Category: Stocks
Protected: Positional Stocks – 7-Apr-23
MF to FD : One more indicator of bottom formation
Protected: Positional Stocks – 1-Apr-23
Indigenization progressing
Protected: Positional Stocks – 25-Mar-23
Protected: Positional Stocks – 12-Mar-23
BuLi CSM
As BAD as it gets
Protected: Positional Stocks – 5-Mar-23
Its Hydrogen decades ahead
Its a DREAM come true
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
Business
Dreamfolks in India’s Largest Airport Service Aggregator Platform. Company provides clients the option of providing their end consumers different mechanisms to access certain airport-related services like lounges and all the other services
DreamFolks platform is proprietary and has been developed in-house. The platform and the technology is cloud-based and it allows lounges and other operators to check the benefits of the consumers based on the cards, memberships, or vouchers, and also allows access to the different facilities based on the benefits or integration as per our clients, such as banks or networks, processes, and their systems
Company’s platform actually comprises of quite a few components. There is benefit configuration, there is benefit calculation, there’s an entire management engine, there are data exchange, APIs with different banks and networks, and integration options to embed into different mechanisms, including with company partners. Platform also facilitates the use of hybrid access modes depending on the client’s preference, so they can use whichever mechanism that is most beneficial for them. It also facilitates lounge access processes so that consumers benefit such things in real time across various access modes. And that drives accurate accounting and is designed to prevent abuse and denial of services to consumers
Major expenses are linked to employee compensation and in-house R&D expenses. And being an extremely asset-light company with a very lean organizational structure and size, Company don’t have any major capex needs or other outlays and Company seems confident of financing any future scale-up or expansion through internal accruals
Revenue mix
Current mix of the lounge versus other services 95% versus 5%, Similar margins
Seasonality
40% to 45% in the first half and rest in the second half of the year, due to the simple reason that the festivals and the holiday season kicks in only starting from August, September.
Coverage
100% coverage across all 60 Airport lounges operational in India
Market share of ~95% of all India issued card based access to domestic lounges in India (FY22)
68% share of the overall lounge access volume in India (FY22)*
Present currently in 10 railway lounges across the country and witnessed a steep growth rate with our modernization of railway stations happening at great next speed
Golf Games, Lessons and Railway lounges are new categories
This association will give customer access to golf games and lessons at 40+ golf clubs throughout India and 250+ golf clubs and resorts in the Asia Pacific region.
Price Realization on the blended basis is INR 940 approximately. Domestic is close to INR 840-INR 845. And internationally, that would be between INR 1,200 to 1,400.
Client 52 —Employees 60 –Nov 22 update, 64 employees Feb23
Touchpoints 1450 in Nov 22, 1486 in Feb23, might cross 1500 by Apr23
Touchpoints refer to a service fulfilment point at Airports across India and overseas owned by service providers with whom Dreamfolks has a contractual arrangement
Opportunity Size
Triggers
- Rising preference of Air Travel amongst travelers over rail and road
- Jump in India’ Ease of Doing Business – Enhanced economic activity
- Rising class of leisure travelers – 72% extend business trip for leisure
- Declining Air travel cost compared to AC Rail travel
- GoI push through UDAN Scheme – Increase Air Travel in Tier 2 & Tier 3 cities
- Increasing Credit & Debit cards base bodes well for DreamFolks – Key beneficiary from Bank led Card Loyalty Programs targeting Airport Lounge Access
- Domestic air traffic grew by ~16.7% in Q3FY23 as compared to Q3FY22.
- Strong growth of ~63.0% in domestic air traffic in 9MFY23.
- Witnessing 98 Mn footfalls in Indian Airports during 9MFY23.
- Credit Card base in India grew by ~18% witnessing 81 Mn cards as on Dec’22
Next phase of growth is centered upon three levers;
Cross-selling and up-selling to existing clients,
Acquiring new clients in existing and new sectors and
Via geographic expansion from a purely domestic focus currently to an international focus in pre-determined geographies.
With the existing clients, we aim to increase wallet share and expand our association beyond airport lounge services to include F&B, spa, meet and assist.
