Posts in category Value Pickr
Contrarian Investment : Always looks the other Side (24-06-2024)
It looks good but is highly concentrated in my opinion toward the finance sector 50%+ is something I might never suggest though totally depends on Risk appetite and portfolio vs your total net worth(Like in my case other than this hold MF(Mainly Equity) + cash + EPF that in terms become 30% so for me risk manage this is something to always look for).
Would still want to know views over RBA over others like Jubliant and Westlife as I personally think Burger as a business might underperform over other QSRs
Contrarian Investment : Always looks the other Side (24-06-2024)
Like i understand it would do better then SFBs and banks at least in growth but their are two reasons that I bought it.
- I bought a long time ago before the Reverse Merger so gained well in it so a bet that is more planned than recent.
- Valuation and Risk profile, I personally don’t track very actively in terms of stocks so quick buy and sell might be hard I need a player that has some base of valuation + good growth, here the main bet is on the shift from pure MSME loans like AU (not similar but can be very close) so their price to book looks good and in terms of total gains would be more like Growth + valuation.
Would still look deep into this and arman finance and if possible will post my study too.
Amara Raja Energy & Mobility Limited: Powering Ahead (24-06-2024)
BENGALURU, June 24 (Reuters) - Indian battery maker Amara Raja Energy and Mobility [(AMAR.NS), said on Monday it signed a licensing agreement with Gotion-InoBat-Batteries (GIB), a unit of China-based Gotion High Tech Co [(002074.SZ), (https://www.reuters.com/markets/companies/002074.SZ), to produce lithium-ion batteries in India.
GIB EnergyX Slovakia, a joint venture between Gotion and Slovakia-based InoBat, will license Gotion’s lithium iron phosphate technology for lithium-ion cells to a unit of Amara Raja, the Indian battery maker added.
Under the licensing agreement, the Indian company will get access to cell technology IP, support for establishing Gigafactory facilities, and be integrated into Gotion’s global supply chain network.
Gotion, whose largest shareholder is the German automaker Volkswagen (https://www.reuters.com/markets/companies/VOWG_p.DE) , specializes in lithium-ion rechargeable batteries for new energy vehicles.
Indian automakers mostly import EV batteries from China and South Korea and, along with domestic battery suppliers, have been investing in developing lithium-ion battery production capabilities within the country.
Amara Raja’s rival Exide Energy Solutions [(EXID.NS), (https://www.reuters.com/markets/companies/EXID.NS) partnered with SVOLT in 2022 to build its own lithium-ion battery plant, which is expected to begin operations later this year.
In April, the South Korean auto duo, Hyundai Motor Co (005380.KS), opens new tab and Kia Corp (000270.KS), opens new tab signed a memorandum of understanding with Exide Energy Solutions to supply batteries for their electric vehicles, to boost competitiveness in the Indian auto market.
Earlier this year, Reliance Industries [(RELI.NS), (https://www.reuters.com/markets/companies/RELI.NS), JSW Neo Energy and Amara Raja Advanced Cell Technologies were among seven companies that [submitted bids](https://www.reuters.com/world/india/jsw-amara-raja-reliance-
submit-bids-make-batteries-india-2024-04-23/) to set up battery manufacturing gigafactories in India.
Those invested/tracking please Note [from a domain expert VP member who can’t post here]
- Gotion is a much superior technology partner than Exide’s partnership with Svolt.
- Gotion has very strong LFP battery technology IP.
- Gotion supplies VW and VW owns 26% stake in Gotion.
Great articles to read on the web (24-06-2024)
Always a pleasure to listen to Ian Cassel:
Smallcap Discoveries 2023 Investor Conference: Keynote Speaker - Ian Cassel
Five Star Business Finance – Financing Bharat! (24-06-2024)
(post deleted by author)
SWAN ENERGY LIMITED (SEL): The company focussing on sectors with strong tailwinds (24-06-2024)
Update on Acquisition of 49% Equity shares of Triumph Offshore Private Limited (“TOPL”)
24/06/2024
In reference to the intimation given today about approval of the Board for entering into a Share Purchase Agreement for the acquisition of 26,21,50,000 equity shares of Rs. 10/- each of TOPL (representing 49% of total equity of TOPL) from Indian Farmers Fertiliser Cooperative Limited (“IFFCO”) at a total price of Rs. 440 Crore, as per duly executed Share Purchase Agreement by Swan Energy Limited (“SEL”).
We further would like to bring into the notice and information of the all concerned that SEL has
successfully remitted/completed the payment of first trench of Rs. 400 Crore to Indian Farmers Fertiliser Cooperative Limited against the said equity shares and remaining payment will be remitted in due course of time.
Smallcap momentum portfolio (24-06-2024)
I don’t think such a comparison can be made. As buy and hold, or if we can call that as investing, is different from shorter term/frequently rebalanced trading. With momentum, there could be more churn, there will be some losses, perhaps more drawdowns as per the stop loss employed, and there could be no place for fundamentals too. And, the return expectation, not selling for any reason, adding more to a loss making position, waiting for the turnarounds, no need to be on toes etc, so, I would call them different. So, I think, creating a system, making it better, scaling it up to handle more funds to the level of our comfort is important.
Also, if we have a system, we can create accounts with brokers, just to calculate the returns, charges, and take a decision on whether to continue the accounts or not w.r.t. the features provided by them.
