They guided for 50 dps of incremental margin expansion year on year, so by 2027-28, they should have 4-5% PAT Margin
Posts tagged Value Pickr
Campus Activewear – betting on the India Consumption Theme (28-05-2024)
The company has announced FY24 Qtr 4 results. Op Margin improved in this Qtr – has it turned for the better? Sales has been Flattish but to give credit not falling either. WC released money but its sustainability is suspect as the debtors have dropped significantly and creditor days have risen. Debt has dropped as a consequence.
Sales started improving from Q3 onwards, EBITDA has improved from Q4 onwards. Good chance that the problems are behind. Now as economy improves the growth will return
Employee Cost Increased and Other Exp reduced-HOW?
SBI MF bot from QRG (Havells) and SocGen from Marshall Wace? @ 234
Shriram AMC – Waking up after a hibernation. Mcap 300cr (28-05-2024)
Hi,
Yes a tepid 4Q results but i expect this to continue for next 1 year. I assume it will take minimum 2-3 years to breakeven since there are upfront costs in the AMC biz. They have grown manpower to 55 as of April 24 and i assume most of this would be backend/mid support employees. They have started hiring for Fund Managers and Analysts as per CIO. Shriram MD has said they will be ready to scale up once they have enough manpower available.
It’s an AUM business. For that they are bringig distributors, enabling in-house Shriram branches, potential launch of Mid/small cap fund by this fiscal as informed by CIO. In last 6/12 months their funds have outperformed the benchmark and Nifty50 which should aid further AUMs.
They are also serious on the Wealth Management piece (apart from AMC)
Shriram Group in talks with partners for wealth management biz foray
Shivam27’s Portfolio and Investment Journal (28-05-2024)
Hello everyone,
I am excited to share my portfolio on ValuePickr today. This forum and its wonderful members have significantly contributed to my growth as an investor, offering invaluable insights and learning opportunities. The journey has been incredibly transformative, with a steep learning curve. Here it goes:
Overarching Philosophy: Growth with a bit (preferably a lot) of Margin of Safety
Strategies
- Quality + Growth
- Mean Reversion – > Quality business trading at dirt cheap valuations due to the act of god / cyclicality of the industries
- Margin of Safety / Deep Value – > Valuations so cheap, that minute improvements = share price movements
- Special Situations – > Demergers / Mergers where value unlocking potential is there.
The Framework
- The company should belong to the sunrise industry OR aligning with Macro trends.
- Competitive Advantage – Quantitatively (constant/rising margins, balance sheet ratios, FCF generating) + Qualitatively. (pricing power, IP based, first mover advantage, Porter’s 5 forces)
- Market Cap >1000. Probability of finding mirrors increases (than just ‘hopefuls’).
- Look for:
- Margin of Safety by playing on:
- Pessimism
- Distressed valuations
- Sector out of favor
- Turnaround etc.
- NPM Expansion
- Product mix change , geographic expansion
- Operating leverage kicking in
- Debt repayment
- Industry outlook turning positive
- Special Situations:
- Demerger/Merger
- Rights Issue
- Margin of Safety by playing on:
- Management quality should be impeccable. They should know what they’re doing → Capital Allocation.
- Return on Capital (ROIC, ROCE,ROE) should be on a rising trajectory.
Fact: Companies making <10% ROE in 2003 compounded at 80-90% CAGR in subsequent 5 years. This was supported by earnings growth (low ROE → high ROE + EPS growth)
Having all these characteristics means that the stock wouldn’t be necessarily undiscovered. But stick to valuations and do not overpay. There will always be some exceptions in the portfolio. Being rigid in anything hasn’t done anyone any good. 
Positioning Sizing is strictly based on my understanding of the business and the conviction I have.