As regards new clients, we aim to expand into new sectors to create customer engagement and provide loyalty management solutions. Another focus area is to focus on customer engagement and loyalty solutions for corporate clients and build specific solutions for loyalty companies, ecommerce companies, new age digital companies, hospitality sector companies, and neo banks amongst others
Replication of similar successful operating model by leveraging deep knowledge of industry, technology innovation, process expertise and business model across new high growth markets which include Central and Eastern Europe, Middle East, Africa and Southeast Asia.
Recent developments
ASPIRE Lounges Australia – Delighted to tie up with ASPIRE Lounges Australia. With this partnership, air travelers can now experience exclusive luxury lounge access in Sydney, Melbourne, Perth and Brisbane as part of 66 Aspire Branded Lounges globally.
Dhanlaxmi Bank – Tie-up for access to Indian Lounges for their customers
FCM Travel – Corporate tie-up to provide their customers with domestic lounge access, Meet & assist and Airport Transfer Services
Onboarded 5 New Clients Including Akasa Air, one of the newest LCCs in India
Lounge area and capacity expansion at T3 Indira Gandhi International Airport, Delhi from 2,500 sq ft to 10,000 sq ft.
Added Lounge at Bengaluru’s KempeGowda International Airport, T2
Strategic tie-up with the leading Golf Service provider for access to golf games and lessons at 40+ golf clubs throughout India and 250+ golf clubs & resorts in the Asia Pacific region.
Strengths
MOATS
Company is is getting into exclusive contracts with the lounges.
In terms of the technology company is deeply integrating with banking partners. So that is one of the strong points because the step of integrating with these clients itself is a very long process, And there are a lot of compliance as well.
Value added services:- airport meet, assist in transfer, golf, railway lounges not easy to start and pickup by competition
Amazing aspect is almost Nil CAC
Risks
RBI may reduce the MDR rates on credit card companies so going forward, what credit card companies also have indicated that if this were to happen, and they will reduce rewards and services they offer to protect their margins – that will negatively impact company business in short term
International lounge vs domestic lounge traffic can change margin profile on either side
Any situation like Covid can again lead to bad times for company
UPI payments can pose a small risk
Competition like Priority Pass etc –this risk is somewhat mitigated as competition have been in this market and they
have been the global player across for more than 30 years now. So, in their presence, Company have actually taken away the India share from them
IMAGES FROM INDIAN AIRPORTS over last 10 months showing lounges are high in demand, runway are back to back lined up with airplanes signifying air travel increasing and travellers interest in lounges also increasing–so Increase in travelers and increase in interest of traveler for lounges can be huge tailwind in coming decade 2023-2033
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
In case you have any questions/ queries, please feel free to reach me through Contact Form
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Protected: Positional Stocks – 26-Feb-23
SAF market
Biofuel, Decarbonization, Aviation, Import saving, greenhouse gases, SAF
Protected: Positional Stocks – 19-Feb-23
Enablers for location intelligence
Eyes and Brain
Biggest moat!!
Protected: Premium Stocks : 4-Feb-23
We dont spend easily : Its costly
Roller coaster from pasts
Response to response to response : Adani vs Hindenburg : Undying Saga
Step1
Step 2
Step 3
413 page response by Adani
Gist of response here
Step 4
Hindenburg response to Adani group here
City gas distribution (CGD) Demand
To understand better on the stock, follow below links
Protected: Positional Stocks – 29-Jan-23
Rarest of rare event : How bad was 2022
Just wrong by 1 digit!!
Protected: Positional Stocks – 21-Jan-23
Thread on Dependable Clean energy Giant in making!!
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
MTAR Technologies – Emerging Midcap
Story – When the going gets tough, the tough get going, wrote American football coach John Thomas in 1953. This axiom today applies to the Hyderabad-based MTAR Technologies too, in more than one way. Old-timers at MTAR recall India’s former President and ‘Missile Man’ Abdul Kalam telling his team during his DRDO days: “If nothing is getting done, go to that Reddy company at Hyderabad.”
