Pay grade is not the only reason for attrition. Till some point it is true. But when pays will be similar ranges or marginal 10-15% hike, employees opt for flexibility, work environments/cultures. Post covid-19, industry significantly changed it’s treatment to employees - nurturing/trusting/providing flexibility etc. At certain point pay hike to be stable, but other factor will play major role then.

Kingfa AGM FY 22 Notes

- Volume growth is very bright. Foray into new Auto OEMs, new age industries (both EV 4 &2 wheelers), consumer durables, a dedicated team in place for the same. 

- Plans to foray into Mining industry as well. 

- Exports to improve to South East Asia, Gulf and Africa.

- PPE contribution currently less than 10%, but will become significant in overall revenues. 

- Raw material increase price passing on: Quarterly, half yearly price passing on has already been in place.

- On quarterly concalls: currently quarterly powerpoints are being shared. Mgmt doesn't seem to have intentions for quarterly concalls.  

- Cost of raw material is ~90% of sales, majority of this is coming from the parent company in China. Mgmt guided that this situation is not going to change, which will keep resulting in foreign exchange outgo. FE outgo could be balanced by FE inflow due to exports. 

Mgmt conclusion:

- Focus for the last two years was on localization of production--> now almost all parts can be produced in-house. 

- Strategy is to make India is global hub for exports. 

- More focus will be on PPE and consumer durables.

Mandating WFO will lead employees opt for employers giving WFH even at little more or almost at same package. Cost of rental home in metro/shifting to other state leads huge extra cost, hence unless heavily compensated employee may not choose that option.

As skills are key here, I do not think a proper skilled resources will not be able to get similar number of offers in multiple employers even now. Skills can not be developed overnight, hence employers have to pay more to get better skilled resource. Few of my friends got good number of offers in last 1-3 months,even much higher than they got around a year ago.

Not true. Flexibility to work is definite aspiration of an IT engineer. One can consider little less pay but flexibility mostly wants.

Moonlighting is just a deviation, can’t be considered as common practice for all.

Recession in US/Europe and Weakening of rupee are not related.

Studied this a bit more through last week, and I am extremely tempted to take a 2.5% position right away. PropTech is a massive whitespace which is just starting in India. It is a lot more mature in many other parts of the world.

I watched a couple of interviews of the founders of two of Aurum’s subsidiaries - Housemonk and BeyondWalls, and I liked what I saw. I have heard good thongs about Sell.do as well - lot of testimonials from RE players on this one. IN the concall Aurum ha smentioned that they will continue to look for inorganic opportunities to become an end to end integrated PropTech ecosystem. This will be one of a kind and unique in many ways - the cross selling potential in my view will be very large.

Aurum is also working on very interesting platform to allow part ownership of individual properties. In an REIR one gets a piece of a cluster of real estate, Aurum is wanting to do this for individual residential and commercial properties. This exists at the moment but minimum ticket size is 25 lakhs. Aurm is trying to do this for smaller ticket sizes - making RE investments accessible to retail folks. This can be a pretty big product in itself.

All of this for under 1000cr and with 400cr cash on books. While I learn more, I will likely initiate a start-up like position on this next week. Sold Affordable today at 147 to swap with Aurum. A better model in a better sector and better competitive structure for Aurum compared to Affordable in my view, and I have constraints of not wanting too many microcap investments with limited information, plus wanting to keep my total holdings to 20 or under.

Also evaluating swapping Allcargo for Gati. Have taken a tracking position in Gati earlier this week. Same pedigree of management, completely India focused business as opposed to global exposure for Allcargo, expected to grow faster than Allcargo, and not too much more expensive in terms of valuation. Seems like better risk-reward.