Thread by @soicfinance

Variant perception makes money in the market. Look for stories that have the following ingredients:

1) Margin expansion play like Britannia in 2014. Maybe Hikal?

2) Industry recovery. Where you know industry is shallow cyclical and will recover. Bkt and Pi industries.

3) Management change. When the underlying business is strong enough, but being run by a poor management. By far the trickiest play. Eg - Essel Propack

4) Operating leverage kicking in. No one truly understands the power of operating leverage. Bottomline growth often suprises.

5) Product mix change. Look for companies entering higher margin products. Sit on them, be early in the story. Eg- Garware Technical fibres and maybe Dmcc today?

6) Special situations. When the good, the bad and the ugly trade together. Valuations given thag are of the ugly. Eg

Suven pharma, a business which had a Roce of 30%+ was at one stage available for 12-13 times earnings after demerger. Look out when the good is seperated from ugly.

7) Missing the invisible Gorilla in the room. Eg- Financialisation is a mega trend. Look for strong banks, they

Will keep gaining market share at the expense of weak lenders. Do not get swayed away from talks of banking is dead. Look for strong Nbfcs and Banks who respect risk first and then lend, and have the balance sheet to ride this out.

8) Complexity: stories whicj others cannot

Understand. But, fall in your circle of competence. Just to give you an example. Many analyst even today in Suvens concall keep asking about generic APIs etc. Inspite of, Mr Jatsi reiterating that they only work with patented molecules that too in the intermediates space. Pata

Nahi kab samjhe ge 🙏😅