In fact, the Reddy duo – Ravindra and Satyanarayana – set up MTAR, to meet a challenge thrown at them by the government, way back in 1970, to make a critical cooling channel for a nuclear reactor.
As global suppliers began tightening their screws on India’s nuclear power ambitions, the government asked HMT to work on the cooling channel. The late Ravindra’s son P. Srinivas Reddy, MD, MTAR, recalls that HMT expressed its inability to do this and the Reddy duo, who were working there, quit and told DAE they would take up the channel challenge.
There are many Proud moments on its journey including
Mangalyan PSLV engine supplied by MTAR to ISRO
GSLV Mark III engine for the Chandrayaan II mission
Base shroud assembly for Agni missiles
Source —BusinessIndia
Business Domains
Order Book
Order Book moving to Clean energy over last 2years. Order book at Sep 2022 closure is 1288 cr while Current TTM sales is ~394 cr (till Sep22)
Sector wise and Geographical Break up of Orders
Company is export oriented–trend is almost same in last 3 years
Clean energy orders constitutes almost more than 50% order book every year
Space and Defense Constitutes between 18-26%
Nuclear constitutes 14-22% order book
Other segments growing fast and now at 5.7%
Customers
Strengths
High Entry Barriers and Increased customer dependency on Mtar
Strong Order Book Position and Strong repeat business due to MTAR’s engineering capability
Advanced and End to End Manufacturing Capabilities
Strong Diversified portfolio of critical and differentiated engineered products in emerging domains of Nuclear, Space,Defense, Clean energy , fuel cell etc
Manufactures import substitute products like Roller screws, ball screws. MTAR will be the first manufacturer of roller screws in India and the product will be used for a wide variety of applications in the nuclear, space and defence sectors
Manufactures precision machined components
Strong association with Exiting Customers & new Customers in Pipeline
Stringent Quality checks –Company uses high precision quality inspection equipment such as 3D co-ordinate measuring machines (CMM), laser measuring, optical alignment instruments, non-contact measuring and other such non-destructive testing equipment, to ensure ideal quality. “MTAR enjoys an unblemished record of quality for its product range”
Capability of making —
- Low volume R&D to high volume production products
- Regular to complex products
- Low weight to high weight products
- Export oriented to import substituition products
Experienced Board of Directors & Well Qualified Management Team
Certifications and Awards
Developed global supplier base over the years &procures materials from US, Brazil, among others, Low supplier dependency which also enables negotiation of favorable terms. Global network provides the option to take advantage of better pricing as available in a particular market
Triggers
Strong growing order book –Currently ~1300cr order book giving revenue visibility of 2+ years
Strong Net profit margins with company growing at 30% CAGR. FY23 and FY24 expected to grow similarly or better
The company has got the in principle approval from the board to establish electronics manufacturing in-house and started working on it
Indigenization of Roller Screws done, Executed the FAI orders
The company has also initiated the development of Electromechanical actuators, which find application in Space and Defense sectors
Specialized fabrication facility to be functional soon, The new capabilities are expected to bring in lot more customers. Sheet metal manufacturing facility at Adibatla, Hyderabad has become operational in Fiscal 2023 to undertake sheet metal jobs for ISRO, Bloom Energy and certain other customers. This business expected to generate 100 cr revenue in FY24. Commenced shipments to South Korea and USA; supplied Rs. 11.8 Crs worth of sheet metal orders for Clean Energy sector in Q2 FY 23
Upgrade existing facilities by implementing new technology and releasing release bottlenecks in production capacity
Expanding Product Portfolio and CAPEX ongoing along with IMPORT SUBSTITUITION
Increasing employee strength in last two years as order book increasing continuously
In discussion with below customers to reduce dependency on existing clients
MTAR is developing the following products in collaboration with Bloom to expand its product portfolio in clean energy sector:
Hydrogen boxes- Use Hydrogen to generate power
Electrolyzers – generate green hydrogen from water that shall be used in power units to generate power with zero carbon emissions