Current Portfolio:
| Instrument | Allocation (%) | Net chg. (%) | Holding Period |
|---|---|---|---|
| AZAD | 5.96 | -1.81 | < 1 month |
| CONFIPET | 8.76 | 19.24 | 4 Years (Averaged Up) |
| ETHOSLTD | 11.78 | 55.96 | 1.5 years (Averaged Up) |
| HDFCBANK | 6.07 | 55.14 | 4 Years (Averaged Up) |
| HINDOILEXP | 9.74 | 12.06 | 5 Months |
| MAHABANK | 3.12 | 148.03 | 1.5 Years (Averaged Up) |
| NSLNISP | 7.51 | 24.15 | 1.5 Years (Demerged, Avg Down) |
| PERSISTENT | 3.72 | 1118.5 | 4 Years |
| POWERGRID | 9.80 | 79 | 2.5 Years (Averaged Up) |
| SBFC | 7.28 | 3.7 | 2 Months |
| SEAMECLTD | 9.29 | 5.22 | 2 Months |
| TEGA | 10.83 | 26.21 | 9 Months |
| TRACXN | 6.13 | -17.32 | 6 Months |
| Stock | Investment Rationale |
|---|---|
| AZAD | An exception to the framework given its lofty valuation. But I’m betting on their brave approach towards manufacturing and playing a huge role in the critical technology in the defense sector in the times to come under the atma-nirbhar Bharat theme. Security soverignity will be a key theme in Modi 3.0. Azad recently received an order from GTRE/DRDO for engines. First time they have received such critical order where they will not only manufacture sub-components but also assemble an entire engine. |
| CONFIPET | Have been averaging up (since Rs. 20/share) on this counter due to the promoter’s pedigree and execution. CNG and recent partnershp with worlds largest VLGC Fleet BW LPG will lead to strong growth. Riding the rising trend of ROEs in the yers to come. A long term bet. |
| ETHOSLTD | Premiumisation play – Megatrend. Store additions, increase in SSSG and ROCE are key triggers. Their acquisition of Favre Leuba will also provide a huge optionality moving forward as their in-house brand. India-Swiss FTA will also lead to margin expansion. |
| HDFCBANK | Have reduced my holding by more than half in the last 2 years. Sold recently too. But will hold on to the remaining quantities of share. It has underperformed and will mean revert eventually. |
| HINDOILEXP | Pure mean reversion play with multiple near term triggers (Check Historical PE). 1. Dirock getting connected to the national grid. 2. B80 – D1 Well being fully operational – TBC in Q4 concall and 3. Global geopolitics will keep oil and gas prices elevated in times to come. |
| MAHABANK | Low investment at right time when PSU Banks had just started doing well. Improving all the important metrics YoY, QoQ. Building into a strong franchise and regret not being aggressive in adding this stock. |
| NSLNISP | Recently only sold my entire position in NMDC after a good run. Holding on to NMDC Steel due to 1. Business turning profitable shortly as soon as op. leverage kicks in 2. Raw material at cheap rates from NMDC 3. Disinvestment and acquisition by a Private player. |
| PERSISTENT | Riding my winner. Company has proved to be agile and muscled its way into the big boy club. Will hold on to it for the long term. |
| POWERGRID | Everyone talks about Power, Energy and Renewables but all of this is nothing without transmission. A near monopoly which is only going to play an even more of an important role as India increases is power generating capacity. Its telecom segment is growing fast and not many are talking about it. See this as a consistent compounder which also pays out hefty dividends. Have been buying regularly on falls but allocation stands complete at this point. |
| SBFC | Aseem Dhru. That’s the thesis. SBFC is a secured lender in the micro-finance space growing cautiously in a severely underpenetrated fast growing 5 lakh to 30 lakh ticket size segment. A way an NBFC should. A long term bet. |
| SEAMECLTD | SEAMEC has the biggest fleet of high margin DSVs in the region and has recently entered into long term contracts at higher prices. Also, participating in a rising ROE/ROCE journey. Promoters have good capital allocation skills as they didn’t invest heavily like other players during the boom. There is a huge demand supply mismatch now which will remain as we enter into a ‘super cycle as per many ship brokers. This is also an ancillary theme to Oil and Gas/Energy as a lot of subsea activity is anticipated in the times to come. ONGC has $11bn for offshore activities. |
| TEGA | Critical Minerals like Lithium are going to be play a central role in the times to come. Tega helps us play this theme as its operations in Chile, which has one of the largest lithium reserves, are likely to commence in the next FY. Also, the fact that its DynaPrime can disrupt the mill liner segment globally opening up a huge market share for them. High switching costs and recurring revenue along with the recent acquistion of McNally Sayaji make Tega a very attractive play for the next 3 -5 years. |
| TRACXN | Another exception – optically atleast, based on the high valuations. But I’m looking at this as a free cashflow generating business with a strong operating leverage given its business model. We’re currently in a down cycle but with interest rates more or less peaked in the US and in India, we can see a pick up in their business in the next 2-3 quarters. Promoters seem sound and with their background (ex-Copal, IIT), we can expect them to deliver. It will test patience, but looking at this for the long term. |
I will only sell if I think that my thesis is broken or if I find a better story elsewhere or if I think that it is better to have some cash to make the most any potential market fall (when things are really overvalued or there’s a major uncertainty around to knock off the markets like central elections)
I’m currently sitting on 10% cash. I would low to know your feedback and thoughts on my portfolio and strategy.
