So as documented I recently sold out of just dial at Rs. 950 due to reasons mentioned above after enjoying a 30 percent rise. Now one of the potential triggers ie a buyout has… Triggered and The price is now around the offer for sale ie 1020 which isn’t that much higher than my exit price, I am considering re entering but I am a bit confused about this. I am not a fan of the ambanis but I don’t think anyone can say that this isn’t a positive. JDs results were getting progressively worse and the timeline of B2B was a long uncertain affair… So with reliance coming in surely things can’t get worse. May consider opening a position again at 1020 which would be at a premium of under 10 percent of my exit price. I am very confused about this though. I have the cash available but it doesn’t fit with my capital protection plan and I hate breaking an allocation rule when I’ve set it up(and since it’s going well so far since my entry in ITC at 201 and rpsg at 490). Also, I can’t quite figure out if I’m entering a trap of speculation or if this is indeed worth pursuing. This will take a few days to figure out. I understand the business so atleast I don’t need to spend time on that. So far
Case A: this is a net positive. Mani remains… Reliance backs them with cash and name and infra. Floor price is 1020 so entering at fair value.
Case B: this entire space turns into a fight for survival with cash burn with tatas also entering. Reliance benefits from the assets and workforce and improves its digital penetration while just dial as a whole stays stagnant and acts as an ancillary.
Trying to figure out what else could happen. I’m not used to speculating based on a takeover 
I have admired and immensely benefited from your thought process and conviction on Deepak Nitrite and Laurus Labs. But in relation to Just Dial, if we look at its history from IPO, it is nothing but a huge disappointment. Disruption after disruption happened in this space and the stock is no where near its initial histeria price even after a decade. Growth or profitability is as unclear as ever. From what I understand, this business was a bit more than yellow pages which has been totally disrupted by the likes of Google and Facebook Ads. From then on this company is starting a number of also ran businesses (recently competing with Indiamart), none of which has a clear future at present. (big) Maybe deep pockets of Reliance can help. Then there is the risk of buyout or merger or equity dilution at low price by Reliance. I think JD’s management does not have the quality of Deepak Nitrite or Laurus. Why are you still interested? You should be wary if the competition is google, Facebook and Tatas.
@SlownSteady
It’s an out of comfort zone bet. I barely have anything as a direct digital play… The closest u have is Vaibhav Global and Intellect Design arena from lower levels… And I cannot justify paying high PE multiples for a space that I’m not comfortable with. I know there are wealth creators and destroyers in this space and I’m not comfortable enough to bet on anything with high valuations here since this space as a whole can change overnight. Just dial was something that caught my fancy in the low teens valuation in this space and post study I realised the business wasn’t as bad as I had perceived it to be. I’d always rather bet on low valuations and with the way things are right now I doubt il get a chance to do so in anything else in the tech space for years to come. I found it interesting that there was a tech company near bottom with low downside and the Concalls and management surprised me tbh. They aren’t a Laurus or a deepak level for sure… But I’m a huge fan of Mani. The core business imo was something that nobody could revive in a fight with Google and yet they somehow managed to chug along with a steady increase in top and bottomline the past decade. This new B2B venture is what I’m interested in though. Reliance coming in could quicken the timeline and lower the risk of it coming to fruition and the valuations are still reasonable. Hence, why I’m interested. And yes it goes against my usual style totally. Hence why I’m on the fence and not even sure if il do it. I’ve been staying away from the market for reasons like this lol. The market found me with the reliance just dial deal literally everywhere. I think I’m just going to end up sticking to my original plan and admit i fell to the pull of the bull market yet again and move on.
Thanks @SlownSteady… I needed a reality check… Will just continue saving money on the quiet and keeping it ready for further addition to ITC and for financials like Idfc early next year when the tide finally goes out and reveals every skeleton in the financial space.
Excellently put and echoes my thought process of key long term risk. I think in such acquisitions this risk remains because we don’t know and would never know what’s in mind of the acquirer…just like pharmeasy acquisition of Thyrocare.
I think we need to think if the synergy would help the acquired business and if acquiring promoters would let it flourish…again speculative.