(Bloom is one of the largest and the fastest growing player globally in the stationary hydrogen fuel cell segment and has 70% of its revenues
coming from products segment and balance from services)
Opportunities in each business domain due to Indigenization policies in defense, Aatmnirbhar Bharat policies in different sectors, demand of fuel cells and growing maintenance market
Exponential growth expected for Indian players in Space sector given ISRO’s plan to commercialise the Indian space sector
and offer its products and services to other countries
Opportunities in defence offset partnership with certain global OEMs
14 New reactors planned and tenders to be released, one recator have equipments worth ~2200 cr Rs where MTAR is focussing on. Long term relationship with NPCIL can help MTAR to grab that opportunity
Green Hydrogen push by Government brightens prospects further. A capital outlay of Rs75,000 crore (US$9.4 billion) over the next three years to develop manufacturing capacities for clean energy technologies, which include electrolysers to produce green hydrogen. NTPC is already walking the talk on green hydrogen. The company is developing India’s first hydrogen-to-electricity project using US-headquartered Bloom Energy’s solid-oxide electrolysers and fuel cell technology. NTPC’s floating solar plant will power the electrolysers to produce green hydrogen. Bloom Energy’s hydrogen fuel cell technology will convert the hydrogen into carbon-neutral electricity without combustion to power NTPC’s Guest House in Simhadri, Visakhapatnam.
Risks
No long term contracts with suppliers, though risk is mitigated with enough suppliers on board
Client concentration risk –Bloom energy almost constitutes 50% of orders–Company is trying to get more clients onboard to mitigate this risk
Valuations seems a bigger risk than above mentioned ones. If orders/Profit don’t materialize on expected lines, stock can easily correct to 900-1200 zone or It can happen that stock may not fall much , but may remain stagnant between 1200-2000 range for long leading to opportunity loss
Any policy changes can delay the expected outcome
Technicals
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Infra Speed breaker
CY2023 – Alpha Picks for Investors
Will keep updating this Hashtag, follow closely to cancel out noise and focus long
DREAMFOLKS
PG ELECTROPLAST
HG INFRA
MTAR Technologies
ALLCARGO LOGISTICS
BHARTI AIRTEL
LIKHITHA INFRA
STERLING TOOLS
GRAVITA INDIA
EXIDE INDUSTRIES
KABRA EXTRUSIONS
DATA PATTERNS
LARSEN TOUBRO
Protected: Positional Stocks – 9-Jan-23
Protected: Positional Stocks – 1-Jan-23
Protected: Premium Stocks : 1-Jan-23
1% to 2%
Key M&A : 2022
Protected: Positional Stocks – 24-Dec-22
Its M&A time!
Small satellites : Way forward
ALPHA LEARNERS – Mentorship program Jan-23
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Why certain high pe stocks keep on running and low pe stocks remain down
Red flags and green flags
Necessary Technical aspect to make our entry and exit better in stocks ,oscillators and unique indicators including SMA, DMA, RSI, MACD, EMA, Trends, SL, , different time frames and some UNIQUE TECHNICAL INDICATORS NOT TAUGHT by ANYONE
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Resources to analyze faster to analyze more companies faster
Understand Contrarian, Cyclical, Value and Growth investing
Bucket and GRADE Framework
Business Moats understanding–how to categorize moats, what is real moat, what is fake moat
Exit Strategies in stocks
Reading Balances sheet in simple way to analyze results and issues to make quick exits or to do pyramiding after results
Reading Cash flows in simple way to understand where money is being moved in company
Reading Quarterly, half yearly, yearly results and interpreting them better
Tricks and Checklist for faster analysis of Annual Reports to help us all understand whether to deep dive or not
Conf-call understanding, Transcripts Concepts and Tricks to understand faster
Big money moves aspect to understand where money is moving
Concepts and tricks on various intricacies in stock market
Understanding about primary, secondary market
Also get a KNOWHOW on
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Protected: Positional Stocks – 10-Dec-22
Aatmnirbhar Version : Speciality Steel
Day ahead market growth
Protected: Positional Stocks – 4-Dec-22
Its Home run
An insight into Infra company
Stock Name –Likhitha Infra
Small Effort for all followers –Just compiled the thoughts together. Feel free to reach me for queries
Disclosure- I am invested from lower levels. Please assume that I may add, sell at any point of time without communicating. Hence Do your own due diligence before Buying selling
