🧵Thread on Affordable Housing Finance:🧵

More focus on Aavas and Home First🏠

Mortgage penetration in India from formal sources is on a rise, but remains low at ~11%. The penetration is further lower at sub 5% in rural and semiurban areas.

1/25 Select focussed HFC players have been posting healthy growth at over 30% CAGR over the last 5 years (33%/37%/45% CAGR over FY17-22 for Aavas, Aptus and Homefirst respectively).

Between Mar-Aug 2020, 18-25% of AUM availed moratorium for 1-6 months in

2/25

ICICI Lombard Initiating Coverage report, (Source Motilal Oswal)

Market cap: 1,195,172 cr
Revenues: 1,91,754 cr
P/E: 31.2
P/S: 6.23
P/B: 13.4

1/25
@safiranand ICICIGI is the leading private Non-Life Insurance player with an 8.1% market share. It has a wide product offering, including Insurance coverage for Motor, Health, Travel, Home, Student Travel, etc.

2/25

Titan Company (Management meet update, Motilal Oswal)

Market cap: 189,724 crores
Revenues: 28,799 crores
P/E: 85.5
P/S: 6.59
P/B: 20.4

@dmuthuk

1/16 Jewelry: The management is targeting 2.5x of FY22 sales (INR232.7b) by FY27, i.e. ~20% CAGR. It targets having over 600 Tanishq stores in 300 towns over the next three years (389 stores in Mar’22). This is in line with a similar five-year target it had set in FY18

2/16

ITC Media statement takeaways,

Market cap: 344,805 crores
Revenues: 60,668 crores
P/E: 22.6
P/S: 5.68
P/B: 5.54

Board recommends Final Dividend of Rs. 6.25 per share. Total Dividend for FY22 is Rs. 11050 per share (FY21: Rs 10.75 per share).

1/25

@dmuthuk Performance Highlights,

Overall for FY2021-22, Gross Revenue at Rs. 59101.09 crores increased by 22.7%, while EBITDA increased by 22.0% to Rs. 18933.66 crores.

Profit Before Tax at Rs. 19829.53 crores grew by 15.5% over previous year,

2/25

Who owns India? (Source MoneyControl)

FII ownership has declined by 65 basis points to 20.9 percent in the Nifty 500 and by 81 basis points to 19.7 percent in the listed NSE universe, taking their holding to a new 9-year low.

1/4 Retail investment in the Nifty 50 stands at 8.3 percent, 9 percent in the Nifty 500 and 9.7 percent in the listed NSE stocks. The retail share in the NSE listed space has risen by 130 basis points since December 2019.

2/4

🏦🏦🏦Banks Sector Update (B&K securities)🏦🏦🏦

Asset quality Super Cycle has already ended and are likely to see sharp moderation in credit costs going ahead. Capital levels are all time high, PCR is strong while select banks carry reasonable contingent buffer as well.

1/n 👉2QFY22 Gross slippages down 23% QoQ.
👉Net NPAs for private banks as of 2FY22 at 1.3% is decisively better than pre-Covid levels of 1.7% (3QFY20).
👉Credit costs at multi-quarter low leading to healthy uptick in ROAs across banks.

2/n

ITC meet takeaways!

There were 290 slides from which have chosen the 50 most important👇

India accounts for over 18% of world population; share of world cigarette consumption is less than 2%.

Legal Cigarettes: ~8% of tobacco consumption Vs ~80% of tax revenue.

@dmuthuk

1/16 Although FY13-17 saw a 15.7% CAGR increase in tax incidence, tax revenues grew by a mere 4.7% CAGR. However, in a relatively stable tax regime (Apr18- Jan20), tax revenues grew by 10.2%.

ITC : India’s largest buyer, processor, consumer & exporter of cigarette tobaccos.

2/16

Thread on Dabur 🧵

Market cap: 107,309 crores
Revenues: 10,193 crores
P/S: 10.5
P/E: 60
P/B: 14
ROCE: 27.3%
ROE: 23.7%

@dmuthuk 1/n

Founded in 1884 in Bengal by Dr. SK Burman to mass-produce and dispense Ayurvedic medicines for diseases such as cholera, malaria and plague.

What helped Dabur during the pandemic, was its CEO Mr. Mohit Malhotra Who had taken charge just a year before in Jan 2019.

Notes from recent meet with the management of United Spirits: (Source MOFSL) 🧵

Market cap: 61,300 crores
Revenues: 8821 crores
P/E: 88.4
P/S: 6.82
P/B: 14.2
ROE: 9.49%
ROCE: 13.3%

@dmuthuk

1/n 📈Demand recovery on track:

👉Around 70% of outlets were operational till mid- Aug’21.

👉While the recovery in on-trade channels has been good, night/weekend curfews and restricted timings are affecting sales, with last orders being accepted at 8-9pm in select geographies.

2/n

Thread on Neogen Chemicals 🧵,

Market cap: 3091 crores.
Revenues: 344 crores.
P/E: 94.9
P/B: 16.9
P/S: 8.97
ROE: 18.5%
ROCE: 16.8%

Here we go👇

1/25 Neogen Chemicals Ltd (NCL) is a leading manufacturer of bromine and lithium-based derivatives in India with technocrat promoters at the helm. NCL has strong competencies in certain chemistries and technologies and offers a wide range of products.

