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Sekhar Profile picture
@LearningEleven
Feb 17 • 20 tweets • 4 min read • Read on X
TIA 20-20 IDEAS SUMMIT

Session 1 - G Maran Govindasamy, Unifi - Eicher Motors

1. 17% our economy is exports, 83% is domestic
2. ⁠Upper mid population will be 44% by 2030 (from 21% in 2018)
3. Eicher has reinvented itself
4. 8-9 years of tailwinds are visible
Session 2 - Balaji Vaidyanath, NAFA Asset - Castrol

1. Low MNC slowly waking up
2. ⁠Market share of 39% in cars
3. ⁠1200 cr cash on the books
4. ⁠New Segments in EV fluids (TaMo, MG) & liquid immersion for Data Centers (Submer) PLUS JIO-BP JV
5. Upside - 52%
Session 3 - Vidya Bala - Landmark Cars

1. India, 3rd largest market for PV
2. ⁠Shift is to luxury segment (14-16% CAGR for next few years)
3. 117 outlets, 27 cities
4. After-sales is lucrative (36% ROCE)
5. But thin margins
6. Game changer can be import duty reduction
Session 4 - Ankit Kanodia - CarTrade Tech

1. One year forward P/E is 13 & P/S is 2
2. ⁠IPO was decorated
3. ⁠Good acquisitions made
4. Asset light & operating leverage opportunity
5. Zero debt, 700 cr cash
6. Current valuation is much cheaper compared to peers
Session 5 - Abhijit Chokshi - Gujarat Pipavav

1. Recommended at 170 to his clients
2. Located at strategic place
3. Excellent connectivity with DFC
4. Debt free, good cash flows (only two listed ports that are debt free in the world)
5. Increased tariffs by 3-7%
Session 6 - Chokkalingam G - Vindhya Telelinks

1. Be cautious, too much is factored in
2. ⁠Telecom EPC, set for digital initiatives
3. ⁠Has holdings in Birla Corp and Birla Cable
4. ⁠Enterprise value is cheap
5. ⁠Core business doing well
Session 7 - Prajesh Maroo - Control Print

1. Printer-base is continuously growing up
2. RFID Chips creating indirect moat
3. QR code mandates will help the growth
4. Aiming for 400 cr top line for FY25 with 25% margins
5. Good acquisitions, business initiatives and JVs made
Session 8 - Saurabh Basrar - GHCL Textiles

1, 340 cr capex in last 3 years leading to 1000 cr revs (FY24)
2. EBITDA is 16-17% avg
3. Thesis is to generate 160-200 cr operating cash flows annually, zero net debt
4. Upside is 2 to 2.5X & downside is 15-20% over the next 2-3 yrs
Session 9 - Aravind Kothari - KDDL

1. Per capita relation with luxury boom is real
2. ⁠ Precision Engineering is growing
3. ⁠100% market share in Watch Hands in India & Largest in Watch Dials
4. ⁠Avg sell price up by 20% CAGR in last 5 yrs
5. ⁠To grow 20-25% for nxt 3-4 yrs
Session 10 - Prabhakar Kudva - Sanghvi Movers

1. Largest Crane renting co in India
2. Good visibility for nxt 2 yrs
3. Capex of 300 cr
4. Cranes directly going from OEM to Site
5. 1 yr Forward P/E-18
6. Operating Leverage play
7. Optionality - EPC in wind & other segments
Session 11 - Ishmohit Arora - GPIL

1. Policy change is the trigger (regime of free allocation)
2. ⁠Integrated player, low debt, lowest cost producer, higher realisation & better EBITDA
3. ⁠Iron ore capacity to go up from 2.6 mt to ~6.7 mt & accordingly other products to go up
Session 12 - Tushar Bohra - Shilpa Medicare

1. Lots of things went wrong
2. ⁠It could be 4X EBITDA in 4 years, Have a strong pipeline and triggers in Biologics, Formulation, API & TD/ODF
3. ⁠By FY25, most things will fall in place
4. Albumin could be a game changer (patent)
Session 13 - Ganeshram J - Sundaram Finance

