Satish's SME Corner : Notes and Con-call Updates

Investment Learning
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Afcom’s Alphaideas SME meet talk by promoter gives hint on the strategy with regard to their expansion into places like Maldives, Hanoi etc and using them as trade/Transhipment hubs and I think Nauru also falls into same bracket. Mgmt. explained that Maldives is a tourist destination with no export of it’s own and imports mainly from UAE. But due to strong tourist inflow many international airlines fly some of their best large aircrafts from US/Europe/South America into the island with empty belly space having capacity as large ~20MT. But those are going unutilized. So idea is to utilize those belly space at discounted rates.

Trade between S.Korea/Japan and India is increasing. So typically a cargo from S.Korea to India would fly to Dubai/Abu Dhabi and then to India and cost 5$/kg. However the same cargo from S.Korea to Hanoi (tie up with VietJet) would cost 90 cents/Kg and then 50 cents/Kg from Hanoi to India. Cutting overall cost from 5$/kg to 1.4$/kg

Nauru looks like a small island with not much export of it’s own but has direct flights from Brisbane, Singapore, Sydney, Fiji, Philippines etc…

This kind of arrangement looks like a win-win for all the parties concerned.

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I had brief investment in Afcom after listening to concall few months back but had exited recently after their 3rd and 4th planes induction & approval are continuously delaying.

Also for additional higher capacity plane ordering initially planned for 2 they could have gone ahead with Equity dilution in parts but reasons unknown they did it more planes and more dilution for better long term growth but -ve for investors in short term

Also, 1 blog i recently came across is below, not sure how true it is on unit economics and question raised, feedback welcome

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One thing to remember about Afcons is that being an SME company, they are not required to follow Ind (AS). The financial statements are prepared as per Indian GAAP and have to be read & interpreted with care, as they would not be the same as what we are normally used to. For example, lease liabilities are not capitalized upfront and hence, leverage will appear significantly understated compared to say, an Indigo or SpiceJet. That said, I like the cargo business. It is preferable to passenger transport though the latter may be more glamorous.

(Disc.: No positions)

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Currently, Afcom is what you would call a transshipment cargo airline operator.

It makes money by using the belly-load capacity of other airlines.

For example:

A lot of tourists fly into the Maldives. Since the Maldives is not a major trading hub, a large portion of belly cargo space flies empty both inbound and outbound.

Afcom buys that empty space at a cheap rate from airlines (for the airlines, it’s essentially free money because that space would have gone unused anyway).

Afcom then uses its own aircraft to move cargo to the Maldives, and from there the cargo gets transshipped to the US and other countries.

The same logic applies to the Hanoi route as well.

That’s why business is so profitable.

I don’t think there are any bold claims as mentioned in that Sub stack post, it’s indeed a unique business.

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Thanks for sharing your insights, really helpful.

Apologies if this sounds like dumb questions (since I am new to SME stocks) -

  1. does 6 month lock-in for Pre-IPO investors also apply to SME stocks including Monarch? was trying to find this information from DRHP but search for Pre-IPO investors yielded zero results.
  2. Anchor investor lock-in is 3 months - is that understanding correct or it is 6 months in this case as well?

Just trying to gauge if there will be some hangover on price till last week of Dec. Thanks in advance!

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  1. There was no pre-ipo here.
  2. I think 50% anchor lock-in open after 3 months and another 50% after 6 months.
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Can anyone do this business or is there any unique differentiation required to plan or manage. Others can compete on pricing with airlines and take afcom seats??

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What are people’s views on EMA Partners? I am new to fundamental research and currently working in the corporate sector. I understand that CXO hiring can be an exciting opportunity. Based on LinkedIn profiles, the Indian leadership team appears capable and experienced. I also see that K. Sudharsha holds a significant stake in the company, but I am not clear on how the Indian entity is linked to the global EMA Partners network? Any insights ?

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Indian entity isn’t linked to Global EMA nor paying any royalty. I guess Global EMA partners were generous enough to let use it’s brand.

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Jaykay gets 80 cr order ( JV share ) order from IRCON.

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Sharing some notes I made for myself and friends over the last few weeks.