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Online Sale of insecticides : New trend
Long term trend in Dairy
Likhitha Infra
Protected: Premium Stocks : 27-Nov-22
Protected: Positional Stocks – 27-Nov-22
We dont know, we hope for the best
Protected: Positional Stocks – 15-Nov-22
Modular Steel Bridges
Mega Trend : Green Energy Play
Are we going to make J curve
IT deals declining
Ready to Drink : New trend
Air traffic
Long term trend : Travel Luggage
New trend : Travel, PA, Health
DEMAT Kranti
Protected: An insight into Versatile player related to RE Infra
An insight into Defense company : Data Patterns
Disclaimer – Below Analysis is NOT a BUY/SELL/HOLD Recommendation. It is for educational purpose and it can be used for educational purposes further. There could be lot of things which might have been missed in my analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
Data Patterns
Business —
Data Patterns is a leading player in India’s Defence and Aerospace industry. The Company is respected for its proprietary capabilities: design to manufacture, testing to validation and support for products throughout the life cycle. Data Patterns is the only Indian company in the Defence and Aerospace sectors to offer complete systems.
Data Patterns’ core competence covers the entire spectrum of electronics including Processors, Power, RF and Microwave, Embedded Software & Firmware. This unique capability allows Company to offer complete solutions, an area addressed only by international OEMs.
Data Patterns has succeeded in building products in high technology domains such as Radars, Electronic Warfare (EW), Communications, Satellite Systems, Video, Control Systems and Navigation, besides others. It is one of the few Indian companies offering indigenously developed products catering to the entire spectrum of Defence platforms – space, air, land, and sea. The Company established its quality management system in line with the demanding standards of AS9100 Rev. D by TUV-SUD, an internationally acclaimed certification
Product offerings and Clients
Can they do 3x in next 6yrs for revenue? Chances are bright with emerging tailwinds
Moats —
Biggest moat is long term relationship with Indian Defense companies built over years. A new company will take years to develop, manufacture, provide and test the integrated systems and then won new orders
Data Patterns is the only Indian company in the Defence and Aerospace sectors to offer complete systems.
Data Patterns’ core competence covers the entire spectrum of electronics including Processors, Power, RF and Microwave, Embedded Software & Firmware. This unique capability allows Company to offer complete solutions, an area addressed only by international OEMs
Strengths
- Data Patterns’ modern manufacturing facility consists of 2,00,000 square feet factory built on 5.75 acres of land in SIPCOT IT Park, Chennai. It has facilities for design, manufacturing, qualification and life cycle support of high reliability electronic systems used in Aerospace and Defence applications. The facility includes an EMS line, clean rooms, board, box and rack level integration capability and environmental testing to cater to the requirements of quality and complex production
- Vertically integrated defence and aerospace electronics solutions providers catering to the indigenously developed defence products industry
- Diversified order book with marquee customers along with state of the art manufacturing facilities
- Experienced management team and skilled workforce
- Highest Revenue growth, EBIDTA margin, ROCE and ROE (for FY20 &FY21) amongst key Indian defence and aerospace companies
- Strong Balance Sheet; Net Debt Free Company
Capabilities and Opportunity
Some triggers and updates ( Market size, order wins etc)
Opportunity Size
TAM (total addressable market) of USD 4.65 bn by 2030 growing at CAGR – 9% from 2020*
Make in India, Indigenous manufacturing defense Theme
Beneficiary of shifting procurement trends in Defence – Aatma Nirbhar Bharat , Make in India, new defence acquisition policies among
others
Increasing indigenization, Domestic defence procurement, Higher share of electronics in warfare
Defense modernization program
Expansion of facilities
Data Patterns is in the process of upgrading and expanding the current facility, with a proposed doubling of available floor area and manufacturing capacity, as well as addition of capability of handling large and heavy equipment, integration of large radars and mobile electronic warfare systems, satellite integration facility. The new infrastructure is slated to be ready by September 2022.
