Malhar's Investing Thoughts

I figured that much but let me share my 2 cents here. Maybe it ll help.maybe not.
I myself had a fixed stop loss for technical bets but When I transferred the same system for techno funda bets I noticed it working against me because of longer time frames. Over the next one month Something like an IBREL or delta corp falling 10% is par for course but Pidilite falling 10% will worry me. Blending technicals with fundamentals is after all blending objectivity with subjectivity. So why not be subjective with your stop loss. It can be a function of your stocks average daily range. Just try it some time. If it doesn’t work then no harm done. It’s only money :smiley:

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I was lucky enough to read this book before learning about Buffetts opinion on technical analysis. Would have never taken technical analysis seriously like most value investors lol
For any stock you get daily high and daily lows on NSE website(downloadable). That way you get the range for each day and then you can take the average for a given period
Quicker way would be to use charting functions such as ATR and ATR band🙂

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I will try and write on this thread more frequently. One area that I have been exploring in the past few weeks is global investment opportunities. I have found that outside India there are high quality structural compounders, often with higher growth rates but available at lower valuations. Let me briefly describe a few that I have been reading recently:

1 Aselsan-Largest defense company in Turkey, among top 50 in the world. This is also an interesting case of how reading a book (The Power of Geography by Tim Marshall) helped me connect the dots with a company. Also, they spend >20% of sales on R&D! The RoE for CY 2021 was 27.6% and the average RoE for the last 3 calendar years for 25.6%. The long-term debt to equity is almost zero. PAT growth is >25-30%.



Sales are majorly to Turkish army…

…but even for domestic sales, they take payment in foreign currencies (while incurring costs in lira)

Here’s the punchline- trailing PE is 7x!

2 Dino Polska- A high growth frugal grocery retailer (supermarket chain) in Poland. Stores are majorly in rural towns, outskirts etc. Almost all stores are owned, not leased. Nil store closedowns since 2007. They have the lowest prices.

Store count growth…

…+ sales per store growth

3 Sechaba Brewery

Disc- no holdings in any of the above as of now. Will update if and when required.


Pakistan is among Aselsan’s leading overseas customers.

Turkey is itself undergoing an economic crisis.

Economic crisis in Turkey and Pakistan can reduce purchases in future.
Personally, weapons supplier to Pakistan even is a big red flag for me.


Thanks for sharing. How would you invest in Turkey or Poland if you wanted to? Are there platforms/apps that enable it?

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Brief post on what I’m studying currently- many of the new age companies that IPOed about a year back have now corrected by >50%. I am studying Nazara, Nykaa and Policybazaar in particular to understand the businesses and figure out whether current valuations make sense or not

Disc- no holdings in any of them as of now

Govt is not in any mood to let a platform biz make fat margins

  1. Beema Nigam for policy bazaar
  2. ondc for swiggy Zomato Amazon Flipkart
  3. UPI for Paytm
  4. breaking monopoly of iex

We cant apply :us_outlying_islands: model to :india: directly because the policy framework is very different

It is the rational decision given our demographic. We need to let that value accrue to our businesses and our users. And not let the bicholiya get fatter.

Always good to study businesses but imo this is not a tenable investment right now. Too many moving parts. I’d let his space evolve for next 1-2 years to see clear government policy direction which may or may not allow for profit platforms to exist (in a way they provide some digital infrastructure so making them free or cheap has multiplier effects on our economy)


Hi Malhar

Whar r ur views on aarvi encon, Its expanding its operations in UAE, Oman etc

I have not been regular in posting here :sweat_smile:. I hope to post more frequently going forward. Sharing some small cap ideas that seem interesting. Would be happy to collaborate on any of them, in case anyone is interested. (Names with hashtags are those where I have tracking positions.)

  • Integra Engineering #

Sales and margins have been quite consistent over the quarters.

One of the independent directors, Mr Mahendra Sanghvi, is the promoter of Shaily Engineering Plastics.

  • Talbros Engineering #

  • Bhagwati Autocast #

They make cast iron and spheroidal graphite iron (ductile iron) castings, mainly for tractors. Interestingly, even though the tractor hub is Punjab/Haryana, Bhagwati’s plant is in Ahmedabad. I am yet to figure out how they navigate freight costs and are able to be competitive.

Clients include Escorts, Swaraj Engines etc

What I found very interesting was that the managing director, Mrs Reena Bhagwati, is a director on the boards of Symphony and Anup Engineering. She has also held leading positions at bodies like the Institute of Indian Foundrymen and CII Gujarat.

The chairman and joint managing director, Dr Pravin Bhagwati, was recently awarded the title of ‘Ironman of Indian Foundry Industry’.

They have incurred capital expenditure of INR 16 Crores to set up a 4.5 MW solar plant for captive consumption. (Expected cost savings?)

I also maintain a ‘priority research list’ of companies that I want to study. At present, some names on that list include Coastal Corporation, Cenlub Industries, BEW Engineering. In case anyone wants to collaborate on these, I would be happy to do so.


