Exited at first hint of Corporate Governance issues. I had bought into the company below 100 bucks. Finally sold at 300 something.
To be corporate governance issue are a NO-NO. Manpasand beverage was a hard lesson
Posts tagged Value Pickr
Newgen Software (16-01-2024)
Good question on the sustainability of PE re-rating.
One of the ways to look at Newgen is to look at how a private software product company (a.k.a. a “product startup”) are valued, even when they are not making profits. I believe this comparison is valid because Newgen is still barely a ~$1.5 B value company, despite the run up – that is, it’s still a small company, with lot of growth potential.
A typical software product startup is valued ~20x their revenue – at least during good times. Based on the Q3’24 revenue, their revenue is around INR 1248 Cr. So, if another larger company were to acquire them, they might not see a valuation of ~INR 24960 Cr as out of norm. So, I do not believe it’s overvalued at the moment. Of course, this is just one of the ways to value, and also the value changes based on the economic cycle and desperation of the acquirer. Also, non-trivial part of their revenue is from “implementation”, and in that sense they cannot be valued like a true product / SaaS company yet. But since they are profitable, have close to zero customer/geo-concentration risk, and I would like to believe that as they expand in US, their margins may improve further and they may also win even larger deals. With all of this, I would think they would be even more valuable to any large company trying to expand their product portfolio and revenues, profitably.
Note that I am not speculating/suggesting that Newgen is open for being acquired. This is just an example to illustrate one common way to value small product companies.
Disc: Invested from lower levels, it has grown into my largest holding now, and views could be heavily biased. I could change my views fast too, with new information and learnings from the fellow members here. I am still a novice investor though I do have experience working at SaaS startups.
HDFC Bank- we understand your world (16-01-2024)
Well mangement is facing issues with Deposits not keeping pace. Thanks to all of you withdrawing money at placing at the right place 
. They are constrainted on capital (Loan to deposit ratio is 120 % while they use to be 85 %). Increasing more branches , they basically made up to increase number of branches. In all management is not appearing to have all the answers (confdence was clearly missing). Cost to income does not come with size so not sure how they will growth of 20s.
Disc: No investments in HDFC bank. On my radar.
Shakti Pumps – solar shakti (power)! (16-01-2024)
Would be interesting to know what for
RACL Geartech Limited (16-01-2024)
Hi Jeewan,
Could you explain why is CROIC negative? Is it because the company is not converting revenue into cash fast enough because of which the cash flow from operations are negative?
What is your read on the fundamental reason behind negative CROIC?
Aadhar
Great articles to read on the web (16-01-2024)
On John Mackay, The California Gold Rush, & Growing ahead of one’s portfolio.
HDFC Bank- we understand your world (16-01-2024)
3QFY2023-24 RESULTS
Snapshot
Conference Call
HDFC Bank Earnings Call for Q3FY24
Presentation
Financial
Jindal saw – Another beneficiary of India’s growth story (16-01-2024)
Operational Highlights:
- Product Mix:
- Iron & Steel Pipes and Pellets.
- Natural hedge against volatile commodity market conditions.
- Production and Sales Breakup (Q3 FY24):
- Iron & Steel Pipes: Production – 4,50,300 MT, Sales – 4,42,800 MT.
- Pellets: Production – 3,86,900 MT, Sales – 3,87,800 MT.
Order Book Position:
- Total Order Book: ~US$ 1.49 billion (Iron & Steel Pipes: US$ 1,474 million, Pellet: US$ 14 million).
- Global Market Orders: ~35% of orders.
- Order Visibility: Approximately three quarters.
Financing and Liquidity:
- Net Institutional Debt (Standalone): ~Rs. 39,190 million (as of December 31, 2023).
- Credit Ratings: CARE A1+ (Short-term), CARE AA (Long-term, Outlook Stable).
Other Highlights:
- Joint Venture – Jindal Hunting Energy Services Limited:
- Establishing India’s first premium Oil Country Tubular Goods (OCTG) threading facility.
- UAE Operations:
- Jindal Saw Gulf LLC (UAE subsidiary) witnessed higher sales of DI Pipes.
- Legal Matters:
- 27th January 2019, the final arbitration award was pronounced by the Hon’ble Arbitral Tribunal in favor of JITF, allowing various claims to the tune of Rs. 1,891 crores plus interest and applicable taxes. At present, NTPC and Jindal ITF have filed petitions which are being heard by the Hon’ble High Court of Delhi. In a hearing on 20th Dec 2023, substantial arguments have been completed by NTPC. The next hearing is scheduled for 14th and 15th February,2024.
- JSAW has filed the Scheme of amalgamation of Jindal Quality Tubular Limited (“JQTL”), Jindal Tubular (India) Limited (“JTIL”) and Jindal Fittings Limited (“JFL”) with NCLT, Allahabad bench for their approval. Shareholders and creditors of Jindal Saw Limited and all the merging entities have already approved the Scheme. The same is subject to the approval of Hon’ble NCLT Allahabad Bench. The next hearing is scheduled for 1st February,2024.
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Outlook:
The steel tubes market is driven by global industrial growth and urbanization, particularly in Asia-Pacific and the Middle East. Increased demand arises from construction, automotive, and oil and gas industries. Government investments in infrastructure, including transportation and energy projects, fuel the demand. The Middle East, influenced by the oil and gas sector, sees significant investments in infrastructure, smart city developments, and transportation networks, contributing to steel tube demand. In India, expanding oil and gas exploration, government water projects, and rural development initiatives create opportunities for pipe-makers. Geopolitical adversities in the Gulf region are not expected to impact the long-term growth outlook.
Disclosure: Invested
