Had applied for red tape franchisee - to understand the store economics
Got this deck - which includes some recent KPIs
Red Tape Deck.pdf (2.9 MB)
Posts tagged Value Pickr
Red Tape Ltd. – The next fashion giant? (01-08-2024)
Mann’s Portfolio (01-08-2024)
Its growing very fast, and the business is essential a distributor, so optimizing working capital is key here, in order to grow this fast, more cash is going in then coming out.
Trent — A value unlocking story from the house of TATA (01-08-2024)
Each individual sell decision merits its own specific industry/business cross-examination, let me share some generic insights from my little experience base - perhaps some of these may resonate with others as well. Markets are inherently forward looking - even in bear markets. So 1-year forward is the base rate. In bull markets like current, 2-year forwards become the optimistic norm - such as what we are experiencing now for most businesses. I have seen I don’t get too worried when valuations are within 2-year forwards. When valuations exceed 2-year forwards and start approaching 3-year forwards, I will find myself uncomfortable and perhaps sell.
Forward PE of Trent Ltd for next 5 year -
Current Share Price: ₹5,835.45 (as of July 31, 2024)
Current EPS: ₹40.39
Assumptions for Future EPS Growth
Given that Trent Ltd. has demonstrated strong earnings growth, we can use the historical growth rates to project future EPS. The company has shown an average earnings growth rate of approximately 60.8% per year over the past few years . For our calculations, we can assume a conservative growth rate of 40% for the next few years, considering market conditions may vary.
Using the assumed growth rate of 40% for the next five years, we can calculate the projected EPS for each year as follows:
- Year
- EPS = Current EPS × (1 + Growth Rate)
- EPS = ₹40.39 × (1 + 0.40) = ₹40.39 × 1.40 = ₹56.55
- Next 4 years- Similarly year 2,3,4 and 5th EPS is projected as ₹79.17,₹110.83,₹155.16 and ₹217.22
Forward P/E Calculation- Year 1: 103.93,Year 2: 73.66,Year 3: 52.63,Year 4: 37.56,Year 5: 26.87
What I have seen is as long as the growth keeps coming, the stock price does not correct much. We saw this in many many cases, Astral, Mayur, Poly Med etc.… At most the correction is 10-15% due to extraneous factors. The business looks overvalued, but the business growth is intact. So, the idea then is to not second guess the market. I don’t know if 200+ PE is high or low. The market may decide to give it 200+PE, like it did to Infosys at one time. The approach, I am contemplating is because I am 100+x up, I will put a trailing stop say 30% below the high price I have seen. If my thesis is correct, it will not correct that much from the recent top, but reverse and continue it’s upward journey. And I will keep revisiting my stop upwards to that 30% mark.
The only practical problem with this approach that I may come across is what to do when the stock just flat lines and does nothing. Like PI some time back. Then the SELL decision may be based on my understanding of their next 2-3 year growth prospect. My knowledge is very limited and I am biased so Please Comment on my thinking direction. Disclosure-Please note there is no buy and sell recommendation on any the stocks mentioned above. I am invested in Trent for 20+ years
VP Cyclicals 2.0: Cement Industry Key Issues & Cyclicality (01-08-2024)
Ramco’s management says that in the next 10 years, there will only be two cement producing regions in India - the north and the south while the rest of the country will be a net importer from these regions. Looking at region wise trajectory of limestone production data published by the Indian Bureau of Mines (latest available data being 2022) , it is self explanatory that IF the demand cycle does pick up in South, it is going to A) improve CUs of players down there AND B) create ripple effects across western and eastern markets as both these regions are highly limestone deficit, and hence, rely on the 5 southern states to fulfill their demand
Journey and Portfolio of a goal-based NEEV investor (01-08-2024)
Date: July 2024
Business Model:
EFC (I) Ltd operates in the flexible office space sector, providing co-working spaces, managed offices, and turnkey project solutions. The company offers end-to-end services including leasing, interior design, and furniture manufacturing through its subsidiaries Whitehills Design Ltd and Ek Design Industries Ltd. EFC is also expanding into REIT and AIF initiatives to control and operate real estate assets more efficiently.
Industry Thesis
The flexible workspace market in India is experiencing rapid growth driven by increasing demand from startups, SMEs, and MNCs. This sector is projected to grow at a CAGR of 15%, offering significant opportunities for companies like EFC that can provide comprehensive, cost-effective, and customizable office solutions.