Data Patterns is also in the process of acquiring an additional 2.81 acres of adjacent land for further expansion
Promoter holding
Promoters have sufficient skin in game, along with FII and DII holdings and big players leading to only 21% approx for retail investors
Risks (tried to see major risks, please do due diligence to understand more on this part)
Fast rampup in orders is key along with execution. Will fast orders and execution can lead to profitability, we need to see in coming quarters and years
The business has long gestation period and inherited execution delays, consequently causes volatility in revenue recognition
Company face challenges to meet the requisite financial criteria of tender based business, for which it needs to rely on bigger entities
Cash conversion cycle and working capital cycle has been really a big risk. Need to be watchful on these two parameters consistently. Major trigger is inventory levels, which should come down with normalized operations and betterment of chip availability
Seasonality Improving but Q4 still Significant
Valuations —
Valuations for such company is difficult to judge as growth can happen exponentially and company one good year can turn the tables on valuations and vice -versa. As per experience start with specific risk reward and then performance observed over a period of time and as and when orders emerge.
Looking at past, such companies look overvalued, Looking at future opportunities, Company seem undervalued
We entered around 700 even when valuations look high and markets took it to 1540+ –so Premium companies might be rerated faster than one can imagine –hence our focus is to ride as long as growth happens in company but 1-2 quarters should not deter us to stop holding long enough and give chance to company to perform
Only thing here is if valuation blow up faster than business –we need to book some partial profits
Your strategy can be different than mine. Your selection of company might be different than mine. So let’s not be a BLIND FOLLOWER
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It is for educational purpose and it can be used for educational purposes further. There could be lot of things which might have been missed in my analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
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Stock : Paradeep Phosphates
P.S. We found that SIP MODE works better in such stocks which have certain risks associated with it.
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
Ramayan Maps
Protected: Positional Stocks – 02-oct-22
Protected: Premium Stocks : 2-Oct-22
Protected: Positional Stocks – 25-Sep-22
Protected: Positional Stocks – 18-Sep-22
Defense players order book comparison
Capex Champs
Protected: Positional Stocks – 11-Sep-22
Protected: Happy Ganesh Chaturthi
Protected: Positional Stocks – 29-aug-22
Aatmnirbhar version : Indigenous GW solar manufacturing
Protected: Positional Stocks – 20-aug-22
Protected: Premium Stocks : 20-Aug-22
Attrition
Positional Stocks – 7-aug-22
Stocks moved very well in last two weeks, keep booking profits
Remember : For exit in stop loss levels Day closing price is important and 1% downside from SL levels is still a hold for next day
Reminder for Quantity in Positional to be chosen carefully and based on formula i have shared below. That will allow us to take sufficient bets to succeed
ALPHA LEARNERS – Mentorship program Aug-22
With great pleasure and best wishes from all of you, we are delighted to launch new batch of
ALPHA Mentorship program
Art and Science of Investing
to make you Independent in stock markets
AVAIL EARLY BIRD OFFER till 15th Aug 2022
A PROGRAM TO MAKE YOU LEARN AND EARN
This is a unique live program for approx. 5 months (on weekends) and 7 months of handholding further, Where one can learn necessary
Fundamental Qualitative concepts to understand the things which create wealth in long run–like how to evaluate management, how to evaluate certain corporate actions, how to understand direction of company
Fundamental Quantitative concepts to substantiate what we have seen qualitatively, understanding ratios and numbers like margins and numbers like EBITDA, PAT, OPM, Financial Ratio, Valuation ratios PE, PB, PS, EVEBITDA, ROE, ROCE, Debt, equity and many other deep ratios to understand whether stock at right price or not
Learn about cost of capital, working capital cycle, inventory turnover, asset turnover, interest coverage, pledging(good or bad)
Why Dividend is good or bad
How long we can hold a stock or when to leave the stock
Capex, Opex and how it impacts and when it impacts
Why certain high pe stocks keep on running and low pe stocks remain down
Red flags and green flags
