India is at the cusp of a mfg renaissance, an inflection point, as it pushes ahead to form a 25% pie of India’s GDP vs 17% at present. There is 1 biz that will be at the heart of this renaissance – CNC machines.

MACPOWER WILL BE AT THE HEART OF THIS MANUFACTURING RENAISSANCE! CNC Machines as a sector potentially caters to 3000+ sectors/segments. It touches the lives of every individual multiple times in a single day.

MacPower Corporate Video:

CNC Industry video:

E2E Networks: India’s first AI Hyperscaler!?

E2EN (Mcap 700cr) uses 0.5MW power across its data centres & is estimating a 20-40x jump (10-20MW) in power consumption over the next 6-8yrs!

If so, can the co potentially grow earnings at 40-50% CAGR?

A brief thread👇

Domestic DC industry at present stands at 1GW power consumption & is projected to grow to 8GW by FY27.

Investments/growth in DCs is a top priority by the central government as well as large corporates due to the sheer demand and use case.

A small Civil Engineering & Mechanical Engineering services company that caters to key players across the globe did their first ever earnings call in 7 years. Over the past decade the company has moved up the value chain - from 2D to 3D to simulation and robotics.

1/20 AAA+ management, 45% RoCE, 35% RoE, debt free BS and strong 40% EBIDTA growth guidance with 20% PAT margins for the next 2-3 years – we believe the company is at an earnings inflection point aided by a strong order book and growth visibility.

2/20

The current market frenzy gives us a good reason to re-visit Wall Street legend Bob Farrell's 10 investing rules:

1. Markets tend to revert to the mean over time

2. Excesses in one direction will lead to an opposite excess in the other direction (ALERT for recent times)

1/8 3. There are no new eras – excesses are never permanent (again a v IMP reminder)

4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.

5. The public buys the most at the top & the least at the bottom.

2/8

Aurionpro held their first ever Investor Day led by Ashish Rai who has been instrumental in pivoting co’s strategy and vision.

Key highlights:
1) 30% rev growth for the next 3-5 yrs

2) OPM between 20-22% - anything higher goes into R&D, NPM ~15%

3) Spend 7-8% on R&D

1/6 4) 25% ROCE bar for all present & new businesses

5) 75% growth of in-year growth to come from existing base

These will be achieved by

- moving from services based to IP based products

- moving from single sector to un-correlated sector

2/6

Tega Ind Q4: Continues to impress with delivery & execution. Strong outlook ahead. Key takeaways:

1) Maintains rev gr guidance of 15% (usually ends up over delivering)

2) Mill Liner segment (75% rev) grew 22%, Non mill liner (25%) grew 25% - Dynaprime continues to impress

1/4

https://twitter.com/caprize_invest/status/1633692904144207875

3) Vol growth 16%, price growth 6%

4) OB stands at 340cr

5) 60% capacity utilization overall, highest in Chile -> $20mn capex there. Total $30mn capex over 3yrs incl Chile, EU, India

6) Gross block increase 170 Cr to due to McNallyt Sayaji acquisition

2/4

While APL Apollo (MCap 33000cr) has been one of the BIGGEST success stories of the past decade (200x), a close competitor Surya Roshni (MCap 3300cr, inferior multiples vs APL) at present is revamping & reviving itself to be a prominent player!

A thread👇

1/10 Engaged in 2 businesses viz. 1) Steel Pipes (80% of Rev) & LED lighting/FMEG (20% of Rev), Surya is one of the most respected brands in both these segments within India (72% of Rev) & internationally (28% of Rev).

2/10

A bearing components co which is a Tier 1 for major Tier 1 suppliers to OEMS within Automotive & Engineering segments, has 60-80% mkt share in key clients, makes 40%+ op margins, is slated to grow earnings at 30% CAGR with 5x capacity expansion over next 3 years!

A thread

1/12 Based out of Surendranagar, Gujarat, SKP Bearings is an impressive story of “Make in India” which is now slowly transitioning towards “Make in India for the World”.

2/12

AllCargo Logistics: Unlocking massive value, building blocks to become a global logistics giant, transforming the international supply chain, consolidating mkt leading network, leveraging massive digital capabilities & upscaling quality M&A. Snippets from analyst meet…

1/9 What should we know about the co?
# Grew Rev 3.3x & EBIDTA 4x in 4yrs
# World’s no1 LCL (Less than container load) consolidator with 14% mkt share, 2400 direct lanes
# Network of 180 countries in FCL
# 40k port pairings
# Largest Indian logistics co

2/9

On 23rd Aug, Kirloskar group gave a 3yr overview on all its businesses in an investor conference. In our view, an otherwise conservative mgmt, gave aggressive growth guidance for all its businesses. We would like to focus on Kirloskar Oil Eng (KOEL) in particular.

1/6 Business:
Largest diesel generator manufacturer (24% mkt share in vol) & offers diesel generators up to 1,500kVA with leadership position in <250kVA category. Co has diversified into multiple new businesses-water & bio waste mgmt, induction motors & firefighting pumps.

2/6

A niche & innovative mill lining business of “critical to operate” mining consumable products with strong entry barriers in an oligopoly market, which is probably recession & capex proof (75% rev). Snippets from our interaction with the TEGA IND management.

1/9 Tega Ind is a a 6 month old listed co. While the IPO band was 443-453, the co listed at 760 – a 68% premium. Since then stock has corrected 40% from its ATHs (MCap 5000cr) & trades at its IPO price – CMP 460 (MCap 3000cr).

2/9

Deep Ind: A survivor in a sea of death beds – in an industry where majority businesses failed or became bankrupt, Deep survived handsomely and became a profitable, debt free company. A quick thread on why we think it is at an inflection point - 8/8 v important!

1/8 While these segments might seem “boring” or “old economy”, the biz isn’t. With focus on profitability, co has consistently delivered 40-45% EBIDTA margins & 20-25% PAT margins. The RoCE for the biz stands at 22%+ ex of goodwill. Co is on cards to double earnings by FY23!

2/8