Posts in category All News
Farmers urge non-NDA MPs to move pvt bills on MSP guarantee (08-07-2024)
Hemant wins trust vote, new ministers including Champai Soren take oath (08-07-2024)
Sandhar Technologies – An emerging market leader (08-07-2024)
Sandhar Technologies ( very bullish commentary ) -
Q4 and FY 24 results and concall highlights -
Company’s product profile -
Automotive locking systems, Latches, Hinges and Door handles
Auto Vision Systems ( basically rear view mirrors )
Sheet metal components for 2W, 3W, PVs, CVs
Operator Cabins for OTR vehicles and CVs
Zinc dye-casting products for 2W, 3W, PVs and CVs
Aluminium dye - casting products for 2W, 3W, PVs and CVs
Magnesium dye - casting products - recently acquired a manufacturing facility for the same
Automotive Opto Electronic systems like - keyless entry systems, reverse parking assist systems etc
Polymer based products for 2W and 3W
Painting, plating and coatings
Fuel Pumps, filters and Wiper blades
Wheel rims and Handle bars for 2W
Q4 outcomes -
Sales - 918 vs 765 cr, up 19 pc
EBITDA - 98 vs 68 cr, up 35 pc ( margins @ 11 vs 9 pc )
PAT - 36 vs 25 cr, up 42 pc
FY 24 outcomes -
Sales - 3521 vs 2909 cr, up 21 pc
EBITDA - 341 vs 246 cr, up 34 pc (margins @ 10 vs 8 pc)
PAT - 110 vs 74 cr, up 45 pc
Company’s clients -
2W - Hero, TVS, RE, Honda, Ather, Suzuki, Mahindra
4W - Tata Motors, Mahindra, Honda, SML ISUZU
CV - JCB, Ashok Leyland, Volvo, Komatsu, Tata-Hitachi
Manufacturing facilities -
Company has manufacturing facilities located in -
Domestic - HP, Uttarakhand, Maharashtra, Gujarat, TN, Rajasthan, Karnataka
International - Poland, Romania, Spain, Mexico, South Korea, Japan, Taiwan
Product wise revenue split -
Locking and Vision systems - 25 pc
Cabins and fabrications - 15 pc
Sheet metal parts - 15 pc
Aluminium Dye Castings - 24 pc
Assemblies - 10 pc
Others - 10 pc
Segment wise revenue split -
2W - 58 pc
PV - 20 pc
Off-Highway vehicles - 15 pc
CVs - 2 pc
Others - 5 pc
New products line up -
EV Motor controller for 2W/3W - production to start in Jun 24
EV battery chargers for 2W/3W - production to start in Jul 24
DC - AC converter for 2W/3W - production to start in Oct 24
Company has done a lot of Capex in the last 2 yrs in its sheet metal parts and Dye - Casting divisions. This Capex can potentially add revenues of around 1500-1700 cr for the company without incurring any fresh capex. However, the company may still incur capex going fwd as it looks to add new components to its portfolio
Company should be able to grow its topline by 20 pc in FY 25 as well with a 50-100 bps margin expansion
Company has added Smart Locks to its product line up. Suzuki and Honda are moving onto these smart locks wef Oct and Nov 24. This should be a major Pivot for the company as the content per vehicle in these locking systems is far higher
Most of the growth in FY24 was led by Dye Casting and Sheet Metal segments
The value of Motor controllers that company is slated to begin to produce varies from Rs 4k-8k per vehicle
Company aspires to keep growing @ 15-20 pc CAGR ( revenues ) for next 3-5 yrs
Disc: planning to add, not SEBI registered, biased
Ranvir’s Portfolio (08-07-2024)
Sandhar Technologies ( very bullish commentary ) -
Q4 and FY 24 results and concall highlights -
Company’s product profile -
Automotive locking systems, Latches, Hinges and Door handles
Auto Vision Systems ( basically rear view mirrors )
Sheet metal components for 2W, 3W, PVs, CVs
Operator Cabins for OTR vehicles and CVs
Zinc dye-casting products for 2W, 3W, PVs and CVs
Aluminium dye - casting products for 2W, 3W, PVs and CVs
Magnesium dye - casting products - recently acquired a manufacturing facility for the same
Automotive Opto Electronic systems like - keyless entry systems, reverse parking assist systems etc
Polymer based products for 2W and 3W
Painting, plating and coatings
Fuel Pumps, filters and Wiper blades
Wheel rims and Handle bars for 2W
Q4 outcomes -
Sales - 918 vs 765 cr, up 19 pc
EBITDA - 98 vs 68 cr, up 35 pc ( margins @ 11 vs 9 pc )
PAT - 36 vs 25 cr, up 42 pc
FY 24 outcomes -
Sales - 3521 vs 2909 cr, up 21 pc
EBITDA - 341 vs 246 cr, up 34 pc (margins @ 10 vs 8 pc)
PAT - 110 vs 74 cr, up 45 pc
Company’s clients -
2W - Hero, TVS, RE, Honda, Ather, Suzuki, Mahindra
4W - Tata Motors, Mahindra, Honda, SML ISUZU
CV - JCB, Ashok Leyland, Volvo, Komatsu, Tata-Hitachi
Manufacturing facilities -
Company has manufacturing facilities located in -
Domestic - HP, Uttarakhand, Maharashtra, Gujarat, TN, Rajasthan, Karnataka
International - Poland, Romania, Spain, Mexico, South Korea, Japan, Taiwan
Product wise revenue split -
Locking and Vision systems - 25 pc
Cabins and fabrications - 15 pc
Sheet metal parts - 15 pc
Aluminium Dye Castings - 24 pc
Assemblies - 10 pc
Others - 10 pc
Segment wise revenue split -
2W - 58 pc
PV - 20 pc
Off-Highway vehicles - 15 pc
CVs - 2 pc
Others - 5 pc
New products line up -
EV Motor controller for 2W/3W - production to start in Jun 24
EV battery chargers for 2W/3W - production to start in Jul 24
DC - AC converter for 2W/3W - production to start in Oct 24
Company has done a lot of Capex in the last 2 yrs in its sheet metal parts and Dye - Casting divisions. This Capex can potentially add revenues of around 1500-1700 cr for the company without incurring any fresh capex. However, the company may still incur capex going fwd as it looks to add new components to its portfolio
Company should be able to grow its topline by 20 pc in FY 25 as well with a 50-100 bps margin expansion
Company has added Smart Locks to its product line up. Suzuki and Honda are moving onto these smart locks wef Oct and Nov 24. This should be a major Pivot for the company as the content per vehicle in these locking systems is far higher
Most of the growth in FY24 was led by Dye Casting and Sheet Metal segments
The value of Motor controllers that company is slated to begin to produce varies from Rs 4k-8k per vehicle
Company aspires to keep growing @ 15-20 pc CAGR ( revenues ) for next 3-5 yrs
Disc: planning to add, not SEBI registered, biased
Ugro Capital – Opportunity To Invest in a Fintech-like Company Below Book Value (08-07-2024)
Hi Deepak, could you explain the rationale and assumptions behind 15x?
