Thanks. Then it makes sense.
Posts tagged Value Pickr
Zen technologies – A micro cap in the defense space! (18-04-2024)
This is the interview of CEO from 3 Dec 2015 where he says we will most likely achieve roughly 500 crore orders (since they get done around 95% successful bids typically)
revenue in next 1-2 years.
(https://www.youtube.com/watch?v=-a2PXFoP4YY)
I have seen the whole interview, The guidance CEO gave was way “toooo” much because i don’t observe in sales anything remotely correlating to 500 crores spread over 2-3 years of sales.
Anyone knows why they missed the self-professed guidance targets by a mile in the past?
Track your portfolio using Google sheets (18-04-2024)
Here’s the link to the Google sheet, I have enabled access to anyone with the link:
Since this is a Google doc, when I download it, the MS Excel file auto-converts the formulas.
R Systems International (18-04-2024)
I was looking at R Systems International this week, and decided to put some thoughts together…
• The price to sales and price to earnings multiples seem fair, and there is the potential for a re-rating
• What will drive this re-rating will be a sustained increase in revenue growth, EBITDA margin improvement, more of a shift to ER&D versus traditional IT services, and consistently showcasing client wins in emerging technologies (cloud, data, automation, and AI/GenAI)
• Regarding the AI bit, the collaboration with IIT Delhi, announced in Feb 2024, is a promising sign of things to come
• Management is trying hard to convince investors that the company is more of an ER&D or digital product engineering company
• It’s good to note that the company does not pursue very low-level IT services work like infrastructure support, basic IT support or ERP implementations
• Management keeps emphasizing how the company wants to focus primarily on handling client products, enhancing them, building/rebuilding them, developing and releasing new features, etc., as opposed to low level IT services
• Cost will continue to remain a focus for the company, and it will focus on cost-led value propositions. A clear indicator that the company is operating in a crowded space
• In my view, this company is still more of at IT services company, versus an ER&D player
• It’s good to see how the company has appointed a chief customer officer, who will be responsible for developing deeper ties with existing customers, and also growing channel sales and partnerships
• I like how the company manages its investor relations related communications. For example, in their Q4CY2023 investor presentation, the q-o-q EBITDA bridge and the 8-quarter revenue and EBITDA margin snapshots are helpful
• Additionally, I noticed a slow and steady upward trend in their utilization numbers from around 75% to 79% over the last two years
• This company being a Blackstone portfolio company can really open doors when the sales team tries to pitch to other Blackstone portfolio companies. Would be interesting to see how the company takes advantage of this opportunity
• I wonder whether Blackstone (or another entity) will try to take this company private again. If this company is already vetted by Blackstone, other institutional investors or even an HNI would be ready to pounce.
• If the company consistently demonstrates big client wins in emerging technologies (cloud, data, automation, and AI/GenAI), along with a lowering interest rate environment, the number of interested investors could really increase
• A customer testimonial would be a nice to have to get a better sense of whether/how R Systems stands out from the crowd in the fairly crowded IT services space
Disclosure: Not invested, but tracking. I personally like to invest in companies that have unique capabilities, with limited competition. At this point, in my view, R Systems International is caught in the crowded IT services space
Edelweiss Financial Services (18-04-2024)
₹2,41,837 Cr Client assets as of Dec 23 for Wealth Management.
Sunteck Realty – Quality Real Estate Company (18-04-2024)
From: India Ratings Upgrades Sunteck Realty to ‘IND AA’/Stable
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Expected pre-sales growth: 18%-20% in FY24 and FY25.
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Collections to be lower at 60%-65% of pre-sales over FY24-FY26 as large portion of the sales have been achieved in initial stage projects
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Expected to launch a commercial project of around 1 million square feet in the ODC cluster, which expects to generate rental income of INR2.0 billion-2.5 billion.
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The ready-to-move unsold inventory at end-9MFY24 is worth more than INR16.0 billion.
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Asset-light JDA approach
- JDA projects do not involve any material upfront cash outgo as the company gives landowners a share of customer collections and there is no material upfront cash.
- The only outright acquisition has been in Napean Sea Road in South Mumbai.
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Total free cash flow (accounting for any capex/ JDA, but excluding interest) of around INR2.1 billion over FY25-FY27.
Suggestion on mutual fund SIP (18-04-2024)
You can go to Coin (zerodha) or trendlyne.
Genus Power – Smart Metering (18-04-2024)
Genus Power (per the management concall) is supposed to have a good quarter 4 (~450 Cr) as they retained their guidance of 1200 Cr. If they do deliver this number, their EBITDA margin should be closer to 16-17% and PAT etc will show good growth. FY 25 in any case, is expected to be ~2500Cr + and with margins of 16-17%, they could possibly do EBITDA of 400Cr+.
The street had possible concerns over the pledging that promoters have done and whether they would be able to deliver the huge orderbook profitably. Therefore price showed spike last qtr and then went down sharply when numbers did not meet expectations. If they do deliver 400cr+ sales, atleast they will show that it is not all gas and there is some merit in the company.
The price has also started to show life/accumulation over the last many days. Possibly hinting that they would deliver the numbers or it may be speculative build up before the results are announced, as last time. I am waiting for actual numbers to be delivered this qtr.
Regards,
Nikhil
Disc: Invested; Top position for me