@StageInvesting , So how to overcome this bias? And how to muster courage and conviction to deploy more funds?? What mental model or thinking pattern we should adopt to both types, known-unknown and unknown-unknown?
Posts in category Value Pickr
Business Quality: Calculating the Value Drivers of the business (28-06-2024)
yes
xlsx not downloadable
StageInvesting +Elliot Waves (28-06-2024)
Known -Unknown Vs. Unknown- Unknown
Known- Unknown are the events where you know about the forthcoming event ( most of the times ) but you are uncertain about the outcome i.e. Budget / Elections /Small scams / Interest rate changes .
Markets generally correct 8-10% and then start the previous trend .
These kind of events are regular ( happen every 1-3 years )
Unknown-Unknown Where events are not predictable, they are sudden ,you’re neither aware about the forthcoming event nor its outcome .i.e. Covid / sudden wars / big scams .
Markets may fall 30-40% and future trend may be different than the previous trend .
These kind of events happen every 8-10 years e.g. early 90s/ 2008 / 2020
Common people are unable to make this distinction and they tend to remember unknown - unknown events more as fall is greater & serious wealth destruction happens - that’s why they are not able to commit big money in the markets .
Orbit exports (28-06-2024)
have been studying the company. few points
- If promoter has participated in buyback this time (and not before) then is surely means company has peaked.
- Sales and margins are stable so no more upside.
- As margins are high, competition could lead to margin reduction as it is not a branded / differentiated company.
At current price of 180 seems to be fairly valued with downward risk.
Bansal roofing products – Pre-engineered for growth (27-06-2024)
Sharing my notes from their recent concall.
FY24Q4 concall
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Incorporated in 2008, Unit I commercialized in 2012, Unit II commercialized in 2021 and Unit I was closed and operations were transferred to Unit II
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Engaged in Pre-Engineering Buildings such as construction of Factory sheds or Buildings, Showrooms, Warehouses. Have completed 250+ products
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Order booked until October 2024
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Unit I is rented out and earns 3.15 lakh/month
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Unit II capacity: 800 tons/month which can reach 2000 tons/month in 3-4 years(thereby reaching 200-250 cr. annual revenues)
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Capex will be done via internal accruals
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FY24 product mix
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Roll forming products (roofings sheets, purlins): 56.88%
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Structures (column beams / sheds from steel plates): 28.42%
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Coil trading: 8%
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FRP sheets, polycarbonate sheets, hardwares: 7%
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90% sales comes from Gujarat with remaining coming from UP, Bihar, and South India
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FY24 margins were lower due to lower prices (Steel price reduced from 80 in March 2023 to 57 in March 2024) and higher employee costs
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Have built 16-18 houses for ~80 labours and started canteen services
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Q1: Revenue was 28 Crs., tonnage was 787 ton
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Q2: Revenue was 26 Crs., tonnage was 501 ton
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Q3: Revenue was 25 Crs., tonnage was 980 ton
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Q4: Revenue was 24 Crs., tonnage was 1100
Disclosure: Not invested (no transactions in last-30 days)
Raymond – The Complete Man (27-06-2024)
Now that we expect the new shares to be listed in August (from their CFO in some interview), how will the price discovery work out (Raymond Ltd & Raymond Lifestyle)?
Dharmaj ready to benefit from high demand for agrochemicals (27-06-2024)
Dharmaj had a very good FY24, with sales growing 24% and EPS by 34%. This was a year when most agchem cos had a very bad year. They are confident of 25%+ sales growth in FY25. Concall notes below
FY24Q4
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Targeting 900 cr. sales in FY25
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Technical division
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Started with 7-8 products in phase 1, 5 synthetic pyrethroids (Cypermethrin, Alphamethrin, Lambda Cyhalothrin, Bifenthrin.) + 3 non-synthetic pyrethroids (Thiamethoxam, Chlorantraniliprole, Pymetrozine, Dimethomorph). Have achieved desired purity levels in May
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In phase 2, will commercialize 3 new molecules in 2024
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Average monthly production of 200 metric tons per month (30% utilization in FY25) - 275 cr. capex
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Witnessing price increase in pyrethroids . Gharda is the largest manufacturer for synthetic pyrethroid and have shut plant for last 6-8 months as they are shifting plant from Dombivli to Sayakha which will become operational in 2 years
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Started exports in April, achieved 27 cr. sales in April + May (sold 300 tons of synthetic pyrethroid)
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Quarterly expenses: depreciation 3.7 cr, finance cost 1.1 cr. (this includes government subsidy), fixed overheads 9 cr.
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Targeting 70 cr. annual overheads (33 cr. fixed + 37 cr. variable), 150 cr. sales and 15-20 cr. EBITDA loss
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Will breakeven at 200-220 cr. (40% utilization to be achieved in FY26)
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Will see 3-4% EBITDA margin improvement by FY27 (and 400-450 cr. external sales)
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B2C
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Tapped 4 new states in South India (Odisha, Andhra Pradesh, Karnataka, Telangana) expanding to 24 states. Wont add new states in FY25
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Rajasthan grew to 23 cr. (vs 13.5 cr. in FY23)
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Gujarat sales was 80 cr.
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25% growth target in FY25
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B2B
- 25% growth target in FY25
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Volume growth was 45-50% in FY24
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Targeting 800 cr. formulation sales in FY25
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Reduced payables to avail cash discount
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Formulation has 90 days credit period, technical division will have 120 days credit period
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Accounting changes
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Cash and quantity discounts were earlier reported as other expenses and will now be netted directly from sales. (FY23 revenue has been restated by ~9 cr.)
