Multi-bagger stocks & Huge opportunity size
Not always true. Some players are in niche markets with small market sizes but significant market share in that market and have high-profit pull, they enjoys good market cap.
As example Eicher has single digit (appro 5%) market share in 2 wheeler market. However their profit is double-digit of profit pull of 2 wheeler industry (about 15-20). Hence they may be having 30% market cap share among 2 wheeler players.
Total 2 wheeler sale in India: 10 Lakh (Feb 2022) out of that 50k of eicher – share 5%.
Revenue TTM – Eicher 10k, Hero 30k, Tvs 24k, Bajaj 34k = total 98k – 10%
Profit TTM – Eicher 1.6 k, Hero 2.6 k, Tvs 0.8 k, Bajaj 5.7 k = total 10.7k – 16%
Mkt cap: Eicher 68k, Hero 45 k, tvs 30 k, bajaj 1.06 L = total 249 k, – 27%
Conclude: Eicher has 5% volume share, 10% revenue share, 16% profit share and 27% market cap share.
Fig are approximate.
The conclusion is incorrect. Eicher has 90%+ market share in 2 wheelers above 250 cc. THat is the relevant niche it dominates. Comparing eicher with hero or bajaj is like comparing mercedes with Maruti - they are serving totally different segments.
LME rolled back trades to prevent JPM and their cronies from getting bust.
They make sure the house always wins, exchanges are not your friend.
This will have impact on multiple players in our markets. Direct impact would be importers and exporters as there would delays and cost overruns. But indirect benefit would be on companies whose competition is mainly from imported players like Borosil Renewables. It will also benefit all those domestic industries which are under pressure due to cheaper overseas competition like tiles, tyres, chemicals etc
Mr. G Maran (Unifi Capital)
Takeaway:
- Income growth vs consumption:
e.g family of 4 with one earning member with a salary of 25k; they may have 5 pairs of shoes; 1 each + 1 additional for earning member
As income doubles, 50k, they may have 10 pairs of shoes
However, if income becomes 1 Lakh, the pair remains the same but the price will increase (Inspirational products).
In e.g. of toothpaste irrespective of income the tube remains the same.
In India making money on premiumisation is hard than making money on penetration; e.g. mattresses. If penetration is 7% (Top 100 to 93 people purchase it now) and if it goes to say 26% (Top 100 to 74 buy it) then it’s a much large scale.
- Promoter Buying as a source of Idea Generation: “In the last 15 years, we have data from 2005. Every quarter if you download the list of companies where promoters have increased it for example 31st march got over this week before 21st April.”
“You buy all the stocks, Rs one lakh each and you hold on three years and blindly sell and you come back after 90 days & again repeat the process - If someone had just done that since 2005 till 2021 you would have made 23.7 percent CAGR. the nearest best performing benchmark is not even half of it and no fund manager i know has done that even if i could not do it.”
- Salary of SBI vs ICICI
Avg salary of SBI is 21 lakhs / annum
Avg salary of ICICI is 8 lakhs / annum
Same market cap; ICICI has 40% less staff than sbi
Reason: ICICI salary depends on demand and supply. The entry-level Salary of icici in 2008 is the same as in 2018 whereas the salary of SBI is fixed by DA/inflation etc.
Top IT companies:
2010 salary vs 2020 salary: increased only 3%
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Stock selection is more important than macro or sector:
Sector selection Vs Stock Selection: “Picking the right set of sectors is important but stock selection within that sector is equally important. For example if in 2016 you knew the broking was going to explode as volumes traded in markets will increase multifold and you would have both two market leaders like Edelweiss & Motilal Oswal you would have been down 40-50% whereas if you would have invested in ICICI securities you would be up 300%.”
Gold jewellery: Market shrink by 20% from 2016 to 2021. If you have known this then you may have sold titan, however, titan gained 3.5 times revenue in a shrinking market. It increased market share in a shrinking market, this is the execution of management. -
AMC industry: leadership changed from HDFC AMC to SBI?
Earlier MF contribution from top cities was very high like Mumbai / Delhi contributed more than 50% and top 30 cities may be contributed most. HDFC was a leader in those cities. Later MF become popular and In the last few yrs, SBI has gone to rural and become the leader…
Samit Vartak shares his multi bagger small and mid cap picks
https://www.morningstar.in/posts/67749/samit-vartak-shares-his-multi-bagger-small-and-mid-cap-picks.aspx
Dr Vijay Mallik has recently added new sector analysis articles on Hospitals and Diagnostic labs.
below are links along with previous sector analysis
Industry Specific Analysis
- How to do Business Analysis of Diagnostic Labs
- How to do Business Analysis of Hospitals
- How to do Business Analysis of Textile Companies
- How to do Business Analysis of Chemical Companies
- How to do Business Analysis of Pharmaceutical Companies
- How to do Business Analysis of Cement Companies
- How to do Business Analysis of Paper Manufacturing Companies
- How to do Business Analysis of Auto Ancillary Companies
- How to do Business Analysis of IT Services Companies
Frost & Sullivan research report -Indian Chemicals and Specialty Chemicals Market Report.
Part of Aether IPO this is prepared and DRHP refers this report.
The central government’s ambitious Open Network for Digital Commerce’s (ONDC’s) small-scale implementation is set to begin from Friday to see how the technology-enabled infrastructure works, thereby making processes more robust before it is officially launched.
This will be done across five cities — Delhi, Bengaluru, Coimbatore, Bhopal, and Shillong. Thereafter, it will be scaled up and launched in 100 cities over a period of six months, said a senior government official. The pilot aims to test end-to-end transactions on the ONDC architecture …
Harvard’s Rawi Abdelal on ‘How to imagine the next global economy’. Insightful talk.
2022 Shareholder’s Meeting Complete Recording (above 6 Hrs)
[IDENTIFYING BEAR MARKET BOTTOMS AND NEW BULL MARKETS]
Sameer Arora easy chat as always