Wealth-Insight - Nov 2023

Subscription copy of [dhavalmore845@gmail.com]. Redistribution prohibited.
A. HDFC TOP 100 Fund - SIP Performance^ - Regular Plan - Growth Option
Since Inception* 15 year SIP 10 year SIP 5 year SIP 3 year SIP 1 year SIP
@
Total Amount Invested (` in lacs) 32.40 18.00 12.00 6.00 3.60 1.20
Market Value as on September 29, 2023 (` in lacs) 687.56$$ 55.32 24.73 9.38 4.77 1.35
Returns& (%) 18.48$$ 13.75 13.86 17.95 19.15 24.84
Benchmark Returns (%)# N.A. 13.32 13.36 15.27 12.73 15.14
Additional Benchmark Returns (%)## 14.43 13.46 13.86 15.80 13.42 14.63
@
Assuming ` 10,000 invested systematically on the first Business Day of every month since October 11, 1996 (Scheme Inception Date). &CAGR returns are computed after accounting
for the cash flow by using XIRR method (investment internal rate of return) for Regular Plan - Growth Option. The above investment simulation is for illustrative purposes only and
should not be construed as a promise on minimum returns and safeguard of capital. SIP - Systematic Investment Plan. HDFC AMC / HDFC MF is not guaranteeing or assuring any
returns on investments in the Scheme.
B. HDFC Top 100 Fund - Performance^ - Regular Plan - Growth Option NAV as at September 29, 2023 ` 870.163 (per unit)
Period Scheme Returns (%) Scheme Benchmark Additional Benchmark Value of investment of (`) 10,000
Returns (%)# Returns (%)##
Scheme Benchmark Additional Benchmark
(`) (`)# (`)##
Last 1 Year 24.07 13.34 16.15 12,400 11,330 11,611
Last 3 Years 27.29 21.20 21.51 20,613 17,794 17,933
Last 5 Years 13.67 13.23 14.03 18,989 18,628 19,294
Since Inception* 18.87 N.A. 13.68 10,60,996 N.A. 3,18,263
Common notes for the above table A & B: Past performance may or may not be sustained in the future. *Inception Date: October 11, 1996. The scheme is managed by
Mr. Rahul Baijal since July 29, 2022. Mr. Rahul Baijal manages total 3 schemes of which only 1 scheme has completed 1 year. # NIFTY 100 (Total Returns Index). ## S&P
BSE SENSEX (Total Returns Index). $$ All Distributions declared prior to the splitting of the Scheme into IDCW & Growth Options are assumed to be reinvested in the
units of the Scheme at the then prevailing NAV (ex-distribution NAV). N.A. Not Available. The above returns are for Regular Plan - Growth Option. Load is not taken into
consideration for computation of performance. Different plans viz. Regular Plan and Direct Plan have different expense structure. The expenses of the Direct Plan under
the scheme will be lower to the extent of the distribution expenses/commission charged in the Regular Plan. Returns greater than 1 year period are compounded
annualised (CAGR). Âbove returns are as on September 29, 2023
HDFC TOP 100 FUND (An open ended equity scheme predominantly investing in large cap stocks) is suitable for investors who are seeking~:
z To generate long-term capital appreciation / income z Investment predominantly in Large-Cap companies
~Investors should consult their financial advisers, if in doubt about whether the product is suitable for them.
Name and Riskometer of Benchmark Name of scheme Riskometer^^ of the Scheme

NIFTY 100 (Total Returns Index) Modera
oderate High tely
o M
Modera w t erate Hi
oderate High tely
Mo Lo
gh
d
o M
w t erate Hi
Contact your MFD / RIA today.
HDFC Top 100 Fund
Mo Lo
Very
z
gh
High
Low
d
Very
High
Low
RISKOMETER
Investors understand that their principal will be at
RISKOMETER very high risk
Benchmark and Scheme Riskometer as on September 30, 2023
^^For latest riskometer, investors may refer to the Monthly Portfolios disclosed on the website of the Fund viz. www.hdfcfund.com
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
Build your investments with the
growing manufacturing theme
Invest in
ICICI Prudential
Manufacturing Fund
1023
To invest, contact your Mutual Fund Distributor IPRUTOUCH App | www.iciciprumf.com

