Now take its peer. Did almost the same stuff. cashflows 4x but could maintain margins, show some growth. Screwed on 5 year basis but decent return on 10 year basis at 19% CAGR.
Well, current PE of NIFTY is 40 but there is more..
A thread covering these questions. 1st thing, uploaded a youtube video on the same. Can watch it n subscribe to channel if like 🙂
The 40 PE of NIFTY is considering TTM earnings (in the table) which includes quarters affected by Covid and we all know that there were temporary business shutdowns due to Covid. So, is not this an outlier situation. So, how to handle it
One way to handle it is- Ignore Covid quarters and go back to previous quarters assuming same performance during Covid quarters. Now the 40 PE reduces to 32.4. Almost a 20% reduction
#NAM Technically, break out is out in the market. Fundamentally, if 1 compares with peers on P&L items, there are possibilities of expense levers to fix. IF new mgmt fixes those, would lead to margin improvement. Topline will also bring more margins. Disc: #technofunda position
This will give some idea what m talking about. Question is can mgmt do 1. Employee cost 2.5x compares to leader. Size of leader is also more than double but thing is - is there an operating leverage possibility? Yes. Check leader employee cost% when it was at current size of NAM
2. Huge cap in operating margin. Can they bridge with size and operations optimization?
when I got tagged on various learn from so called financial guru tweets. This is going to be a long thread n many accounts are going to get naked as an when I find them. The story of follow these gurus bullshit.
First common patterns: 1. Most of these accounts who suggest to
follow x, y, z guru have been created post march 2020 (let's call them chela)
2. These accounts have never liked even a single tweet of some of gurus highlighted
3. There are some Gurus who took birth in 2020 on Twitter n now everyone is recommending them
@OldSchoolFinanc A small thread on working capital economics of pharma and drug companies taken out from my dashboard.
Assumptions: 1. Data does not include any company with <10 cr annual PAT or <200 cr market cap company for a given year
2. Investment options are chosen for start of every financial year 3. 52 pharma companies could qualify from 2003 to 2015 for calculating 3Y CAGR
Insights: 1. Considering I have already removed any loss making company year (even if sun pharma makes losses not included), means
I am somehow trying to retain profitable options , that itself is 1st filter 2. >39% of companies (in profitable basket) have WC/Sales > 40% and >56% companies have WC/Sales > 30% 3. Companies with highest WC/Sales ratio (>40% basket) have given worst 3 year CAGR of 18%