Posts tagged Value Pickr
Motherson Sumi Wiring India Ltd (MSWIL) – Wired for growth (22-07-2024)
Hi, Yes, I am tracking and in fact have taken a position in the company. In the absence of a long history, difficult to say anything definitively but I like the fact that the business has natural tailwinds, financials are clean and the company seems to be growing faster than the industry, so gaining market share. Let’s see how it goes.
B’s Notes : company analysis, portfolio roundup (22-07-2024)
Business Analysis of Secured MSME Financing:
There has been a huge growth and in this segment and also 2-3 firms are available at a reasonable valuations due to the recent correction in this segment. So a small write up to clear my mind.
First the Problems:
- Very high default ratios.
- Lack of scale benefits.
- Lack of formal documents like GST Returns and CIBIL Scores.
- Lack of collection Infrastructure and Geographical penetration.
Now the Solutions:
- Securing it with their Home.
- Technology to some extent but feet on Ground are required for such business
- Again Technology to some extent but either references network may help
- Slowly expanding geography and adequate seasoning
There are few companies which fit the Bill
MASFIN, SBFC and FIVESTAR
Please share your views/ critique
Disc: I eat my pudding. Hence Please presume that I may have financial interest in some of these companies.
RS Software – Will they pay investors too? (22-07-2024)
Let’s try and demystify the RS Software puzzle before us:
[Disclaimer: This is half-baked work-in-progress - discussions on with payments domain experts; Inviting VP members experienced/connected with domain experts to raise their hand and help take the discussion/examination forward]
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Undeniable technology platform/architecting/product strengths: UPI Platform is handling monthly transaction volumes of 12Bn+; June 2024 volume was 13 Bn up from June 2017 volume levels of 10Mn 0r about 1300x in 7 years. Especially noteworthy is EFRM (Fraud & Risk Management) product (RSSL owned IP till last year; co-shared with NPCI from 2023) scaling up in tandem to support that volume of transactions with high availability, without degrading customer experience, with transactions getting completed within 5-6 seconds. No other Real Time Payment (RTP) infrastructure is anywhere near these transaction volumes - or has seen that kind of scaling up and therefore cannot claim that kind of high availability, high performance having been delivered.
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High foot-in-the-door Convincing/Success rate: RSSL was and still is a very small company when it own the UPI Tender in 2015 competing against ~70 other competitors - many were much bigger, well-entrenched payment companies like FICO, FIS, Fiserv and others like Volante, Vocalink. Yes, they were probably helped by some like FICO who refused to share the source code (mandatory for our sovereign payment infrastructure) and withdrew, but most others stayed in contention. Which means only one thing, RSSL could demonstrate RTP technology, process, and architectural superiority over other contenders. They won again the design and architecture contract for Payments Canada Real Time Rail (RTR) project. Implementation was through Intertec - but launch has been delayed several times, now pushed to 2026!
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Unable to Leverage/Build on early success: On the other hand, RSSL hasn’t been able to leverage these early successes and scale up on the revenue front (annually still somewhere at 60-80 Cr), although profitability is back with a bang and operating margins at all time highs of 36% in latest Qr). Surprisingly some other small businesses like Volante (in almost similar payments modernisation space) has scaled up 10x in revenues and profitability since 2018 (FY23 Revenues 206 Cr, EBITDA 35 Cr).
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Big Guns protecting Payments Modernisation Turf (?): The biggest global payment processing networks are Amex (TTM 52 Bn), Visa (TTM 30 Bn, MasterCard (TTM $22Bn), and SWIFT (TTM $). With the inevitable shift to RTP (driven by consumer demand and regulatory tech) gradually happening, its no wonder that the biggies would try and ensure continued/scaled up presence in RTP infrastructure and with Banks and FIs.
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Investments by Networks/Large Banks/Fis in RTP Vendors:
3B Blackbio DX Ltd (22-07-2024)
Does P/S of 12 not over valued? As an investor what returns to expect from here?
Angel One: Metamorphosis into a Fintech? (Previously Angel Broking) (22-07-2024)
I think you should wait before you invest more in this stock. If the SEBI tantrums regarding options trading result in something meaningful, it will be very negative for broking companies as majority of their Revenues come from Options.
Believe me, I have been waiting for this stock to correct for a very long time, but given the regulatory uncertainty, I am not super confident about Investing right now. The valuations are cheap, but one needs to determine the reasons behind this. If shrinking Revenues and Profits due to Regulatory risk is a possibility, then this stock may be accurately priced.
Poly Medicure – at an inflection point! (22-07-2024)
Poly Med has came up with Q1 Fy25 result. Revenue and Profit growth is there.OPM sustained at 27%.Company hardly generate any free cash flow as going through agrresive capex phase. Like any decent mid and small cap in Indian market valuation has been taken to different orbit. PE hovering at 72 though Poly med is growing at rapid rate. But one thing in result footnote is catching eye , in current quarter Poly Med has received a CGST demand notice in the tune of 42.38 Cr. Poly Med is going to challenge the demand.But nothing to conclude yet. Tax dispute is very normal for Indian companies and without any resolution for very long time.
[Invested at lower level , no plan to add/sell for now]
Long term investment strategy (Buy, hold but don’t forget) (22-07-2024)
Hi @Cshar
How are you navigating the market off late ? Any recent modification to your portfolio and how is the portfolio composition now?
Thanks
Buy Unlisted Shares (22-07-2024)
sir, can you please let me know from which platform you bought at what price?
Multi-Disciplinary Reading – Book Reviews (22-07-2024)
Basic Economics by thomas Sowell is another great book similar to this!