I have booked losses and moved on after holding on far over two years. There is not clear cut way to scale the business. Dependent on government orders (municipalities) only and that is the biggest risk. Working capital intensive business as govts don’t pay on time. Too much competition in this sector with even big IT companies getting into this field. Peers like Ceinsys are also struggling due to no new orders from Govt and Operating cash flow issues. I guess there is no moat in this business. The tie ups with mobility vendors like Tata Motors will not give them margins. The raised funds from institutional investors at around 650 which proves that even sophisticated and well informed groups also have no idea about a company beyond a point. So better accpet your mistake and move on. Last but not the least management does not interact with shareholders.
No problem at all in quitting investments when you lost convictions and bear markets are boon to accept your mistakes and churn your portfolio as both horses and donkeys are painted with same brush.
. I will agree on Govt orders slowdown and short term pain however will not agree on Moat. Press release about GPR “scrambling patented Tech” has lot to say about, not an easy job. On a contrary note, i have doubled my quantities yesterday at 275 levels. A famous quote from warren buffet “ you must buy in a bloodbath even its your own blood” This is last buy with average price 390, will hold it for longer term as i feel even if nothing happens its a very good aquisition candidate.
If we see last three year chart, from fundamental analysys, sales have grown, intrinsic value has grown, profits have grown. From price perspective, stock from 100 levels moved to 1050 and dropped 70% from there. Same old story across all sectors, stocks , a typical bear market investor psychology. A clear case of similar trends in year 2018-2020 bear markets, nothing to do with fundamentals. 2020 to 2024, all stocks were euphoric, some on fundamental and remaining on narrative, operator, greed. Valuations became excessive and markets needed a reason to correct, Trump was crucified for tariffs when US exports had less than 0.2% effects on GDP . I can correlate this to IL&FS fiesco in 2018 where short term rates spiked and fragile models like DHFL and Gruh lost a fortune.
Iran attack again i am trying to equate like Covid in 2020 which may act as bottom formation as equities are way cheaper and stocks are trading below intrinsic valuation.
My concerns are more from business POV. Revenue growth is dropping to zero, margins have halved and operating cash flows were never there. I would not have sold if the business numbers were strong or even decent. Right now it is hoping against the hope as the management does not communicate through quarterly calls. Lastly, Genesys always declares quarterly numbers on the last day of stipulated time period (with in 45 days of the next quarter). Once in a while is fine, but doing it every quarter, does not indicate well. Most good companies will not follow this practice. Anyway all the best and hope your conviction is proven right.
I am just curious to know if your holding period was two years than you have seen peak rate of genesys, above 1000 it was damn expensive, you could have sold while it was coming down. Not questioning your judgement now. When i first bought at 650 it was a momentum trade for me hence i exited around 1030 levels. Last quarter results are real disappointment but stock corrected before hand.
Let me give you one example which might help you for future decisions. I had bought force motors in 2016 around 3200 levels, averaged it in 2020, again added more quantities in 2023 once results turnaround came. Force motors never gave any explanation on results, capex, no conference call, never appeared in TV channels. Only thing which kept me holding was BMW, Mercedes and traveller as it was a monopolistic business models. Stock raised to 25000+ from 800 covid lows. Now they have started giving investor presentation also but its a normal business at current valuation levels, exited around 23000 levels. Total holding period 9+ years, compounded returns 19X for a stock no one discussed about for a long period with so called weak corporate governance. Ultimately what matters is industry, business moat, TAM, Product capability and fair management willing to work honestly, rest of this follow if your entry price has good safety of margin. In case things don’t turn out your way than you exit with minimum loss and if turnout as you thought, you create a fortune, exit partially at fair price, exit fully at euphoric price. Exit is important.
Wonder how the tech works in this case. If this is a unique technology, then there could be huge applications for military . Mapping bunkers and underground shelters could be of huge demand….
You make it sound too simplistic… but to really help the community, what wud really help is if you could pls share any “tangible and specific points”:
- Where will the growth come from?