The quest to getting better is all about improvement; the route to improvement is through feedback. Long-term investors like myself often struggle with feedback. It is not until at least 5 years that some meaningful results show up. In the meantime, tracking business performance is the only way to gauge decision quality. How can one close the feedback loops quicker? How can one reflect on decision quality without waiting for 5 to 10 years?

The solution: history. Make history your friend, and you will accelerate your learning curve multi-fold.

Since the past 10 months or so, I have been reading historical annual reports of large wealth-creators. The clarity it has added to my thought process is immense.

Here’s what I mean: I might pick up the 2010 annual report of a Page Industries or Astral or Vinati Organics, etc; occasionally, I might also read reports of Nike from the 1980s, or TSMC from the 1990s, or Monster Beverages in the early 2000s (no holdings in any as on date). I then continue reading and highlighting several years’ worth of reports, and make avid notes with AR snippets on a Word document*. (So far, I am at >20 companies with the Word doc at 63 pages!)

This way, I get a dynamic picture of how a particular company evolved over time: how they added product verticals, expanded capacities, entered new geographies etc. Crucially, one often finds generalisable insights that transcend a particular company or industry. It is also revealing to try and ponder without hindsight bias (not an easy task!), ‘would I have invested if I had the facts available at the time?’

Now, admittedly, this is no substitute for having actually been invested over those years. Reading about the various roadblocks along the way is one thing; experiencing them is quite another. With that caveat, it is remarkable how much one can glean by reading ‘vintage’ annual reports…

*In case anyone wants, my document is at For a sneak peek, below is just one among many remarkable insights: this is from the 2011 annual report of a company whose share price has since grown by over 100x (any guesses?). Please note that this is not investment advice.


Any updates on Talbros engineering? They have some amazing numbers.
Curious to know if you did more analysis.

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Hi @Malhar_Manek

Talbros Engg is also featuring in my shortlist of top fundamentally-sound micro/small cap auto ancillary list here.

Happy to exchange more notes on it on a thread dedicated to the sector/company.


Oh nice, thanks for sharing. Unfortunately there is no topic created for this company. I found one for the industry though. Could you please share your thoughts here?


Each of these has moved a lot. As always, regrets of underallocation :sweat_smile:; would love to hear how others deal with this

Have decided to exit Integra. Current valuations don’t make much sense to me. Might buy again later but I think there will be healthy time correction here.

Some more names that seem interesting:

  • Loyal Equipments
    Loyal Equipments (‘Loyal’) makes process equipments like heat exchangers for petrochemicals, chemicals, fertilisers and other sectors.

In 2020, Loyal announced an order from Linde for INR 20 Cr per year for 5 years.

More recently, in October 2022, Loyal announced an order for INR 15.1 Cr from GAIL to be executed in 11 months.

Loyal is a member of Heat Transfer Research Inc (HTRI).

One of Loyal’s competitors, Anup Engineering, mentioned strong tailwinds due to the ongoing capex cycle in their recent conference call. Interestingly, even though Anup’s revenues, profits and market capitalisation are each roughly 10x that of Loyal, Loyal has a higher asset turnover ratio and lower debtor days.

Loyal has cited domestic competition as a key threat in its annual report. Likewise, the above referenced concall of Anup Engineering mentions the increases in capacity by domestic companies. One can find a list of key competitors in tender documents, here and here: Therm Transfer Equipment, Aero Engineers etc.

One can track their exports here.

Loyal has a subsidiary based in Texas, USA, for booking orders (all manufacturing is done in India). Through this subsidiary, Loyal is a registered vendor with NASA.

Loyal has engaged in a consultancy project with IIT Gandhinagar.

Loyal’s posts on LinkedIn have attracted comments from senior managers at reputed firms like GMM Pfaudler, Atlas Copco and Linde India. Managing director Mr Alkesh Patel posted about potential opportunities in defence and aerospace for Loyal.

  • HG Industries
    Acquired by Greenlam, did capex of 125 Cr which commenced commercial production last month, with peak revenue potential of 400 Cr. Market cap is less than 100 Cr.

  • Lakshmi Electrical Control Systems
    LMW group, captive sales to LMW is around 80% of LECS revenue.

LECS revenue historically is around 7% of LMW revenue; LMW concall says their textile machinery division alone will have revenue of 5900 Cr in FY24 backed by current order book. LECS FY24 revenue should be 400 Cr+ conservative

LECS is debt free, >20-25% RoCE consistently, also ramping up sales in smart energy meters and EV charging.

LECS has stake in LMW worth 100 Cr+ at CMP which can itself rise in value. Assuming zero holdco discount, LECS net EV is 170 Cr. Single digit PE FY24 and less than 0.5x sales even conservatively.

In case anyone wants to collaborate on these, I would be happy to do so.

Disc- holdings/tracking positions in all


Hello Malhar,

I live in Bangalore, let me know, if I can be of any help in your research.