ICICI Prudential Manufacturing Fund (An Open Ended Equity Scheme following manufacturing theme.) RISKOM
ME ET
HE
is suitable for investors who are seeking*:
C E
• Long term wealth creation
R
S
Investors
• An open ended equity scheme that aims to provide capital appreciation by investing in equity and understand that
equity related securities of companies engaged in manufacturing theme. their principal
will be at Very
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details on scheme riskometers.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

November 2023 VOLUME XVII, NUMBER 5
EDITORIAL POLICY 37 COVER STORY

The goal of Wealth Insight, as with
all publications from Value
Research, is not just limited to gen-
erating profitable ideas for its read-
ers; but to also help them in gener-
ating a few of their own. We aim to
bring independent, unbiased and
New kids on
meticulously-researched stories
that will help you in taking better-in-
formed investment decisions,
encouraging you to indulge in a bit
the street
of research on your own as well.
All our stories are backed by IPOs steal the show
quantitative data. To this, we add
rigorous qualitative research
at Dalal Street
obtained by speaking to a wide vari-
ety of stakeholders. We firmly stick
to our belief of fundamental
research and value-oriented
approach as the best way to earn
wealth in the stock market. Equally
important to us is our unwaveringly
focus on long term planning.
Simplicity is the hallmark of our
style. Our writing style is simple
and so is the presentation of ideas, 34 WORDS WORTH WISDOM
but that should not be construed to
mean that we over-simplify.
Read, learn and earn – and let’s
grow and evolve as we undertake
“Cheap Investing
lessons from
this voyage together.
companies are a valuation
professor
EDITOR-IN-CHIEF Dhirendra Kumar not always good
COPYEDITING Anupama Garg, Khyati
Simran Nandrajog and Mithilesh Bhaumik bargains”
RESEARCH & ANALYSIS Hemkesh
Khattar, Karthik Anand Vijay, Kunal Aswath Damodaran
Bansal, Nipun Arora, Sneha Suri,
Udhayaprakash J and Vishal Goyal
DESIGN Anand Kumar, Aprajita Anushree,

Kamal Kant Koner, Mukul Ojha and
Nitin Yadav
DATA SOURCE FOR STOCKS AceEquity
MARKETING
Aastha Tiwari, Aditya Roy, Ashish Jain,
50 INTERVIEW
Jash Ashar and Kasturi Kaushik
PRODUCTION MANAGER & CIRCULATION

Hira Lal +91-9958058407
Through a
ADVERTISING CONTACT
Venkat K Naidu +91-9664048666
professional’s lens
Biswa Ranjan Palo +91-9664075875
Investing insights from a fund manager
SUBSCRIPTION
Shipra Srivastava +91-9868891830
Chhaya Verma +91-9560200520 Daylynn Pinto
Senior Fund Manager, Bandhan AMC
4 Wealth Insight November 2023

CONTENTS
7 Edit 32 vis-a-vis
by DHIRENDRA KUMAR
On a solid footing
Two sides of the coin This month, we have put two leading footwear
There are good businesses and bad, companies in the ring. Who kicks whom?
but they are all worth some thought
52 Stock Advisor
8 Twitter by DHIRENDRA KUMAR
The value investing virtuoso Pfizer, Vaccines and Stocks

Rohit Chauhan | @rohitchauhan | 56.7k The strange story of Pfizer stock’s collapse highlights
something important about equity investing
10 Market Reporter
54 Straight Talk
Buzz of the month by ANAND TANDON
Megathreats
14 Stock Story Here is why global debt has risen to such alarming levels
Surviving the telecom tempest
Vodafone Idea’s quest for survival in an 56 Main Street
aggressive industry by SAURABH MUKHERJEA
Urban Indian women have more money

16 Big Moves
than men
Find out the reasons for the rapid rise of Indian women
The most significant price movements
60 Everyday Economics
17 ABCD ETF by PUJA MEHRA
Passive debt funds for investors The Taylor Swift economy

Read how a pop sensation added billions to the
20 Index Watch US economy
S&P BSE Telecom

