Rounaq Bakshi notes

1.Video:  https://youtube.com/shorts/lWaMI6xMrdU?si=MSQsQwTxFJ4FJs62 2.Video:  https://youtu.be/lwRrYfqWQ9M?si=u392JIrklGkoBJTF There are times, when i look at recent government policies and try to build a theme around it Name : PM launches National Logistics Policy “The notion that India is emerging as a manufacturing hub is stabilizing in the mind of the world” “Policy is just a beginning, policy plus performance is equal to progress” “National Logistics Policy has not come out of the blue, there are 8 years of hard work behind it” “From 13-14 percent logistics cost, we should all aim to bring it to single-digit as soon as possible” “Unified Logistics Interface Platform- ULIP will bring all the digital services related with the transportation sector on a single portal” “Gatishakti and National Logistics Policy together are now taking the country towards a new work culture” “India, which is determined to becom...

1.  Video:  https://youtu.be/lP7QJWjqzmQ?si=6PqORSfmeMlFj98v 2. Video:  https://youtube.com/shorts/lxFvhNc22s0?si=_ZNO2hAil7Ki4XZJ Textile story is already very big in India and can grow more in future if Government provides further support. My theme says, that this sector can get re rated as well.  Huge capex plans for future plus decent valuations is a magical sauce that one can aim to find while screening companies Performance Overview:  FY23 proved to be a mixed bag for the Textile Industry, and  RSWM  Ltd. experienced a similar trajectory. The year began on a strong note with a positive Q1, but the industry faced significant challenges in Q2 and Q3, leading to a steep decline. However, there were signs of recovery in Q4 Business Environment Challenges: Geopolitical tensions and an unprecedented increase in cotton prices presented a highly challenging business environment over the past nine months. These factors created obstacles for  RSWM ...

 Video:  https://youtu.be/3PUzzPM2_Xk?si=CevVclExPTbDf2lQ When you study a particular industry, trying understanding who are the leading players, what is the valuation levels for the leading players When a sector is down, it is best time to enter companies that are leaders and have huge margin of safety Business of Sugar E.I.D.  Parry  has six sugar factories having a capacity to crush 40,300 Tonnes of Cane per day, generate 140 MW of power and five distilleries having a capacity of 417 KLPD Sugar Strategy-  Maximize realisation from sugar   Loose Sugar- @ Rs 33-35   and brands charge upto  Superior Health Benefit:  @ Rs.120 Upgrade consumers to higher price points and larger brands  First mover with entry barrier on both sides of the spectrum   Focus in South India  ➢ Presence in 78000 outlets (direct presence) as of Mar’23 from 38000 a year earlier   Q1 PAT:  324.90 Vs  494.19 FY23 PAT:...

 Video:  https://youtu.be/HTUjbr-6sYc?si=brWj7eump0ucwWfR Have you read below news recently? What are your thoughts? We need to pick up themes that can play out well in next 7 yrs Maruti Suzuki would double its car production by the year 2030 from 2 million cars annually On the above story, i found a company that can benefit largely The Company is engaged in manufacture of  Seating  System, moulded carpets and extruded components for Car market leader, Maruti Suzuki India Limited and Suzuki Motor Gujarat Private Limited as well as  seats  and frames for Suzuki Motorcycle India Pvt. Ltd. two wheelers, at their plants at Gurugram in Haryana and at Surendranagar and Hansalpur in Ahmedabad, Gujarat Plot No.1, Maruti Udyog Joint Venture Complex, Gurugram Has 5 plants The Company is already in production for more than thirty seven years  Financial Collaboration with M/s Suzuki Motor Corporation, Japan, who holds 14.81% of the total equity of the Company. Tec...