1. No dilution for 50+ years
2. ⁠ They were Risk averse b4
3. ⁠What changing - Diversification, expand non-south, least funding cost, better margins & SoTP upside
Session 14 - Vivek M - Poly Medicure

1. Largest exporter of medical devices
2. Medical devices market growing at 16% CAGR
3. Top 3 IV Cannula Mfr, 372 Patents & strong distribution network
4. 80% devices r imported, 300cr capex, dialysis market, Operating Leverage & US Ramp up
Session 15 - Pawan P - PNB Housing Finance

1. Sector growing at 15% CAGR
2. ⁠New leadership
3. ⁠Asset quality is getting better
4. ⁠Branch network growing
5. ⁠AUM CAGR of 18% for next 2 yrs and FY26 P/B is 1.0
6. ⁠RoA is growing
Session 16 - Kumar Saurabh - LT Foods

1. Has dominant leadership & acquired lots of other Cos
2. ⁠Double digit growth & a potential of re-rating
3. ⁠New products growing faster
4. BS getting better & good cash flows
5. SALIC could help in Middle East
6. Conservative TP 256
Session 17 - Hamsini Karthik - IndusInd

1. Turn around story, Asset quality improving
2. ⁠Retail focus increasing
3. ⁠Forward looking valuations are attractive
4. ⁠Loan book is expected to grow by 20%+
Session 18 - Vikas Kasturi - Repco Home Finance

1. Cheapest home finance company
2. Many things gone wrong
3. New leadership driving the change
4. Asset quality and disbursements improving
5. Potential re-retating candidate
Session 19 - Athreya Ramkumar - PVR INOX

1. Dominant market share
2. ⁠Screens to go up from 1700 to 3000 in next 5-7 years
3. ⁠F&B revenues significantly going up helping margins
4. ⁠To be Net debt free in 3-5 years
Session 20 - Mohit Beriwala - REITs

1. REITs are growing fast due to office demand & GCCs
2. ⁠Almost 70% income is tax free
3. ⁠Excellent fixed income opportunity
4. ⁠Re-leasing yields much higher (15%+) kicking in operating leverage
5. Int rates reduction - icing on the cake

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More from @LearningEleven

Sekhar Profile picture
Nov 1, 2023
A thread for Diwali Picks: If you come across any Diwali Picks, feel free to add to this thread for the benefit of everyone!

1. SBI Securities Diwali Picks

📌ICICI Bank CMP: ₹ 915 Target: ₹ 1,081 Upside: 18%

📌Maruti Suzuki CMP: ₹ 10,391 Target: ₹ 12,000 Upside: 15%

📌UltraTech Cement CMP:₹ 8,422 Target: ₹ 9,800 Upside: 16%

📌Polycab India CMP: ₹ 4,922 Target: ₹ 5,877 Upside: 19%

📌Kalyan Jewellers CMP: ₹ 289 Target: ₹ 364 Upside: 26%

📌Praj Industries CMP: ₹ 536 Target: ₹ 633 Upside: 18%

📌Titagarh Rail CMP: ₹ 762 Target: ₹ 988 Upside: 30%

📌Mrs Bectors CMP: ₹ 1,120 Target: ₹ 1,358 Upside: 21%

📌Kolte Patil CMP: ₹ 479 Target: ₹ 570 Upside: 19%

📌Goodluck India CMP: ₹ 850 Target: ₹ 1,072 Upside: 26%
Image
2. Sharekhan Diwali Picks

📌Bank of India
📌Bharat Forge
📌Kirloskar Oil Engines
📌Hindustan Aeronautics
📌IndusInd Bank
📌Gokaldas Exports
📌Kolte-Patil Developers
📌BSE Limited
📌Birlasoft
📌DLF
📌Garware Hi-Tech Films
📌Sanofi India
📌Larsen & Toubro
📌Tata Motors
📌WonderlaHolidays
Image
Geojit Diwali Muhurat Stock Picks 2023

