Test cricket and long term investing
The longer a batsman survives in test cricket, especially on a difficult wicket and when the chips are down, the more comfortable he gets. The ball starts to come a tad easier on the bat and runs begin to flow more easily. The more sessions he bats, the more credible he gets as a sensible…
Its not ROCE, its you!
This whole ROCE business went through some sort of a hype cycle recently – a term that is widely cited by most well-known investors as the first filter of a quality business, it also most came to be taken as the holy grail for investing successes. Find companies with high ROCEs and invest in them…
Reasons to (not) sell
They will give you a reason every single day to sell your stocks. Those prized ownership interests in businesses which will work for you year after year, through good and bad times, and make your stake more valuable, over time. You will have some losers but yet your winners, invariably more than take care of…
Many shall be restored that now are fallen…
Thesis written as of July 21, 2023 Gland (NSE: Gland) is a leading pure-play generic injectables CDMO with solid capabilities not just in contract manufacturing but also in developing IP (on their own or in partnership clients). Their record in this space is commendable, having grown their sales base ~5x over the last 10 years…
Tell me where I will die and I won’t go there
Hinduja Global Solutions (HGS) has a mediocre track record with building and running a BPO business – although they did sales of ~US$750 mn by FY20 (before they sold the healthcare vertical to Baring PE), these were heavily inorganic led (50% of assets are goodwill) and the company had poor margins and return metrics. For…
CY22 – a year that humbled, tested, and taught
For anyone investing their client’s capital or their own, this was not an easy year. The wild swings in the market and a series of global events (need not mention) would have tested the best of nerves. However, as with most things in life, these toughest hours illuminate the most. In my portfolio review…
IT services – What adds the most value: currency, growth, or margins?
It is a well-known fact that stocks of IT service companies respond the most to three key variables: (1) currency—specifically how the INR moves versus the USD, (2) USD-denominated revenue growth, and (3) margin performance. While the quantum of stock moves could seem random and sporadic to the changes in the above three, I tried…
New age businesses – starting valuations to blame; not fundamentals
As the stocks have new age businesses have crashed 65-70% form their all time highs, it has become ‘fashionable’ for many to say they saw this coming and these businesses do not have a fundamental business in place. I beg to differ. First, it’s important to separate stock sell-off from fundamental performance. In almost all…
Caplin Point Labs – unusual but interesting
The journey of this company (CAPLIN Point, henceforth referred to as CAPLIN) has been very different from most of its Indian peers. The company’s major business (90% of sales) is selling formulations in frontier markets of Latin America which are collectively referred to as Central America. The region includes small countries such as Guatemala, Nicaragua,…
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