- Why are sales stagnant for last so many quarters?
- Why are margins falling?
- Why will they rise now?
- Will they sustain and why?
- How sustainable can that sales growth be?
- Who are they competing with?
- What is their competitive advantage? How long can it last?
- Whats the impact of AI on their biz, now and likely in future?
- Do they have good talent? Will they keep attracting and retaining good talent?
- When will they start making money, CFs?
- Debtors were insanely high and hv risen more recently? Why? Why will they fall and when?
- How dependent are they on Govt biz?
- Is their dependence on Govt increasing or decreasing?
- This industry was supposed to grow exponentially for many years? Is the indy not growing? How has Govt spending trended in last few quarters vs sales of the company?
- Which of their pdts are successful and what proportion of their rev comes from these pdts and how has been this trend?
- How shud one value this co and why? What is the realistic value of this co and why?
There are so many more questions simply related to “how to analyse a biz….to judge if it is investment worthy” at “any time in the journey of a business”…..discussing any of these “specific” “meaty” points will help a lot more than discussing “high level” narratives which wud fit many companies….or are you saying buy 20 such companies which hv fallen 70% from highs with similar characteristics (and pls list those characteristics observed speicfic to this co, you may also list similarities between this co and Force…coz it appears there are far more differences than similarities between them both as companies and investment candidates).
Also, if this forms way ess than 1% of your pf then maybe most of the specifics are not required…and based on a high level ‘feel’ one cud speculate and see this as an investment…
Personally, I hold this co as a speculative bet….and hv never been able to see this as investment worthy in last 4-5 yrs…maybe your answers wud help.
Thx for your initiative in helping build a community of better investors.
You are right, in hindsight my buy price of 700 was definitely wrong. I don’t mind holding a strong business with a drawdown of 60-70%. I normally don’t exit my positions easily but in this case due to no management interactions coupled with deteriorating quarterly numbers you are just hoping that your thesis would be right based on your understanding of the industry. Peers also struggling with new orders and cash flows concerns suggest, something is wrong. Eventually it took this tough call and chose to exit. It is not that doing conference calls is a must but business numbers have to justify the silence of the management. Kovai Hospital given me great returns, no conference call, no management interviews, no guidance yet Numbers speak for themselves.
No doubt there are all these concerns, but the stock prices seem to reflect the current situation. These 17 questions that you put out were there even when Genesys was above 1000 Rs.
On a technical level, Genesys has breached the 300 lows made in 2022 when the company was loss making! The assumption is that Genesys will not get any more orders rather than the fact that there has been a major slowdown in inflows. This I feel is wrong. They are migrating towards annuity model where they get repeatable revenue. They have a lot of IP and the stuff they are working on are a necessity for Smart cities, urban planning and smarter and ADAS enabled cars ( the Tata deal showcased this already so it is not theory anymore)
Genesys is now for me a company to place in a vault and not track. Worst case, I lose the remaining money invested, but best case, Genesys becomes many multiples from here. Remember that the current price reflects all your questions and there are many successful companies without management interaction.
People were not complaining about management interaction when Genesys was 1000 rs XD. It seems like people want price interaction with Genesys instead. But I agree that lack of interaction makes stocks fall like an inverted rocket during bad times.
@Aloysius_De_Sa has explained a lot of things already. Below are reasons i am interested
- Genesys current trades at 1.8 EV/Networth
- Price dropped from ATH 70%, deep pessimistic case
- Geospatial TAM for India including land, civic services, Infra, Sub surface, ADAS Maps, 3D Twin Mapping of cities including sub surface amenities is close to 12-13 B USD as per screener AI by 2030
- Genesys holding largest 3D map covering 9 M Kilometers and expanding.
- Varanasi, Mecca, Mumbai 3D twin will disrupt competition.
- Orders will be small numbers and scattered over years or a large order state wise can be issued over a longer duration.
- There is clear need for Geospatial services for better urban town planning, optic fibre cabling, power cabling,
- 2D maps have become irrelevant, 3D is future
- Commercial urban drone services need mandatory 3D twin map which is upcoming business model 4-5 years away.