Key Positive Triggers for India macro:
1.⁠ ⁠Good rainfall this year and limited Summer. This should have bumped up ground water table in depleted places.
2.⁠ ⁠⁠Interest rate cuts and direction also seem to be either going to go lower or remain stable here, no hikes in rates for now.
3.⁠ ⁠⁠Pay commission hike effective from jan 2026, estimated to be around 0.7% GDP ⁠. 2.5 Lakh crore outlay.
4.⁠ ⁠⁠Last year tax changes for salaried guys savings is around 1 lakh crore overall.
5.⁠ ⁠⁠GST rate cuts , around 50,000 cr tax let go by govt due to cuts taken.
6.⁠ ⁠⁠Very low inflation rates.
7.⁠ ⁠⁠Rural growth and urbanisation intact .

Investment Philosophy
In investing there is a time for sowing the seeds and watering the crops and then there is time to harvest the crop. Current slowdown(exiting) in FII activity due to rupee sliding against dollar is causing the stock prices to trend lower. This can turn around anytime and no one can predict the trend accurately.

Patience is the Key
Our job is not to fight the trend nor to wait for the trend. We just have to ensure to buy the right stocks backed with Deep research at lower than the intrinsic value.
Post that if market takes the further low, we add more if we have cash or just wait.
I do expect we will see very good returns for the coming year.

VIX is low
VIX is trading below 10 indicating very low interest and activity and hence dried up trades with very low volumes. Lower VIX shows low volatility going ahead for next 30 days. So there is chance we have 1 more month to buy some of the stocks if not having desired quantity .

Key Risk items :
Rupee going down too much from here.
Trump doing some more new weird things.
One more New War from US , China proxies.

Note : These are not recommendations on what to do in your portfolio. I am just trying to share my optimism for the coming year after a very rough year in terms of returns and volatility.
PS : I am not an expert on macro or technicals, so please treat my view on this with caution.

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One additional key risk to monitor is the upcoming round of state elections, which may lead to a shift in the government’s policy priorities from capital expenditure toward increased spending on “freebies”.
Major state elections scheduled for next year include Assam, West Bengal, Tamil Nadu, and Kerala.

Data of past major elections (Generated with Gemini):

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Excuse me , but which budget is under discussion here ? States or centers ? And which infra capex ? States or centers ?The ruling party may not win the elections except one … just look at the state names…so whatever they pledge wont get used . Also ,declaration during pre-poll and execution after budgeting also has disconnects …right ? So how can one actually say that infra capex is not going to happen based on some poll promises ? Sentiment is one thing ..it affects the market mood but it does not really translate to ground realities always ..

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Watch from 20th minute to understand my POV better https://youtu.be/u3tDFrY1RQs?si=nk8efxvNvP2ikJPU

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Good rainfall and short summer was not good for all industries.
Floods caused infra damage in some states. at one point there was A.C Inventory of around 4M units across brands.
Microfinance Industry also took a hit in M.P, Rajasthan, and Gujarat.
another big negative is Japan increasing rates, slowly liquidity is getting sucked up in global markets.
Big Positive for India is Crude which is hovering < 60 USD/Bbl budget estimate was i think around 75-80 although that is reflected in Inflation data covered by you.
Wealth wise Indian Household savings had been decreasing continuously but that had been offset by the Family Gold and Silver.

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Neetu yoshi - The promoters are Lohia - Jupiter wagons directors Lohia - I believe they might be some distant relatives and are getting support from there…Will have to dig deeper

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They’re not related. I asked them about it. But I believe they do have some industry connects with a Hyderabad based railways company.

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An off topic post:
Money saved is money earned !

Found this one works well. You can check all your UPI mandates here and cancel too..

Big Relief for UPI Users: NPCI Tightens AutoPay Rules to Stop Hidden Subscriptions - Times Bull?

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I have compiled the various order wins recently and found that these are quite widespread and continuous, but the market is ignoring everything. What are we missing as a retail shareholders?

Order wins post IPO Listing:

11/10/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Letter of Acceptance for Engagement of consultant for all Land Acquisition Activities for Package - Rajkot to Dwarka Length of Proposed Somanath Dwarka Expressway. The total order value of the project is Rs 41,43,37,275/-(Rupees Forty One Crores, Forty Three Lakh Thirty Seven Thousand Two Hundred and Seventy Five Only)

The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Letter of Acceptance for Engagement of consultant for of consultant for all Land Acquisition Activities for Package - 4 Rajkot to Porbandar Length of Proposed Somnath Dwarka Expressway. The total order value of the project is Rs 37,66,70,250/- (Rupees Thirty Seven Crore Sixty Six Lakh Seventy Thousand Two Hundred and Fifty Only)