HDFC BANK
PI INDUSTRIES
BIOCON
TTK PRESTIGE
AMARA RAJA ENERGY & MOBILITY
ASIAN PAINTS
CROMPTON GREAVES
Zee Entertainment Enterprises
PVR INOX
RELIANCE INDUSTRIES
Read 8 tweets
Sekhar Profile picture
Aug 19, 2023
Day 2 IAS Summit @ias_summit

Session 8 - Puneet Khurana, Stoic Investing - Insights, Evidences & Multibaggers

1. Number of companies that did 25% CAGR in a 5 year period in their trading history?

Most of us would guess it would be a single digit or single number percentage, but!

Correct answer is 3077 (47%)

622 companies gives such 25% cagr every year for the previous 5 year period!

Message: opportunities are in front of us, we are just not looking

2. How to improve? Reduce mistakes, errors, and uncertainty PLUS increase insights

3. How to generate insights?

Knowledge funnel - market wisdom, strategy of allocation, personal epiphanies, folklore etc. (all noise around you, books, WB’s letters etc.)

a) Take all the noise, then look at source (should be authoritative) and proof behind that narrative and/or stories and then differentiate the story whether it’s global or domestic.

b) Then test the thesis, formulation of hypothesis. For ex, quality stocks makes money, then do back testing, or cyclicalities gives great returns etc, makes sure there data backed hypothesis and then it becomes part of your belief system

c) now, translate these hypothesis into ideas thru screeners or filters start defining if and what if scenarios

d) Pillars (quality, financials, valuations, turnarounds, market caps, industry/sector) that help in identification process

2003 alone had given 1500 multibagger and even 2008 had given 150 such opportunities!!

About 50% of multibaggers come from 0-50 cr market cap

But then we need to remove the junk because there will be lot of volatility

What is junk!?
Companies that have not traded consistently and those that are extremely volatile

70% of multibaggers come from 0 to 250 crores. 11% from 250-1000 crores bracket.

Very rarely you will find a multibagger after it crosses 10 market cap, mind you definition is 25% cagr for a 5 year window.

Good zone to find multibagger is 100 to 10,000 crore.

Why!? Because, post 10K, hardly any and less than 100, too many failures plus volatility.

Once you apply quality checks, 50% of the multibaggers can be found from 100 to 1000 cr market cap.

Quality checks (profitability, cash flows, cash conversion, capital structure, incremental ROICs, valuations)

75% multibaggers weren’t actually fundamentally strong!! That’s why perhaps Vijay Kedia once said don’t look at ROE and ROCE!!

At lower level market cap, historical fundamentals had no role in they becoming multibaggers!

At higher market cap, Fundamentals have a role to play in identifying multibaggers.

So, based on which market cap you are playing, you need discount the fundamentals. But then, lack of fundamentals might also hurt you bad!

Welcome to catch 22!

Out of 37 sectors, only 7 contributed to 60% of the multibaggers (Chemicals, Financials, Auto ancillaries, Healthcare, Textiles, FMCG, Construction)

Bigger driver that ends multibagger journey is valuations.

So, identify the “genuine” stories before they become fundamentally good and exit when valuations become expensive

Ignore too small and too large - sweet spot
Be in profitable industries where profit pool is high
Starting valuation and growth are paramount

1/n
Session 9 - Aashish Somaiyaa , WhiteOak Capital - Why Do Winners Rotate

1. Generally, retail money flows into the sector/theme that was popular an year ago. But chasing recent performance leads to accidents!

2. The best performing fund from 2009-2011 was ranked at 162 between 2012-14. Likewise, number 1 fund from 2012-14 ended up at 20 between 2015-17.

Past performance is not an indication of future performance fund. It’s a fact!

Remember, the title - Winners rotate!

3. It’s not possible to forecast macros and even if we did, we can’t forecast how markets will perform. Look at last 4-5 years, anything that had to go wrong, had gone wrong. Yet, most made decent returns!