 1 Video:  https://youtu.be/FoBEG7qapgk?si=wWypQ7vdbQjzwWpQ 2 Video:  https://youtu.be/wH3kmw8tBW0?si=qtlX1Z5q7fsxDNoE Linc : Boring Earnings Transcript but helps me very well in understanding businesses Advertising to sales is about 3%  Slightly better gross margins than the domestic market. So, let's say if on some product it is making 40% margin in the domestic, on the export front it would be additional 4%-5%. So, yes, so that is a kind of trend Some challenge that  Linc  face in the traditional channel across the country that the retailer has so many products. Of course, it is the job of people in the field to ensure that the dispenser is displayed properly   3% of revenues coming from e-commerce   India is a very unstructured market, so our sales team they have to keep a good relationship with all the retailers and at the same time we have to keep our brand visible in various media   Purpose of the acquisition of Gelx India-Ke...

 Video:  https://youtu.be/g_WyZHxD4W8?si=-QKKVbvM4tjpPXdu NBFC is a highly interesting space and i spend a lot of time in finding businesses that are niche category ones in this particular space When you find a company, try gathering the unique offering it caters to a sub category Here JM financial is full service investment bank offering Distressed Credit AUM as on June 2023 stood at Rs. 15,109 Cr (up 32% YoY and up 11% QoQ)  Aggregate dues of Rs. 77,058 Cr – June 30, 2023 acquired at Rs. 23,776 Cr  JMFARC’s aggregate cash investment of Rs. 6,659 Cr till June 30, 2023 ROA %:  2.4%  Consolidated Performance : Diversified Business Model for Earnings Resilience  50 member professional team as on June 30, 2023 The team is also involved in  financial  and legal due diligence for acquisitions and resolutions     Co-Investment model with strategic partners/  financial  investors including distressed funds

1. Video :  https://youtu.be/gLae-CNb5bs?si=PDkGv-iZ2jcaowwa 2. Video:  https://youtube.com/shorts/ZsyDs8rLX9o?si=xUjwNxd_zmbR4c4Q When i first looked at this paper company, my first reason was low PE. Company was showing results that was not comparable to previous year's results. In such cases, it is difficult to digest on how the company is performing so well Then, i spent good amount of time in understanding the industry point of view where i found majority companies were showing similar lines results.  Paper industry as a whole has fundamentally changed and we can expect Re rating in these paper companies Video of paper industry:  https://youtu.be/dmLuhBOU8pw?si=oScyPiNbsNDmGzEV FY 2023 Vs 2022 EPS: 131 and CMP is 400 Net profit after tax :   522 Cr Vs 139 Cr  Investments: 800 cr and Market cap is 1600 cr Cash flows: 535 cr Vs 202    Expansion plan: Andhra   Paper  at its meeting held on 26 August 2022 approved a capital expendi...

 Video:  https://youtu.be/YhzyRaeDgXk?si=91-ee_UILs5iFYyS My base theme is China's dominant share in manufacturing should fall by 5% by 2030, although that 5% fall is less for China but can be game changer for India Numbers matter a lot:  Currently, China is a dominant player in the Rubber Chemical Industry contributing over 80% Coming to my company NOCIL, here my sub theme is Automotive sector to continue growing Maruti Suzuki plans to double capacity by 2030   Maruti Suzuki  to invest $5.5 bn to double production capacity by 2030       NOCIL  is Dependable, Non- Chinese Player enjoying a favourable positioning  FY 2023 Vs 2022 Operating EBITDA Margin :  15.6% Vs 18.2%    Net Profit:  149 Vs 176   Net Profit Margin:  9.2% Vs 11.2%   Net Cash flows generated from operating activities :  282 Vs (30)   Issue:  Chinese exports into other countries are increasing, and there is a lot more aggr...