Smallcap momentum portfolio (24-06-2024)
Points referred by @Mudit.Kushalvardhan, hold true, Momentum ETFs typically include a broad range of stocks in their respective indexes, which may dilute their potential returns compared to a more concentrated portfolio. Studies and practical experiences suggest that selecting the top-performing stocks within an index can lead to superior returns. For instance, focusing on the top 10 or 20 stocks based on momentum criteria can often yield better results than a broader ETF which holds many more stocks.(https://www.etf.com/sections/news/single-factor-focus-ranking-top-momentum-etfs).
Furthermore, the frequency of rebalancing is crucial in momentum strategies. More frequent rebalancing, such as weekly, tends to capture the momentum effect more effectively than monthly or quarterly rebalancing. This is because momentum trends can shift quickly, and frequent rebalancing allows the portfolio to adjust and capitalize on these shifts in a timely manner. ETFs, due to their structure and operational constraints, often do not rebalance as frequently, which can limit their performance relative to a more actively managed or frequently rebalanced strategy.
Therefore, while momentum ETFs can be a convenient way to gain exposure to momentum investing, they may not fully capture the potential returns that a more focused and frequently rebalanced strategy can offer.
Ranvir’s Portfolio (24-06-2024)
Garware Hi Tech Films -
Q4 and FY 24 highlights -
Q4 outcomes -
Revenues - 446 vs 349 cr, up 28 pc
EBITDA - 89 vs 70 cr, up 27 pc ( margins @ 20.1 vs 20.2 pc )
PAT - 57 vs 43 cr, up 34 pc
FY 24 outcomes -
Revenues - 1677 vs 1438 cr, up 16 pc
EBITDA - 321 vs 269 cr, up 19 pc ( margins @ 19.1 vs 18.7 pc )
PAT - 203 vs 166 cr, up 22 pc
EBITDA growth in FY 24 and Q4 driven primarily by increased sales of Sun Protection Films ( SPFs ) and Paint Protection Films ( PPFs) driven by extensive marketing and sales initiatives. SPFs, PPFs are higher margin segments for the company. However, the industrial products division ( IPD ) was muted in FY 24
**Company’s business segments - **
Consumer products division ( CPD ) -
Auto - Sun Control Films
Architectural - Sun Control Films
Paint Protection Films
Safety films
All these are value added products
CPD - constitutes 65 pc of company’s business
Industrial Products division ( IPD ) -
Value added products -
Shrink Films ( contributes 10 pc of company sales )
Electrical / Electronic Insulators
Release liners
Insulators + release lines contribute to 14 pc of company’s sales
Commodity products ( within IPD segment ) -
Thermal lamination
Plain Films
Packaging Films
These commodity products contributed to 11 pc of company’s sales
Launched titanium PPF with lifetime warranty
Launched new architectural films - DecoVista and Spectra
Expanding their PPF network / Garware Application Studios ( GAS ) to tier 2 cities ( total count now @ 120 + ). Now present in Lucknow, Belgaum, Goa etc. Aim to take the GAS + PPF distributor numbers to 200 in next 2 yrs
Company’s PPF is currently available in 650 dealerships. Aim to take this beyond 900 in next 2 yrs
Completed some new projects in FY 24 - Central Bank of Brazil, Biggest mall in Mohali, renowned developed in Pune for their residential projects ( for their SPFs )
89 pc of FY24’s revenue came from value added products ie - SPF + PPF + Shrink Films vs 80 pc in FY 23 ( rest comes from commodity films )
Company’s SCF manufacturing is completely backward integrated ( only company in the world to achieve this ). Company’s brands for these films are among top 3 brands in US+EU.
Also, Company is the sole producer of premium PPFs in India
Higher sales of premium/luxury cars in India is a huge tailwind for company’s PPF business. Current adoption rates in India are around 1 pc vs >10 pc for US, China
Company putting up a new PPF line with capacity of 3 lakh sq ft / yr. This is likely to go commercial by Q2 FY 26. Seeing strong demand in PPF segment. Total capex requirements for this should be around 150-160 cr
SPF sales in Q4 @ 185 cr vs last few Qtr’s avg of 150 cr or so. SPF sales momentum should continue as the overstocking related issues are now behind in US + EU mkts
PPF sales in Q4 @ 110 cr. For FY 24, PPF sales @ 450. Company is in advanced discussions with various customers in developed Mkts to sell company’s PPFs. Should see good breakthroughs going fwd
In the domestic mkt, company sees most of the growth to be driven by SPFs in Architectural segment. PPF segment should also continue to do well
Aim to hit 2600 cr of revenues in FY 26. Company believes, its on track to achieve the same
Company is seeing very good response from various automotive dealers from tier 2 cities
( like Lucknow, Kanpur, Raipur etc ) to take up franchise of GAS ( Garware application studios ). On an avg, GAS studios are doing PPF work on 15-20 cars per month per studio
@ penetration levels of 1.5 pc, company already has a ready addressable mkt of 60,000 new cars per yr for its PPF products ( in India ). With increased car sales and increasing penetration of people opting for PPF, this addressable mkt should keep increasing every year for a long time to come. For high end cars, PPF work costs upto 1-2 lakh per car
Company also does PPF work directly with Automotive OEMs
Domestic : Export sales breakup @ 20 : 80
40 - 50 pc of PPF + SPF exports by the company are under Garware’s own brands, rest are contract manufactured for other players
Garware has trained over 700 applicators across India for application of their PPF. These films are quite expensive and their application is an extremely specialised kind of Job
Company’s liquidity position is extremely comfortable. May even go in for inorganic opportunities to utilise the cash on books
Will continue to spend aggressively towards marketing and promotional events / ads - to grow the domestic business
Disc: holding, biased, not SEBI registered