4. Best way to filter is a) superior ROIC, b) scalable opportunities and c) strong execution and governance

5. Number of unique stocks in mutual funds now is at all time high!

6. If we look at past 20 years, Best performing sectors and best performing market caps, domestic vs exports, defensive vs growth, no matter which characteristic you look, they rotate.

7. Play rotation, that’s emphatically true!

@ias_summit

9/n
Session 10 - Ishmohit, SOIC - Learning P2P Analysis

1. Fundamental framework - Capital cycle. Capital will always chase higher returns. Now, so many micro finance IPOs coming in coz it’s the current cycle. Two years ago, it was Chemicals.

2. Technical framework - Stage analysis. Playing capital cycles with stage analysis gives you the best outcome

3. If you look at gear companies, RACL Geartech, Bharat Gears and HITECH Gears, the margin profile is totally different. That’s how you do P2P analysis and differentiate the superior players. Then, you start reading concalls and identify how the superior player is able to do that and see if it’s sustainable

4. Look at Pellets - it’s commodity, but has few players are selling at premium. Again you can differentiate by realisation or margins

5. 90% small caps have volatile margins. Identify opportunities in small cap where margins are stable. Ex: printing company. Another one is a casting company that has incremental margins.

6. If a company posts good improvement in ROE, you should look at seriously and check if it’s business improvement or one off.

7. Aarti Drugs vs Aarti Pharma - you just do P2P analysis, you can see the difference in gross margins. Look at what markets they are operating in

8. GAEL versus its peers (Anil, Riddhi Siddhi, Cargil, Sukhjit, Gulshan etc..) and when you compare these, you know what stands out. It’s of course cyclical but you know which company to look at when cycle is turning on if you have done the P2P analysis

9. VIP vs Safari - look at which business grew faster in last 5-6 years. Simple P2P analysis would have told us 5 years ago that there is something that’s happening good in Safari.

10. Message is whenever you are studying any company, do P2P analysis, it will help you understand the opportunity size, allocation target, growth triggers etc.

11. Volume growth is holy grail in consumption sector. Just look which companies doing double digit volume growth. Look at Mrs. Bectors or ADF Foods and how they have differentiated themselves.

12. Forging companies - you can differentiate the growth

13. Navin vs SRF - simple P2P comparison and check cash flows. There is a clear leader.

14. Wires and cables - look how KEI and polycab are way ahead in their EBIT compared to rest

15. Identify the parameters that you should use to do P2P analysis. For ex: excess provisioning/AUM makes sense in financial whereas earnings per bed in hospitals. Similarly Greenfield vs brownfield expansion. Or compare ROE between HCG and Rainbow, both super specialty hospitals

16. EPC Companies - it’s capital intensive, so check debt/equity and compare between Ahluwalia and Dilip Buildcon.

17. Message is pick a strong horse to ride the sector. To know which is the stronger one, you should do P2P

18. Reverse is also true. Best players also will fall apart when sector is doing bad. Packaging films or MDF etc.

19. Key learnings - For P2P, compare sales growth, product segments, margins, cash flows, relative valuations, value added vs commodity, etc plus some unique metrics in respective sectors. Ride with better player in a sector that’s in stage 2.

@ias_summit

3/n
Read 7 tweets
Sekhar Profile picture
Aug 18, 2023
IAS Summit @ias_summit

Session 1 - Arvind Kothari, Niveshaay - Key message, remove biases that low valuations are better or renewables is just a fancy story isn’t here to stay or digitals stories will replace everything etc.

1. Stocks that gave huge returns, usually, are under owned by fund houses

2. Attractive valuation multiple tempt us to buy but, usually, results in low returns. Make investing simple. Look for promoters skin in the game

3. Why Business Predictability over Investing Observations - if industrial turnaround is happening, would you invest in industrials or would you invest in banks who are lending them?