Competition pairing:
Note: EFC revenue is from FY24 (not FY23)
Industry Summary:
- Total Desks: 738,800
- Total Area: 42.4 million sq ft
- Total Revenue: ₹5,459 crore
- Total EBITDA: ₹2,554 crore
EFC’s Absolute Values:
- Desks: 43,000
- Area: 1.9 million sq ft
- Revenue: ₹428. crore
- EBITDA: ₹191 crore
EFC’s Market Share wrt:
- Desks: 5.82%
- Area: 4.48%
- Revenue: 7.85% (8% market share)
- EBITDA: 7.51%
EFC (I) Ltd has a substantial presence in terms of revenue and EBITDA relative to the total, despite having a smaller scale in terms of desks and area. This indicates strong operational efficiency and a competitive position in the market.
Primary Industry Drivers
1. Rising Demand for Flexibility: Increasing need for flexible office solutions post-pandemic.
2. Economic Growth: Expansion of businesses and entry of global companies into India.
3. Cost Efficiency: Flex spaces offer cost savings compared to traditional office leases.
4. Urbanization: Growth in urban centers driving demand for commercial real estate.
Primary Investment Rationale
1. Strong Financial Performance: Significant revenue and profit growth in FY2024.
2. Scalability: Ambitious expansion plans to double seat capacity by 2026.
3. Diversified Revenue Streams: Integration of REIT, AIF, and furniture manufacturing.
4. High Occupancy Rates: Consistently maintaining over 90% occupancy.
5. Cost Efficiency: Economies of scale and in-house capabilities reduce costs.
What I Like About the Business
1. Integrated Operations: End-to-end solutions reduce dependency on third parties.
2. High-Margin Segments: Expansion into furniture manufacturing with high EBITDA margins.
3. Strategic Client Base: Long-term contracts with large enterprise clients.
4. Growth Potential: Positioned well to capture the growing demand in the flex workspace sector.
What I Don’t Like About the Business
1. High Capital Expenditure: Significant upfront investment required for expansion.
2. Market Competition: Intense competition from established players like WeWork and Awfis.
3. Debt Levels: Potential risk from high debt used to fund growth and REIT initiatives.
Trackable Growth Drivers
1. Seat Capacity Expansion: Doubling seats to 92,000 by 2026.
2. Furniture Manufacturing Launch: Expected revenue of ₹300-400 crore annually.
3. REIT and AIF Initiatives: Additional revenue from managing real estate assets.
4. New Leased Spaces: Adding 400,000 sq. ft. in major urban centres.
Risk Factors
1. Market Competition: Price wars and reduced margins.
2. Economic Downturns: Impact on demand and occupancy rates.
3. Operational Risks: Project delays and quality control issues.
4. Regulatory Changes: Compliance costs and restrictions on operations.
5. Technological Disruptions: Adoption of remote work reduces demand for physical spaces.
Valuation Expectations (July 2024)
The company looks favourable from the forward multiple (although would have liked MoS at current levels i.e. P/E less than 30). Currently, the company trades at 45x P/E with an expected EPS growth of min. 30% YoY
Techknowgreen Solutions – Microcap in need of the hour business (01-08-2024)
on result declaration of March 2024, the stock crashed 20% because in Red heiring prospect company mentioned certain profit for FY 2023 , but in result of March 2024 they mentioned last year’s profit half of the declared in Red heiring prospect to show investor that company growing with high speed. Thus promoter is liar
Neuland Laboratories Limited – Transformation towards niche APIs? (01-08-2024)
Excellent reults from Neuland.
I hope you find it useful.
Mayank portfolio (01-08-2024)
S.NO | STOCK | PORTFOLIO % |
---|---|---|
1 | NUVAMA | 13.9 |
2 | SENCO | 12.8 |
3 | GARWARE HI TECH | 10.4 |
4 | PRICOL | 9.6 |
5 | SUPRIYA LIFE SCIENCE | 9.4 |
6 | ALL E TECH | 7.5 |
7 | NEULAND LAB | 7.3 |
8 | ADF FOODS | 6.6 |
9 | GRAVITA | 6.3 |
10 | PRIVI SPECILITY | 6.3 |
11 | ORIENTAL A | 4.9 |
12 | DMCC | 4.8 |
TOTAL | 100 | |
recently change Samhi hotel for Oriental aromatics I am bullish on chemical company as their margin are impacted and can do better from now .Techinal are showing the same. |
Gujarat Ambuja Exports (01-08-2024)
Keval,
Corn prices seems to correcting in big way.
I am referring to this data.
I tried reading concall transcripts but didn’t find data correlating Corn Prices and Profitability.
Also i tried comparing the stock performance and corn prices if any relation can be spotted…but didnt find it there too.