The new acquisition,Railway Equipments from Escorts – their customer is Indian Railways and their current EBITDA margin is around 20%. Given the customer is a government entity, will there be a scope for margin improvement by controlling cost? If not, it may bring down the overall consolidated margins of Sona BLW by a few percentage points from their current level of 27%

I don’t think the fall in stock price has anything to do with fund raising. When the company is trading at such high valuations, a miss in earnings can easily bring down the stock by 10-15% in a day or two. If you look at the commentary of management also, they are acknowledging the slow down in Auto in Europe and they expect it to continue even in Q3.

We need to understand that KPIT got higher valuations due to delivering results Q after Q. Now when the growth slows down, the valuations will revert. Also one has to understand that KPIT is a focused ER&D player only on Mobility. What worked in their favor (compared to diversified players) during tailwinds will exactly work against them during headwinds.

Disc – Not invested.

Jeffries downgraded Price Target from 2000 to 1900 but still maintains Outperform rating. I assume market is not taking fund raise very positively for now along with high PE. Many hifg PE companies are getting the hit and money seems to be moving to more reasonable (low PE) names now.

Hello @jmpullat. One of the advantages of our system oriented investment (like momentum) is the discipline it brings. It also removes the discretion that one might want to apply.

I started with 10 stocks. Later, when I wanted to invest more, there were two choices, (1) increase the amount in each stock or (2) expand the pf size and continue.

I went with option 2 because it gives me a long runway for future investments. Typically, you can go up to 10% of the universe and this case, as the universe if Midcap150, I can go with a 15 stock portfolio without any concern.

Not sure what you mean by % holding.

1. If you are asking about % holding of each stock in the pf. My objective is always to go with an equi-weighted pf. Thereafter, I let the winners run without any limitation. However, when I invest some bulk amount (which I do when I have investible surplus), I try to get back to equi-weighted.

2. If you are asking what % of my pf is momentum. I invest in multiple pfs using this strategy. My total investment in momentum pfs is slightly more than 10% of my total equity investment. That is because, I started in 2021 only and typically, more of the new investments are in momentum.