Necessary Technical aspect to make our entry and exit better in stocks ,oscillators and indicators including RSI, MACD, STOC RSI, EMA, TEMA, DEMA, Trends, SL, Heiken Ashi candles, different time frames
Technical aspect and understanding of Price Volume action, candlestick patterns ( bullish, bearish, single, double, triple patterns)
Technical understanding of Targets from different patterns, How to look for patterns and when to look for which pattern
Resources to analyze faster to analyze more companies faster
Understand Contrarian, Cyclical, Value and Growth investing
Bucket and GRADE Framework
Business Moats understanding–how to categorize moats, what is real moat, what is fake moat
Exit Strategies in stocks
Reading Balances sheet in simple way to analyze results and issues to make quick exits or to do pyramiding after results
Reading Cash flows in simple way to understand where money is being moved in company
Reading Quarterly, half yearly, yearly results and interpreting them better
Tricks and Checklist for faster analysis of Annual Reports to help us all understand whether to deep dive or not
Conf-call understanding, Transcripts Concepts and Tricks to understand faster
Big money moves aspect to understand where money is moving
Concepts and tricks on various intricacies in stock market
Understanding about primary, secondary market
Also get a KNOWHOW on
Checklist for stocks to identify red flags faster
Checklist for deep dive into selected stocks
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An insight into Equipment company
Disclaimer – Below Analysis is NOT a BUY/SELL/HOLD Recommendation. It is for educational purpose and it can be used for educational purposes further. There could be lot of things which might have been missed in my analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
Valiant communications
Business —
Established in 1993., Valiant is a manufacturer and exporter of a wide range of communications, transmission, protection, synchronization and cyber security products to a wide range of sectors including Power Sector Infrastructure – Sub-stations, Distribution, Transmission, Utilities – Water, Oil and Gas, Solar and Wind Energy, Railways and Metro Rail, Airport Communication Networks, Corporate Networks, Financial Institutions, Mobile / Cellular Communication Networks, Defense Networks, Synchronization applications for autonomous driving technology – automobiles, providing cyber security to core services (Power, Railways, Airports, Utilities) and other emerging sectors and technologies.
It is an approved manufacturer to some of the major power utilities including Power Grid Corporation (India) and various National and State Electricity Boards, with track record of successful installations in more than 3000 power sub-stations worldwide including at 765kV power sub-stations, one of the highest functional power sub-station levels in the world.
Customers or target industries
Power Utilities
Cybersecurity
Government and Corporations
Moats —
Biggest moat is long term relationship with clients including home grown Tejas networks (a growing company acquired by Tatas)
Being the only Indian manufacturer for various products in select domains, the Company has a distinctive advantage over its MNCs competitors.
VCL is the only manufacturer of PMUs in India. There are a very few successful manufacturers of the PMU in the world with Valiant being among those few. The VCL PMU has been tested, validated, approved and Type Tested by CSIR‐National Physical Laboratory, New Delhi, India.
Strengths
- An ISO 9001:2015, ISO 10001: 2007, ISO 14001: 2015, ISO 18001:2007 and ISO/IEC 27001:2018 certified equipment manufacturer of Communication, Transmission, Protection, Synchronization and Cyber Security solutions.
- Successful installations in over 110 countries, worldwide.
- Global footprint
- Valiant has the technical know-how and expertise to integrate legacy communication equipment, that is already installed in the network, and to inter-operate with modern communication hardware
Region of operation
Global footprint with offices in U.S.A., U.K., Canada and India.
Regional Distributor offices in 25 countries
Company has three subsidiaries with one each in UK and USA
Valcomm USA, has now been an approved vendor with Hargray Communications Group and Anixter (a Fortune 500 company).
Valcomm USA made pilot project supplies of communications and synchronization equipment in the US to Power Utilities, Energy Cooperatives, Shale Oil & Gas, Hydro companies, regional Cable TV, Broadband Internet Service Providers and Government organizations. Whereas, Valiant UK has also been approved now as registered vendor with Siemens for Lithuania and Latvia.
