I looked at Wabag too when I was considering investing in this space. But a bulk of their orders comes from the government and as a direct result, their Working Capital position is terrible.
This situation is a good case study on why Working Capital management and therefore, Cashflows are important to a company.
Hi Dinesh ,
Donât you think Indiuind is more risky die to their higher corporate exposure? I donât see any indian bank making serious money lending to corporates [ at least in the near future] .
Well, yes. IndusIndâs strategy itself (Has been for quite some time) is to purposely have a riskier loan book than most banks. Clearly during a scary period in the loan cycle like this, they have to bear the brunt of their strategy. That is also why the bank came down from mighty levels of valuations to more reasonable levels.
In the past (Before Mr. Sobti), the bank has been ever more disoriented. To understand the entire backstory how IndusInd used to be and how it evolved, read the following document I came across while doing my research on the bank:
(For instance, did you know that IndusIndâs vehicle lending arm used to be Ashok Leyland Vehicle Finance? I certainly didnât, before reading this document)
My personal thesis for IndusInd is:
The only real risk here is the replacement of Mr. Sobti, who has added tremendous value to the company. But if one were to believe his words, the successor has been groomed personally by him and should be able to handle the business equally well, if not better.
Almost a decade back when I just started with markets, one of my first long big idea was water and waste management. Maybe way too early of time and still earlyâŚand the only company I could find then was wabag. I think the stuck gov orders, as rightly pointed out by you, destroyed the prospects of the company. What is the order mix and target audience for ion exchange in comparison? Also do you see any potential listed company in waste management business? Thanks
I recently presented on the topic âThe Intrinsic Value Puzzle: Components and Case Studiesâ on a SEBI-sponsored investor awareness meeting of the Tamilnadu Investors Association (TIA).
Not really sure where to put it, so Iâm posting it here for now. Mods, if you think this is not the right thread, kindly point me to the correct one.
Presentation and Notes: https://www.dropbox.com/sh/1l2m5krl41ny8p6/AADk2H4yOC2P2662DQPL3flya?dl=0
Excellent presentation Dinesh. Thank you for sharing. Very well laid out, easy to understand and focuses on what really matters.
Do you have a video of the presentation?
Unfortunately, no. I have gotten so many requests for a video. I have passed on the feedback to TIA, if theyâd consider it in any future meetings.
Sorry for the delayed response.
Ion Exchange mostly does B2B. For instance, their current bids are for Refineries, Steel, Food & Beverages, Oil & Gas companies. Their B2G is a tiny portion (I think they do 1-2% business with IRCTC).
I think âEco Recycling Limitedâ is the only listed waste management company in India. But I have not done any research on this.
These are really good and legit. Specially liked the example of âGodrej - Cintholâ redundant brand asset. Thanks.
Done 
Thank you so much
"Ion Exchange India Limited - An Idea Whose Time has Come" (20-20 Ideas Summit, TIA, 2019) Presentation and Notes:
Downloading option is at the top right corner. Yes, you can even download it without having a DropBox account. Size: 5.3 MB.
@aveekmitra ji, here you go.
Great notes and information. Very helpful
Been invested for last 18 months . Bought a good chunk between November 2018 and may 2018 and been doing SIP ever since till today.
Disc: invested , 2nd highest holding in portfolio
Hi @dineshssairam It seems report has been moved from drop box. I got message that report is missing. Can you please double check and share the link again?
Try this: https://www.dropbox.com/sh/5hdfa3iscnoqys7/AACvNusvrGDC_aIysh6fx6cwa?dl=0
If itâs still not working, instead of clicking, copy-paste the link into your URL tab.
Portfolio Update
Deployed the remaining cash mostly in IndusInd Bank, DHP India and KMCH (I did buy a little bit of Heritage Foods some time ago as well). I have also added a tracking quantity in Shivalik Bimetal Controls, but the exposure is too small to warrant a special mention.
Top 3 holdings now form slightly more than a 50% allocation.
Looking forward to Q2 results season.
Hi Dinesh,
Are you only tracking Shivalik or are there any other Auto ancillary stocks that you are tracking too? What are the main points you shortlisted Shivalik over others? I am looking at JBM Auto, Minda, Shivalik and RACL. Not even tracking quantity yet. I will decide after next OR dec. quarterly results of complete auto sector whether to invest or not.
My current watchlist / tracking list is as follows: Eicher Motors, GCPL, Grauer and Weil, Marico, Mayur Uniquoters, NESCO, SIS, Shivalik Bimetal Controls and Timken India. I also track Motherson Sumi on and off, but mostly interested in seeing how their next couple of acquisitions go.
Dear Dinesh,
I can see you are very bullish on IndusInd Bank and that is the only bank or financials stock you have. What makes you think this bank is best of the lot in terms of valuation and future growth prospects.
A quick look at screener, I could see compounded profit growth is coming down over the years.
Disc: Not analysed closely and not invested.
What would worry me is the claim that it provided around 2000 cr unsecured loan to ILFS in early FY19. Like the credit rating agencies, they were also incompetent in analysing the publically available financial statements of ILFS.