DIY Momentum QnA and Discussion (08-07-2024)
Hello all, want to draw some light on the important factor of momentum strategy widely used and accepted:
The Sharpe ratio is a measure used in momentum strategy to evaluate the risk-adjusted return of an investment or portfolio. It compares the excess return of the investment (return over the risk-free rate) to its risk, represented by the standard deviation of the investment’s returns.
Formula
Sharpe Ratio= R_a - R_f /sigma_a
where:
R_a is the average return of the investment.
R_f is the risk-free rate (often the return on government bonds).
- sigma_a is the standard deviation of the investment’s returns.
Interpretation
- Higher Sharpe Ratio: Indicates better risk-adjusted returns. The investment is providing more return per unit of risk.
- Lower Sharpe Ratio: Indicates poorer risk-adjusted returns. The investment may be taking on too much risk for the return it provides.
Use
The Sharpe ratio is widely used by investors and portfolio managers to compare the performance of different investments or portfolios, especially when considering both return and risk.
Misconceptions about the Sharpe Ratio
- Higher is Always Better: Many believe that a higher Sharpe ratio always indicates a better investment, but it doesn’t account for the underlying risk or the source of returns.
- Uniform Across Timeframes: It’s often assumed the Sharpe ratio is consistent across different timeframes, which is not true. Short-term Sharpe ratios can be misleading compared to long-term ones.
- Ignores Non-Normal Distributions: The Sharpe ratio assumes returns are normally distributed, which is often not the case, especially for assets with skewed or kurtotic return distributions.
- Risk-Free Rate Stability: The calculation assumes a stable risk-free rate, but this can fluctuate, affecting the ratio.
- Perfect Measure of Risk-Adjusted Return: While useful, the Sharpe ratio is not a comprehensive measure of risk-adjusted return. It doesn’t account for other types of risk like liquidity or credit risk.
Pros of the Sharpe Ratio
- Simplicity: Easy to calculate and understand, making it accessible for most investors.
- Comparative Tool: Useful for comparing the risk-adjusted returns of different investments or portfolios.
- Incorporates Risk and Return: Combines both the return and volatility, providing a balanced view of performance.
- Widely Used: Commonly accepted and used by investment professionals, facilitating communication and comparison.
- Focus on Excess Return: Highlights returns in excess of the risk-free rate, emphasizing the added value of an investment.
Cons of the Sharpe Ratio
- Assumes Normal Distribution: It may not accurately reflect the risk if the return distribution is not normal.
- Volatility as Risk Proxy: Uses standard deviation as a measure of risk, which may not capture all forms of risk.
- Ignores Drawdowns: Doesn’t account for the severity or duration of drawdowns, which can be critical for investors.
- Risk-Free Rate Fluctuations: Sensitivity to changes in the risk-free rate can impact the ratio’s stability.
- Single-Period Measure: Typically calculated over a single period, it may not reflect the performance consistency over different time periods.
Understanding these aspects can help in using the Sharpe ratio more effectively and avoiding potential pitfalls in investment analysis.
Labour min junks Citi’s report on employment in India (08-07-2024)
AI boom reshapes Wall Street as TSMC joins trillion-dollar club (08-07-2024)
Ugro Capital – Opportunity To Invest in a Fintech-like Company Below Book Value (08-07-2024)
I was going through the guidance of CreditAccess Grameen Ltd one of the alleged competitor of Ugro in Micro financing. Management guided for 20-25% loan growth and ROA - 5.4 - 5.5% from FY25-FY28.
This looks incredible to me as per this the Mcap could be around 70k cr at the end of FY28.
I am wondering how the micro finance industry is growing at this insane rate and how big is this market segment, why even the big players like Bajaj finance is also exploring this market?
Ugro Capital is also banking on providing micro financing to small retailers for increasing it’s ROA. Do you think Ugro can be a substantial player in this industry? If this is possible, we are looking at a multibagger with a potential of 15-20x from here in the next 10years.