Reading Time: 5 minutes Biodiesel is produced from waste vegetable oil, soybean oil or animal fat sourced from restaurants, industrial food producers. It is carbon neutral, rapidly biodegradable & non-toxic. By applications, the biodiesel market can be classified into two sections, mainly power generation and transportation. This study will focus on both separately in terms of market research. For […]
Football: The Color of Money
Reading Time: 6 minutes I have two passions in life and they are wildly different. I love analyzing and valuing businesses, which is why I started my blog. I also love sports and by sports I mean football. It’s the perfect balance because my love of financial valuations takes my mind off football and vice-versa. But as a combination, […]
Unprecedented Bull Run? Counter View
Reading Time: 6 minutes This bull run has been nothing short of historic in terms of the public outcry it has generated. Almost every expert (at least all value investors) globally and domestically has been shocked by this meteoric bull run. The latest GDP figures might be deep in the red but the market is close to all time […]
Strategy: The Right Financing Mix for your Company
Reading Time: 7 minutes Debt is bad. At least that’s the conventional wisdom among most investors, especially in India. Yet in a survey conducted by Mckinsey, CFOs all over the world were asked to rate their choice of financing and the results were somewhat surprising: Retained Earnings Straight debt Convertible Debt External Common Equity Preferred Stock Convertible Preferred Stock […]
NMDC: Deep Dive Valuation – Wisdom of Crowds
Reading Time: 7 minutes Commodity companies are generally prisoners to commodity prices. NMDC is no different in this regard with respect to iron ore prices, however it is trying to diversify in other areas. To see just how strong the relationship between iron ore prices and NMDC performance I plotted operating margins against iron ore prices in the last […]
Oil India: Forget the Oil Price
Reading Time: 6 minutes “Our reverse valuation exercise suggests that the stock is already discounting dated Brent crude price recovering to about $50 per barrel, providing limited leverage to any improvement from current levels,” wrote analysts from Kotak Institutional Equities in a report on 23 August,2020. The analysts saw a sharp decline in oil prices which coincided with a […]
Business Growth: Value Creator or Value Destroyer?
Reading Time: 6 minutes Markets all over the world put a premium on growth. Companies chase it and make it their holy grail. In the Indian stock market context, I took the top 50 high revenue growth stocks with a market cap of greater than 500 crores and found the average Price to Earning ratio was a whopping 80.84. […]
Syngene Valuation: Quantifying the Qualitative
Reading Time: 6 minutes Syngene International is engaged in providing contract research and manufacturing services from lead generation to clinical supplies to pharmaceutical and biotechnology companies worldwide. Syngene’s services include integrated drug discovery and development capabilities in medicinal chemistry, biology, in vivo pharmacology, toxicology, custom synthesis, process R&D, formulation and analytical development along with clinical development services. Syngene is […]
Market Efficiency in Indian Markets – Wisdom of Crowds
Reading Time: 3 minutes How do we know markets are efficient? But before that, what is market efficiency? Market efficiency as a concept championed by Eugene Francis Fama basically states that the market absorbs all available information and incorporates it in the price. If this concept were true, all of us should stop this treasure hunt of picking undervalued […]
ITC: Sum of Parts Valuation
Reading Time: 5 minutes ITC is one of India’s foremost private sector companies with a market capitalization of US $ 50 billion and Gross Sales Value of US $ 10 billion. ITC has a diversified presence in FMCG, Hotels, Packaging, Paperboards & Specialty Papers and Agri-Business. I decided to value ITC using a discounted cash flow model. The only […]
Banks Valuation: RBL Bank – Wisdom of Crowds
Reading Time: 5 minutes This is my first blog post in a series of posts where I value companies from the top down and explain my story for the numbers I have used and the process I go through. I use different versions of the discounted cash flow model to value companies. Through this post I intend to value […]
Markets and the Price of Risk
Reading Time: 4 minutes What is the price of risk? Not very much it seems as I sit here writing this on the 13th of July. The pandemic refuses to relent but someone hasn’t told this to Mr. Market. Nifty is soaring upwards of 10,800. The bulls and the bears are locking horns again. What is the price of […]