For API holdings, Thyrocare is not its main business and similarly for RIL, JD is not its main business…tough decision…
Disc. Took small position in both Thyrocare and JD near open offer price. Not sure about above thoughts but like individual business & valuations & expected triggers if synergy plays out. Not buy/sell recommendation
Hi
Can you please share your views on Xelpmoc
Thanks In advance
@ganesh_bastwadkar
It’s an interesting company. I was interested in it since I wanted some sort of exposure to the startup space and it seemed the only option next to info edge… Entered at around 250 but exited recently too since there was another safer option in the startup space that I’d missed initially. The problem is the valuations were too high(though I must admit mihup and fortigo look fantastic) and the core business wasn’t that great. I have allotted the same cash in rspg ventures instead post the crash after their latest result. I scratch my startup itch but with a safety net. First source solutions looks an able cash cow and based on my study has a steady future and the optionality of growth… And the bonus is this money is used to build Fmcg brands ie too yumm etc. The valuations are dirt cheap due to the aforementioned first source solutions… And i also find sanjiv goenka to be someone who’s vision I can get behind. The little scuttlebutt I did regards placements and what colleges felt about goenka and rpsg and the pay packages offered to students along with ex students currently working there convinced me too. This bet gives me exposure to both IT and Fmcg… 2 sectors that I want to increase exposure in anyway and I feel my money is a lot safer here with huge potential for growth and value unlocking over the next decade. Basically, rpsg equals peaceful sleep and xelpmoc equals one eyed open sleep for me atleast.
Note usually with under 1000 crore companies I guage the placement scene since I have a front row seat to that and can talk to both aspiring employees and employees too. Xelpmoc was literally unheard of… Even companies like ugro capital enter these circles with 30+ lakh pay packages(though I’ve yet to talk to an actual employee at ugro apart from investor relations). Not saying this is the main criteria of course… But rpsg seems the far better bet for a safe startup play.
Hi @Malkd - would be good to know your recent thought on Just Dial. Will it be a long term beneficiary of the Reliance acquisition? Den & hathway havent worked in favour so far but those were competing businesses while JD is complimenting at present…
@Investor_No_1 i 'm unsure. On the face of it everything looks fantastic. With reliance backing it they could speed up their B2B and pose a threat to the udaans and indiamars of the world faster. However, reliance could just as easily use the database and infrastructure to boost their jio suite. Having a database of customers and reviews and learnings from JD could be the value reliance saw and in the medium term that could be what they concentrate on. So in this case maybe if bullish on this venture buying reliance would make sense. Im very confused about how this will play out. I’m not sure if I want to back anyone in the B2B space either since it looks like it’s become the new fancy of conglomerates and could be a fight with cash burn over the next few years with a few winners standing. Considering I’m pursuing capital protection now in this heated market I’m just going to sit on the sidelines and watch it progress for the next few quarters. Currently I’m just eyeing safe havens like ITC and even Hcl(and maybe even reliance) and financials like idfc in a few quarters once I understand the full scope of the covid impact on them… So just dial will just have to sit on the back burner until a much later period… Ie probably mid FY23. By then we should have a clear understanding hopefully.
Hey 
Could you please share what you found either here or in the RPSG Ventures thread? I’ve been tracking senior management hiring at Guiltfree Industries and Dr. Vaidya’s, since Anupam Bokey left the former, and the vision for the latter is extremely crucial at the moment given the heart and soul of Dr. V have left the firm post acquisition.
Would love to hear what you’ve found out, as RPSG’s AGM hasn’t provided much insight, and the venture fund is a lot more vocal than the rest of the business.
Thanks!
@Chins
I am not sure if I can disclose exact information. Regards the company as a whole you have done a fantastic job so I wont even attempt to talk about their business here. In short I work with a lot of colleges on the placements side… Ie I’m unofficially in 25 placement cells at engineering/non engineering students and I have most of my ex students in top Bschools across india. About a month back there was an rpsg buzz everywhere since they were hiring from all levels ie UG and Pg. So I got a good idea of what they are hiring for and the salary etc and also got to speak to a lot of people involved in that process. The feedback from all involved was good too. For bigger companies I don’t really bother… But when small companies/startups start hiring it always adds something tangible to the thesis and gives me a small low level employee foothold in the company for the medium term so I can keep a passive track on the corporate governance side(ie how they treat them etc… Since corporate governance is the one of the most important thing that matters once an investment thesis is made). I’m not sure if I can disclose more… But seeing that play out in real life + your fantastic posts + the huge crash post results made me a buyer. I personally don’t think we ll be getting a lot of worthwhile info from the management at current stage. I currently pretend I own first source solutions and just track that. For the Fmcg side I just use your posts in the thread haha.
Thanks for sharing your scuttlebutt.