Video:  https://youtube.com/shorts/PCDfJo1Kwdo?si=JKcEHgBo6z6kBtnZ Because the market is not perfect, you will sometimes find hidden companies that are trading at beautiful levels Example: HGS market cap < Cash on balance sheet This is value hidden that is good reading on how sometimes you get a good deal when you dig in companies Employee Headcount:  20,683 as of March 31, 2023 19,947 as of June 30, 2023 Clientele:  As of March 31, 2023,  HGS  had 292 active CX/ BPM clients and 762 HRO/Payroll processing clients.  Digital Media business (NXTDIGITAL) has a customer base of more than 5 million Clientele: As of June 30, 2023,  HGS  had 299 active CX/ BPM clients and 772HRO/Payroll processing clients  As on June 30, 2023 Net Cash and Treasury Surplus stood at Rs. 4,962.0 crore Net Profit from continuing operations stood at Rs. 304.6 crore for FY23 PAT stood at Rs. 16.6 crore for Q1   EBITDA margins for the quarter was 15.3% In June ...

Video 1:  https://youtu.be/YayqOrv9p1U?si=Lp3-aPfKl8X93egD Video 2:   https://youtube.com/shorts/cdEc31Urd50?si=zv-BOjP2Y-ca8Ciu Whenever, i make an investment be it 1000 or 10000 or 1 lac. I invest with a mindset of a business owner, this changes the vision on why i am associated with a company for next one decade My next big bet on 10 years time period is manufacturing On this, i am adding quite a few names Overview Total manufacturing capacity is projected to be 7,90,000 MTPA and 122 MW of green power from  6,66,000 MTPA  (  (Expected in FY 24)) FY 2023 Return on Capital Employed 16.27% Debt-Equity Ratio :  0.25   (%) EBItdA margin : 13% PAT:  444.09 Vs 427.14 Carbon black Carbon black is a commonly used reinforcement compound in the tyre industry due to its ability to enhance the mechanical and dynamic properties of tyres Carbon black is used in multiple sectors worldwide, with the demand for it primarily driven by the tyre and rubber pro...

 Video:  https://youtu.be/LK_RwnAc0vo?si=OGw7zb9TwSXbayWZ In my 13 yrs of investing, i have seen many cases where stocks run up like a rocket for a limited time period and then creates fan base on social media. The retail investors get trap everytime I rule I follow, is never buy when everybody is greedy !!! This stock is great example !!!! Valuation is 99% for me as a rule of investing and rest everything is 1% to me IRCTC  stock has rallied ~500% since listing in Oct-2019   but down 50% Passengers travelled per month: 4 crore   IRCTC  is the only entity authorized by the Indian Railways to provide catering services to railways, online railway tickets and packaged drinking water at railway stations and trains in India Operates one of the most transacted website  www. irctc .co.in  in the Asia-Pacific region  IRCTC  is one of the most transacted websites in Asia Pacific with a transaction volume of over 34.5mn per month and 6.2...

Video l:  https://youtube.com/shorts/cmIJY9OBvPM?si=XNBpgKat3hH1C6mg   Video 2:  https://youtube.com/shorts/CgVbB6lIALw?si=jG1a_w3xqYArcWLf Video 3:  https://youtu.be/YsxNGRc-aEQ?si=tbxg6cZysU0Pz_vt Net Debt to Equity (x):  0.03 FY23  ROCE:  19%  PAT Margins (%) : 13%  Q1-FY24  EBITDA Margins (%) : 19.36%      Q1-FY24 PAT : 10cr  Q1-FY24   Vs 12cr Revenue growth was driven by ~10% growth in realisations and 3% growth in volumes on a YOY basis Sigachi  Industries : Makes a 100 cr bet Acquisition of  80% in Trimax Bio Sciences for Rs. 100 Crores    Size and Turnover of the Company: Existing capacity is 92 KL and turnover for FY 23 is Rs. 35 Crores Huge Expansion Possibility from Current 92.0 KL to 540 KL which includes 11 API Suits & 100 Intermediate Reactors with Possibility of Dedicated Oncology Block About the company: Sigachi is the largest manufacturers of MCC in India and one of t...

