My Summary of MOSL Wealth Creation Study

Attaching PPT of summary of various wealth creation studies done by MOSL.MOSL Wealth Creation Summary.pptx (1.7 MB)

Please go through it and give feedback on it.

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Subhash,

Very Nice effort. Presentation is simple and to the point. The curves on Lifecycle of an Organisation and Lifecycle of Commodity market was key take away for me.

There were some Redundant Slides like the DNA of Wealth Creator. Overall a laser straight info share.

Hi Subash

The Presentation is simple and easy to understand. Thanks for sharing this.
One suggestion is you may add one more slide for “Buy Right and Sit Tight” as after finding a great business one need to hold it for longer periods.

Cheers,
Pavan Morishetty

Nice work Subash…condensed wisdom of all the reports

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@bhaskarbora67 Thanks

Thanks Subash for the efforts

Thanks Subash, Look forward to more such posts from you.

Excellent write up and presentation Santosh.

I found even more informative than MOST study report itself.

I didn’t see this summary earlier.
Very well summarised and easy to digest, as it makes it easier to get the gist of the MOST study without going through the entire original document.

Kind Regards.

Hi friends,
Any one having details of 21st wealth creation study?
Can any body share highlights?

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I have a question, mr ramdeo in begining speaks that the faster the GDP makes its next trillion, the faster the durables would grow as essentials would remain comparatively slow growers… although I don’t completely agree with this assessment for India yet…but that’s a different discussion…what my question is that having stressed so much on the exponential increase In durables, still the final 25 ideas lack any strong consumer durables… With the initial example and thrust on durables increasing the most in every next trillion increase of GDP, I would have expected at least 5 to 7 consumer durables ideas figuring in final 25…
Views invited

There are 5 - bajaj finance, bata, dixon, Page, Whirlpool

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Thanks, I missed them. I would take them as 4 - Bata, Page, Whirlpool and Dixon.

Infact on second thought, I would take pure play consumer durable as only one in the list - Whirlpool. Rest, bata is more of a retail/essential while page is again retail/discretionary in an essential segment and Dixon is contract manufacturing business. Views invited

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25th wealth creation study was a delightful read, listing my key takeaways/things I found to be interesting below:

  • Market does seem to overvalued, have to be prepared for a market drawdown anytime

  • I liked the “25 for 25” idea, wherein the study lays out the following criteria (basically it is a good screen-quantitative + qualitative)

And the results are :

  • Some of these stocks are widely discussed on VP, definitely warrant a closer look especially the industries which are emerging such as Life Insurance and Asset Management

  • The most practical part of the study for me was the QGLP checklist:

Over the last several years, we have evolved our own formula for compounders. We call it “QGLP” – Quality, Growth, Longevity, reasonable Price (Framework #4). Here –
• Q stands for (1) Quality of Business and (2) Quality of Management
• G stands for Growth in earnings
• L stands for Longevity of both Quality and Growth
• P stands for reasonable Price.

The QGLP Checklist

BUSINESS CHECKLIST
Q#1 What is the history of the company and management?
Q#2 Is the company’s business model understandable? How does it make money?
Q#3 Is the company profitable? If not, is it expected to emerge?
Q#4 Are the company’s terms of trade favorable? Is Cash flow healthy?
Q#5 What is the company’s cost and margin structure? How has it changed in the past? Q#6 How’s the Du Pont Analysis for the company?
Q#7 What is the competitive landscape? What is the role of regulation in the business? Q#8 Does the company enjoy an Economic Moat? What are its sources?

GROWTH CHECKLIST
Q#9 What is the addressable market opportunity and its key drivers? Q#10 What is the company’s growth plan? How sustainable is the growth?

MANAGEMENT CHECKLIST
Q#11 Is the management high on Integrity & transparency?
Q#12 Is the management competent?
Q#13 Does the management have passion / growth mindset?
Q#14 Does the company have a rational capital allocation policy?
Q#15 Does the company have a suitable organization structure and depth of management? Q#16 What is the organization culture?
Q#17 Does the company have a sound succession plan?
Q#18 Do the owners have enough skin in the game?
Q#19 Have the promoters pledged a large portion of their holding?

