Wind Turbine Winners: SECI Auctions

As FY-18 comes to an end the market has seen 3.9GW of wind auctions with another 1GW of auction expected to come in another few days in Mar-18. The average blended rate for the auctions conducted in FY-18 is Rs 2.72 per MW with rates falling from Rs 3.45 per MW at the start of the year to Rs 2.44 per MW in the latest auction held in Feb-18. While the falling rates creates pressure for all including the wind turbine suppliers, Indian OEM’s namely Inox Wind and Suzlon appear to be winning. Continue reading “Wind Turbine Winners: SECI Auctions”

Suzlon: Q2-18 disappoints as expected

A weak set of numbers for Q2-18 were not a surprise given the pricing discovered in the auctions. However, the quantity and quality of disclosures made in the investor presentations was even more disappointing. The company managing to stay in the black in H2-18 by the magical appearance of a gain of Rs 455 crore on derecognition of asset and liability and release of foreign currency translation gain on account of overseas business subsidiary. We don’t understand what this non cash gain means. It seems as if this was a magic track up its sleeve held back for a poor quarter. All said and done, on paper Suzlon clocks in another profitable quarter. Continue reading “Suzlon: Q2-18 disappoints as expected”

Ruchi Soya: A vehicle to ride on the Patanjali Phenomenon

Patanjali Ayurveda is the most talked about FMCG company in India, giving stiff competition to established players like HUL, Colgate, Nestle etc. However, Patanjali Ayurveda is not listed in the stock market and does not provide an opportunity to for the retail investor. We have been keenly watching the collaboration between Patanjali Ayurveda and Ruchi Soya since the start of 2017 and are wondering if Ruchi Soya could be vehicle to ride the Patanjali phenomenon. Continue reading “Ruchi Soya: A vehicle to ride on the Patanjali Phenomenon”

Suzlon: Good Q4-17; Strong FY-17; Optimistic for FY-18

Suzlon has given two consecutive years with a positive PAT. A positive PAT for FY-16 was delivered on the back of Senvion sale and not based on operational performance. FY-17 PAT was delivered based on strong operational performance and strong market share gains. We are reasonably comfortable with our initial thesis from a year ago as Suzlon delivered a strong FY-17. (Refer Suzlon: Not for the faint hearted and impatient investor)

We continue to be optimistic as we look towards FY-18 Continue reading “Suzlon: Good Q4-17; Strong FY-17; Optimistic for FY-18”

Apollo Tyres: Capex not yet priced in

We had looked at Apollo Tyres nearly a year back (Apollo Tyres: Available at attractive valuations) and our view was framed based the thesis of lower commodity prices namely lower rubber and crude prices. Our thesis has played out and the price is has moved around 50% higher from the time we started looking at Apollo Tyres. However, the 16% drop in the Q4-17, PAT made us re-look at our position. Apollo Tyres has moved from being available at attractive valuations to now being available at reasonable valuations.  Continue reading “Apollo Tyres: Capex not yet priced in”

Indian Pharma : Time to swallow a bitter pill

Indian Pharma along with Indian IT is the most unloved sector when the market is near its all time high with the Nifty at 9,000+. We get interested in well run companies when they re available at attractive prices. The prices could be attractive from a PE multiple or attractive from a psychological level i.e. close to their 52 week lows. We found some interesting names and are looking at them as portfolio after investing the company specific issues. Continue reading “Indian Pharma : Time to swallow a bitter pill”

Suzlon: A profitable Q3-17 comforts; does not support a stock price break out

SoEvery profitable quarter for Suzlon adds to our comfort in the outlook and the turnaround story at play. While  we are comforted by a profitable quarter, we also observe certain issues which indicate the outlook and turnaround story is not as rosy as Suzlon would want us to believe. Continue reading “Suzlon: A profitable Q3-17 comforts; does not support a stock price break out”

Tata Motors: Market Share Gains Delivered

A key part of the thesis in favor of Tata Motors was the expectation of the JLR franchise gaining market share.

JLR to gain market share in the luxury market given its success in taking both the brands global i.e. China, US and Europe.

Tata Motors: Not Fantastico yet

We feel better now that we have seen the JLR franchise gaining market share. Continue reading “Tata Motors: Market Share Gains Delivered”

Suzlon: Not expecting a strong Q3-17

Looking at the news released by Suzlon related to order flow does not inspire significant confidence in the prospects of a strong performance for Q3-17.

The quarterly order flow is indicating that volatility in the recovery of Suzlon as Q3-17 is expected to be a weak quarter.

Quarter Units Orders (MW)
Q3-17 54 113.4
Q2-17 205 430.5
Q1-17 52 109.2
Q4-16 0 0
Total 311 653.1

List of orders in 2016


We expect the stock price to react to the weak Q3-17.