4. Understanding Predictability of the Economics of a Business is key

5. We tend to Underestimate Large Changes in Business Environment. Ex: Renewable or New Energy

6. Waaree (unlisted) - bet on India’s largest Solar Group. Module manufacturing capacity - 2GW in Mar’ 21 to 25 GW in 2025

7. Waaree Renewables Technologies - PAT -2 in FY21 to 55cr in FY23

8. After years of slow down, Wind Sector is reviving. Wind installations capacity going to be 2.5x between FY23 and FY30

9. Sanghvi - India’s ambitious wind targets augurs well for this crane supplier. To supply 750 tonnage cranes. Capex dove at right time to acquire market share

10. Castle and Moats created over the years - Ex: Avantel. Promoters are technocrats. Amazing R&D capability. Positioned in a category where a minimum of 50% indigenous content required. 100% market share in satcom supplies to Navy

11. KDDL - Digital watches didn’t affect luxury watches. Both Ethos and watch component businesses are doing well.

1/n
Session 2 - Ravi Jain, Strategies for wealth creation and how to identify opportunities

1. Forced selling post Spin Off - once forced selling by Institutions is done usually becomes multibagger (assuming quality company)

2. PEAD : Post Earnings Announcement Drift - when you notice a turn around in the earnings in a given quarter (for measurable reasons), it’s a good time to take position as it will be on up move. Write a screener and run it every evening during results season, you will be able to identify few opportunities. WPIL, Apar etc few examples,

3. Management change - Companies that are taken over thru NCLT process or thru other means. Ex, APL Apollo took over Amulya Leasing snd SG Finserve. HK trade which is now known as Waaree Renewable Tech. CG Power another example. Other examples include next generation taking over the business or a new Chairman comes in (Tatas). Typically, in most cases, first re-rating happens immediately and second re-rating happens when execution happens well after a quarter or two

4. Management signalling - Insider buying or when investor relations start (first concall) or appoints a big four auditor or a big star is appointed as brand ambassador

5. Other factors - Exclusive licensing or JV with a world leader

6. Operating leverage - Fixed assets going by 2x or 3x but facing sectoral headwinds. When headwinds go away, operating leverage will kick in. Himatsingka, a case study.

7. Quantitative Momentum Strategy - 52 week high breakouts and ATH Breakouts. Setup a process on chartink, get the alerts to buy. When alert kicks in, buy certain % on the alert, but if it falls below 21 DMA, exit it. Also observe if most names are coming from a single sector. If yes, then it’s time to play a basket in that sector.

@ias_summit

2/n
Session 3 - Kedar B, Congruence Advisers - underrated factors that shape investing outcomes in consumer business

1. Context is everything in investing - Understanding where we are.

2003-08 - build India, investment and capex led growth
2010-14 - focus on balance sheet risk, shifting from investment led growth to consumption led growth
2018-21 - business quality and free cash flows over all else

What worked very during 2016-21 cycle hasn’t worked for more than 2 years now

Financial numbers are the last thing to change, theme would have been identified by then.

Both macro and micro changes do matter

Re calibration of change is important

2. Don’t get lost in the Narratives. For example, in 2021 - consumer business will “always” outperform was a big narrative (common knowledge)

3. Common knowledge (that everyone is talking about or everyone knows) influences you to buy expensive business or ignore businesses in headwinds

4. The Indian consumer pyramid - middle class represent 31% of population expected to go up to 38% by 2047. Rich population is expected to grow even faster

5. 2.6% (3.7 crore) are unique MF investors as of March 23 out of 140 crore.

6. In consumer discretionary category, our large mass population is irrelevant. Essentially, just top 4 crore population are doing heavy lifting in consumer discretionary spend. This segment is heavily penetrated.

7. Channel Management - how businesses reach consumers

8. Even today, 80% retail spending is thru traditional channels (mom and pop stores) and online is just 6.5%. Online is bit higher in Tier-1 cities with 13.5% but in tier-3, it is only 3.5%. It’s not easy to capture market from traditional channels

9. Relaxo’s online is only 11%, Metro Brands has 8%

10. Channel management isn’t easy for businesses, hence consumer story isn’t as straight as it sounds to grow even though there is this narrative of consumer discretionary growth.