The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Letter of Acceptance for Engagement of consultant for of consultant for all Land Acquisition Activities for Package - 6 Jetpur to Somnath Length of Proposed Somnath Dwarka Expressway. The total order value of the project is Rs 21,80,72,250/- (Rupees Twenty One Crore Eighty Lakh Seventy Two Thousand Two Hundred Fifty Only)

The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Letter of Acceptance for Measurement of all yards using advance trolley under the jurisdiction of Senior Divisional Engineer North of Bilaspur Division. The total order value of the project is Rs. 2,05,93,870.70/- (Rupees Two Crore Five Lakh Ninety-Three Thousand Eight Hundred and Seventy Rupees and Seventy Paise Only)

The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Letter of Acceptance for Conducting Final Location Survey, Associated Geological Studies, Traffic Survey, Techno Economic Studies & Design of Railway alignment and Preparation of Detail Project Report (DPR) for Construction of Additional New BG Railway Line between Jammu Tawi (JAT) and Shri Mata Vaishno Devi Katra (SVDK) Railway stations of Jammu Division. The total order value of the project is Rs. 6,18,96,221.98/- (Rupees Six Crore Eighteen Lakh Ninety - Six Thousand Two Hundred and Twenty-One Rupees and Ninety-Eight Paise Only)

05/11/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Work Order as Appointment of Agency for End-to-End Land Acquisition Support including Direct Purchase, Documentation and Liaisoning up to mutation for Naveen Nagpur Project under Nagpur Metropolitan Region Development Authority. The total order value of the project is Rs. 4,15,40,000/- (Rupees Four Crores Fifteen Lakh Forty Thousand Only).

The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Work Order as Appointment of Agency for End-to-End Land Acquisition Support including Direct Purchase, Documentation and Liaisoning up to mutation for Outer Ring Road under Nagpur Metropolitan Region Development Authority. The total order value of the project is Rs. 10,74,00,000/- (Rupees Ten Crores Seventy Four Lakh Only).

06/11/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received Letter of Acceptance for Providing facilitation to Competent Authority for Land Acquisition (CALA) under the Railway Act, 1989 work to the Railway Projects of Doubling and traffic facility works between Chikajajur and Bellary stations in Mysuru Division and Hubballi Division of South Western Railway. The total order value of the project is Rs. 3,19,14,172/- (Rupees Three Crores Nineteen Lakh Fourteen Thousand One Hundred Seventy Two Only).

12/11/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received Work Order for Implementation of pilot project of surveying and mapping of Sub-division Land Parcels across 18 Talukas of Maharashtra. The total order value of the project is Rs. 3,87,26,240/- (Rupees Three Crore Eighty Seven Lakh Twenty Six Thousand Two Hundred and Forty Only).

18/11/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received Work Order for Optimization of Interchanges Construction of Nagpur – Goa (Pavnar – Patradevi) Access Controlled Super Communication Maharashtra Shaktipeeth Expressway in Maharashtra State and total order value of the project is Rs. 4,32,00,000/- (Rupees Four Crores Thirty Two Lakh Only).

06/12/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received Appointment Order for GIS Based Base map creation & Door to Door Property Tax Assessment Survey of All Properties and supply installation, implementation and integration of offline with response QR code solution for Shahapur Nagar Panchayat, to assist tax assessment process and to provide all required data in prescribed format and total order value of the project is Rs. 2,00,00,000/- (Rupees Two Crores Only).

13/12/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the LOA for Consultancy for Preparation of Detailed Project Report and Detailed Engineering for Construction of Second Link Road to Jawaharlal Nehru Port and Construction of ROB Connecting Jaskar and Karal Village in Jawaharlal Nehru Port and the total order value of the project is Rs. 1,67,00,000/- (Rupees One Crore Sixty-Seven Lakhs Only).

24/12/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received work order for survey consultant for carrying out survey and all other allied works for lands requisitioned / acquisitioned for Sinhastha Kumbhamela 2027-28 in Nashik and Trimbak and the total order value of the project is Rs. 7,83,04,800/- (Rupees Seven Crore Eighty-Three Lakh Four Thousand Eight Hundred Only).

28/12/2025
The Monarch Surveyors and Engineering Consultants Limited is pleased to announce that it has recently received the Work Order for Pre and Post tamping track measurement survey using Trimble Gedo Vorsys trolley system and the total order value of the project is Rs. 3,29,89,898.40 (Rupees Three Crore Twenty-Nine Lakh Eighty-Nine Thousand Eight Hundred and Ninety-Eight Rupees and Forty Paise Only).

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I think we should wait for the H2 results and the con call. It’s a newly listed business, so it will take time for trust to build between the management and investors.

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