PRICE CHECKLIST
Q#20 Has the financial modeling been done with earnings estimates for at least 3 years? Q#21 Is it a QGL stock?
Q#22 Is valuation reasonable?
Q#23 Is there enough Margin of Safety?
Q#24 Is the stock reasonably liquid?

RISK CHECKLIST
Q#25 What can go wrong with the company narrative & numbers?

  • I remember one video of Prof. Aswath Damodaran where he says the same thing about M&A, that if any company in his portfolio wants to merge with another, the stock is a sell for him

image

I think what he meant was in general “consumer facing businesses”, paraphrasing below from the report:
“We preferred consumer-facing companies with secular business models. So we eliminated cyclical businesses like Auto ancillaries, Capital Goods, Chemicals, Oil & Gas and Realty”

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Thanks @Ansh_Gupta for beautifully presenting MOSL study.

I had 2 queries which I raised to Shrinath Mithanthaya of Motilal Oswal (Co-author of report). Putting his reply for VP friend, consider you may like it.

Q-1: Ref Page 14 of report.
You indicated that Mega includes Top 100 companies however if we calculate companies in Mega total comes to 97 (32+20+45). Same with Mid companies; its total comes to 131 (10+22+99) instead of 150.

Could you clarify missing numbers of companies (3 in Mega and 19 in Mid)?

MOSL Reply:
The missing companies are indeed delisted due to (1) merger or (2) bankruptcy or (3) voluntary delisting.

These are the 3 Mega companies in 1995 which are now delisted –

Core Healthcare
Mideast (India)
Carol Info Serv.

These are the 19 Mid companies in 1995 which are now delisted –
Assam CO. (I)
Baroda Rayon
Malanpur Steel
Futura Polyester
Usha (India)
Modern Denim
SOL Pharma.
Winsome Diamonds
Value Industries
Modern Syntex
Modern Threads
TPI India
Sanghi Polyester
NEPC India
Mardia Chemicals
Autoriders Fin.
Silverline Tech
Cons. Finvest
Apple Credit

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Q -2 to MOSL.

As per report
Total Companies in Mega category:
4 Moves from Mini to Mega
10 Moves from Mid to Mega
32 remains in Mega
With that it makes a total 46 out 100;

Remaining 54 are new entrants? If you could share a list of that as well.

MOSL Reply:

These are the 54 are new entrants into the Mega category –

Wipro
UPL
Aurobindo Pharma
JSW Steel
HDFC Bank
TCS
ICICI Bank
Power Grid Corpn
Bank of Baroda
Maruti Suzuki
IndusInd Bank
Axis Bank
HCL Technologies
O N G C
DLF
Punjab Natl.Bank
United Spirits
NTPC
I O C L
Coal India
NMDC
Power Fin.Corpn.
GAIL (India)
Marico
Biocon
Bharti Airtel
Tech Mahindra
L & T Infotech
Info Edg.(India)
Alkem Lab
Petronet LNG
SBI Cards
Indraprastha Gas
Cadila Health.
Divi’s Lab.
HDFC AMC
Adani Ports
Godrej Consumer
HDFC Life Insur.
ICICI Pru Life
SBI Life Insuran
ICICI Lombard
United Breweries
Muthoot Finance
UltraTech Cem.
Yes Bank
Bajaj Auto
Bajaj Finserv
Interglobe Aviat
Bharti Infratel
Avenue Super.
Bandhan Bank
Adani Green
Embassy Off.REIT

Any comment / feedback?

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Motilal Oswal 27th Annual Wealth Creation Study

(Actual video starts from 29.10 only)

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Motilal Oswal 28th Annual Wealth Creation Study - Hockey Stick Return is the theme for this year.

(Actual video starts from 45.5 only)

summary available part of press release.
https://www.motilaloswalgroup.com/Media-Room/Press-Release/-/motilal-oswal-28th-annual-wealth-creation-stu/FS/20499

study report now available below

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