My attic and Investing Journey

Accelerated Learning
24

Hi Ishmohit (@Worldlywiseinvestors), There are two hidden types of Capex I think can be added to the list:

  1. Some companies report technology improvements or work on IT enhancements, etc. as operating expenditure (opex). But these are actually their capex. These expenses show up on P&L and hence affect profitability in the short run. But they enhance “capabilities”, in order to reduce cost or increase revenue in future. Hence the saying, for new generation of companies, opex is capex.
  2. The second type is the converse of this. Some unscrupulous companies capitalize certain project expenses that should actually be opex. This may temporarily bump up immediate quarterly numbers, but impose needless depreciation burden over the subsequent years.

Based on your experience, how do we identify these hidden types of capex.

1 Like
25

One naive question i would like to ask
During all these capex investments, how do we know , whether promoter is telling the truth? What if he says that capex of 300 crore is done, but in actuality only 280 crore is done?
There is a huge scope of taking money out of company in the name of capex. How can we be sure, if this is not happening?
After all we are trusting all the figures that promoters are telling us. And we know how auditors can be hand-in glove with them.
Such kind of mis-appropriation of funds has more possibility in such kind of capex-intensive businesses.

5 Likes
26

Have you studied PayTM’s lending business? Seems like one day it will disrupt the micro-finance sector. Do check it out and let me know your views. Thanks in advance.

4 Likes
27

Solid results this Quarter continues…

Spandhana, CAGL and Ujjivan have reported good QoQ and YoY growth.

New sector always emerge in different cycles.

Disc: no reco to buy or sell. No trades in last 30 days in the above mentioned names.

13 Likes
29

Hello Ishmohit,
In your opinion which are the few themes in India which will continue to play out in the medium term?
I am positive about these themes

  • Infrastructure
  • Renewable Energy
  • Ethanol, Biofuel capex
  • Maritime: Cargo Handling, Ports operations and Ship Building

Not sure about the below themes which have already given massive returns recently

  • Railways (IMEC uncertainity in short term)
  • Auto Ancillaries
  • EMS (P/E has exploded in last 6 months , and earnings growth does not match that)
30

Greetings sir.
From couple of weeks plywood sector is gaining attention I noticed abrupt moves in prices what am I missing .
Thanks in advance