Sold NH( Narayana Hrudayalaya Ltd)
I sold it after going through the Q4FY24 concall at around 1200.
Reasons – operating deleverage might play in coming 2-3 quarters.

1. They will use only money earned in India for Indian capex(as they can not bring money earned in the Cayman to India due to tax issues). They might take loans up to 300-400 cr(1000 capex- 300 cr cash in India – 400 cr estimated profit this year in India), decreasing the net profit by 30 – 40 cr.
2. Employee cost can become high going forward due to backlog as told in the Q4Fy24 concall.
3. New facility of cayman will come in operation in Q2FY25 and depreciation and fixed cost will hit the balance sheet. My estimation is near to 40 cr in depreciation will get deducted from the PnL. As the capex is of category greenfield in the same city and it is in the city centre, it might take least 1 year to breakeven, till then it will decrease the profit in PnL(operating deleverage). The operating deleverage might be too high, it seems in the initial few quarters.
4. The growth in revenue YoY is not coming even if the Northern Hospitals issue that they faced last quarter is gone(concall – Q4FY24). Considering they increase their prices by at least 5 percent on 1st of January every year, the YoY revenue increase of 5 percent has not been satisfactory.

I will judge the company again after the Q2FY25 results or if growth comes again in Q1FY24.
The reason why I looked at this company concall in detail was that, I studied it after I saw it being added in axis small cap fund as their top holdings and due to SOIC. But Axis small cap fund started selling the NH since few months, and I was looking for reasons.

Mutual fund updates
I could not find many stocks and hence have deployed the money that I got by selling stocks in the last few months in the Parag Parikh tax saver mutual fund. I have kept some cash(4.5% of net worth), to take a position in one stock if anything good arises.

Stock buying update
Added some units of Neuland.

Mutual funds have been adding SRF recently, the Mirae mutual funds which sold the SRF in April, added it back in May. Need to understand the reasons.

From available public data:
The Operating Profit Margin (OPM) of Supreme Power Equipment Ltd. increased from 7.4% to 17.4% in recent years due to several factors:

1. Improved Gross Margin: The company’s gross margin increased from 11.62% to 14.20% over the same period, indicating higher profitability from its core operations[3].

2. Reduced Operating Expenses: The company’s operating expenses as a percentage of revenue decreased from 85.38% to 74.91% during the same period, indicating better cost management and efficiency[3].

3. Increased Revenue: The company’s revenue increased significantly, from ₹113.59 crore to ₹14.00 crore, over the same period, indicating higher sales and revenue growth[2].

4. Improved Return on Capital Employed (ROCE): The company’s ROCE increased from 29.16% to 73.32% during the same period, indicating better utilization of capital and higher returns on investments[1].

5. Increased Net Profit Margin: The company’s net profit margin increased from 1.11% to 14.32% during the same period, indicating higher profitability from its operations[1].

These factors collectively contributed to the significant increase in the company’s OPM from 7.4% to 17.4% over the recent years.

Citations:
[1] https://www.indmoney.com/stocks/supreme-power-equipment-ltd-share-price
[2] Supreme Power Equip Share Price Today (14 Jun, 2024), Supreme Power Equipment Stock Price (₹ 256.65) Live NSE/BSE, Supreme Power Equip Shares
[3] Supreme Power Equipment Ltd. | Tijori Finance
[4] Supreme Power Equipment Ltd. Live Share Price, Stock Analysis and Price Estimates