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Saplings Capital Profile picture
Saplings Capital
@CapitalSapling
We Sow You Grow🌱 Seeds Of Growth ⚡ Founder Member @chiragdashj⚡ Not a SEBI Registered Firm
2 subscribers
Jul 30, 2021 • 4 tweets • 1 min read
Some companies that deliver future returns have hair on them to begin with.
#Camlinfine is one ex, has been going a transformation internally (not visible optically at present) and is now on strong footing with installation of commissioning of Diphenols capacity in Dahej. Diphenols capacity helps them save on freight which was hitherto spent on importing from Italy.
This capacity makes them one of the very few players in the world with captive capacity of diphenols.
The diphenols derivatives to come will have substantially higher margins.
May 25, 2021 • 5 tweets • 2 min read
Great thread. #Garwaretechfilms is one of the few small caps, thats able create a brand in advanced markets. They compete with the likes of 3m in the US and while it gets valued as a commodity company, it deserves to be trading as a speciality consumer company.

Disc: Invested A barometer of company's brand strength is it gross margins & Payment terms. GM% are at a great 65% at present( vs 38% for the commodity film companies) and the company offers no credit and works on a cash & Carry model.
Hard to find an Indian company that sells in the US in cash
May 13, 2021 • 6 tweets • 1 min read
Even for a small cap investor a large % of his PF should be optimized for "Capacity to suffer & durability" rather than for pure upside.

In country like India, if one stays invested long enough the demographics & its upwardly mobile percapita income will take care of the upside. This calls for a supply side excellence which creates a capacity of suffer through difficult periods or actually demonstrates antifragility and thrives under stress through the strength of its reputation and balance sheet by acquiring assets in distress.
May 6, 2021 • 15 tweets • 4 min read
#PixTransmission is a dominant small cap in its duopolistic market of V-Belts, essential in all manufacturing sectors.
Company due to robust demand has recently approved further capex of 60 crores.
Promoter increasing stake.

Disc: invested from 300 levels.

Much more to come! Indian Market is dominated by Pix & Fenner, V-Belts has repeatable purchase as the product wears out after a limited time.
Due to its use in every industry, it is required that the manufacturer have v belts in 1000's of sizes and every size has a different mold.
May 4, 2021 • 5 tweets • 1 min read
Investing in Small cap domination eventually leads to big wealth creation, Don't overoptimise for valuations here, in-fact optimize for Moat, if the company's business Castle is well moated, the long runway of opportunity will ensure you make a hell of a lot of money regardless. The likes of Astral and Page hardly ever traded at conventionally cheap valuations since the beginning of last decade, but have still generated immense wealth for investors who have held it with the scarce commodity called "Patience".
Mar 15, 2021 • 7 tweets • 2 min read
A successful consumer tech company should always be valued significantly higher than a normal consumer company.
Opportunity size is large for both but the digital distribution of the tech company services allows it traverse the opp landscape faster than a normal consumer company. Since capex is not a challenge in setting up a tech business, therefore a tech company has to create alternate barriers, thus the need to drive business velocity as network effect is true barrier to entry.
To get to that scale, tech companies have to sacrifice near term eps.
Mar 6, 2021 • 27 tweets • 9 min read
#Nazara's gamified early learning app, Kiddopia, subscriber base grew from 115,220 paying subscribers in January 2020 at the time of acquisition to 290,508 as of Oct 2020.

Stunning growth!

Another #Nazara subsidiary has 80% market share of Indian industry in esports segment. #Nazara's annualised Advertisement & Promotion spends has gone from 27 cr in Fy19 to 238 crores this year. They can easily show significantly higher profits by cutting this marginally but its more about land grab at this point. Market should recognise that and value accordingly.
Feb 26, 2021 • 18 tweets • 7 min read
#Praj zooming. Street started to realize the potential. Skeptics turning believers! #Praj wins its first project from HPCL for manufacturing CBG from rice husk through its proprietary technology. Image
Feb 18, 2021 • 6 tweets • 1 min read
Few small tech companies can become large:

Offer subsidised services to participants in an ignored niche industry.
Get them to start using the platform, over time the participation becomes so active that the platform becomes an indispensable resource.

Time to Monetize! If a platform company can have a trifecta of Service providers, Service Consumers and service regulators using the same platform, it becomes a potent cocktail.

Hard to replace!
Feb 8, 2021 • 6 tweets • 4 min read
#BalajiAmines blasts it out of the park! Pat grows from 20 cr to 78 cr yoy. and this is after they incurred a loss of 8.5 cr in CFL division. outdid Alkyl as well! Image #Balajiamines commissions its ethyl amines project & now becomes the largest manufacturer of its products both in ethyl and methyl amines. Image
Feb 2, 2021 • 51 tweets • 20 min read
Stunning results from #IntellectDesign , pat of 80 crores as against loss of 11 crores last year. Sequentially a stunning growth of 35% in bottomline.
Trading at ridiculously cheap valuations now for a software product company with great products. long way to go.

Disc: Invested Image To sell cement 2day, u gotta make it 2day

To sell cement day after, u gotta make a new batch to sell.

Develop a software product 2day,
Sell it 2day, 2moro, next year.

Simple Stuff Desi analysts dont get,

& then they go value product tech cmpnies like conventional products.
Sep 21, 2020 • 4 tweets • 1 min read
Phenol tanker load was selling at Rs140000 per ton in 2018 and was selling at 42000/ton last month selling at 50000/ ton this month and brokers write earnings, ebidta, eps estimates of Fy 23 of Deepak nitrite and so many others to the second decimal in research reports. Jai ho! Reminds of a joke

A fishing accessories store was selling shiny bate hooks. A man asked the store manager:
" why do u sell such shiny hooks, the fish dont even care"
The store manager replied
" We dont sell to the fish, we sell to the fishermen"
Sep 20, 2020 • 9 tweets • 3 min read
1. We a see a trend these days to compare operational cash flows to net profits and judging the quality of a company based on this rather simplistic metric. Through this thread we seek to dispel this myth through an investee sapling of ours. #saplingcapital #Saplingframework 2. One of our most favorite technical pesticide manufacturing sapling has often been ridiculed for not generating operating cash flows in line with net profit.
If all that were required to identify great companies was to compare OCF to profits everyone would be a super investor.
Sep 19, 2020 • 5 tweets • 2 min read
1. Disproportionate returns are generated from companies undergoing ROCE expansion, pharma saw a massive run due to Roce expansion playing out. Roce expansion takes place when sectoral tailwinds are blowing. 2.Running vanilla screeners wont do it and one is likely to lose out on returns depending solely upon them.