Yes you are correct. Cannot expect higher valuation unless their fundamentals are exceptional (highly unlikely in a commodity lending industry).

Yes credit costs were abnormally low for the entire industry in FY24. If credit costs remain within 1.5% in FY25 then we can expect 1250 to 1500 cr of PAT. If higher credit costs materialize then PAT could degrow. Usually they have better credit costs than industry in normal times due to better CEs.

They guided to reduced collections team expenses as well, but didn’t materialize in FY24. Outsourced collections team is still strong.

They are also in CAPEX mode with new branch additions so OPEX will weigh on PAT. Alas, to the market only growth numbers matter, this is an opportunity for LT investors, recognizing opportunity in LT when market focuses on ST.

Current fall from 60 is just market’s anxiety towards loan waivers which reoccurs every election cycle. Once elections are over, the market will dust off the risk (which has nil probability of materializing anyway). Entire MF sector has seen such fall. Ujjivan may have had additional fall due to some arbitrageurs exiting as the arbitrage was down to low single digits.

Some uncertainty due to CEO change requirement also remains, they should focus on announcing an internal (my opinion) candidate soon (mid-year). That should give some relief to the market’s anxiety. In the meantime as BVPS keeps rising, there should be support to the price.

Platform companies are indeed valuable and generally get a higher valuation. Because of

1. Network effects – the platform’s value increases as more users and producers join. This positive feedback loop can lead to exponential growth
2. Scalability – Platforms are often highly scalable since they can grow linearly without increasing costs linearly. This means more capital can be put to work for higher returns
3. Data analytics – Vast amounts of data generated by platforms can be leveraged for insights, personalization, and targeted advertising.
4. Ecosystem value – Platforms often create ecosystems for third-party developers, partners, and users that contribute to the platform’s growth.
5. Diversified revenue streams – They often have multiple revenue streams like transaction fees, subscriptions, advertising, etc. that lead to better margins and demand higher valuations.

The outcome of the above factors leads to the development of a moat around the business, that offers higher visibility and certainty of growth for a longer duration for which investors are willing to pay a premium.

Hope this helps.

I find something more. I find the parent company Linde PLC has four unlisted entity in India Linde through which it divert all profitable business. The parent Linde PLC also directly deals with Indian clients.

Linde group operates in India through Linde India Limited – listed co (75% ownership by Linde plc). The other 3 are not listed – Praxair India Private Limited – (100%), Linde Engineering India Private Limited (100%), Linde Global Support Services Pvt Limited (100% owned Global Captive Centre, GCC) and Linde South Asia Services Limited (owned jointly by Linde India and Praxair India, to manage the operations and maintenance of the facilities set-up/owned by both entities). In addition, Lind plc is servicing clients in India directly.

Hi @Rajesh_Singh sir,

Request your views and thoughts on the following-

1. Took an entry in DocMode at 246 (1 lot, before the lot size reduction). Thoughts? Is the entry a bit late?
2. Considering to enter Basilic Fly now at 353. Your views on whether its guidance has been baked in? Do you think it has the potential to perform better than Digikore Studios from here? You foresee any risks?
3. Considering to enter Presstonic now at 121. Do you think it will be able to scale up? Understand the growth potential though.
4. Your general view on Thaai Casting? I don’t see it in your PF. Any reason why?

Thanks
Ramanjan

Founded in December 1995, Konstelec Engineers Limited is active in the fields of engineering, procurement and construction/commissioning (EPC).

The company offers a wide range of services including engineering and drawings, procurement, operations and maintenance, project management and construction and commissioning. The company’s areas of expertise include electrical installation, solar power plant installation, instrumentation and automation. The company has completed more than 200 projects of varying size and complexity, including 45 major projects worth over 400 crores.

The company’s clients include Reliance Industries Limited, Engineers India Limited, JSW Steel, Indian Oil, BPCL, HPCL, CPCL, MRPL, ISRO, ACC, BARC, Dangote Industries Limited, Adani, NTPC, Tata Steel Ltd, Navin Fluorine International Ltd and IGPL, etc.

The company provides services in more than 15 states in India and Nigeria.
a) Engineering Design & Consultancy Services;
b) Construction and commissioning;
c) Operation and maintenance;
d) Project Management

Domestic – 95.5% in FY23 vs 89% in FY22
Exports – 4.5% in FY23 vs 11% in FY22

As on today the order book is around 600Cr which is 4 times current sales