Some triggers and updates ( Market size, order wins etc)
Opportunity Size
Two research reports on different segments shows huge scale of opportunity in MPL router and Cybersecurity market size in next few years
Company is also engaged in emerging technologies and Next generation transmission equipment
IP/MPLS Aggregate Routers
• IP/MPLS Edge Routers
• 1G / 10G
• 40G / 100G
• 1G (optical and electrical)
TDM and IP/Ethernet communication for transmission for military/defence
PRP (Parallel Redundancy Protocol) Switch for zero packet-loss transmission-switching
Fail-Safe, Transparent Firewalls designed for IEC-104, DNP3 and MODBUS RTUs
Phasor Measurement Unit (PMU)*
Phasor Data Concentrator (PDC)
Data Encryption Equipment.
Recent order wins
Valiant has been recently won orders from EGAT Thailand to provide Synchronization solutions in the Thai Utility network.
Valiant has received orders worth 34cr for supply commissioning of its Communication, Protection and Automatic Ethernet Failover solutions from Tejas Networks to be executed in FY23
Valiant has also been short-listed by Emerson and Yokogawa for their requirement of Synchronization solutions.
Valiant has entered into 4-year rate contract last year under a frame agreement with the engineering major, Balkantel OOD for Bulgarian state-owned Power Utility ESO EAD, for supply and installation of its power utility products and solutions for the contract awarded to Balkantel OOD.
Make in India, Digital India Theme
Various initiatives taken by the Government of India, such as “Aatmnirbhar Bharat”, “Make in India”, “Digital India” and “PMA Policy”, are helping indigenous manufacturers of communications, transmission, synchronization and cyber security equipment in India. Various products of the Company have been approved by major corporations such as PGCIL (Power Grid) and almost all , ISRO State Electricity Boards (SEBs). Valiant is working on various opportunities to scale its products and technologies across various utility sectors and corporates.
The Company has recently completed fully indigenous design of Routers, Firewall, IEC 61850-3 complaint Ethernet Switches along with its exclusive range of related cyber-security products which it shall be offering for the forthcoming Bharatnet, Power Grid and Railway projects.
Addition of big names as customers
Valiant Communications Ltd. (VCL) has added the following prestigious customers to its customer reference list. These include Tesla (applications for Time Synchronization of high speed cameras for crash testing), Embark Trucks (Self-Driving Trucks) and GE renewables (Grid solutions)
Expanding Marketing and RnD network
The Company is expanding its marketing network in Europe and South America. The Company has appointed distributors in
France, Spain, Portugal, Peru and Chile for its recently introduced Cyber-Security and Power Utility products.
Valiant Communications Limited has opened its New Office, Research & Development Center in Bengaluru, India near Bengaluru airport
Promoter holding
Promoters have been buying and increasing stake
Risks (tried to see major risks, please do due diligence to understand more on this part)
Very Small company kind of nano cap ( < 100 cr Mcap) so many inherent risks for survival for such companies
Fast rampup in orders is key along with execution. Will fast orders and execution can lead to profitability, we need to see in coming quarters and years
The communication sector being part of a rapidly changing technology orbit, the level of risk increases due to high technology obsolescence.
The business has long gestation period and inherited execution delays, consequently causes volatility in revenue recognition
Company face challenges to meet the requisite financial criteria of tender based business, for which it needs to rely on bigger entities
Cash conversion cycle and working capital cycle has been really a big risk. Need to be watchful on these two parameters consistently. Major trigger is inventory levels, which should come down with normalized operations and betterment of chip availability
Valuations —
Valuations for such small company is difficult to judge as growth can happen exponentially and company one good year can turn the tables on valuations and vice -versa. As per experience small qty in such companies can be taken and then performance observed over a period of time and as and when orders emerge.
Looking at past, such companies look overvalued,
Looking at future opportunities, Company seem undervalued
Truth lies somewhere in between!! Hence Risk management and Portfolio allocation is the key
Another important thing is to give long rope to company to perform
Your strategy can be different than mine. Your selection of company might be different than mine. So let’s not be a BLIND FOLLOWER
Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It is for educational purpose and it can be used for educational purposes further. There could be lot of things which might have been missed in my analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
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