Pharma as a sector has been on a tear for last couple of quarters and seems to be picking up good pace.

Lupin Weekly Chart. It made a new ATH lately after 9 years. If one notices, PAT was 2444 in FY15. Current TTM PAT is yet to cross FY15 PAT but stock has already moved higher. What a roller coaster in margins it has had. From 28% peak EBITDA to 1% in FY22 and now back to 20% for TTM.

Management guided to get back to 23%-24% EBITDA levels in medium term along with healthy topline growth. US, Non-US, India markets – all are doing well and company has a decent pipeline of products to be rolled out in next quarters.

Disc: trading position

There are 2 things, airport foot falls and people who access longue.
The increase in dreamfox pax is 2.2%. Which pax is this ? Airport footfall or people who used dream folks for longue access

Definitely caution should be exercised for this reason and also for the valuations it’s trading at.

But sometimes valuation can sustain if the growth and profitability sustain. Also the management has guided about part of this quarter’s revenue to come in the next one or two quarters because their execution was delayed.

Hence there can be couple of lumpy quarters to follow.

When in doubt, better to play such businesses at expensive valuations with technicals.

Hello All, I invested in the following stock, I want to hold these stocks for the long term. Views are invited on my current portfolio.
1. Ltfoods – Bought in 2020 at 29rs /2023 at 123rs /2024 at 271rs

Thesis –

1. Basmati rice can be produced in few states only(punj/hary states) which should be distributed through out the world
2. Basmati rice category itself is growing around 12% CAGR.
3. At COVID time, the necessity item is food, I know the demand for rice will shoot up in india after covid unlocking & Ltfoods results are good at that moment.
4. Ltfoods has consistent margins through out the 3 years period.
5. I was averaging the stock based on the cash reserves of the company.

Antithesis:

1. Based on monsoons & cyclical stock.
2. if there is a slowdown in US/EU will impact the company.
3. Non-basmati rice segment is not growing. 80% of revenue is dependent on basmati rice segment.
4. Logistics cost will impact the revenues.
5. Valuation is expensive now.

2. Radico Khaitan – Super product with excellent management: bought in 2020 at 400rs

Thesis:

1. Best company is the liquor segment with focus on premiumization & selling the lMFL liquor in different parts of world.
2. Abhishek khaitan who has a good idea on premium liquors and turnaround the company from loss making to market leader.
3. Last year completed major capex for backward integration. Premium liquors(> 3k rs each bottle) are sold in india.

Antithesis:

1. Liquor drinking is treated as bad habit in india
2. Valuations are too expensive
3. Already well tracked business, any earning surprises could re-rate/de-rate.

3. Affle India: High growth sector – Recently bought at 1306rs

Thesis:

1. Mobile usage in emerging countries which will increase the revenue of this company.
2. Company guidance is met in the previous quarter.
3. High growth company.
4. Mergers and acquisitions are yielding the results after 1 year.

Antithesis:

1. Valuations are expensive
2. Already well tracked business, any earning surprises could re-rate/de-rate.
3. Any decisions from google on cookies could impact the company.

4. E2E Networks – Bought at 289rs – 2023

Thesis:

1. Cloud based company which is helping SME companies, who cannot afford Amazon/Google cloud.
2. When SME companies are growing E2E will also grow.
3. Management has in depth knowledge about cloud business & tie-up with NVIDIA.
4. Doing capex to increase the capacity.
5. Recurring revenues from the business are growing rapidly.

Antithesis:

1. Valuations are too expensive.
2. Correction from the current levels is unavoidable.
3. if amazon/google cloud packages are changed then this could impact the company.

5. Birlasoft: bought when KPIT & Birlasoft are splitted – 143rs in 2020 & 624rs in 2023

Thesis:

1. Birlasoft has emerging technologies like Cloud, BFSI & healthcare segments.
2. Lot of changes in the client management
3. Orderbook is good.
4. US is coming out from the recession.
5. Angan Guha is frank & vocal about the company issues.

