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Sahil Sharma

@sahil_vi

10 Aug

Time for a thread on things I have learned in last 1 year. My key takeaways, and also mistakes I made.

If you like the thread, please retweet this tweet so it can benefit maximum investors.
🧵🧵🧵👇👇👇

1⃣ Predicting nifty levels and what broader markets will do is an exercise in futility

Nobody can do it consistently. This is because there are too many random variables (probabilistic outcomes) which control the level of nifty including but not limited to:

investors ease of access to money, federal bank action across the world, profitability of cos, demand, supply, extent of formalisation of economies, expectations of aforementioned factors and very broadly, the extent of innovation coming into the market

Read 62 tweets

Sahil Sharma

@sahil_vi

9 Aug

https://twitter.com/unseenvalue/status/1424012247655985152

"Upsurge in the valuation of API companies is also because of formulation companies stocking up APIs. (~ to defensive buying of semiconductors by consumer electronics companies) “If earlier they’d stock for 3m , they began stocking for 6m-12m"

- the-ken.com/story/glenmark…

https://twitter.com/unseenvalue/status/1424012247655985152

Recent neuland concall showing some reversal of that trend:

Things seem to be consistent.

Observe Divi's growth in Jun-20 and subsequent quarters versus growth in this Q:

Read 6 tweets

Sahil Sharma

@sahil_vi

3 Aug

https://twitter.com/sahil_vi/status/1403719236892061696

Q1FY22 concall was today for 🌋🌋. My key takeaways 👇👇

1⃣ Revenue & margin 🔻

In b/w lines:
Multiple factors for affecting both. Unit 3 has been commercialised, but not ramped up. Operating de-leverage at play. CMS revenue lumpy. As biz mix changes, so do margins.

https://twitter.com/sahil_vi/status/1403719236892061696

Some CMS revenue postponed due to complex nature of projects (more on that later).

2⃣ Medium term guidance of 15-20% topline growth and 20% EBITDA margins

In b/w lines:
What we need to understand is that this is a very lumpy biz, even YoY there wont always be 15% growth.

Prices for Generic APIs are as per market movements. CMS revenues are lumpy. How can a management predict when will the Patent protected innovator molecule get commercialised? They simply cannot. With unit 3 ramping up & CMS revenue coming up, i fully expect 20% EBITDA margins

Read 8 tweets

Sahil Sharma

@sahil_vi

3 Aug

Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives.

The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father,

...hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there--on a mote of dust suspended in a sunbeam.

Read 10 tweets

Sahil Sharma

@sahil_vi

31 Jul

#IDFCFIRSTBank FIRST concall was right now. My key takeaways:

1. Credit costs of 2.5% in FY22, 2% in steady state.
In b/w lines: Bank has incremental NIMs of >9% which will support 2% credit costs. 1800cr provisions taken in Q1 represent a very conservative approach

A 850cr mumbai toll road account slipped into NPA due to covid lockdowns. There were partial payments. Expect it to come out of NPA post covid wave. VI exposure credit costs not included in 2.5% guidance.

2. Runway for growth is long
In b/w lines: Can grow loan book at 25% for a long time. Expecting 18-20% ROE from retail lending alone in steady state. CASA will also continue to grow enough to support retail lending needs. Enough cash right now.

Read 9 tweets