11. Ease of market entry and channel mix - 55% Mobile sales are online, footwear at 22% but food and grocery at 1.4%, jewellery and watches at 0.6%

12. So, the message is there is no one template for growth in consumer space.

13. Brand + Distribution continues to be one of the strong moats.

14. Standalone D2C brands scaling to 500 crore revenue is a serious challenge even today. Multiple channels are as important as as ever before

15. Pricing power - textbook “pricing power” appears to be elusive in most categories, barring a few luxury segments. Even with 60% market share, companies aren’t sure of pricing power. Hence, it’s just a narrative is most cases

16. Pricing power is a complex function of brand pull, customer loyalty, industry structure, switching costs, how good alternatives are etc.

17. Investors appear to be more confident about the “pricing power” of businesses than management themselves

18. USA - marriage rate going down and divorce rate is going up. Pool of employed young man is going down. Depression rate going up. Pet adoption going up significantly. Fertility rate sharply down, so could these changes improve consumer space!?

19. There are more dog/cat moms and dads are in US than actual moms and dads. Japan’s death rate is higher than birth rate.

20. Can sustained consumption will continue with all these demographic changes happening around!? It may not in happen in India anytime soon but if motherships are going thru these challenges, how much market opportunity would that leave!?

21. Demographic shapes the Economic landscape

22. 45% of women between 24 and 45 are single working women by 2030

Summary - don’t fall prey to narratives of consumer discretionary such as exponential growth (when relying on just one or two channels) or pricing power when there are no serious switching costs etc. understand the demographic story

@ias_summit

3/n
Read 7 tweets
Sekhar Profile picture
Feb 18, 2023
Focus Lighting & Fixtures

The new FOMO kid on the block.

It is up by 250% in last one year!

Philips in their marketing pitch says "We can match the quality of Focus"!!

Others give 1-2 year warranty but Focus gives 5-8 years!

Who are these guys really!?

1/n
I have uploaded my notes on the Telegram channel today, so, you can read the detailed version there & hence, I am limiting the current thread to

10 reasons why I like Focus Lighting
3 reasons why I will be cautious
and
10 point summary

So, lets get started!

2/n
BTW, back in Oct’ 22 part of the group study at @ScientificInve6, I had done some basic work on this & later invested & booked 40% profits.

Then in Dec’ 22, @SunriseFinanci2 and @shubhfin reminded me again and that's when I got serious!

3/n
Read 21 tweets
Sekhar Profile picture
Feb 10, 2023
Sudarshan Chemical: Q3 Concall

1) Among end users, coatings industries contribute highest followed by plastics, inks, cosmetics & others

2) SCL expects decent Q4 demand from the coating segment. Market share of the company is well maintained in coatings & plastics segment

1/n
3) The plastics segment was especially impacted due to volatility in overall prices, which remained till November 2022. From December, 2022 onwards the company witnessed some demand from the plastic industry

4) Logistics cost coming off from peak level

2/n
5) Continue to see buying decision deferral in customers due to volatility in customer’s prices, which resulted in lower inventory level at customer end

6) Total capex plan is ~Rs 750cr of which capex incurred is Rs 730cr

7) Focusing on growing in America & South America

3/n
Read 4 tweets
Sekhar Profile picture
Jan 29, 2023
Ten reasons why I like Solar Industries

As you might already know, Solar Industries is a leading manufacturer of bulk explosives, packaged explosives and initiating systems for mining, infrastructure and construction industries plus venturing into Aerospace

1/n
In this mini-thread, I won't get into detailing the company, rather, want to share the reasons that have excited me and if you also happen to like those reasons, please do your own study.

So, lets get started!

2/n
1: Consistency of growth

Barring FY2020, revenues never dipped. Margins are as consistent as they can get and mgmt is guiding for 18-21% margins again and again!

Explosives, largely being consumables, are prone to low cyclicity and hence display secular growth.

3/n
Read 17 tweets

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