62 Stock Screen
Small-cap growth stocks
22 IPO Tracker
Investing in small caps that go on to become mid and
D-Street debutants even large caps is any stock investor’s dream.
Here is how the S&P BSE IPO Index has performed over the Here are some promising small caps to explore.
last one year and how the biggest IPOs have fared
66 Wordsworth Now
24 Market Barometer Quotable words from prominent figures
Trends and trails
Here are some charts that will help you make sense of the
current market in terms of valuations and return potential 9DOXH5HVHDUFK,QGLD3YW/WG
Wealth Insight is owned by Value Research India Pvt. Ltd., 5, Commercial
Complex, Chitra Vihar, Delhi 110 092.
26 Analyst’s Diary
Editor-In-Chief: Dhirendra Kumar.
z Printed and published by Dhirendra Kumar on behalf of Value Research India
Sectoral spotlight Pvt. Ltd. Published at 5, Commercial Complex, Chitra Vihar, Delhi 110 092.
z Chronicles of resilience Printed at Option Printofast, 46, Patparganj Industrial Area, Delhi-110092
z In corporate limbo Total pages 68, including cover
',6&/$,0(5
The contents of Wealth Insight published by Value Research India Private Limited (the ‘Magazine’) are not intended to serve as professional advice or guidance and the Magazine takes no responsibility or liability, express or implied, whatsoever for any investment
decisions made or taken by the readers of this Magazine based on its contents thereof. You are strongly advised to verify the contents before taking any investment or other decision based on the contents of this Magazine. The Magazine is meant for general reading
purposes only and is not meant to serve as a professional guide for investors. The readers of this Magazine should exercise due caution and/or seek independent professional advice before entering into any commercial or business relationship or making any
investment decision or entering into any financial obligation based on any information, statement or opinion which is contained, provided or expressed in this Magazine.
The Magazine contains information, statements, opinions, statistics and materials that have been obtained from sources believed to be reliable and the publishers of the Magazine have made best efforts to avoid any errors and omissions, however the
publishers of this Magazine make no guarantees and warranties whatsoever, express or implied, regarding the timeliness, completeness, accuracy, adequacy, fullness, functionality and/or reliability of the information, statistics, statements, opinions and
materials contained and/or expressed in this Magazine or of the results obtained, direct or consequential, from the use of such information, statistics, statements, opinions and materials. The publishers of this Magazine do not certify and/or endorse any
opinions contained, provided, published or expressed in this Magazine.Reproduction of this publication in any form or by any means whatsoever without prior written permission of the publishers of this Magazine is strictly prohibited. All disputes shall be subject
to the jurisdiction of Delhi courts only. ALL RIGHTS RESERVED
November 2023 Wealth Insight 5

EDIT
Two sides of the coin

There are good businesses and bad, but they are all worth some thought
worthy of some scrutiny. Much conventional waters can also offer

like the real world, the business insights into emerging consumer
landscape is vast and varied. It’s a behaviours, nascent technology
melting pot of innovations, trends, and shifts in societal
experiments, and dreams. Some norms. And sometimes, within
dreams come to fruition, while these tales of challenges, setbacks,
others fade away into obscurity. and perseverance, we stumble
But every venture, successful or upon the next big thing.
not, tells a story. And it’s these So, as we embark on this
stories that we, as investors, journey of exploration through
analysts, or even casual observers, the world of new companies, IPOs,
By Dhirendra Kumar should be eager to hear. Because and innovative businesses,
within them lie lessons, patterns, remember that the narrative is
and perhaps, unseen opportunities. about more than just success. It’s
New company + IPO + new business. At some point, I ask myself, about the journey, the lessons
B
ased on everything I’ve always “Why focus on businesses that learned, and the potential for
written about the three topics aren’t making the cut?” Well, the what’s to come. It’s about
above, we should not be doing answer lies in understanding the broadening our horizons and
this cover story. IPO investing is nuances of the market. Every understanding that, sometimes,
hard, small companies are harder, business clearly shows the pitfalls, unconventional stories can offer
and companies that invent new risks, and miscalculations that valuable insights.
businesses (especially digital ones) others can avoid. On the flip side, We’re not doing this story to
are even harder. That’s true for the those who defy the odds, even if pinpoint who’s doing great or
set of companies that we have this not profitable right away (or goofing up. It’s more about
time. Many of these companies are never!), often introduce disruptive soaking in the big picture of the
not great businesses; some are innovations or fresh perspectives business world. Whether soaring
struggling, some have never made to industries that might need a or struggling, every business
any profits, and some may never do shake-up. Moreover, in the digital results from someone’s dream,
so. For this very reason, I have age, the definition of success is sweat, and guts. So, it isn’t always
been heavily critical of some of constantly being rewritten. about crunching the numbers. It’s
them in these pages. For example, Flipkart, as a a nod to those daring enough to
However, for this story, that business, was an utter failure. give business a go. As we flip
actually does not matter. As However, it had a successful exit through this story, let’s not just
investors, the first part of our job for its investors and the promoters, hunt for the success stories or the
is to absorb knowledge about and it’s now Walmart’s problem. I failures. Let’s appreciate the
business trends and businesses. guess it’s a success even though messy, unpredictable, and utterly
Only after that do we start analysis the people who ran the company fascinating world of business, out
and selection, and finally, we reach all these years proved to be of which great investments arise
the stage of investing. To identify fundamentally incompetent at the and the not-so-great ones, too.
one successful business, we may basic business. Many other new-age In cricketing terms, business is
have to look at dozens which are digital founders, even some of the always a percentage shot. Some go
not successes but have some other most famous names, are like that. straight to the fielder’s hands, but
characteristic that makes them Still, diving deep into these less some clear the ropes.

