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jeevan patwa

@jeevanpatwa

Oct 29, 2020 • 22 tweets • 4 min read • Read on X

Cloud & Digital – Multiple times bigger than Y2K for India…

Covid has accelerated cloud adoption in the world with more and more organization moving to cloud..Healthcare is shifting its data centers to cloud..patient records are getting moved to cloud..EHR software,

ERP software, HR and payroll software.. everyone is coming up wtih cloud enabled version..In next 10 years (and I am conservative here..), everything will be on cloud…Own data centers will be an obsolete concept…

Big pharma is using cloud for drug discovery.

Its both cost effective and much faster…Hospitals are dismantling their data centers and moving to cloud. It removes their non-core administration headache..Small,medium, big every organization is choosing cloud to cut their costs and improve the efficiency..cloud is the future

According to IDC report, 79.4 ZB data will be generated globally by 41.6 Bn IOT devices by 2025. As per Gartner, 28% of IT spending will shift to the cloud by 2022, affecting $1.3 trn..Artificial Intelligence, Data Analytics and IoT are next big trends..

There will be huge work for Indian IT for cloud migration and cloud management, multiple times bigger than Y2K and for next few years..TCS, Infy, HCL all will be beneficiaries of this trend…TCS being process champion will benefit the most…

in small and mid caps, its Tata Elxsi and Happiest Mind…

Cloud effect

Loud on Cloud

M&A space buzzing with cloud and digital acquisitions in last one year. Biggest being IBM Corp’s $34-billion acquisition of Red Hat last year, to further its hybrid cloud agenda. Top Indian IT firms are acquiring smaller cloud firms as a strategy to grow their

cloud business, which has accelerated as clients embraced digital transformation during the pandemic.
Infy made three acquisitions including Simplus, GuideVision and Blue Acorn iCi. All three works in cloud and digital arena. Wipro did four acquisitions this year.

In July 2020, the company completed a pair of acquisitions, buying Salesforce cloud partner 4C of Mechelen, Belgium, and Brazilian vertical market technology consulting firm IVIA Serviços.
In Oct. it acquired Eximius Design which provides solutions and services to build

connected products in areas of cloud, IoT, edge computing, 5G and AI..Last week it acquired Encore Theme Technologies, a SaaS and cloud solutions specialist that focuses on the financial services sector.

Cognizant made six cloud-related acquisitions this year – Code Zero, EI Technologies, Lev, Collaborative Solutions, New Signature, and 10th Magnitude.

According to Fitch Ratings, IT services companies that focus on digital businesses such as automation and cloud-based service delivery, are likely to perform better than those with a focus on business process management (BPM) and legacy application and infrastructure services.

Strong results and management commentary from Accenture. Cloud services grew double digits..expect good nos from #IndianIT supported by cloud and digital services..

IT rally started... Mid cap IT will create new ATH

#Infy large deal win.. There will be a trend of acquiring captive centers which will drive growth for Indian IT.. IT, Chemical, Pharma... Three pillars of current bull run

ATH from Nifty 50.. all IT... Similar story will repeat for mid cap IT... Watch for Tata Elxsi, Happiness Mind and Mastek

IT rally going really strong... Tata Elxsi, Mastek hitting new highs.. Similar story to play out in pharma and chemicals after Q3 results

#TataElxsi crossed 2000...

#IT unstoppable... TCS, Infy, Wipro ATH..

#TCS cloud commentary - cloud adoption will remain secular growth driver over next 3-5 years + cloud transformation trends going on very strongly.

Cloud is the new ERP: 1st is migration to cloud followed by phase 2 which entails utilising that capability and infrastructure

#happiestmind now at almost 100x TTM PE. Honestly I also never imagined this. I am speechless...

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jeevan patwa

@jeevanpatwa

Oct 22, 2022

#Lauruslab What went wrong

ARV formulations was 1500 cr business for Laurus, they didn't participate in tenders in Q1 at lower pricing thinking that would have impacted long term margins for entire 1500 crs. Q2 pricing went down further. Took them 2 qtrs to adjust to this..

People say it couldn't deliver on promise. It has actually delivered fantasticaly on nonARV, CDMO.

