Q4FY26 Aerospace and Defence

1/7 **The Indian Defense & Aerospace Pivot** Forget the basic "indigenization" narrative. The Q4FY26 earnings calls across the Indian Aerospace & Defense (A&D) sector reveal a transformation.

We are witnessing the birth of global OEMs, revenue visibility, and massive capital shifts into emerging tech. Here are the most critical, non-obvious insights from the latest earnings season that investors need to understand.🧵 2/7 Evolving from Component Suppliers to Tier-1 OEMs- Historically, Indian A&D firms were low-margin "Build-to-Print" subsystem vendors. But now companies are transitioning into Development-cum-Production Partners (DCPP) and IP-driven systems manufacturers.

Astra Microwave, for instance, aims to launch fully owned, branded products globally by Diwali, moving away from just executing orders to owning the IP.
Apollo Micro Systems secured a lifetime DPIIT license to manufacture complete weapons platforms, including UAVs and missiles, charting a clear path to become a recognizable global OEM. The value chain is shifting from mere execution to global influence.

Indian Aerospace & Defense: Q3 Key Takeaways
1/7
The Indian Aerospace & Defense (A&D) and Precision Engineering sector is undergoing a structural
metamorphosis. Q3FY26 concalls reveal a distinct shift from "low-cost outsourced component hubs" to
"IP-driven system manufacturers" amid a massive global supply chain rebalancing. For institutional
investors, the real alpha is hidden beneath the headline numbers—here are the core non-obvious trends
shaping the sector's next decade. 2/7
The Great Value-Chain Climb: Indian precision players are no longer content with "build-to-print"
contracts. Companies are aggressively graduating to full system integration. Apollo Micro Systems is
actively transitioning from a subsystem supplier to a full-fledged weapon system manufacturer, even
acquiring explosives capabilities for complete backward integration. Similarly, Data Patterns is fiercely guarding its staggering ~44% EBITDA margins by developing complete Radar and Electronic Warfare
suites with 100% in-house Indian IP, writing off development costs upfront rather than importing basic building blocks.

This is quite a bad situation in Mid and Smallcap stocks (Rank upto 500) which is above Rs 8000+ Cr market cap. 30% of midcaps down by 20% and smallcaps down by 30% from their 52W high

However, Big B ki jubaan me bolu to -
Iske age ki tu daastan mujhse sun
Sunke teri nazar dabdabaa jayengi

Let us look at the world below Rs 9000 Cr market cap I have taken a universe of companies between Rs 200-9000 Cr. There are 1951 companies

55% of companies are below Rs 1000 Cr market Cap. 42% of these stocks are down by more than 40%.

Yes, if you are holding all the companies in Rs 200-1000 Cr market cap band, 42% of your stocks are down by more than 20%

Imagine the pain the lowest segment is going through

#Ultramarine Annual Report 2025 #AR2025 and some fun facts and why we should look beyond numbers visible to all:

Screener PE: 19.7
PE is based on EPS growth derived from P&L. However, if a business has:
1. High accounting depreciation but low actual maintenance
2. Lot of capex done recently resulting in high depreciation with scope of better asset utilization in times to come
PCE (Price to Cash EPS, a term purely coined on own and not in valuation books) could be a better reference point. There are many situations where PCE either based on cash EPS of OCF based is a better representation of valuation.

When we look Ultramarine from OCF perspective, Ultramarine did Rs 90 Cr of OCF,

Earlier PE: 19.7
OCF based PE/PCE: 15.5-16.5

Below is cashflow statement from AR 2025 It does not stop here. When one looks at the balance sheet of the company, there is something interesting. It has a non-current investment of Rs 498 Cr

This investment is for the value of 20% stake they hold in sister company Thirumalai chemicals.

Yesterday, I shared this data point of % of companies hitting 52 week low close to ILFS Oct 2018 number.
Question is what is the significance of this data?

Let us explore The reason to share this data is much more interesting. In current market, people would say - do not catch falling knife, let it bottom etc.

What if you invested in all those days when more than 20% companies were making 52 week low?

Can you backtest return of all such scenarios since last 10-20 years?

Got reminded of my Face2Face video done 4 years back where I presented lot of backtested outputs including how your returns would pan out

Here is this data right from 2006. The red bars are % of companies making 52W low

SMALLCAP 250

For SMALLCAP 250, based on Q3FY25 results so far:
❓Best performing companies?
❓Attractively valued companies?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research


💡 Companies delivering >15% sales growth

NIFTY NEXT 50

For NIFTY NEXT 50, based on Q3FY25 results so far:
❓Best performing companies?
❓Attractively valued companies?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research 💡 Companies delivering double digit sales growth

NIFTY 50

For NIFTY 50, based on Q3FY25 results so far:
❓Best performing companies?
❓Attractively valued companies?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research 💡 Companies delivering double digit sales growth

Aarti Pharmalabs Limited

1/15 🚀 Introducing Aarti Pharmalabs Ltd!
They make APIs, Xanthine Derivatives, and offer CDMO/CMO services for drug development and manufacturing.
Let’s break it down step by step! 🧵👇 2/15 🏢 Company Background:
● Originally part of Aarti Industries, Aarti Pharmalabs became a separate entity in 2022.
● Focus: Manufacturing key pharmaceutical ingredients, intermediates, and offering contract manufacturing for drug development.
● Their goal? To supply high-quality ingredients for medicines, energy drinks, and supplements globally.

