Disciplined execution to respectable ROCE across the cycle.
Posts in category Value Pickr
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (05-01-2024)
Through C-heavy route, production is only 4% sugar equivalent – volumes will be hardly anything to compensate for losses of sugar/ ethanol companies. C Heavy prices will have to be increased further by 10 to 15% and even then the losses will not be compensated – this is simple maths. Instead govt has increase prices of maize based ethanol – now sugar mills will move from cane to maize and cereal prices will shoot up… biggest losers are farmers…
Sugar mills have already cancelled their expansion plans for ethanol. the owners (i have spoken to a few) will prefer to dividend out profits (or through buyback as Balrampur and Dhampur Sugar have done) and invest elsewhere. As far as current capacities are concerned they will try to optimise between sugar and ethanol and increase margins.
Ethanol plants in Maharashtra also shut…
Only way forward for ethanol supplies to increase is govt backed co-op mills will set up ethanol plants – and probably make losses and then shut down !!
Indus Towers Limited (05-01-2024)
I’m not a telecom expert, but am an investor in Indus. Just read about this: Starlink could theoretically be a threat to Indus and the Telecom industry in the far future (10 years+), but it is still pretty far from getting there, due to the following:
- Starlink is still not fully approved in India – it could be a few years before it is approved for commercial usage
- After approval, it would need to apply / bid for spectrum allocation – which could be a significant cost for Starlink, which is currently loss-making. So, I’m not sure if they have sufficient funds to bid for spectrum
- Based on costs in other parts of the world, I doubt this solution would be cost effective when compared to Indian mobile and broadband costs in big cities and towns: ” As per industry estimates, the pricing of satellite Internet services is expected to be around Rs 8,000-10,000 per month along with one time set-up cost. This is significantly high, compared to affordable home broadband plans of Rs 399 per month by telcos such as Reliance Jio.”
- Based on the current download speeds, it is probably at the lower end of 4G: 60~90Mbps. So , would not be a great solution to stream videos / download movies etc. However, it might be quite a good solution for remote areas without cell tower coverage (e.g. mountains / forests).
So, in conclusion, I think it is a solution that will complement existing mobile and broadband coverage in India, especially to remote locations where is it not economical to set up towers and lay data cables.
Sources:
- Starlink is getting a lot slower as more people use it, speed tests show | Ars Technica
- https://www.financialexpress.com/business/industry-musks-starlink-to-get-satellite-internet-licence-next-month-3256844/
- Starlink – Wikipedia
Hitesh portfolio (05-01-2024)
Dear Sandesh,
I want to highlight some imp aspects what I am currently reading from a book Trade Like a Stock Market Wizard by Mark Minervini which may probably help you in dull choppy markets. He identified characteristics of SUPER-performance Stock. The most important characteristic among them is Earning Growth and Quality of Earning Growth. If you can identify a company which is growing Earning 30%, 40%, 50% QoQ with also increasing sales and you board it in first or second base you most probably find winner in choppy dull (Not Bear crash) market also. Ex Aapar, Uasha Martin, Elecon etc. The only thing in bear market is stock will test breakout/ longer duration MAs more often than bull market, but you have to understand underlying fundamentals to ride it properly and adjust temperament according to the market environment.
He also mentioned in the book what Hitesh sir mentioned is most life changing SUPER-performance stocks can be identified during the end of bear market. If you can ride it properly with good allocation you are done.
I recommend you to read and re-read this book. He has done extensive research on SUPER-performance stocks and laid down very simple principals and strategies for us.
Olectra Greentech – Electric Bus Opportunity (05-01-2024)
Could you please share the source link. I would like to track upcoming tenders as well.
Management already told about this L1 in the last conference call, it’s almost 3000 buses after considering the +ve tolerances.
Recent media interaction they have confirmed that they are L1 in some other 500 buses tender.
I am concerned about the execution of these orders, Earlier they had a target of 1200 buses later its come down to 1000 buses and now they said 700-800 buses will be delivered in FY24.
Eicher Motors (05-01-2024)
The new Himalayan 450 seems to have stellar reviews across the board. Is this category a meaningful volume generator for the company? Should Q4 see better volumes due to this launch?
Portfolio Analysis (05-01-2024)
Okay so ive been investing for 9 odd years.
Jindal Drilling I bought in the post covid era expecting a revival in crude consumption and there were talks on revising drilling charges so I bought some and I added more after I saw a technical breakout. Mostly I bought seeing it as a desi crude play, and then since the past 6 quarters they’ve kept on giving out great commentary and financials so ive just held on.
Tbh, ive always had a big list of stocks but seeing the rich valuations ive sold quite a bit of my holding and now I’m just holding onto some stocks that were either too convincing on a 5 year forecast or if someone strongly recommended me to buy some (like Subex, Adani Ent & Shree Renuka).
Mann’s Portfolio (05-01-2024)
Could you provide some more colour on your thesis on crown lifters, I am actively researching the stock. They have filled an announcement regarding high demand. Are promoters trustworthy?
RACL Geartech Limited (05-01-2024)
UP state govt awarding RACL for highest export in FY 22-23 in engineering category