I will be using this as my digital diary to chronicle my journey in my personal investment journey.
Mudit’s Portfolio (Stage Analysis + Relative Strength) (28-05-2024)
On the metal & mining stocks, results envisaged for next 12 to 24 months to a large extent has already been priced in. But the commodity super cycles last for longer than 5 years & still good 3 years are left at the least in this cycle. This segment has the maximum weightage in my portfolio with only 3 stocks Coal India, NMDC & Hindustan Zinc, built last 9-12 months and is already more than 2x.
I don’t fancy any strong moves in next 12 months, rather will be looking to add more in other mining on a 20-30 % correction from current levels, if an opportunity strikes.
I rank NALCO above Hindalco and will be equal weight with Hind Copper. Hind Copper, NALCO & GMDC will be in my buy list on sharp corrections.
Not holding any position in other segments, hence no comments.
Indiabulls Housing – A compounder from here? (28-05-2024)
If you see in notes (just above your notes), it says “written-off” nothing in balance sheet but they expect to recover 40% at least so 4000 crs. Thanks!
Brand concept – New Emerging Micro cap Retailer (28-05-2024)
Q4FY24 results
https://x.com/radireddy/status/1795438831497359621
Goldiam International : A rare shareholder friendly and debt free Jewelry company (28-05-2024)
Notes from Q4 FY 24 call
-
Revenue grew by 12% year-on-year to Rs. 1,513 million for Q4.
-
LGD segment now at 49% of revenue, up from 25% in FY 23
-
Order book stands at 120 crore. To be executed over next 3 months. Export order of 60 crore
-
Launched retail operations in domestic market by the name of Era.
a. Appointed Mr. Abhinav Kumar as President of India Retail for Goldiam and ERA.
b. Planning to have first few stores up & running smoothly by Q3 FY25 (by festive season)
c. Will have significant mall-based presence with average retail price between Rs 45 to 55,000
d. Competition is currently into Natural Diamond Jewellery only
e. Targeting launch in Mumbai, Bengaluru & Delhi NCR in first 6 months
f. Targeting gross margin in range of high 30s or low 40s for new stores -
Acceptance in US – Gaining traction and acceptance in US. More than 50% sale of engagement rings in US has come from LGD
-
Other geographies –
a. Seeing traction in LGDs in Middle east and in Europe and looking to further grow there -
Pricing strategy
a. Media articles on reduction in prices (De Beers etc), pertains more to B2C / consumer prices. Within B2B, price trend is stable. They do not see a massive price decline coming ahead
b. Company marks down inventory whenever necessary, due to differential pricing
c. Margin profile in lab-grown diamonds expected to remain healthy. -
Outlook and guidance
a. Similar revenue growth guidance as we have seen in last few years
b. Focusing on maintaining EBITDA margin of 20 to 21%
c. Targeting to become the largest retailer of lab-grown diamond jewelry in India.
Disc: Invested
FAZE THREE LTD. –A Textile co. Rising From ASHES to GLORY (28-05-2024)
Anybody still tracking this ?
Q4 topline growth is good. I think highest revenue achieved till now.
But margins shrunk to ~11% on consolidated basis and 10% on standalone basis.
Even if we discount the one time expense of 4 Cr, margins are still under 13%.
Drop of around 4% when compared to last few quarters.
Management commentary is good but they have indicated some margin pressure in the near term till their new products reach break even levels.
Does anybody have any more insights into this ?