Antithesis:

1. Depends mainly on USA and dollar conversions
2. Healthcare business is volatile.
3. Delay is some of projects which are not materialized.

6. United Spirits – Bought at 682rs in 2021

Thesis:

1. Liquor Business leader available at cheap valuations.
2. In con calls, turnaround was visible concentrating on cleaning up the low margin business.
3. Hina Nagarajan has handled very well, now focusing on premium liquor business.

Antithesis:

1. Liquor drinking is treated as bad habit in the country and some states liquor banning will impact the company
2. Taxes on the liquor will change from state to state.
3. Due to raw material prices, logistics – operating margins are contracting.

7. Varun Bevarages: bought at 882 rs in 2023

Thesis:

1. Distributor for pepsi products.
2. Rapid Expansion through out the india.
3. High margins business
4. Hot countries like india & africa need beverages, demand is over lasting.

Anithesis:

1. Valuation is too expensive
2. Consistent growth, well known business, missing expectation could derate the stock
3. In Africa, they got distribution but in india they are not getting the snacks business.

8. PDS: bought at 539rs in april 2024

Thesis:

1. Supplying cloths to brands from western countries and completing the product in emerging countries like Bangladesh, srilanka & india on huge scale.
2. Guidance is to go 1000 cr revenue
3. Managers(20+ Exp) are having separate units, they are distributed all over the world to help in scaling the business.

Antithesis:

1. Slowdown in USA
2. Bangladesh clashes
3. Missed the target in previous quarters.
4. Capex heavy business model.

9. NMDC Steel: bought with NMDC, average price is 50rs

Thesis:

1. NMDC steel has a high end steel factor with latest technology.
2. NMDC Steel has trading around the book value.
3. Breakeven will happen by end of this year & production is only at half the capacity.
4. Privatization rumours, JSW wants to acquire it.
5. Iron ore raw material is coming from NMDC.

Antithesis:

1. Cannot rely on privatization rumours.
2. Debt should not increase in the books, before the full production.
3. There is lot of delay to run in full capacity.

10.IEX: bought at 148rs in 2021

Thesis:

1. Electricity consumption is growing rapidly in india.
2. IEX has running all the energy exchange platforms (Gas exchange/Renewables/carbon)
3. IEX has vast experience in the electricity segment.

Antithesis:

1. Government electricity policy could change scenario
2. Government does not like monopoly in any segment.
3. Changing Climate environment, will impact iex business.

11. Rainbow Children: bought at 822rs in 2023

Thesis:

1. Concentrating Niche hospital.
2. Especially on children we are ready to spend any amount without the second thought.
3. They charge good amount but the treatment in Rainbow has good feedback.
4. Best speciality hospital attrack best doctors in country.

Antithesis:

1. Valuation are too expensive.
2. To convert Capex to revenue will take long time in hospital sector.
3. Hospital revenues are depend upon the hospital reputation in the specific region.
4. Greenfield capex will take more time atleast 3 to 5 years.

12. Vaibhav Global:bought at 360 in 2024

Thesis:

1. Good management
2. Manufacturing in emerging countries and selling in western countries.
3. investing in TV ads/ott platforms
4. Going for acquisitions and changing to different products.

Antithesis:

1. Slowdown in USA & EU
2. Breakeven in EU is not happening from few years due to slowdown
3. Earnings are weak, targeting only aged men/women.

13. GHCL bought at 511 rs in 2024

Thesis:

1. Sodaash prices were at rock bottom prices.
2. Company had planned capex 4000 crores(Greenfield sodaash plant) which is equal to market cap of the company
3. switching to high margin business like Bromine project.

Antithesis:

1. Dependency on sodaash prices.
2. If Capex is delayed, cashflows will be impacted.

14. IOL chemicals : bought at 290rs in 2021

Thesis:

1. In COVID time, Ibuprofin they have large capacity
2. IOL chemicals has having 2 divisions: Chemicals & pharma business
3. They migrating from pure API business to pharma business
4. Recently company got approval from Brazil & China for exports.

