What could be reason wabag is trading on lower valuations despite clear order book , technology leadership , diversification , and also being in essential sector with big future prospect ? Is it about lower promoter holding , or no significant revenue growth or market might see few more quarters with steady twin digit margins with higher PAT ?
Posts in category Value Pickr
Pragnesh’s portfolio (21-08-2023)
Hello Pragnesh
How long do you think the headwinds will remain in the business and what do you think about the future of Apcotex.
I am studying this stock for about 2 weeks found your thread useful.
Thanks.
How to build a concentrated PF (21-08-2023)
That may defeat the purpose of high allocation for others, because limited downsize does not guarantee superior returns, which are the reason for allocating more. I bet because I know that the high returns along with the high capital will make meaningful change to the PF. Yes, I do agree that when allocating big, no loss is also good, but I am not sure if all prefer that.
And even people who bet big, may not go in all at once, but gradually build positions, as and when what they have envisaged is happening, they average up. Of course some may average down because of their conviction, many ways to skin the cat, as we know.
Once can allocate 25% of the PF to ITC or TCS, the chance of losing is less, there could be some loss of course, but who would want to make high allocation to such stocks. Over the course of years, if not sold, from the initial position to the current holding, stocks may occupy 25% of the PF, that is a different story.
My limited point is that, there are different schools of thought for betting big, different perspectives.
Just my 2 cents.
How to build a concentrated PF (21-08-2023)
To build a concentrated portfolio you need to know –
- Understanding of business & industry dynamics
- Your own investment time frame
- Ability to value a business.
- Brain wiring to handle volatility (This one being the most important)
I always wondered why many people cannot invest 15-20% in single stock, after spending some time alone in silence, I found the answer to why I can do it and many can’t.
What I’m doing is “betting on stocks where losing money is difficult.”, instead of trying to betting on making money.
Apcotex Industries – monopoly in Synthetic Rubber? (21-08-2023)
Hello Lakshay,
I have one query regarding your valuation.
High Capex(higher depreciation) and Higher Interest cost will be impacting their bottom line for few Quaters so is EV/EBIDTA a proper tool for one to value the company?
Also have you built a position in Apcotex ?
Thanks.
Kovai Medical Center and Hospital – Health and Wealth (21-08-2023)
all the promoters family are involved so succession will not be a problem
Kalpesh’s Portfolio (21-08-2023)
Portfolio update –
Equity – 62%
Debt – 38%
Equity –
| ASRL | 16% |
| TTL | 29% |
| SRGHFL | 28% |
| PUNJABCHEM | 27% |
Debt –
| Vastu finserve | 22% |
| APCRDA | 44% |
| UPPCL | 29% |
| Avance Financial | 6% |
Kalpesh’s Portfolio (21-08-2023)
I though I will give detailed answer to you post, but I took so many days to understand(again) that I’m too lazy to do that. really sorry for that.
- Promoter is well known & respected person in Gujarat.
- I did not find anything wrong with issuance of new shares in the last few years.
- I did not find anything wrong in the rights issue, their mistake was to do it at wrong price. (Yes, I consider this as their innocence)
- They are primarily a trading entity, from last few years trying to enter into manufacturing of some products.
- They have entered into a tie up agreement with Marss Herbal (India) which is engaged in manufacturing of wide range of herbal and natural use products. (Marss Herbal is a real company)
- They are into ayurvedic, food supplement, agriculture, animal feed supplement, and personal care products. but I broadly divide them into FMCG & Agri products, where they are mostly into trading in FMCG products (with few products manufacturing inhouse) & manufacture agri products inhouse(This is my inderstanding, may be erronous).
(Setting up of herbal & ayurvedic processing unit for manufacturing of cosmetic & non-cosmetic products at Village Padawala, Taluka Kotdasangani, District Rajkot (“Project”); 208.75Lakh – RHP)
- You confirmed in the thread that you recieved a real product, (Thanks for that
)
They are into trading business where they are pushing sales on long credit terms. As long as they do that they will have high receivables. I don’t remember exactly but I did not find any bad debts in past Annual Reports.
I did not find anything fishy in past AR’s, if nothing is wrong, it is investable for me.
Yes receivables were equal to market cap. because market is acting irrational due limited availability of information, bad financial decisions of promoter and it being a micro-cap company.
In the next post.
Risks:
I see promoters as illiterate in finance, so this is a biggest risk.
Company is growing faster than its capacity, they need to slow down to 20-25% growth only, and now on I think they will.
Good thing is they recently onboarded Mr. Pradipkumar Harjibhai Lathiya who have 10 years of experience in finance, I dont know how good he is but I’m happy with this development.
Discl: Invested, may be biased, my research can be wrong or erronous,
Not a sebi registered, this post is only for educational purpose.