Query Desk

Admin Reply 31, Jan 20

Hi Sir,

Infoedge is a Unique bet on Recruitment+ Real Estate Search revenues getting Reinvested in Starts up like Policy Bazaar, Zomato, Grey HR, IIM Job, Ustra & New Starts up as well.. They are Launching in AIF as well to Invest in Starts up which is similar to Nasper in South Africa (Own PAyumoney, Tencent, swiggy, Byju etc) or Softbank.. 

All i can say is that Consumer Technology is a Global Trent & Naukri, Indiamart, Reliance is our bets on this, We should do ok as long as Nasdaq is ok! (Below image explains naukri investment :D)

Fair Value of naukri is 400 Crores of Naukri Free Cash Flows *40x = 16000 Crores

10x Sales for 99 Acres = 2500 Crores

Zomato Stake at 3 Billion Valuation they own 27% Stake = 5000 Crores 

Policy Bazaar they own 13% Stake at 1 Billion Valuation =  1000 Crores.. 

Total = 24000 Crores i can Justify easily, Beyond that is the Management Premium Naukri gets for Consistent Reinvestments in Newer Indian Start ups..  

Admin Reply 31, Jan 20

Hi Sir,

Vaidhyanath IDFC, Sanjay Agarwal of AU & Nitin Chugh are all Young around Years of age of 50 & all 3 of them have about 20 Years to go.. One of these three will make it really large... They understand the Game Really well & all three understand Technology... Nitin Chugh was the head of HDFC Bank's digital banking & understands the game well.. Vaidhyanath had developed an SME loan Algorithms where they are really ahead of competition whereas Sanjay agarwal is like the Reliance of Execution.. 

Kotak & bandhan are more Matured Players at 62, Both are smart in their own way ofcourse bandhan is going through a Rough Patch.. A large fund has offloaded their Position in Bandhan will massive speed in last few days.. 

Vaidhyanathan is doing the Right things & is very conservative... He is the only guy who has done a 50% Provision for Vodafone i.e. 1622 crores out of the 3200 crores they have lend... He knows market wants to bet on conservative promoters & now he will show the street that i am conservative & trust my book (Nobody really trusted his Corporate book).. I can see Vaidhyanath understands the Market which sobti could not, Definately IDFC bank should be part of our watchlist.. 

Admin Reply 31, Jan 20

HI Sir,

Apl Apollo & Astral pipes are different games but both are really really aggressive promoters & both want to win really really bad... 

The pipe industry’s current size is 30000 Crores (2.5mn tonnes). The non-agricultural segment is growing at 12-14% CAGR while the agricultural one is growing at 7-8% CAGR. The farm segment accounts for 60-65% by volume and 50-55% by value. Pipes form only 2% of cost of residential projects, making price a lesser factor to choose between competing brands, & As far as agri-pipes goes, they are lifeline of a farmer, so he rarely compromises on quality, making it as important as distribution and branding..

A good PVC pipe should ideally have a lifespan of ~50 years so its not a recurring revenues Business but a one time thing, people trust the best player just like you Trust Fevicol in adhevises. While Supreme & Finolex fight for Agri Market Aggressively, Astral is a virtual monopoly in Real Estate Business of west India & ashirwad is the leader in South India..

Astral is a Housing Anciallary bet with Focus on Brand building by the management with salman khan etc & new product innovation including acquisitions.. 

APL Apollo on the Other hand is led by Sanjay Gupta, He was a lala Proper till he met Ashok Gupta in 2011 when he turned around the firm for Sanjay Gupta... Ashok Gupta has now moved on & is now CEO of Shalimar & Porinju has taken position in Shalimar because of this only... 

APL apollo is also market leader in Steel Pipes & is about 20-30% Market share in India... The Competition cannot compete with him as he is technologically move efficient & has a superb supply chain.. 

Astral we should have bought it during NBFC crisis at 700, It is a great bet but in the short term i wouldnt be too bullish on Housing Ancillary.. 

