Disc:
Trimmed Axis bank.
Sold NOCIL.
Added - KVB, IDFC First Bank ( for reasons mentioned in the previous post ).
Bought - RIL ( new position ) - have been really impressed by the strides they are making in the retail business.
Disc:
Trimmed Axis bank.
Sold NOCIL.
Added - KVB, IDFC First Bank ( for reasons mentioned in the previous post ).
Bought - RIL ( new position ) - have been really impressed by the strides they are making in the retail business.
Anyone tracking Alkali Metals Ltd.? The Co. specializes in Sodium derivatives & one can see a steady improvement in numbers. Can the Co. contribute in the development of Sodium-ion batteries, which is gaining in acceptance as a potential option to lithium batteries. Its early days but the potential is immense.
Assuming you purchased PEL shares before the ex-date (30th August 2022), you will be entitled to receive Piramal Pharma Ltd.
Assuming you purchased PEL shares before the ex-date (30th August 2022), you will be entitled to receive Piramal Pharma Ltd.
Nope. you would not get Pharma shares if you buy PEL today.
Nope. you would not get Pharma shares if you buy PEL today.
The DAO of Capital: Austrian Investing in a Distorted World by Mark Spitznagel | Goodreads
This is a very unique book. The focus is to build the framework for Austrian Investing, which makes it a very dense read. Perhaps prior reading of the Austrian Economists is a must for reading this book.
Market is viewed as a process of price discovery which is essential to establish coordination among large number of workers. The main actor is the entrepreneur who tries to build better capital structure with the aim of earning profits. However a distinction is made between those who focus on short term profit versus those who forgo present profit so as to build competitive advantage for themselves and larger profits in the future. Humanity progresses due to the roundabout capital building leading to greater productivity by this Austrian hero. I can’t help but think of many of my investments, for example, Dmart which chose to buy large plot of land and slowly build their network of large format stores with the focus on low prices which becomes their competitive advantage and source of larger future profit.
The last two chapters suggests two complimentary trading strategies. The first is to exploit the distortion in market produced by money printing. The idea is to buy out of money put options when the Mises index (also known as Tobin’s Q ratio is significantly above equilibrium (at 1), say 1.7. Market return in such cases have been poor and in the event of market crash, the put becomes the source of capital for investing in low Mises index environment. The second strategy selects which stocks to invest in. The ideal stock to invest in has a high ROIC and low Faustmann ratio.
A sustainably high ROIC is an indicator of competitive advantage, therefore applying an ROIC threshold in stock selection removes those which do not have any competitive advantage. A low Faustmann ratio then ensures that we don’t overpay.
The edge of the first strategy comes from the market distortion caused by FED intervention. The edge of the second comes from the entrepreneur forgoing the present profits to build more efficient capital structure, competitive advantage, and higher future productivity.
FDC could be poised for a decent year ahead, especially next couple of quarters, due to pricing and RM tailwinds. Excerpts from the last concall point are suggestive that the management is looking to take the full extent of the NLEM price hikes.
Management points to the fact that Q2 FY 22-23 will see the full impact of the NLEM price increases (10.7% increase) with all old inventories getting used up now. FDC is especially a beneficiary here as >40% of their Indian portfolio fall under the NLEM portfolio. And considering market leadership of brands like Electral, this could be interesting to monitor
A second tailwind could be cooling off in RM prices. This should further give a fillip to margins (apart from price increase). FY 22 OPMs were lowest for a decade at ~17%, same consequently with ROCEs (15%). Average OPMs and ROCEs over the last decade are comfortably 20%+ and 20+ respectively. With margin/pricing tailwinds around the corner, could this depict a cycle bottom?
Last quarter results were very impressive in terms of sales growth. They delivered topline growth of 10% despite June 2021 being a COVID affected quarter with an abnormally large base This number was significantly higher (>40%) than June 2019, the last normal comparison quarter
Small amount of promoter buying going on in the stock, last in June’22. Company is sitting on reserves close to 50% of its market cap. Fundamentally still quoting at just above 2 PB which is low cycle valuations. In terms of sales also looks reasonable at 3x sales. PE not cheap, obviously because of base with very low margins
Technically also looks interesting (I am not an expert in technicals)
Disclosure: I am invested as a techno funda position and am biased. This is not investment advice and I am still learning technicals. Do your own research before investing
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