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Out of 275 cr. capex, 260 cr. was on physical assets with remaining being capitalization of interest, consulting fee, intangible items.
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6.25 cr. expenses in FY23, one-time professional and consulting fee for Sayakha project
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Disclosure: Invested (position size here, no transactions in last-30 days)
Vikram Thermo (27-06-2024)
Company announce any date for transfer of vikram aroma shares in demat accounts
Any one receive till date ??
DIY Momentum QnA and Discussion (27-06-2024)
The intent of the forum is to learn new things, it is also on us to unlearn preconceived misconceptions. Incorporating elements like stop-loss orders, stage analysis, and fundamentals (e.g., promoter holdings) into a momentum strategy can indeed provide additional layers of risk management and fine-tuning. However, it can also dilute the purity of a quantitative momentum strategy. Here’s a breakdown:
Stop-Loss Orders
- Pro: Protects capital by limiting losses during sudden price drops.
- Con: May lead to premature exits due to normal volatility, causing missed opportunities.
Stage Analysis
- Pro: Helps in identifying stocks in the early stages of an uptrend, enhancing the likelihood of catching strong momentum.
- Con: Adds a subjective element to the strategy, deviating from pure quantitative measures.
Fundamental Analysis (e.g., Promoter Holdings)
- Pro: Ensures that selected stocks have a solid backing and are less likely to be speculative, adding a layer of safety.
- Con: Shifts focus from purely price-based indicators to qualitative aspects, diluting the quantitative nature of the strategy.
Pure Quantitative Momentum Strategy
- Simplicity: Focuses purely on price movements and trends without additional subjective filters.
- Consistency: Follows a strict, rule-based approach, reducing the risk of emotional decision-making.
Balancing Both Approaches
While integrating these additional factors can potentially improve the robustness of a momentum strategy, it also moves it away from a purely quantitative approach. Each investor needs to find a balance that aligns with their risk tolerance, investment goals, and comfort level with subjectivity.
Conclusion
Adding stop-loss orders, stage analysis, and fundamental checks can enhance a momentum strategy by providing better risk management and selection refinement. However, it does dilute the pure quantitative nature of the strategy, making it more complex and potentially introducing biases. Each investor must decide based on their preferences and investment philosophy.
Pharma || Hospitals || Diagnostics : Industry perspective (27-06-2024)
Windlas Biotech -
Company overview, Q4 and FY 24 results and concall highlights -
Its a contract maker of generic formulations for Domestic branded companies, GoI ( Jan Aushadhi Kendras ) and also export generic formulations
Vertical wise revenue split -
Generic Formulations CMO Domestic - 77 pc of sales. Last 5 yrs sales CAGR @ 14 pc
Trade generics + Govt Supplies - 19 pc of sales. Last 5 yrs sales CAGR @ 42 pc
Exports - 4 pc of sales. Last 5 yrs sales CAGR @ 45 pc
Therapy wise revenue split -
Acute therapies - 34 pc of sales
Chronic therapies - 66 pc of sales
Product wise revenue split -
Complex generics - 64 pc
Conventional generics - 36 pc
Focus therapy areas - Respiratory, Anti-Diabetic, GI
No of manufacturing facilities @ 4. All 4 located in and around Dehradun. Dosage forms manufactured - oral solids, chewable, liquid bottles, sachet / powdered products, Injectables. Injectables facility commenced operations in Mar 24
Q4 outcomes -
Sales - 171 vs 141 cr, up 22 pc
EBITDA - 22 vs 16 cr, up 34 pc ( margins @ 13 vs 12 pc )
PAT - 17 vs 11 cr, up 48 pc
FY 24 outcomes -
Sales - 631 vs 513 cr, up 23 pc
EBITDA - 78 vs 60 cr, up 30 pc ( margins @ 12 vs 12 pc )
PAT - 58 vs 43 cr, up 37 pc
CFO > 100 cr for FY 24
Cash on books @ 206 cr as on 31 Mar 24
GoI planning to triple the number of Jan Aushadhi stores to 25k inside next 2 yrs. should act as major catalyst to the Trade generics segment
Company’s CMO - domestic vertical grew by 20 pc in FY 24 - that’s 3X of IPM
As company’s capacity utilisation grows (and specially for injectables segment which is a high margin segment) - company’s EBITDA margins should expand going forward
Guiding for 1000 cr topline in FY 26
Capex guidance for FY 25 @ 20 cr for expansion of Dehradun plant - 2. For FY 26, it should be around 30-35 cr
The Capex spend for the Injectable facility was @ 75 cr
Company’s trade generics segment generates greater EBITDA margins vs CMO for branded companies as the company gets to retain the distribution margins in addition to the manufacturing Margins
Govt’s focus on better quality of generic medicines and crackdown on non-compliant players is a structural tail wind for the company
At peak capacity utilisation, the Injectables facility can do an asset turns of 1.2 times ( so that amounts to 90 odd cr of annual revenues. However, the EBTDA margins here are > 15-16 pc )
Company’s expansion plans for medium - long term will be a mix of organic + inorganic - given the healthy cash flow generation by them
Company’s employee costs are in the 13-14 pc band vs Innova Captab’s 7-8 pc band. Company believes that employee cost is an investment
Company believes that complying with all GMP / Schedule M regulations is not easy for smaller non-compliant players. It does cost significant money and a complete change in operating mindset
Disc: holding, biased, not SEBI registered