Posts in category Value Pickr
Smallcap momentum portfolio (05-07-2024)
Hi @visuarchie Sir,
How do you track stock splits or bonuses for the smallcap 250 stocks?
Addictive Learning Technology limited (LAWSIKHO) (05-07-2024)
FY24 Concall
Financials
- Doubled their revenue and have been doing so for a while now.
Business details
- Scaled up skill arbitrage well and the cost of acquisition is very low. It has a bigger TAM and can expect faster growth than LawSikho
- they have been able to expand geographically as they have been able to sell in North America, UK and Canada. it is a very nascent stage but the promoter expects a big chunk of revenue can come from this.
- doubled their engineering team! which they have earlier struggled with. they create new products and features and reduce costs
- Making courses AI friendly to adapt with the current world. It will also be a big differentiator as no one else is doing it
- process of building app as well so that they can bypass other websites and search engines.
- Rapidly scaled up content creation from the proceeds of IPO
- they could not meaningfully scam the sales team which they plan to do.
- Auto funnels are being made which help sell products. IN US, businesses don’t do calls for products below 10,000 dollars and hence use auto funnels.
- On reducing CAC: companies like google and Meta are gatekeepers of your audience. they will charge you to contact these audience. Most of the CAC goes to these guys. Companies need to build things that brings long term users. For example, a blog which I write should have a lot of subscribers so that I don’t need to advertise them
- Other methods of reducing CAC are like building content and making it so good that people wait for it. eg: SOIC
- team size: 600+
- No immediate plan to monetize opportunities platform. It will be free until it is the go to model
Industry
- Ed-tech had the worst year last year. there was a funding winter and only they got listed. However, they have not been worried and IPO gave them good funds to work with while the rest don’t! so helped capture market share.
- 7 states they have seen produce lawyers, judges etc. a lot of success was seen! Also had success in NCA Canada, Solicitor qualification in London and soon success will come in California BAR where results will come in June/July. this success will help with marketing strategies.
Outlook
- TAM without new products being added: 1200 crores
- launched a new platform called loss eco opportunities. 3000 visitors per day and 300 applicants per day.
- currently have 80 sales which they want to scale to 300 in one year.
- PBT should be 25% in the long run. that’s their target. rn they are targeting growth so they aren’t chasing this margin but it is possible.
- Because of increasing TAM by skill arbitrage geographical expansion, They think they can double their revenue for 2-3 years. Category, TAM and geography isn’t an issue. 65-130 won’t be easy and 130-260 will be a bit difficult but possible
- When they reach 100 cr per month, then he will be worried in doubling it.
- Over the next 2 financial years, Goal is 20 crores per month
- they want to go offline but they don’t have expertise on it
Risks
- more like Risk aversion: Slowdown in the economy does not effect them at all. During slowdowns when people lose jobs, they want to take up new skills and find jobs so they invest in education such as their platforms.
- Risk in AI: They have to keep up with AI because new stuff keeps coming up, this way the cost of course goes up because the learning is already outdated.
- If people raise a lot of money, then their competition can do a lot of marketing then CAC increase for Addictive learning as well.
- Hiring remote eliminated problem of finding good employees
E2E Networks Ltd – Listed small Cloud computing player (05-07-2024)
Recently I have been doing the research on the cloud computing space in the GPU era and I have found some astonishing facts. Some of them are as follows:
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Global Cloud Computing Market: The global cloud computing market is projected to reach $2.5 trillion USD by 2032, up from $500 billion USD in 2022.
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Top Cloud Service Providers: The three leading cloud service providers—AWS, Azure, and Google Cloud—are expected to hold a 36% market share in the $2.5 trillion cloud computing market (approximately $900 billion USD). This growth is driven by the ongoing AI revolution.
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Indian Hyperscalers: Currently, there are no hyperscale cloud providers originating from India.
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Yotta’s Initiatives: Yotta, a player in this space, has ordered 16,000 NVIDIA H100 chips, with a total acquisition and implementation cost of around $1 billion USD. The shipment was scheduled for receipt by June 2024. Yotta has launched its own cloud computing platform called Shakti Cloud, which has already sold out its capacity, with more companies on the waiting list.
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Yotta’s Cloud Capacity: Yotta’s cloud capacity is sufficient to train two ChatGPT-4 models within three months.