Admin Reply 28, Jan 20

Hi Sir,

the easiest way to get popular in India is to constantly write bad things about others & believe me it works awesome... If anyone wants a lot of eyes they just need to consistenly write bad things about a promoter/Advisor/PMS/Mutual Fund/ etc..The problem is that its not the correct way nor you would be proud of yourself.. 

I dont think there is a problem in the Accounting of Indiamart, He may not be the smartest guy in the tech business but i think he is honest.. Westbridge has been part of the company Pre-IPO & has stayed the course, i know they would never ever back a bad corporate governance management!

Admin Reply 28, Jan 20

Hi Sir,

Godrej Properties is a Unique business in itself, This budget Real Estate would be the biggest focus of the Government.. I believe we are seeing great Trending Signs in Commercial Real Estate companies like Phoenix, Nesco & Embassy.. Companies like Prestige who are Commerial + Residential are going well & i believe Godrej will also do really well.. 

I also Strongly Believe that this sector will see the strongest Consolidation with 4-5 Builders in Every city from 100 Builders earlier... If you can have a negative working capital cycle where customers pay before you before you even start the Project you can really scale up here which is the case with Godrej.. 

There is no Freecash flows that Godrej generates nor the Real Estate sales are booked on P&L... Its a little complex trade, if it goes to 1500/Share i dont know if its  cheap or expensive, the bet is on the story not on the numbers exactly!

Admin Reply 28, Jan 20

Hi Sir,

Aapko jaroor Dukh hoga, Mujhe bhi ho raha hai.. We are underperforming the Benchmark on all product this month of January, The Stocks which are rallying like Sugar, Steel, Cement is beyond our Investment Philosophy or understanding.. We will have to see times when others will do better than us, We have no option & after a 28-37% Alpha our Products last year there was no doubt that 2020 there would be some alpha correction.. 

I can tell you that our Products will be Less Volatile & more trending in nature... We are Seeing Correction in 3 of our Key Holdings 1) Reliance 2) HDFC Bank 3) Bandhan whereas 1) Naukri 2) Indiamart 3) Bajaj Finance look set for higher levels... 
 

Over long term i have seen that We dont have to just focus on Earnings, ROIC, FreeCash Flows & our Sector allocation towards Consumer, Pharma, tech & Financials will take care of everything!

Admin Reply 28, Jan 20

Hi Sir,

3m is Kind of a Investment you look after 3-4 Years typically & You would have made a decent Return.. the only thing i dont like about 3m is their Capital Distribution policy, thats one negative here.. Last Quarter was a good Quarter for 3m & i know they will scale up a lot 5 years from today, 10 years from today & 20 Years from today.. These are business that get better with Size & 60000 Strong product portfolio they will keep launching new Products that solve customer problems!

Admin Reply 28, Jan 20

Hi Sir,

There would be too much cost of Entering or Exiting a Company when we buy Smallcaps, We need decent Liquidity to Enter or Exit a Position.. I dont think our Alpha's would be affected much, We expect to do 20% CAGR for next 10 years on Multibagger...

I have seen that Smallcap Advisory companies dont last beyond a Cycle to be honest, They dont have any longevity, We may not be the Best Performing advisory company in the country but its ok we will certaintly work hard and make very decent returns for the Stallion Family.. Our Portfolio will be materially higher in 2030 or 2035!

Admin Reply 28, Jan 20

Hi Sir,

I Regret not buying MNC Pharma Companies where the Drug Price control happened in India 3 Years back, Most of these companies are up 100-150% Since then.. 

We should buy These companies on Bad News, you will see USL are Materially Higher levels from here 3-5 years form today!

You can Rarely do wrong in "Consumer DAWA & Consumer DARU" in this world

Admin Reply 28, Jan 20

Hi Sir,

I am giving a clue of what is working, Look at Consumer Companies where there is Change in Management

1) Rnam acquired by Nippon & Stock is up 70% in a Few Months

2) Essel Propack Acquired by BlackStone & stock is up 100% in a Few months

3) Crompton 3 Years back was Acquired by Advent

4) merck was acquired by P&G

5) USL was Acquired by Diageo

We need to Bet Smartly & large when a MNC/Private Equity..

Arman Finance large Stock price move happened after SAIF Partners acquired Stake last year at 300/Share..