1  https://youtube.com/shorts/AQHrRbNnGkI?si=DnLjNjZUyh0zUBJF 2  https://youtube.com/shorts/jXsFsOblX10?si=mrD-5-vR-nlnY4Ly 3  https://youtu.be/iBBUsnIXFCU?si=HEXcQW5PdP3vnr1X I myself will never do F&O as i dont understand how the mechanism works on derivatives ( Nor i intend to learn the charts). But being a investor, i personally like the broking business. Why?- Rising industry and huge potential it offers + Cross selling to customers once the customers are acquired So, i am invested in this good business Q1 24 Total Income stood at ₹411.0 Cr for Q1 FY24 (up 39% y-o-y)  Total Comprehensive Income stood at ₹73.9 Cr for Q1 FY24 (up 75% y-o-y)  Assets under management and custody stood at ₹1,47,090 Cr   For the quarter, the average daily market turnover (including F&O) for the broking business was ₹2,30,816 Cr (BSE + NSE), up 82% y-o-y and 18% q-o-q  Insurance premium stood at ₹44.3 Cr for the year ended June 30, 2023, up 30% y-o-y. Mutual...

 Video:  https://www.youtube.com/watch?v=CIOPkfiHACo&pp=ygULZ25mYyByb3VuYXE%3D Profitable operations supported by subsidy release support from GoI has helped improve the cash cycle On operating front, new production and sales records have been established in case of Ammonium Nitrate Melt, Ethyl Acetate and Urea During the year, new formic acid revamp project has been commissioned with 20 MTPD additional capacity   Further foray into import substitutes like Polycarbonate and Cracker based product slates which will help improve the upstream capabilities are at advanced stage of consideration As part of green initiatives, green hydrogen based investments are already approved by Board in principle.  FY 2023 vs 2023 Company continues to be debt free and has resources to fund its already planned capex. Cash reserves in excess of ₹2,000 crores will lend good support for capex led growth.  Investments:  3,106 The company reported highest ever revenue of ₹1...

Video1 :  https://youtu.be/5sAqc1fj0S0?si=OCRZtFTe7auNszSf Video 2:  https://youtu.be/I2b5HgxabMk?si=ehtZSF91OUFCcpCf I love to read about new themes that hold huge potential for India in coming next 10 years. Post reading i try to identify sectors that can supercharge from GDP growth of 6-7% and can they can grow by 2x easily Then comes the companies that i study and build my story around them Sasken  is a specialist in Product Engineering and Digital Transformation providing concept-to-market, chip-tocognition R&D services to global leaders in Semiconductor, Automotive, Industrials, Consumer Electronics, Enterprise Devices, SatCom, Telecom, and Transportation industries.  For over 30 years and with multiple patents,  Sasken  has transformed the businesses of 100+ Fortune 500 companies, powering more than a billion devices through its services and IP   Semiconductor business remains to engage with global leaders and expand presence across all...

 Video:  https://www.youtube.com/watch?v=3PUzzPM2_Xk&pp=ygURZWlkIHBhcnJ5IHJvdW5hcSA%3D Business of Sugar E.I.D.  Parry  has six sugar factories having a capacity to crush 40,300 Tonnes of Cane per day, generate 140 MW of power and five distilleries having a capacity of 417 KLPD Sugar Strategy-  Maximize realisation from sugar   Loose Sugar- @ Rs 33-35   and brands charge upto  Superior Health Benefit:  @ Rs.120 Upgrade consumers to higher price points and larger brands  First mover with entry barrier on both sides of the spectrum   Focus in South India ➢ Presence in 78000 outlets (direct presence) as of Mar’23 from 38000 a year earlier   Q1 PAT:  324.90 Vs  494.19 FY23 PAT:  1,827.74 Finance costs:  298.20     FY23 Petrol blended with 20% Ethanol has been rolled-out in select petrol pumps across 11 states in Feb 2023   E.I.D. PARRY  (INDIA) Limited Owns...