Antithesis:

1. Low margin & cyclical business
2. Ibuprofin prices fluctation will impact the company.
3. Clear vision is missing in the company.
4. Company results are not great.

15. Talbros Auto: bought at 309rs in 2024

Thesis:

1. Management is bullish and meeting the guidance as per the concall
2. Talbros auto components are famous.
3. OEM companies are forming JV with talbros.

Antithesis:

1. Valuations are expensive.

16. Shankara Building: bought at 652 in 2024

Thesis:

1. Company is in building retail segment which is popular in western countries.
2. Its easy for any customer to get all the building products at one place.
3. They are concentrating on few places with big ware houses.
4. Split with steel low margin business by next financial year.

Antithesis:

1. Receivables are increasing.
2. Paying interest expenses and cash flow is not appropriate.
3. Previously company was in bankruptcy, still the practices are not improved.
4. Not clear guidance from the company, realestate slowdown will impact the company

17. Butterfly Appliances: bought at 873 in 2024

Thesis:

1. Change in management to Crompton Greeves.
2. Scaling the business is easy due to distribution availability.
3. Recently new product is listed(Air frier)

Antithesis:

1. No new steps from the new management.
2. There are no aggressive step from the managements.
3. No surprises in earnings.

18. Aarti surfactants: bought at 688rs in 2024

Thesis:

1. Splitted from Aarti industries, good management should be in place.
2. Valuation is cheap with low marketcap.
3. Turn around expected in the chemical companies.
4. Asset light business model.

Antithesis:

1. No earning surprise.
2. Need to track the chemicals, volatility in margins.

19. Tata Technologies: bought at 1048rs in 2024

Thesis:

1. TATA management should be clean
2. parent company will takecare of any bad debts
3. In emerging technology, Software defined vehicle, Cloud business & Aerospace.

Antithesis:

1. Valuation are expensive
2. No change in earnings.

20. EID Parry: bought at 785rs in 2024

Thesis:

1. Cholamandalam company, management should be good.
2. High cash flow business.
3. Going into high margin business.

Antithesis:

1. Need to keen look at execution
2. Sugar is a cyclical industry.
3. Impacted due to ethanol slow down

21. Suyog Telematics: bought at 1697rs in 2024

Thesis:

1. Recurring revenues from the existing towers with 10 to 15 year contracts
2. ROI is early known before investing, spending only if the customer needs the tower.
3. High experience in the business

Antithesis:

1. Company with low funds
2. Don’t have enough funds to establish new towers going for debt/rights issue.
3. Indus tower is acquired by airtel with 50% stake.

22. Arrow Greentech: bought at 866rs in 2024

Thesis:

1. BIO plast company with dissolavable soultion
2. Earning surprise in recent quarter
3. Experience management.
4. New projects are signed, asset light model

Antithesis:

1. Valuation are expensive.
2. Earning surprise could derate the stock

23. HDFC Bank: bought at 1669rs in 2024

Thesis:

1. Consistent compounder for a decade.
2. Good managements
3. Available at cheap valuations

Antithesis:

1. HDFC & Hdfc bank merging issues
2. RBI Regulation compliance issues.
3. FII inflows are missing.

Among these, I’ve looked at TechKnowGreen and Cellecor Gadget.

With TechKnowGreen, I think they’re in a pretty exciting space, and they seem to have a strong promoter driving things forward. However, it’s been a bit hard for me to understand their business and its nuances. So, I feel it definitely deserves a deeper dive to really understand what’s going on there.

Now, with Cellecor Gadget, it strikes me as a bit of an undifferentiated player in the crowded consumer electronics market. At their current size, that might not be a huge deal, but I think it could become a serious hurdle as they try to scale up in the future. Since I’m really interested in companies with solid long-term growth stories, this lack of uniqueness and potential scalability makes Cellecor less of a fit for my investment approach.

So, while I’m keeping TechKnowGreen on my radar for further study, I’m not so convinced about Cellecor Gadget given my focus on long-term plays.