The biggest concern is the two brothers not getting along. I dont know how the split will impact. additionally the market leader PAGE is also not doing great.
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What makes you infer this?
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Technically speaking, there is an RSI divergence on the charts.
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Well, I don’t know much about charts and technicals, but my thesis is (1) p/b bottoming out to all-time-lows, and at the same time (2) p/e instead being at a significant premium to the historical p/e, together indicate a bottoming-out of the price. To me: (2) above is indicative of “hope” of good things to come. Additionally, I rationalized all this in light of the narrative I shared earlier (all bad news baked in).
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KRBL
I feel KRBL offers an opportunity for an asymmetric bet:
The stock price has taken a big hammering in the last few months. Some of it is of course because the business didn’t do relatively well in the last couple of quarters; as per my understanding the reason for that is the export business to the gulf countries took a hit because of a multitude of reasons
(1) the relationship with the distributor in Saudi Arabia didn’t work out…while they are looking for a new distributor but as of today their exports to the country are almost nil
(2) business in Iran has taken a hit because of the ongoing conflict in the region
(3) shipments are delayed/expensive because of Houthi situation
In my view all the issues above a transitionary and should sort themselves out in due course. Additionally, in the last concall the MD said that Europe exports are growing at a fast clip + they are working hard towards finding a new distributor in Saudi Arabia.
Disc: invested; this is not a buy/sell recommendation, please do your own due diligence
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Any sector/ industry that someone can find with lots of pessimism ? Seems like everything is going up in last few months
Gambling/Casino industry because of the GST demand notices.
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Chemicals and pharma
Yep. Recently The Morning Context-released an article on how Tata Chemicals is facing oversupply in commodity chemicals like soda ash and bicarbonates. But they are essential chemicals for batteries and glass manufacturing. So there might be a rebound.
Paper industry is another one facing an influx of cheap imports. Solar panel imports and steel dumping as well. Basically Chinese oversupply being stopped in US and EU being diverted to us and ASEAN block.
Cotton mills such as Rajapalayam and Ambika facing supply, demand uncertainties. Garment manufacturers facing competition from Bangladesh and Vietnam.
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Is there anything else beyond Nazara and Delta in this space…? Do we have any hardware (slot machine), design service related business in India ?
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Would IT sector fall into this category? Most of the companies are signaling no to low growth and US investments in service industry has also gone down. However, with AI investments skyrocketing, future looks bright. What does folks think about it?
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I think IT sector is relatively non contributor to recent relly and ignored. IT big names are giving stable results & can bounce back in near term 1-3/4qtr.
Long term perspective I think they will have challenge getting business from US Market as US IT spends will reduce. those which have high % revenue comming from US will have challenging time ahead.
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This has aged well, and I feel its just the start. I disagree on lesser expenditure from US to India. We are services hub, the new onset of AI also means more services, done by AI not humans, but powered by our service sector companies. Another greenshoot is upcoming rate cuts, fueling companies to spend more…
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Any updates on your view? KRBL has styaed flat while LT foods doubled from 200 to 400+.
@Mudassir_Parvez – I feel the worst is baked into the price (things have only gone from bad to worse in the Middle East, unfortunately, since I first posted my thesis). In my view my thesis still stands – as soon as they figure out a game plan for Saudi and as soon as Iran normalizes KRBL should benefit hugely from it. One more note I want to make is: I feel the management overpromises and underdelivers – they’d said they’d fix Saudi by Diwali but there has been no progress/communication on that front.
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@HSPl - recently. Tata chemical’s Indian Peer GHCL has been rising very strongly (infact today only made all time high). Wondering any fundamental reason which is causing pessimism in Tata Chemical whereas optimism in GHCL.
Disc: Invested in Both GHCL as well as Tata Chemicals.
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Good day everyone, here fellow VP’s. I initiated this thread in December of 2022, and here we are in December of 2024. It has been good two years. And yes after the sectors, companies and things that I mentioned then- I really did not contribute in way of writing or adding to it. I am reminded of what Howard Marks has said something on these lines:
“I’ve always made correct predictions in my career, and the reason they were correct is because I’ve only made them twice in forty years career".
“Things seem more obvious when they are at extremes”
“Being hell too early in your trade is equivalent of being wrong”
I think its in our best interest to not swing at every pitch, and wait patiently.
With that first sector about which I spoke about in December of 2022 is Shrimp sector. There is an evidence that things are improving, soybean meal prices which is one big raw material has gone down in price, The Ecuador is finding it tough to sustain with additional dumping duties, and Indians are doing good in value added shrimp. This is not a company specific post. but here is how things look like
And yes it would not be wrong to say that I think I was too early in this trade. If you had your entire portfolio in Shrimp sector, you would definitely be jealous of your neighbors buying into Solar stocks. But its not that we have holed our under garments buy buying these. I still feel the best is yet to come and as a disclosure I am still holding these.
Lets talk about the GE twins now
So yes putting all your money in these two stocks would have altered your life definitely, and would have made your neighbors jealous of you. As a disclosure, I may still be holding these two companies as of today (22 Dec 2024). But mostly I am out.
Lets talk about companies of Auto sector which were struggling and I wrote about here
Force motors and Atul Auto
So yes a portfolio of these two companies of stocks would have done exceptionally well too. As a disclosure, I have exited Force Motors and still invested in Atul Auto.
Its too early to say, but we can all see that buying into a beaten down sector can alter the course of your wealth, if the cycle turns around and also that your downside is limited. If you follow Charlie Munger his diversification is just 3 ideas. Here too, these three ideas(Shrimps, GE twins and Commercial vehicles) did pretty well. The market is running like crazy and its important to be cautious and keep looking for the safety. Thanks to @ndharmawat and @jitenp for bending my mind into thinking this way. To this day I rewatch their videos and I would urge everyone to watch these too. Its like drinking water from the fountain.
@Apurva_Dubey has also given us some good ideas to ponder upon.
I am still trying to find pessimism and yes there are a few places, you can search into buiding products, few IT names, Dyes and Chemical names and here is one chart I would leave you all with to see the beauty of market cycle in action, these two images are of the same company
The name of the company is Sterlite Tech, As a disclosure I invested in this stock in a way “stepping foot in the door” as Jiten Parmar sir calls, however still evaluating.
Keep in mind that looking at P&L, and OPM trends are just starting points and much more due diligence is required and diving deep in the companies is beyond the coverage of these threads as for those we have, company specific VP posts.
If you are low on time I had tried to summarize some of the sought after financial classics and the lessons I have learnt from them on my youtube channel. I hope you will find it helpful. Here is the link:
Happy investing!
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Has anyone taken a look at Valiant Organics? Seems to be at the bottom. Also I’m trying to learn so in order to evaluate this co. how shall I check if it could potentially turnaround in the coming years? Any help would be appreciated. @Lavanya_Tomar
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Below are some fallen stars I am looking at. Have a position in IRM; tracking the rest:
1/ IRM Energy
2/ Tarsons Products
3/ Barbeque Nation
4/ Uniparts
5/ Ugro capital
6/ CSL Finance
7/ Satia Industries
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