Amit Singh Pal

@Malhar_Manek Hi Malhar. I have couple of queries pertaining to above stocks:

Talbros Engg:
How is this company better than Tabros Automotive. What is the revenue potential and scope of margin expansion, came to know that a new plant is getting operational in FY 24. There is no mention on potential business or growth in MD&A in 2022 AR, no investor ppt. On the contrary, Talbros Auto has clearly declared the new orders, potential of doubling turnover over a period of next 4 years. Your insights on this?

Loyal Equipments:
Nothing mentioned in MD&A regarding future potential. less info available in public as compared to Anup. In this scenario, how do you gauge the future potential in these kind of microcaps. Unless we have a strong conviction, allocation in individual stocks cannot be significant.


Agreed there is very little clarity anywhere for Talbros engineering . Margins have expanded for the last year. There is just a line in the annual report saying they will focus on exports for growth. New plant will start in fy24 according to AR

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Hey @Malhar_Manek

Completely agree with you on finding insights in pages of history. As a 22 year old I only have experience of 4 years in the market but reading the great investor and businesses has improved me as a businessman (Like one of Buffet’s famous quips).

I’m starting my research on Lakshmi Electricals and would love to do it with you. Let’s pool efforts and research?


Lakshmi Electrical control system AGM meeting details:

  1. Orderbook: As the company has very short delivery cycle and hard to predict for the long term basis and its as per customer requirements.
  2. Customer Acquisiton: Company is looking to add customers in electrical, plastics, ev chargers and smart meters.
  3. plastic segment opportunity- products consists of industrial and medical plastics and focusing on adding customers on yearly basis.
  4. EV and smart meters Opportunity : GOI is promoting the state discoms to implement smart meters and currently company is working into ac and dc chargers for 3w and 4w, single and three -phase energy meters.
  5. Capex - Estimates would be on business requirements on time-to-time.
  6. Margins - Its low due to raw material availabilty and customer demand and raw materials prices haven’t been recovered fully.
  7. promotors holding - Currently the promoter holdings is low but it would increase its holding as and when appropriate.
  8. Growth- Prof. have been hired already for the growth and company is working towards it.
  9. Roadmap - It wants to be a active player in electrical segment and looking to scale up new products.
  10. Revenue segments - textile, cnc, compressor industry.
  11. Automation of plants- Its under process and it would be starting in H2 of FY24.
  12. Products - assemble control panels for required for textile machinery and cnc machinery, manufacture industrial plastcs, use steel cabinets which products electrical components for panel assembly and polymer for industrial plastics.
  13. Company has done technology absorption for smart meters for which details can be seen in the annual report.

Temporal Alignment in Investing

In meeting well over 200 investors and fund managers over the past couple of years, I have recognised something that separates the best from the rest: alignment. Alignment of interests, and alignment of time horizons. This post is on the latter.

Suppose a find has a long-term investment philosophy, e.g., an average holding period of 8 years. While raising funds, it is tempting to accept limited partners with shorter time horizons, in a quest to grow assets under management (and thus, fees). But doing so can wreck all sorts of havoc: furious clients begin calling after a quarter of negative returns or underperformance, not recognising the managing partner’s much longer outlook.

The very best fund managers I know turn down — refuse to accept — potential clients, when they sense misalignment. They focus instead on attracting aligned capital.

Say no to misaligned capital. One rupee of aligned capital is worth hundred rupees of misaligned capital.

— Mr Utpal Sheth (source)

Doing this is difficult in the short run, since it entails willingly forgoing fees. But in the long term, it imbues the fund with what my mentor calls temporal leverage: the ability to survive in order to thrive.

Consider Nicholas Sleep and Qais Zakaria, who co-ran the Nomad Investment Partnership and returned ~20% CAGR over 20 years.

They also took delight in turning away investors who seemed unsuitable or irritating, regardless of how rich they were. Zakaria chuckles at the memory of a comically awful meeting with a team that managed billions for heirs to the food-packaging company Tetra Pak. These financial advisers demanded access to Nomad’s proprietary stock research as a condition for investing their clients’ money in the fund. Zakaria says the atmosphere grew “frostier and frostier,” with Sleep crossing his arms and legs in a sign of mounting annoyance. After fifteen minutes, Sleep and Zakaria showed their visitors the door.

Richer, Wiser, Happier by William Green

How Nick Sleep Achieved a 20.8% Annual Return For 15 Years | DataDrivenInvestor

Mr Nicholas Sleep

Beyond investment management, I can think of 2 parallels of how misaligned time horizons cause problems:

  1. Asset-liability mismatch (ALM) in banks and NBFCs. Nearly every banking and NBFC failure (apart from outright fraud) involves ALM: borrowing short term and lending long term. In theory, the lender can roll over their borrowings repeatedly. When the goings are good, this works perfectly well…that is, until the tide turns.
  2. Companies that want to build for the long term are almost always punished by public markets (in the short term). Investing for tomorrow’s profit pools entails forgoing profits today: something not appreciated by most analysts and hedge funds, who prefer higher earnings next quarter. It is crucial to have shareholder-management fit, which is why Mr Sridhar Vembu — one of my favourite thinkers — makes it clear that Zoho has no plans to list anytime soon: they are building for the long haul.