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Global NVIDIA Chip Shortage: Despite TCMC doubling its capacity in 2023-24, there remains a global shortage of NVIDIA chips. TCMC plans to double capacity again in 2024-25.
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Challenges for Indian Data Centers: Indian data centers, even the latest ones, are not adequately equipped to handle the power and cooling requirements of next-generation GPUs like the H100 and Blackwell. Reengineering is essential to host cloud computing in Indian data centers.
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Indian Public Cloud Services Market: In 2023, the revenue from Indian public cloud services (including IaaS, PaaS, and SaaS solutions) reached $8.3 billion USD, according to the International Data Corporation (IDC). The overall Indian public cloud services market is expected to grow to $24.2 billion USD by 2028, with a CAGR of 23.8% for 2023-28.
E2E Networks Concall Analysis
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Capex and GPU Acquisition: In FY 2023-24, E2E Networks invested approximately ₹145 crore in fixed assets, primarily acquiring 450 NVIDIA H100 GPUs. The cost per GPU was approximately ₹32 lakhs.
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Monthly Recurring Revenue (MRR): Following the recent capex, the company expects an MRR of ₹14-16 crore. For FY 2023-24, the MRR stood at ₹7.83 crore.
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Incremental Revenue and Profit:
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The increase in MRR amounts to ₹8.17 crore, resulting in an annual incremental revenue of around ₹98 crore from the current year’s capex.
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The incremental PAT (Profit After Tax) is approximately ₹12.48 crore.
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Assumptions: EBITDA margin at 51%, depreciation based on a 6-year straight-line method, interest cost at 9% for outstanding short-term and long-term borrowing, and a tax rate of 25%.
Note: There is a scope of improvement in EBITDA margin.
- Guidance for FY 2024-25:
- The management aims for an ideal capex of ₹800 crore in FY 2024-25.
- Assuming consistent parameters, the company could acquire 2500 H100 chips with this capex.
- Incremental revenue from the ₹800 crore capex, following the same MRR Increase/capex ratio, would be ₹540 crore.
- Incremental PAT would be approximately ₹79.52 crore.
- Assumptions: Source of funding – 50% debt: 50 % equity, EBITDA margin at 51%, depreciation based on a 6-year straight-line method, interest cost at 9% for outstanding short-term and long-term borrowing, and a tax rate of 25%.
Note: There is a scope of improvement in EBITDA margin.
- Total Peak Revenue:
- After the ₹800 crore capex, the total peak revenue is projected to reach ₹732 crore.
- The peak PAT is estimated at ₹111.34 crore.
Challenges/ Questions for which I am looking the answers for:
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Sourcing NVIDIA H100 Chips: Will the company be able to source NVIDIA H100 chips?
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Fundraising for Capex: Will the company be able to raise funds for the required capex?
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Data Center Space: Will the company be able to obtain the required space from data centers for running the GPUs?
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Selling Cloud Computing Space: Will the company be able to sell cloud computing space to customers?
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Technical Readiness and Staffing: Is the company well-equipped technically and does it have the required number of employees to cater to such a large number of customers?
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Product Strength and Demand Creation: Is the company’s product strong enough to create this kind of demand?
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Competitive Strengths: What is the company’s right to win? What are its competitive strengths?
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Software Stack Importance: What is the importance of the company’s software stack in the GPU era?
Feel free to share your findings, and I’ll be here to continue the discussion!
ValuePickr Pune (05-07-2024)
Hello!
I dont know if I am too late but could I be added to the group as well?
Shalby Hospitals (05-07-2024)
HI All,
Can somebody elaborate on how it’s franchisee business works.
Screener.in: The destination for Intelligent Screening & Reporting in India (05-07-2024)
Available for premium members by annual payment
Syngene International (05-07-2024)
The Mangalore facility will take time to start contributing, they will start with pilot projects there in the medium term as a precursor to getting large contracts in the long term.
BAJAJ STEEL INDUSTRIES LTD – Proxy on Agri Theme (05-07-2024)
ginning machines are neither a high growth business, nor a large market, replacement cycles are long. any benefit from textile growth will be limited and with lag. just look at their 3/5/10year sales CAGR
they have a few other segments – engineering & construction, plastic batches, etc. which are not material yet.