https://x.com/VishalBhargava5/status/1769994408617820198?s=20
Any views on this? He is predicting oversupply situation in Mumbai housing market.
Posts tagged Value Pickr
Lazycap’s Portfolio – Feedback (19-03-2024)
Update
Entered UPL ltd with allocation of 2% at 465 price point. I feel this one resembles Lupin at 500 bucks, similar issues of price erosion, inventory destocking, volume, high interest due to high debt & out of nifty 50 all negatives bombarded at once. Trading at 1.2 PB which is bottom valuation for the stock I guess in lifetime, could lose most of money so less allocation, one thing I am not clear is what to do if rights issue is executed in next 6 months although i feel its unlikely for them to issue at depressed price unless in pretty bad shape. Agro is bad currently anyways got it not basis fundamental outlook but basis past history and valuation point of view
Sitting with zero cash, bank has money to get me by till month end xD
Digikore Studios Ltd – a micro cap VFX play with good growth potential (19-03-2024)
Company Name: Digikore Studios Ltd (DIGIKORE)
Website: https://digikorevfx.com/
CMP: 490
MCap: 310 Cr
No. of Shareholders: 1007 (Promoters: 66.54%, FII: 2.79%, DII: 7.89%, Public: 22.79%)
About the Company: Incorporated in 2000, Digikore Studios Limited is a visual effects studio that offers a full suite of visual effects services.
Business Profile: The company offers Visual Effects (VFX) services for Films, Web Series, TV Series, Documentaries, and Commercials and has a studio in Pune.
Services: Rotoscopy, Reflection Removal, General Cleanup, Wire and Wig Removal, Muzzle Flash, Composting, Green Screen Composting, MatchMove, Driving Camps, Day to Night, CG Blood Camps, Beauty Fixes, Crowd Multiplication, Set Extension
Projects: The company made its mark in animation and VFX. It worked with projects like “Thor” – Love and Thunder, “Black Panther” – Wakanda Forever, “Glass Onion” – A Knives Out Mistery, “Deadpool”, “Star Trek”, “Jumanji”, “The Last Ship”, “Titanic”, “Ghost Rider”, etc.
Approvals: The company has approvals from major production houses like Disney/Marvel, Netflix, Amazon, Apple, Paramount, Warner Bros., Lions Gate, etc.
Matchmaking Business: The company has started a new venture known as Digikore Matchmaking, which is the world’s first Televised Matchmaking Show hosted by Bollywood Celebrity Bhagyashree
Clientelle: Digikore Studios’ clientele mainly comes from India, Australia, New Zealand, the US, and European markets.
Geographical Revenue Bifurcation:
North America – 86% in FY23 vs 42% in FY22
Europe – 11% in FY23 vs 12% in FY22
Australia & NZ – 2% in FY23 vs 0.11% in FY22
Rest of the world – 1% in FY23 vs 46.5% in FY22
Takeaways from Q2FY24 Concall and Q3FY24 Investor Presentation
If one looks at their screener page, they’d find this stock to be trading at a PE of 71. However, this is based off the FY23 Net Profit data. I confirmed this from the H1FY24 EPS of 9.85 mentioned in screener.
H1FY24 – Net Profit: 6.24, EPS: 9.85
FY23 – Net Profit: 4.37, EPS: 9.85 * (4.37/6.24) = 6.90
PE = 490/6.90 ~ 71
If I extrapolate the H1FY24 performance for FY24, the EPS would come to 9.85*2 = 19.7, giving us a current/TTM PE for FY24 of 24.87. There is most likely going to be some more growth in H2FY24 relative to H1, leading to an even lower PE, but for now let’s assume a linear projection.
This gives me an attractive valuation, given how its peers command a PE of greater than 20:
Prime Focus: 20.66 (TTM -16.90)
Basilic Fly Studios: 31.23
Phantom Digital Effects: 40.49 (TTM 29.31)
Now, let’s look into the projections given by the compny’s management. If we see the Investor Presentation PDF released in Jan 2024, on page 39, we can find the management forecasting a revenue of INR 120 crores by FY26. This would be 2.4x from current figures (again, I’m going by extrapolating H1FY24 sales).
Also, on page 8 of the concall transcript of Nov 2023, their CEO Abhishek More says that the company will target a PAT margin of 30%-35% by FY26. This means a PAT of 36 cr to 42 cr, taking the EPS between 56.83 (at 36 cr PAT) and 66.30 (at 42 cr PAT). Calculating the forward PE at current price, we get something between 8.62 to 7.39. This is mouthwatering value, and assuming no PE rating change, a price target of 1420 to 1657 at 25 PE can be expected in the next two years.
Disclosure: I am not a SEBI registered analyst. Please do not consider this post as a buy/sell recommendation. Unfortunately, since it is an SME stock, buying a tracking position in this stock is beyond my budget. However, I would have bought it if I could afford.
Redington India : Strong Performance history, re-rating candidate (19-03-2024)
Shifting business model that has become a trend mostly in the IT industry. Rather than just providing sales and support companies move towards a subscription based approach with much better support.
From my understanding of providing “As a Service” is that
- there is a fixed source of recurring revenue compared to a one time sale, although looking at the current business it might have never been a one time sale.
- They would also benefit on scalability as it is easier to adjust resources(infrastructure) to cater to the growing needs(this is often seen in cloud solution provider and other subscription based services).
- This in turn would increase the overall profits, even though (one time)sales maybe higher, in a continual service the subscription cost leads to higher profits over time(depends on the product) specially with the customer base of Redington Ltd.
There is good and bad in everything here as some downsides:
- initial investment to infrastructure to get the business model up and running(in likes of new software and customer support etc…)
- adapting to the market dynamics and customer preferences, some customers(smaller ones) may not agree to subscription based services.
Overall impact on profits is subjected to how effectively the company transitions with its execution plan.
Future concalls/investor presentations will probably highlight more on this.
Annapurna Swadisht Ltd – A Swadisht FMCG investment? (19-03-2024)
Positive development
Annapurna has accquired a 6 acre plot in Tezpur, Assam on a lease basis for a greenfield manufacturing facility to expand its footprint in the North-East market.
https://nsearchives.nseindia.com/corporate/ANNAPURNA_19032024142232_Intimation_SE_PR_ASL.pdf
Mankind Pharma – Next Big Pharma Player? (19-03-2024)
Insightful and Interesting podcast w/ the MD of Mankind – Rajeev Juneja.
I liked the humble nature of Mr. Rajeev and the pedigree of experience (~30 years) he comes with. Right from personally visiting small villages to sell his products to now managing a company with 22,000 employees, his journey is very inspiration.
Yet to read more about the company. Disclosure – Not invested.
Truth of Pharma Industry, Medicine, Condom Sales explained by Mankind’s Founder Rajeev Juneja | TRSH
Muthoot Microfin Limited is it next JP Morgan? (19-03-2024)
Net profit is one of the important indicators to show the financial health of the company. Net profit of Muthoot Microfin is Rs 163.89 Cr and the compounded growth of profit in the past 3 years is 108.02 %. The PAT margin of Muthoot Microfin is 11.47 %.
Star Health & Allied Insurance Company – Leader In Retail Health (19-03-2024)
Company is losing market share to its peers.
Piramal Pharma Limited (19-03-2024)
Can anyone share the latest Jefferies Report on Piramal Pharma Limited?
Cosmo Films – Diffentiated player in commodity business (19-03-2024)
How to track BOPP and BOPET price please guide anyone?