TWITTER
The value
investing virtuoso
Celebrating portfolio performance in the last 90 days is being happy about
Rohit Chauhan running a fast mile in a marathon Trader or investor, consistency and
@rohitchauhan endurance matters more than flashes of brilliance.
56.7k | Followers And add patience & persistence over a long period of time Nothing happens
overnight Most fail, not because they are not smart or don’t have access to
Why Follow the knowledge, but because they are looking for shortcuts How do you
develop persistence? If you are passionate about it you will persevere.
R
ohit Chauhan is a
As you study different styles and approaches to investing, something dawns
self-taught investor
on you There is nothing special about your style or edge It is all about
with over two figuring which one fits your personality, learning it to fluency and then
decades of experience. Being executing with discipline A lot of investors waste time trying to find some
an engineer and MBA, Rohit esoteric approach, when basics is all you need.
is the founder of RC Capital
Key point: Different approaches are like different tools. Learn about each
Management and also writes tool and have it in your toolkit Knowing which tool to use in which context
the popular investment blog is the key Or maybe you don’t use a tool or approach at all if it doesn’t fit
'Value Investor India'. He your temperament I won’t day trade or do F&O at all even if i study more
is a simple value investor about it.
and follows the mantras

Investors have an obsession with hidden gems ( me included) In the
of legendary investors process, they miss the obvious gems hiding in plain sight Again, like me,
like Warren Buffett, Ben investors think - how can this be a good stock when everyone ’knows’
Graham, Philip Fisher, about There were several ‘google and Microsoft’ hiding in plain in the last
and more. With long-term decade which gave far better risk adjusted returns.
investing as the overarching

Why are older/ experienced investors more humble ? It’s not a character
theme, he comments trait It’s because they have been proven wrong more times than they can
about sectors, trends, and count Hang around in the markets long enough and your arrogance gets
investment behaviour of beaten out of you.
market participants.
Follow us on
social media
@VROStocks vrostocks VROStocks

3CANHERE
TOKNOWMORE
+HBDMBDV@RFQ@MSDCSN,HQ@D RRDS,TST@K%TMCNM-NUDLADQ AX2$!(TMCDQ2DBTQHSHDR@MCDWBG@MFD!N@QCNE(MCH@ ,TST@K%TMC QDFTK@SHNMR