Your comments about hiring and how new employees are treated shows me that the management has ambition, and are very valuable in getting a peek inside. This is one of the missing links in my understanding: how much Sanjiv Goenka plans to commit to the FMCG business, given the size of the conglomerate. Your comments also tell me that we can’t rule out the venture fund becoming a lot larger in the future. There’s no reason why they won’t buy a larger stake in companies like IncNut and mCaffeine down the line…
Thanks for the kind words, and happy to see you become invested.
I wouldn’t extrapolate so much into it. They hired across UG and PG but I haven’t disclosed the positions or salaries or how many jobs. They just became tangible for me. I wouldn’t use it as part of An investment thesis
Great, since we discussed it recently, as a disclosure today I sold out my tracking position in JD, along with some minor additions I had done before the deal, completely today at almost same price as cost.
Somehow, I feel I am able to make money with some type of management more than others. My experience with RIL had also been not so good. Nothing to do with RIL, its more to do with me and my fault. Somehow, I tend to lose my patience, confidence (even wrongly, as in case of RIL) with certain type of companies. With RIL coming into picture in JD (I was expecting the Tata’s), and add to it the history of their recent acquisition of Hathway & Den and subsequent challenges faced by each - unfortunately I lost conviction in my story. When it was falling after the deal, I did not feel like adding it and that was my trigger point to let go a business that I am not willing to add when it falls even though I have very small current position.
I maybe wrong in my assessment of JD’s future with RIL but past history of RIL acquisitions do not give me courage & conviction to add JD anymore…
Disc: Not a buy/sell recommendation. Personal view for academic purpose only. Can be completely wrong in my assessments
@Investor_No_1
I think that’s a good decision. I’m staying away from JD too. I’ve never really been a fan of reliance either. One of the best decisions I’ve made recently was locking up my cash in ITC so I don’t have the money available for any other bets so I was forced to ignore JD. Also, luckily one of my favorite companies ie alembic pharma is now at a level I never thought I’d see again ie Rs. 830. So I’ve spent my wife’s free cash there as part of the capital protection PF since. Will Continue building a position in both itc(for me) and alembic (for her) next few quarters at hopefully continued depressed valuations since I can’t see these opportunities lasting for more than a year.
If I may pick your mind, why do you think price erosion will not continue for generic pharma like Alembic. The phenomenon cannot be US centric. Right?
@sanjeev_thakur
I believe it will continue…And I’m sure the share price will continue getting pummeled for the next 2 to 3 quarters. The thing is I have no problem with that. I trust the company long term and I’m getting a chance at prices that I feel are reasonable for the long term since I can’t overpay for businesses and have to wait for chances like these. The key montirable for me has been the India business. Being a branded market India = stability, and the bigger the India contribution the better. And the contribution was more than I expected this quarter. Same with api and row. Slowly but surely dependance on the USA is going down and in a few years I won’t need to worry about Sartans and pricing pressure etc. I personally prefer buying companies when the chips are down and the odds are against them. I trust the management over the long term so I’m going to make use of this short term(1 to 2 year) problems to build a position at cheap valuations. They don’t have any existential threat even with debt and I am betting on them navigating this period and concentrating on the non usa segment to prevent this happening in the future. That being said with eps guidance out the window valuations may not even be cheap right now… But they will be cheap as chips considering FY23/24… Note that Laurus labs is my main pharma bet and is the better option for growth by far. However, with my wife’s portfolio I look for slow stable growers that I can hold forever and where I can see a bottom at a max 20 percent away for capital protection And hence why I’ve added it to her PF today(though I’m splitting the buying into tranches over 1 year or more) and not mine. The way I look at it is I’m getting a blue chip pharma company with 57 percent branded and api contribution… With the optionality of huge spurts of growth in the USA whenever an opportunity like Sartans comes around in the USA in the future (and their continuous R&D spends and anda Approvals means this can happen anytime) + A foray into injectables. And as a bonus I get to build a position during pessimism so the valuations wouldn’t capture any of the optionalaties when they play out in the future. Next buying tranche will be at 750 and then 700 if it does infact reach there over the next few quarters. Personally, I think the market overreacted so I’m not holding out hope for such a drastic fall and hence why I started building today.
Have u ever checked symphony and any opinion on that…??