RBI released Financial Stability Report - Dec 2024 (half yearly publication covering financial sector)

🧵 sharing key insights and visuals from the report covering macro, banking, investment and other regulatory aspects after going through the report To start with market, how much the EPS needs to grow to justify the existing valuation against historic multiple.

Against this, Q2 growth was below 10% YoY
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#smallcap index - What is happening and what all may happen - where are the probabilities?

A thread🧵on Current state of smallcap market.

Savdhani hati durghatna ghati zone

We have hit the last time high levels which acted resistance in last 3-4 months and today again it did % of companies > 20D EMA has hit 80% where short term market becomes overheated if we are not in a clear bull market

For Hotel Sector, Q2FY25 result:
❓Best performing hotels?
❓Attractively valued hotels?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research 💡 Companies delivering > 15% Sales growth

Chemicals Sector

For Chemicals Sector, based on Q2FY25 result:
❓Best performing chemical companies?
❓Attractively valued chemical companies?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research 💡 Companies delivering > 15% Sales growth

Plastic Products and Packaging Sector

For Plastics Products and Packaging Sector, Q2FY25 result:
❓Best performing companies?
❓Attractively valued companies?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research 💡 Companies delivering > 15% Sales growth

Kovai Medical Centre & Hospital

1/15

Let’s talk about Kovai Medical Centre & Hospital (KMCH)—a regional healthcare powerhouse based in Coimbatore, Tamil Nadu. With a mission rooted in affordability and accessibility, KMCH is proof that healthcare can balance business acumen with social impact. Here's the full story. 🏥👇 2/15

KMCH has achieved impressive revenue growth, expanding at double digits annually over the last decade (except in FY19 and FY21). In FY24, its revenue reached ₹1,126 Cr. Even during the pandemic, when many hospitals struggled, KMCH demonstrated resilience. 📈

Pharma 101: A Beginner's Guide to Essential Pharma Terms

Previously, we explored a list of pharmaceutical companies based on valuation and growth (x.com/suru27/status/…). But first, let’s simplify and explain some key pharmaceutical terms in an easy-to-understand and detailed manner. By the end of this thread, you'll have a clear understanding of the basics of the pharmaceutical world!🧵👇

1/13

Active Pharmaceutical Ingredient (API)
What it is: The "hero" ingredient in a drug responsible for its therapeutic effect.
Example: Paracetamol in a pain-relief tablet is the API.
Why it matters: APIs determine what the drug is used for, like pain relief, infection control, or lowering blood pressure.
Fun fact: APIs are made through chemical synthesis or fermentation. 2/13

Excipients
What they are: The "sidekicks" that help the API do its job. They are inactive ingredients.
Examples:
Binders: Hold tablets together (e.g., starch).
Preservatives: Prevent spoilage (e.g., benzyl alcohol).
Sweeteners: Improve taste (e.g., sucrose).
Role: They ensure stability, ease of use, and proper delivery of the API.

Pharmaceuticals Sector, Q2FY25 result:
❓Best performing companies?
❓Attractively valued companies?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research #pharma #q2fy25results #scientificinvesting 💡 Companies delivering > 15% Sales growth

Healthcare Sector, Q2FY25 result:
❓Best performing healthcare companies?
The list we shared

● Healthcare Global Enterprises
● Indraprastha Medical
● Kovai Medical
● Krsnaa Diagnostics
● 3B Blackbio
● Prevest Denpro

Let us explore some of these companies ⚫️Healthcare Global Enterprises
Company is largest PAN India oncology player

#IEX Fundamentals, Technical and the other data, a🧵:

IEX has been coming up with great results but market is anticipating coupling fear and hence stock is falling. This is the common perception.
Is this the case, let us deep dive? Was curious to check which institutions are selling because if I blindly look at charts - then all we see is stoploss. Something very interesting came out. First thing, looking at screener, looks like FIIs and DIIs are buying and retail is selling. Also, evident in falling count of retail investors. So, who is moving the prices down?

#Onwardtechnology #Q2FY25 #ConcallInsights

An 18–20-page conference call the beginning of the year getting compressed to 10 page at the end of the year with growth stagnating and a 50 PE valuation biting the dust - ER&D is also not secular.

If last 3 cycles of Tata Elxsi did not teach it, let Onward technology 1st cycle teach it #ScientificInvesting

Is it end of new beginning?

Some positives and some negatives from the concall covered in this thread

Why business took a hit? Are things turning around?

Chemical Sector

For Chemicals Sector, based on Q1FY25 result:
❓Best performing chemical companies?
❓Attractively valued chemical companies?
❓Both attractively valued and best performing?

🧵to answer all such questions to help to filter interesting ideas for research

1/6 💡 Companies delivering > 15% Sales growth

2/6