue growth. (Ice cream segment witnessed 20% odd revenue growth. Bangalore is becoming big market via swiggy, zomato, zepto)
- Orissa as a new geography is responding quite well.
Zen technologies – A micro cap in the defense space! (29-07-2024)
Why would it be an antithesis pointer when management had already said that they anticipate new orders only in H2?
Omkar’s Portfolio Analysis and Discussion (29-07-2024)
ICICI bank does not have a previous underwriting track record. It’s my attempt of being ‘flexible’
Sharda Cropchem – Can it get into indian market in a bigger way? (29-07-2024)
Management said that this quarter, volumes are coming back majorly and prices improving slightly compared to last year. Pricing to improve quarter to quarter.
Q1 FY25 concall summary:
Guidance for FY 25: 15-18% revenue growth and 15-18% EBITDA margins
Product registrations:
Total product registrations as of 30th June 2024: 2928 (about 80% are active)
1040 product registration at approval stage
Capex in Q1 FY25: 78 Cr., FY 25: 400-450 Cr.
Top 10 molecules contribute about 35-40% of total revenue, these top 10 molecules keep changing every year depending on demand situation.
Non-agriculture business:
Drop in demand currently due to high freight rates and high duration.
Management is very optimistic in the future. Non-agri helped company a lot last year when Agri was down.
Agri business:
Management insights: Today demand is matching supply, and companies don’t want to lose market share, hence prices are still not moving up. Once demand increases, prices will move up naturally.
Region wise volume break up:
EU: 5 million units, NAFTA: 4 million units, LATAM: 0.6 million units, ROW: 0.35 million units
Region wise gross margins break up:
EU: 35.5% NAFTA: 22% LATAM: 32%, ROW: 38%, overall: 31%
Region wise registrations break up:
EU: 1625 , NAFTA: 300, LATAM: 750, ROW: 250
Clarification on employees and sales force:
Company has 180 employees in India. It hires consultants abroad to circumvent the variety of legalities and benefit schemes of the countries. Management said they have 350+ sales force who received roughly 100-105 Cr. as commission in FY24.
Panchsheel Organics Ltd (29-07-2024)
Panchsheel Organics Ltd. has several strengths, including its low debt, diverse product portfolio, strong financials, and promising growth prospects within the expanding pharmaceutical industry. Its strategic capex plans, low promoter pledge, and solid client base add to its attractiveness as an investment. However, investors should also consider the risks, such as decreasing RoE and RoCE, and the impact of rising raw material costs. Low PE, indicating growth opportunity. Overall, POL appears to be a company with solid fundamentals and growth potential, but further detailed analysis and due diligence are recommended before making investment decisions.
HDFC Bank- we understand your world (29-07-2024)
How do we need to interpret the contingent liabilities mentioned in a Bank’s balance sheet?
Omkar’s Portfolio Analysis and Discussion (29-07-2024)
Hi Umesh Sir
In my latest portfolio update, Kotak’s allocation is marginally higher than others. I aim to size all 4 BFSI stocks – Kotak, HDFC Bank, ICICI Bank and Bajaj Finserv – equally around 4-5%. In fact, I made some efforts in that direction today and slightly increased allocations in HDFC, ICICI and Bajaj Finserv
The reason for equal weight portfolio and not concentration
As mentioned a couple of days back following is my broad definition of a franchise, the description of which fits all 4 companies. I do not have any “differentiated insight” which enables me to find which among 4 has a better and more durable franchise
On your point of stock going nowhere and weak recent earnings
As Kotak Securities’ recent note puts it – the banking sector has gone through a process of ‘democratisation’ of multiples in the past 3-4 years. Multiples of earlier ‘Corporate’ private banks and PSU banks seeing rerating on improved performance of the banks with higher ROAs reflecting higher NIMs and lower credit cost ( barring the current quarter ). At the same time, multiples of earlier favourites see a derating because their superior underwriting skill is less of a differentiator in reasonable credit cycle conditions and also because of specific bank-related issues
( P.S. – Don’t think I am that smart after reading these lines. These are word to word copy from the report but I thought they are relevant here in answering your query )
This is the main reason why Kotak’s / HDFC’s multiples have converged with other banks leading to underperformance
Why I am buying only these 4 companies
Baggage of the past cycle
It’s a shame that I entered this bull cycle with the baggage of the past bear cycle where there was serious damage in a few names because of either poor underwriting decisions or asset-liability mismatch. I still remember that day when DHFL was down 60% in one day. I as an investor have failed to come out of that impact which is where I would like to improve in future
Witnessing benign credit conditions for the first time
In my investing career which started around 2014-15, this is the first time I am witnessing conditionals like these. First time I have seen PSU balance sheets so clean. To be honest with you, I did not know how to react and how long these conditions can last
Therefore I am sticking to names which has proven underwriting (rightly / wrongly )in the past cycle being fully aware that I don’t deserve any alpha because of the above 2 points. Having said that – I still believe these 4 companies hold earning power to grow earnings in high teens in future