Today and tmrw are days I am going to be very active on here since most of my companies have their results coming out on 28th and 29th July. Things have started out fantastically with embassy office. Finally the fog on office Reits seems to be lifting and it’s already performing at a level I thought would only be possible in FY23. Betting against WFH and real estate being a white wash during covid seems to have given a nice safety buffer here since the days of low 300s could potentially be long behind us now in embassy. The result blew me away so much that I’ve added a bit into mindspace too for my wife’s portfolio since it’s still at good discount to nav(though I still prefer embassy by far due to the management communication).
I am also currently attempting to catch a falling knife with alembic for my wife’s portfolio. While every bone in my body is currently quaking with fear doing so… I can’t help but see the potential here post what could be a rough 2 year period… The same applies to jubilant pharmova which is at dirt cheap valuations too. And hence why il be siping into alembic as my long term project in my wife’s portfolio. The valuations of both these companies is too good to pass up for what they offer.
My strategy has stayed the same. I have been courting itc… Added a huge amount at low 200s and waiting for my next chance which hopefully happens in a few quarters if the government decides to sell. I am considering adding a little more of Intellect Design today after what I thought were perfectly reasonable results.
A company on my radar is amaraja batteries though. Looks like a good capital protection play with good dividend and most of its problems(no eV play, institution selling etc) slowly going into the rear view mirror. I still haven’t guaged the promoters well enough to open a position but I’m getting there. Financials, especially Idfc is tempting me at current valuations. However, since I’ve waited so long I feel I might as well wait for the post morat npas and voda situation to get cleared now.
I’ve lowered my expectations for Laurus, Deepak, Vaibhav and Oracle(OFSS has been on a tear though) based on market action pre results all of whom have results due over the next 48 hours. I’ve reached the point where I’m hoping for bad results from my companies so I can add more in this heated market.
Cheers.
@PraveenKG I don’t track symphony. Sorry
Edit: managed to increase my position by 50 percent in Intellect Design arena at 720 Rs which is a price I did not think I’d see again especially after a robust result. I’m glad I had a chance to do the same since I was getting annoyed with my allocation(albeit at a much lower Rs. 430) but I wasn’t so sure about adding to it at higher valuations post q4. Luckily Mr market complied.
I have been following your thread. Can you kindly comment on Alembic Pharma as the results have been rather bad. Is it a good price to accumulate , especially since its almost touched its yearly low. Regards.
@satish58 if someone offered alembic at under Rs. 800 to me a few months ago I would bite their hand off. Now it’s actually available at that price and nothing has really changed. The sartan opportunity fading was something that was known… The extent of it was a shock but that’s how it is with the generics business. See, I firmly believe businesses are moving pictures and what we look at today is just a snapshot in their decade long histories and futures. I trust the alembic management and I believe they were as shocked as we are with their severity of the results and will do everything in their power to prevent this happening again. They’ve already built their branded India business to a big scale and apis are growing nicely too. Once injectables come on board they’ll have a good predictable base to prevent this from happening again. With their R&D spends and andas lined up they could easily capture another spartan type opportunity for further upside too over the next few years. Personally, I prefer buying good companies at the bottom when things look bleak… Since it opens up future upsides. In 3 years when it’s blue skies I don’t want to buy alembic at 30+ valuations and expose myself to such a shock in the future. I like when shocks like these are priced in so that I can enjoy the run later. That being said the generics business in general is a horribly unpredictable commodity business and this current usa dependability won’t go away anytime soon so expect a LOT of pain and if the branded business and api growth stalls a re rating could be a long way off since investors seem to have cooled down on generics. I will be adding slowly but surely at all dips in sip format for the next few quarters. There could be further downside and the pain period could be long so I don’t want to lock a lumpsum in here. At the end of the day it comes to investment style. I don’t mind taking a hit for a few quarters or even years to improve my result 5 to 10 years from now. At the end of the day, for me atleast, everything until atleast 5 to 10 years pass is unrealized gains. So why does it matter if it goes up over the next 2 to 3 year? If anything it offers a chance to build a bigger position for me to reap the rewards 10 years from now. Every company will go through growth and stagnation/decline… Even the highly valued companies people chase in the lieu of fast growth and quick profits. I’d rather buy during the decline and wait for reversion than do it the other way round. If one does not have the patience then maybe waiting for charts to give an entry point would be good ie when it closes above 200 or 50 dma… And alembic is nowhere close to being settled chart wise so the drop could go lower next few quarters… Since I’m siping I am looking forward to that. I follow charts for entry with some stocks especially when I’m not too sure about the long term story or management… Here I am. My investing style is more suited towards accumulation during bear markets and letting my companies run during bull markets . So I’m very comfortable investing here.