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Basant Maheshwari Profile picture
@BMTheEquityDesk
Aug 6, 2021 • 4 tweets • 1 min read • Read on X
#Sail Q1FY22 profits were 94% of full Fy21 profits. Would have easily surpassed but for lower volumes of 3.3. MT (oxygen related shutdowns) compared to 4.35 MT in Q4fy21. Two numbers to focus are Rs 20,250/ tonne Ebidta and a 5063 cr debt reduction. Now how to value a cyclical:
Sail traded at an Enterprise value/ Ebidta of 6x during the pandemic. Market cap was 10k cr in March 2020, while debt was 54k cr total Enterprise value came to 64k cr. Assume that Sail trades at the same EV and debt is reduced to 15k Cr at the end of fy 22. Then …..
… at a 17 MT output in FY 22 and a conservative 21k per tonne Ebidta, Sail generates a Ebidta of Rs (17 mn x 20,250) = 34,425 cr for fy22.
At the same EV/ Ebidta of March 2020 the market cap should be Rs 34,425 cr (ebidta) x 6 (ev/ebidta) - 15000 cr (Debt) = Rs 191,550 cr. And if the Steel cycle picks speed then…….

Disclosure : No recommendations: we own all metals.

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More from @BMTheEquityDesk

Basant Maheshwari Profile picture
Jun 16, 2020
Only way to beat China is by being economically stronger. How does a $2.7 trillion economy take on a $14 trillion global bully? Get growth back, use it to upgrade our defence make India an integral part of the globe. Everything else is crap. #ChinaIndiaFaceoff #chinaindiaborder
Countries that have progressed globally stay away from wars, conflicts and hatred. U.S does all the wars but thousands of kms off its coast,Japan and South Kores don’t disturb N. Korea. Germany hasn’t fought a war since WW2...
England fought Argentina thousands of miles down south near the Falkland Islands. No advanced nation goes into war. The cost of war is unimaginable and takes you bacK by decades . War is the tone of the weak and good for winning elections not for raising people out of poverty.
Read 5 tweets
Basant Maheshwari Profile picture
May 3, 2020
Govt. policy matters little for the big sector leaders. They’ll become bigger & stronger. It’s the bottom 5%-10% of businesses that face extinction. Sometimes the situation demands us to spend money & get out of a crisis. Can we do it? @PMOIndia @narendramodi @nsitharaman @RBI
Let’s privatise our PSUs.Privatisation will get a better price-disinvestment won’t.The country needs immediate cash and if it doesn’t the small and mid-size players will be killed. They need cash grants/wage support not loans. In distress you repay back loans not take more of it.
Failure across businesses, will create job losses, defaults and also social unrest. People cannot survive on DBT. The habit of ‘money without work’ is dangerous. They will resort to illegal activities. Corona, economy with Law & order. Can’t deal with 3 fronts at the same time.
Read 10 tweets
Basant Maheshwari Profile picture
Apr 25, 2020
Till May 04,2020 we would have lost 35 days of Fy 21. Any extension beyond that date will play havoc on the nation’s finances. This is what our financial set up looks like but with a 25% drop in tax-revenues. It looks scary.

. @narendramodi @PMOIndia @nsitharaman @FinMinIndia
A severely undesirable and predictable outcome is a steep drop in tax collections and an increase in welfare expenditure. Quite possible but equally detrimental.

Collectively, both have the power to shake up any economy and it can hit in several ways. And we are no different.
India’s Balance sheet reflects a revenue stream that is broadly variable (tax and non-tax) and a cost structure that is broadly fixed (interest, salaries, defence, health and subsidies).

In other words, money has to be spent whether the state generates revenue or not.
Read 10 tweets
Basant Maheshwari Profile picture
Apr 2, 2020
1992 to —
1) Market won’t let you survive. If it does, the fellow investors will ensure that you wrap up everything for safety. No one has every archived anything worthwhile playing safe.

2) Everyone would wait for clarity but once clarity emerges bhaav bhi clarity ke honge.
3) Someone who’s lost 40% will be happy because someone else is down 41%. Someone who couldn’t anything will be pleased just because his neighbour is down 40% on. 50x. That’s still 30x from the bottom. The public finds great satisfaction in seeing everyone else lose.
4) The research houses, brokerages, fund managers & the public will either buy stocks that won’t go up at all on recovery or they will remain in cash.Just as stocks don’t get converted into cash at the top cash doesn’t get converted into stocks - at the bottom. That’s a classic.
Read 9 tweets
Basant Maheshwari Profile picture
Jan 5, 2020
All large investors started small. If the corpus was built on salary or non-market related income then you always seek risk averse strategies. If you start on inherited wealth you’ll do below average to avg returns. You have to start poor. Having nothing to lose is an advantage !
The first 10 lakhs needs a lot of self control. You have to stop spending to reach here. The next 15 lakhs needs skill. You have to grow what you’ve saved. From 25 lakh to 50 lakhs it’s self control. You have to stop thinking of buying a home, car, Holiday, TV etc.
if you’ve hit 50 lakhs wealth creation will become a habit. But it’s not the end. You have to still be hungry for more. You can’t buy ETFs and large cap stable names. You have to look at growing not protecting. And the best wealth decisions won’t come out of a consensus opinion.
Read 7 tweets
Basant Maheshwari Profile picture
Dec 1, 2019
India needs to grow at 11% nominal cagr to move from a 2.9 trillion economy to 5 trillion by 2025. This means an ideal growth of 7% GDP & 4% inflation.

But can we reach 5 trillion with the present set of systems & legislations? No. @narendramodi @PMOIndia
@nsitharaman
Can we do it with Big Bang reforms - especially on the taxation and capital markets front ? Yes

The capital markets are the life and blood of our financial dreams. Maharashtra elections would have swung the other way had the Govt. given our capital markets a better treatment.
High ticket agriculture income which can potentially raise thousands of crores in taxes is painfully exempt while Long Term Capital gains which raises zero revenue for the Govt. is taxed at 10%. We can’t reach our targets with such brutally biased anomalies.
Read 8 tweets

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