Semiconductor shortages are creating some fantastic opportunities in the broader stock market; think FY24 & swing the bat.
On the contrary, the current supply crunch will help the OEMs to pass on the increased RM costs.
This will reflect in the bottom line & gross margins (OEMs have seen a 6-7% reduction from FY18) when this normalizes.
High uncertainty in the short term is the best friend of a long-term patient investor.
Look for companies that have high operating leverage play (including financial leverage), are not being talked about in the investment circles & where the promoters have everything to lose.
What caused the current semiconductor shortage.
Again, this is not going away in 6 months, nonetheless, it will taper down gradually.
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"We are carrying Rs 27,936 crore of fixed-rate liabilities at 8.66%, largely legacy, and you can imagine the upsides when these are replaced by low-cost deposits." ~ V. Vaidyanathan, IDFC First Bank FY21 AR.
"We advise our product teams to design products in such way that it is meant to be sold to our 'near and dear' ones. We make products with transparent pricing and fees."
"We don’t pressurize our employees to 'somehow' sell high-margin products to meet fee targets. The list of our 'Customer First' features is long."
Fresh Issue of 165crs (50 for capex | 48 for Working capital | 20 for debt payment) + OFS of 237crs (Partially by promoter & PE Tano selling out as the fund tenure is up)
~ Total raise of 402crs
2/ About the company (Not a Biotech company)
A Contract manufacturer for formulation cos. (204 in total) for Indian markets & a small domestic OTC biz
3279 products, 4 plants with 700cr tablets/capsules capacity
Emphasis on chronic (60% of rev) & complex generics (70% of rev)