ARV is where it went wrong and that was because of change in business dynamics similar to what happened in US generics few years back. Players are still not able to adjust to that

On brighter side, it spent 1300 crs in last 18 months and will be spending similar in next 18 months. So effectively gross block will double from Mar'21 to Mar'24 and majority of that is towards nonARV and CDMO funded through internal accrual

Read 5 tweets

jeevan patwa

@jeevanpatwa

Jan 27, 2022

Time to switch from FMCG to IT.. My bet is on #INFY

Around year back we discussed that “IT is new FMCG” and market actually recognized this and lot of IT companies trading at 50-60x. I feel one needs to be selective in IT. Not every ER&D is #TataElxsi.

#TataElxsi has its own quality. That’s where I called it CRADS (Contract Research and Development Services).

Cloud, Digital, Blockchain, AR/VR, Robotics, 3D Printing, IoT, AI, ML, Meta…complete transformation of how businesses work and consumers react. Mammoth opportunity

waiting in IT. It’s time to switch FMCG into IT. With flourishing e-com and online marketplace, value of distribution franchise is waning for FMCG. New brands are able to create market share with digital marketing and sales channel. Higher Ad spends, product development cost and

Read 9 tweets

jeevan patwa

@jeevanpatwa

Jan 26, 2022

#IBullreal results have no significance at this point. Key points to understand –

Debt reduction – Ibulllreal will be debt free at the time of merger with 650 cr coming from Mr Gehlot and 580 crs from land sale to Elan group. Embassy will have 3000 crs debt out of which 1500 cr

will be reduced through QIP and rest 1500 crs will come from collections next year. So merged entity will be zero debt company in FY23

Sales potential – Launched + planned projects have 18000 cr sales potential with 3400 crs of near completed inventory. Pending cost is 3900 cr

and sold receivables is 4224 crs. That means 9900 crs of cashflow to come in next few years from these projects. In addition, it is holding land bank of 3353 acres and 350 acres (42.5 Mn) for commercial development with potential annual rental of 4300 crs.

Read 4 tweets

jeevan patwa

@jeevanpatwa

Dec 29, 2021

#Lauruslabs Dr Chhava speaks about Care, Innovation and execution...Must watch

- CG is for benefit of ourselves and stakeholders
- Collegues, thier families, come first, shareholders come last in the list
- Mediclaim premium for CEO and chemist is same

- Customers and vendors both treated equally well
- Canteen is free for all, everyone including CEO and contract workers eat same food

- Dilution in early years was high due to the design of the company. It started as R&D company. Before hiring first person in mfg, R&D had 350

people. it lost 100 crs in first 4 yrs
- Tried to do products where we are strong at and not where neighbors are strong at. Believe in our strengh instead of playing at other weakness
- Overlap of R&D and mfg,done lot of process innovations
- same quality product for all region

Read 5 tweets

jeevan patwa

@jeevanpatwa

Nov 29, 2021

#Nifty EPS (Dec’19) = 563. Nifty was trading around 12000 (21x TTM PE) in Feb 20. After corona, it crashed to 7500. Assuming similar PE, market factored in 30%-40% EPS contraction for Dec’20. In reality, EPS contracted only 14% (Dec’20 EPS = 483)

Today if another corona wave

comes, we are much better prepared, lesser uncertainty and India is best placed among all the geographies. Last time, world assumed India would collapse given the size and population, but we did far better..

Nifty earnings have improved significantly in last year and

it gained momentum in last two qtrs where qtr eps is around 200... Dec 21 EPS estimate is 750

Even in worst case, IT, pharma (20% weight) will support earnings.. So Dec 22 EPS cannot be less than 850..

In best case, PE could be 25 & worse case 20.. So Nifty to remain between

Read 4 tweets

jeevan patwa

@jeevanpatwa

Nov 12, 2021

#Lauruslabs

There’s lot of confusion and concers around whats happening in Laurus and I thought of putting my view

There are two main concerns
1.RM costs – this is universal to all pharma companies, but eventually will get sorted
2.ARV sales – this seems the bigger concern.

Because of regimen change (Efavirenz to Dolutegravir) and 30-day to 90-day pack, governments are in process of clearing the inventory which caused sales to go down. This may continue for a quarter more, but Q4 looks good..

Some might feel, funding may divert to Covid.

Global funds are for 5 years, it is a must medicine, so I don’t think, funding can divert or stop

Some are drawing conclusions from Q2 Aurobindo ARV sales. Pls understand LL is last man standing being lowest cost producer. Even if the market shrinks, other players may opt out,

Read 6 tweets

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