2/25

Brief note on ITC by CLSA,

A thread 🧵👇
(Only for Educational purpose)

ITC could look to acquire regional brands to address portfolio gaps and use its distribution network to scale them up (as it did with the recent acquisition of Sunrise).

1/25

@dmuthuk With large capacity now in place and about US$3.7bn in liquid assets, it makes sense to pursue value accretive opportunities.

2/25

Thread on Glenmark Life Science IPO 27 July 🧵:

Glenmark Life Science (GLS) is the wholly-owned subsidiary of Glenmark Pharmaceuticals Ltd;

In 2001-02, GLS launched the API manufacturing business; Currently, the company has two key business verticals: namely API and CDMO;

1/25 GLS is a leading developer and manufacturer of select high-value, non-commoditized APIs in chronic therapeutic areas, including CVS, CNS, pain, and diabetes;

As of FY21, API and CDMO contributed ~90.6 & 8.1% to GLS revenues respectively;

2/25

Thread on IDFC first Bank 🧵

Market cap: 37,087 crores
Revenues: 15,968 crores
P/E: 82
P/B: 2.42
ROE: 2.95%

Here we go 👇

1/25 Unique evolution,

On getting a license, it was created out of a demerger of infrastructure financing business followed by the merger of erstwhile Capital First;

Stress build-up and franchise investment resulted in a weak Return profile during the transition phase;

2/25

Thread on Solara Active Pharma 🧵

Market cap: 6,523 crores
Revenues: 1,616 crores
P/E: 29.46
ROE: 12.48%
ROCE: 11.73%

Here we go👇

@safiranand

1/n Solara Active Pharma Sciences (SOLARA) has a differentiated business model, formed by demerging the API business of Strides Pharma and integrating it with the Human API business of Sequent Scientific;

2/n

Thread on APL Apollo Tubes 🧵

Market cap: 15,967 crores
Revenues: 7,723 crores
P/E: 53.63
P/B: 10.10
ROE: 22.23%
ROCE: 20.12%

Here we go 👇

1/25 APL Apollo Tubes commenced operations in 1986 as a private limited company promoted by the late Mr. Sudesh Gupta. It has emerged as one of India’s leading Electric Resistance Welded (ERW) steel tubes manufacturers with a capacity of 2.6 MTPA across 10 plants.

2/25

Thread on Equitas Small Finance Bank🧵

Market cap: 6061 crores
Revenues: 2645 crores
P/E: 24.9
P/B: 2.21
ROE: 9.75%

Here we go👇

1/25 EquitasB is five years old bank though has over 13 years of lending experience. Amongst all MFI-convert SFBs, the share of MFI at EquitasB is amongst the lowest and settled at around 20%;

2/25

Nestle Annual Report Notes (Motilal Oswal)🧵

*Some good charts in there*

Market cap: 164,738 crores.
Revenues: 13,350 crores.
P/E: 79.11
P/B: 81.58
Dividend yield: 1.17%

Here we go👇

@dmuthuk
1/25 Barring 2QCY20, where all Consumer companies, especially those with their own manufacturing facilities, faced supply-chain issues due to the sudden COVID-led lockdown, Nestle India reported 10-11% sales growth in 3 quarters in CY20.

2/25

Thread on IndiaMart 🧵

Market cap: 24,225 crores
Revenues: 638 crores
P/E: 90.26
P/B: 15.40
ROE: 67.7%
ROCE: 83.9%

Here we go👇

1/25 IndiaMART has emerged as a winner in the B2B classified space with a 60% market share and 27% revenue CAGR over FY16-20;

The quality of the franchise is established by
(1) 100% organic traffic,
(2) Buyers and business inquiries’ 5-year CAGR of +33/40%,
(3) Pricing power,

2/25

Howard Marks Memo 1990 -2005:

'After reading the first 15 years of memos, here are the top key learnings'

There are certainly many many more but I chose the best one from each year to quote.

Thread👇🧵 1990!

Striving to do a little better than average every year through discipline,
- less likely to produce extreme volatility,
- less likely to produce huge losses which can't be
recouped &, most importantly,
- more likely to work (given the fact that all of us are
only human).

Thread on Varun Beverages (Annual report update)🧵

Market cap: 28,695 crores
Revenues: 6,555 crores
P/E: 87.22
P/B: 8.14
ROCE: 9.73%
ROE: 10.43%

Here we go👇

1/22 The management looks to improve its presence, product mix, and utilization levels.

Key insights mentioned below:

Over CY13-20, the volume mix of carbonated soft drinks (CSD) has fallen by ~10pp to 73% in CY20 (309m units).

2/22

Thread on Aavas Financiers 🧵

Market cap: 18,217 crores
Revenues: 902 crores
P/E: 69.75
P/B: 7.90
ROE: 12.72%

Here we go 👇

1/25 Aavas Financiers is a low and middle-income, self-employed focused (~65% of the book) housing finance company with a presence in 10 states via 263 branches (Dec’20);

The lender is focused on semi-urban and rural locations with limited presence of large HFCs or banks-

2/25