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Abhishek Murarka 🐂💹 Profile picture
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7 Feb, 8 tweets, 3 min read
Over 75% of corporate India (by market cap) has declared Q3 results and the verdict is - We are on a roll!

Highlights of last 6 month performance (July-Dec) for 809 results (ex-financials) declared till Friday, Feb 5th.

1/n 👇 Image
2/n
 While revenue growth is close to pre-Covid levels (down 5%), there is a strong profitability growth lead by both gross margin expansion and operating leverage. No wonder everyone is talking EPS growth!

How do we compare with US on this front? Here.
FIIs: Note 👇 Image
3/n
52.5% PAT growth overall and 43.9% ex financials!
How does this look across industries?

Ans: Broad based Image
4/n
Is this profitability growth due to one time cost savings?

Numbers reflect that is not the case. Most of the margin expansion is flowing from COGS (lower raw material/ cost of service) as against other opex!

Industry wise trend is healthy👇 Image
5/n
Which names are driving the profitability growth?

Top contributors 👇 Image
6/n

Companies directly impacted by Covid are gradually making a comeback but not yet back to normalized levels (highlighted in yellow). Image
7/n
This brings is the moot question - Has the declining corp profit to GDP trend bottomed out?

Enough indicators to say yes.

This, by no means, is a recommendation on valuation levels. But it re-enforces the view that Mr. Market has the best pulse of the economy and doesn't wait for reported numbers.

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More from @abhymurarka

Abhishek Murarka 🐂💹 Profile picture
4 Apr
I grew up watching a lot of Nat Geo & Discovery. One learning I took was to not touch any brightly colored animal.

I watched LoTR as a teen and was fascinated with Gollum's greed for the ring.

Youngsters can taken some lesson from this - don't "blindly" chase all shiny objects. Image
What is happening on the blockchain, cryptocurrency, DeFi, stablecoins, etc is super fascinating stuff. Designed by some of the best minds. But there are more landmines than goldfields. Study if you are keen, but don't just FOMO in unless you understand what it is all about.
Just read this good post on the recently hotly debated topic of NFT (Non Fungible Tokens). Many of these I see as experiments. Some will definitely take off and be bigger than current asset classes over this decade.

blog.multipie.co/2021/04/04/wha…
Read 4 tweets
Abhishek Murarka 🐂💹 Profile picture
25 Mar
Kind of sure this will get squashed. Doesn't make sense.

This reminds me of the socialism example where every student gets the average marks in the class, irrespective of their real score. And we know the outcome.
It takes time, effort, networking, reputation over years and proprietary research for relevant questions (beyond the concall). Don't see any reason why all of it should be made public.
Peace.
Read 4 tweets
Abhishek Murarka 🐂💹 Profile picture
18 Mar
1/9
Last 2 weeks:
ICICI Pru 📉-15%
HDFC Life📉-7%
Max Life📉-6%
SBI Life📉-3%

What's bugging private Life Insurance companies?
Read on if you are invested (or interested) in Life Insurance:

A short thread🧵
2/9
How to IPO LIC - This was a topic covered in the first Equity Capsule newsletter (read extract shared).

Historically, LIC has had lower profits & NW due to higher payouts to policyholders vs peers. But post recent amendments to LIC Act, they are in line with listed peers. Image
3/9
 What's changed?
Earlier LIC treated payout for both policies at 95%. Now it has lowered mandated distribution of surplus from 95% to 90% for Par products (ULIPs) and 95% to 0% for Non-Par (Term Ins for Protection).

Link for Par vs Non Par products:
lifeinsurance.adityabirlacapital.com/articles/life-… Image
Read 12 tweets
Abhishek Murarka 🐂💹 Profile picture
24 Apr 20
Most important topic that is hardly discussed!

🚩At 4% fiscal deficit and 55% debt to GDP, India has a sovereign rating of BBB- (just one notch above junk)

💲At 18% fiscal deficit and 150% debt to GDP, USA has a sovereign rating of AAA

Something is rotten here.
To clarify a misconception:

The limited Covid response stimulus in India (1% of GDP) vs US (10%) or Japan (20%) has less to do with risk of Fiscal deficit but more to do with fear of stagflation if it doesnt bring back demand. One notch downgrade & we are junk = FDI/FII sell off
A BBB- rating is the last Investment grade rating and BB+ onwards classifies as non investment grade. Global funds of funds are not mandated to invest in sub investment grade sovereign papers. Understand the flux before criticizing.
Read 7 tweets
Abhishek Murarka 🐂💹 Profile picture
22 Apr 20
Highlight of the day - Facebook acquired 9.99% stake in Reliance’s Jio platform for an investment of Rs 43,574 cr valuing it at Rs 4.36 lakh crore. That's 56% of market cap of RIL (~7.8 lakh cr) – huge right!!

A simplified thread on the deal, Jio platfrom and competition.
1/n
2/n
Landmark deal:

📝Largest investment for a minority stake by a technology company ANYWHERE in the world
📝Largest FDI in the technology sector in India.
📝Values Jio Platforms amongst the top 5 largest listed cos. in India
📝Improves India's $ reserves & fiscal balances
3/n
Deal rationale - Facebook had $50B of cash on B/S making practically no money. Deploying $5.7 bn in Jio gives them broader access to India and India 2 retail users. For Reliance, it strengthens their consumer wallet share and brings big ability to cross service clients.
Read 23 tweets
Abhishek Murarka 🐂💹 Profile picture
7 Apr 20
Quick snippets from ICRA's note on Covid-19 impact across Indian industries. Looks at it from 5 vantage points.
👇
1. Domestic Demand Slowdown

Govt. curtailments + risk aversion to have short-term repercussions on domestic demand; recessionary trends possible in longer-term
2. Global demand Slowdown

Rapid spread of pandemic across the globe leading to country-wise lockout, and fears of an impending recession to have impact
across multiple sectors.
3. Supply Chain Impact

Supply disruptions of key imported raw materials in electronics, renewable energy, automobile and pharmaceuticals sectors
could adversely impact production even post lift of the lockdown.
Read 5 tweets

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