A business growing at 20%+ deserves a higher PE but there is a huge regulatory hang. Sooner or later the government/SEBI will do something stupid and maim the entire F&O business.
SEBI recently did mandate brokers to negatively advertise their most profitable division by showing a warning message each time a user logs in. I found it very funny to think that all brokers had to put their engineers to build something which will harm their cashcow!
If they find that it didn’t work then they are sure to make even more discouraging move like capping F&O turnover of a individual based on their historical ITR etc.

Just look at the GST norms on casino, online gaming. One shot and the whole industry is jeopardized.
At say 30 PE owning a stock with such a risk (and other risks) may not justify the reward.

disc: invested

Update

As of now, certain sectors ( e.g, realty, auto ) have started showing the movement of next leg.

Please go through Company Concalls and their commentary is very positive. IPO was at high valuations and maters got worse with War and Supply chain issues/China dumping. Things have stabilized in last quarter and any improvement in coming quarters will lead to significant appreciation as management is going with significant capex.
I got surprised when I heard that IPL export substitutes are at lower margins than company overall and look for same in this quarter.

P.S-Holding tracking position from 220 levels and looking for additions around 270 levels

“To make the Investments of Rs.114.29/‐ Crores (Rupees One Hundred and Fourteen Crores and Twenty Nine Lakhs Only) in the wholly owned Subsidiary i.e. Shakti EV Mobility Private Limited.”

Net Gross Block of the Company is only Rs 147 Cr and Company had achieved a turnover of around Rs 1200 Cr in FY 21-22. The Capacity utilisation is slightly higher than 50% and therefore it means that the Company can double its revenue from here without any incremental CAPEX in next 2 to 3 years. Company can generate cash accruals of around Rs 150 Cr to 200 Cr annualy on a sustainable basis for next 3 to 4 years due to picking up of KUSUM scheme. As CAPEX requirement is not there for funding incremental growth and working capital requirement can be taken care by working capital borrowing, Company will have sufficient cash to invest in some diversified but related activities.

Company had been commenting on it EV business. Excerpts from Q1 concal

• Under EV business, we have done a tie up with a bus manufacturer and we are developing motors with them and our motors are on the roads which we developed earlier in our R&D under our EV company and now slowly its sale will also start.

• Currently our company is in development stage, for construction building work and civil work is going on, but we have started our product development work long ago.

• We have experience of making motors for induction motors, BLDC motors, PMSM motors and we have already developed all these motors.

• You will be very happy to know that we already do controller manufacturing in our company, so already our 175,000 controllers are running in India which is a matter of pride for us. We have already developed technology.

• We have developed under 2 wheelers and in 3 wheelers it is under development.

• We have developed and released for 2 wheelers in market.

• And regarding 1,75,000 controller it is solar controller, means it doesn’t matter whether it works on battery or solar panel, technology is almost same, but yes, money goes in development and time is gone in development. So we have developed a lot in that and already company is in-house and work is going on, and there are many engineers from IIT Delhi, IIT Mumbai and other IITs are working on R&D and more than 28 patents are there and we have done a lot of work in the controller.

• Another 1 year or 1.5 year more will go for Plant to be ready.

• In controller, the bought out items are chip, PCB, IGBT, resistance and this technically which is used in power electronics is there, we do the assembly of the SMT line in-house only, do the designing in-house this is regarding controller.

• We make motors in-house, we have a stamping machine with us, we do machining ourselves and only bought out items are aluminum inbox or aluminum components are bought out items, rest all is an in-house process.

• We have NDA with them otherwise our motors are on road now. Already 400 buses are on roads with our motors.

Its good that they are investing in the area which they are already working and have expertise, however only time will time how fruitful the proposed investment is. Even after the proposed investment Company is likely to remain long term debt free.

Management quality i have found to them to be honest and committed. In the past they had given very high revenue growth targets which they were not bale to fulfill. The management has now become realistic and therfore they have given revenue growth target of 20 to 25% , however I believe that with the orders in hand and new orders which will be coming , Company can easily achieve revenue growth of at least 50%.

Disclosure: Invested and is now substanital part of my portfolio.