- Company hold lot of patents
- As per my estimation fair value should be between 400-500 levels with current fundamentals which will rise based on adoption rate of geospatial services
- Holding period should be close to 5 years to realize full potential
- from capital allocation perspective, 5% on maximum side i can allocate, thats what i am playing.
- Safety of margin is very high current rate
- Cash flow issues will remain with Govt orders however these are large number of small amount orders which has lesser risk for realization.
- Price never states the business strength of a company as prices are determined by greed and fear, as an investor our role is to identify if odds are in our favor. Kalyan Jewel rose to 750 from 100 levels in 2 years, it became my largest holding 30% of portfolio, 7X gains. At 725 PE was 127 which was not justified, exited the whole chunk at 710 average in 2 hours, so no emotions attached. It was clear case of greed. At current price genesys is a case of fear and mean reversion will happen once market stabilize
- Even if promotor decides to sell company, 100% returns can be expected
Hope this helps because future is always uncertain, you best portfolio stock becomes your worst stock by just an event. We can follow all due diligence still can lose due to factors which are not in your control. As Howard Marks stated, it not important what you don’t know, its important what you know is not fully true hence have stopped paying for growth at high PE valuations, have missed lot of growth opportunities in railways, defence and EMS, seeing than crashing by 50% once narratives are broken by stagnating growth, cash flow issues or management false over excitements despite all these, could find lot of multibaggers or exited with minor losses if conviction was broken due to error in judgement. ABFRL is one example of wrong judgement, exited with losses after holding for 5 years.
Very well explained. In this correction most midcaps/small caps has fallen 40-50% and hence lot of value is appearing in these categories. Question is should we buy a business that is growing at 25% or should we buy companies like Genesys where we foresee a lot of potential but current numbers are nothing much to talk about. When ever the market turns around we will see reversals in stocks where business indicators are pretty assured.
Interesting update by google maps. Moving towards 3D maps (I think). Not sure if the update is for India or not but this is where we are headed.
Genesys provides data to Google.
It all depends on what type of investor you are. I am neither invested not having any near future plans to add. Despite this huge drawdown neither FII, FII seeing value nor promoter. I can understand the business but this is also one of key metrics that I follow before investing. Many companies that I invested either promoter increased share or atleast stay constant but opposite in this case. I may think of good future but I am not long term trader
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Unfortunately Indian retail have always punished product companies for weak profitability .. unlike in the US where people pay billions in mcap for revenues in the few million or hundreds of thousands.
Genesys is hopefully investing into the future and while I am sitting on a big loss percentage wise, it’s a hope that some day their products can get monetized and deliver massive returns for everyone who dared to hold. Digital twins benefit the govt through cost savings and the public through better facilities so it seems like a no brainer to have such tools. ADAS and AV are things where its not a matter of “if” but “when”. Jal Jeevan is back on track but Genesys is still punished. Regardless, I hope that Genesys too will have it’s day
This one has to perform, timing cant be predicted. Holding patiently.
What in the AI slop have you posted bro?
Please delete your message and post a small summary.
@satishwe Can we have some guidelines regarding AI generated content. People are simply pasting their whole chats.
@ALL,
Please ensure that what you post is not a direct copy-paste from AI, which is very hard to read. We all need to understand that using AI for research and posting AI output verbatim are not the same thing.
What works best is when you are fully done with your AI-based research (after multiple prompts, etc) and then write the post in your own words, or at least modify/trim it. Basically, put in some effort to ensure the content isn’t repeating what has already been shared in earlier posts.
Before posting, please ensure you have read it thoroughly and are fully confident that the content is factually correct and in a format people can read easily.
Mods will review any post that is flagged and take action on a case-by-case basis. It’s not possible to decide everything in black and white, some posts fall into a grey area, and I have noticed people get aggressive when something is approved or rejected.
PS: (Repeated violations will face periodic suspension )