Suzlon: Q2-17 looks better; but not enough to rerate the stock price

Suzlon which is trying to come back on the path on profitability delivered a setback as it started the first quarter of FY17 in the red and jumped into profitability in Q2-17 and hence ending H1-17 with a marginal loss.  A negative PAT (profit after tax) does not concern us significantly as we never expected a straight line path to recovery.(Refer: Suzlon: Not for the faint hearted and impatient investor and Suzlon: Q1-17 is not good)  What concerned us is that the growth outlook for the wind business though improving from Q1-17, still does not give us the full confidence. Continue reading “Suzlon: Q2-17 looks better; but not enough to rerate the stock price”

Suzlon: Q1-17 is not good

Suzlon which is trying to come back on the path on profitability delivered a setback as it started the first quarter of FY17 in the red.  A negative PAT (profit after tax) does not concern us significantly as we never expected a straight line path to recovery.(Refer: Suzlon: Not for the faint hearted and impatient investor)  What concerned us is that Suzlon management is trying to make the Q1-FY17 performance look stronger than it is. Continue reading “Suzlon: Q1-17 is not good”

Yes Bank: Say Yes

Yes Bank is one of the leading new age private banks and which got in the new with the failed $1 billion QIP (Qualified Institutional  Placement). The stock responded negatively to failed QIP with a close to 8% haircut and fear of a temporary overhang on the stock. The failed QIP without any changes in the underlying business could provide an opportunity to enter the stock while living with the risk of temporary overhang on the stock on account of the failed QIP. The failed QIP could lead to bigger cuts in the stock price. Continue reading “Yes Bank: Say Yes”

InterGlobe Aviation: Good business; not so good price

InterGlobe Aviation more commonly recognized as IndiGo is the largest domestic airline with a market share of more than 35%. IndiGo is one of the most successful Indian low cast carrier which has taken market share from its competitors. IndiGo has increased its market share from around 12% in 2009 to the current market share of 35% with a possibility of the market share moving closer to 40% by the end of the financial year.

Continue reading “InterGlobe Aviation: Good business; not so good price”

Camlin Fine Sciences: Cost leadership & Value Addition

Camlin Fine Sciences is a leading specialty chemicals manufacturer in the Diphenol downstream segment. Camlin Fine Sciences is the biggest global manufacturer of antioxidants, namely Tert‐Butyl Hydroquinone (TBHQ) and Butylated Hydroxyanisole (BHA). It is currently undergoing a transformation via capacity expansion to further solidify its leading market share, improve cost competitiveness and focus on value added products.

Continue reading “Camlin Fine Sciences: Cost leadership & Value Addition”

Tata Motors: Not Fantastico yet

Tata Motors through its global Jaguar Land Rover (JLR) franchise is a small yet growing player in the global luxury car (Jaguar) and SUV market (Land Rover). In the India market, it is a leading player in the in the commercial vehicle (CV) market and a very small player in the passenger vehicle (PV) market. Tata Motors is a tale of two cities when one compares the performance of the global JLR franchise with the India business. Continue reading “Tata Motors: Not Fantastico yet”

NMDC: Too expensive to be a value buy

NMDC is the largest iron ore produce of India. In FY16, NMDC produced ~28.32 million tonnes of iron ore out of the 155 million tonnes produced in India from its mines in Chhattisgarh and Karnataka. NMDC is currently working towards commissioning a steel plant at Nagarnar, Chhattisgarh  by Dec-17 that will produce around 3 million tonnes of flat products. NMDC will maintain its position as the largest producer of iron ore in the country in FY17. Continue reading “NMDC: Too expensive to be a value buy”

Threat to the urban India consumption story

The India consumption story is broken into rural and urban consumption. The employment opportunities generated in the IT industry are a driver of the urban middle class India consumption story. The employment opportunities generated in the India IT sector are on a path of secular decline. How would this impact real estate, consumer discretionary, autos built up on the urban India consumption story? Continue reading “Threat to the urban India consumption story”

Apollo Tyres: Available at attractive valuations

Apollo Tyres is the second largest tyre manufacturer and sells its products under the Apollo and Vredestein brands. The truck and bus segment accounts for around half of its sales. The passenger car and light trucks segments account for around a third of its sales. These two segments contribute to close to 85% of its sales. Around three fourths of its revenues are from the replacement market. Outside of the domestic market, Europe contributes around a fourth of its revenues. Opportunities in the European could drive the  unfolding of the Apollo Tyre story in the next 12 to 18 months. Continue reading “Apollo Tyres: Available at attractive valuations”

Zicom: A security & fire solutions provider available for cheap in increasingly insecure times

While many of us are familiar with Zicom Electronic Security Systems Limited as a leading Electronic Security Surveillance company in India, in reality it should be seen  as provider of fire monitoring solutions in the Middle East. Around 60% of its revenue comes from fire monitoring solutions while only around 30% percent comes from CCTV-camera surveillance security. On the security side of the business the hardware business is dominant. Continue reading “Zicom: A security & fire solutions provider available for cheap in increasingly insecure times”

Zydus Wellness: A market leader in underpenetrated and niche FMCG categories

Zydus Wellness has strong market share in niche health and wellness categories of the FMCG market and could be considered as buy in your portfolio. Its portfolio of brands include:

  1. Sugar Free – sugar substitute
  2. Nutralite – butter substitute
  3. EverYuth – skin care products
  4. Actilife – health drink

Continue reading “Zydus Wellness: A market leader in underpenetrated and niche FMCG categories”