MARKET REPORTER
RBI retains repo rate

RBI has kept the repo rate unchanged at
6.5 per cent for the fourth time in a row.
However, the committee has stated it
will continue focusing on reducing the
money supply to control inflation. It has
also retained its real GDP growth and
inflation forecast for FY24 at 6.5 and Vedanta announces
5.4 per cent, respectively.
mega demerger
Vedanta has announced a demerger
Grasim to raise
to simplify its corporate structure
and improve capital allocation. The
`4,000 crore via conglomerate will split into six
different entities. The presently listed
rights issue entity will hold its stake in Hindustan
On October 16, 2023, the Zinc, and the other five will house the
Board of Grasim Industries remaining five verticals: aluminium,
approved raising oil & gas, power, steel, and base
`4,000 crore via rights issue metals. Vedanta shareholders will
to the eligible equity receive one share of each of the newly
Microsoft gets the shareholders. The amount listed companies.
nod to acquire
will primarily go towards
capital expenditure for its
Activision paints business, for which
it announced a `10,000 crore
Microsoft completed the capex plan earlier.
acquisition of the gaming It aims to be the second-
mogul Activision Blizzard for largest player in the paints
$69 billion. The acquisition segment in the next
comes after much delay few years.
because of scrutiny from the
`1.25
UK’s Competition and Market
Authority. The regulator gave
its nod to the acquisition in lakh cr
August 2023 after it received a is the capex planned by Maruti
revised agreement barring
Microsoft from acquiring cloud
Suzuki to double its production
rights for Activision’s existing capacity to 40 lakh units at its
and future games for the next existing plants in Gurgaon,
15 years. Manesar and Gujarat by FY31.
Tech giants declare their Q2 FY24 results
YoY growth (%)

Revenue 10.2 8.3 10.0 -0.1
Operating profit 10.9 9.3 11.1 -2.0
Operating margin (bps) 15.1 19.0 18.0 -26.1
Net profit 12.6 6.8 8.8 0.7

TCS announces `17,000 crore buyback
TCS, the largest Indian IT company, has announced a `17,000 crore buyback.
It plans to repurchase 4.09 crore shares at `4,150 per share via the tender offer
route. This is the fifth time the company has announced a buyback in the last
six years. Post buyback, TCS would have spent around `83,000 crore on
buybacks, repurchasing around 27 crore shares since 2017.
JP Morgan includes Indian bonds in

emerging markets index
US banking behemoth JP Morgan has included
Indian bonds in its Government Bond Index-
Emerging Markets (GBI-EM). This benchmark
index tracks the performance of local
currency-denominated sovereign bonds
issued by emerging market countries.
HDFC Bank posts strong

Indian bonds might get a weightage of
around 10 per cent in the index,
results post merger which should result in a
considerable inflow from FPIs.
HDFC Bank posted impressive results in
the first quarter post its mega merger
with HDFC. Based on the pro forma
numbers for Q2 FY23, its gross advances
Kaynes Tech to
and deposits grew 17.6 and 18.2 per cent invest `2,800 cr
on semcon facility
YoY, respectively in Q2 FY24. However,
the net interest margin contracted to
3.6 per cent in Q2 FY24 as against The recently listed Kaynes
4.1 per cent in Q1 FY24 given HDFC’s Tech has announced that it
higher interest cost and rising share of has entered into an
fixed deposits in the deposit mix.
Rise in the agreement with the
government of Telangana to
US government set up a semiconductor
bond yield
`10,000 cr
assembly and testing
facility in Hyderabad. It will
The yields on the 10-year and invest `2,800 crore through
30-year US government bonds its subsidiary, Kaynes
is the amount to be raised by have reached levels last seen Semicon and will set up an
Bajaj Finance. `8,800 crore in 2007. As of Oct 18, 2023, they R&D centre in association
will be raised via QIP, and stood at 4.73 and 4.94 per cent, with IIT Bombay for
`1,200 crore will be raised from respectively. The Federal package research.
its parent, Bajaj Finserv. Reserve expects interest rates
to stay at elevated levels due to
the sticky inflation numbers, a
high fiscal deficit and a piping-
hot job market.
Unsurprisingly, the rising
yields have caused FPIs to flee
Indian equities. As of October
18, 2023, FPIs have taken out
`9,205 crore (on a net basis).

MARKET REPORTER
K&R Rail wins a ECONOMIC METRICS

$500m project in Nepal .:;JVSSLJ[PVU
K&R Rail has signed an MoU with the 2,00,000 In ` cr
government of Nepal for the world’s
1,50,000
longest cable car project. It will have
20 stations and will cover a distance of 1,00,000
84.3 kilometres. The contract, with a
50,000
deal value of $500 million (or about
`4,160 crore), should be completed 0
in the next 48 months. Sep '21 Sep '23
0UMSH[PVU!*VUZ\TLY7YPJL0UKL_
Groww replaces 8 % change YoY
Zerodha to become the 7
largest stockbroker 6
5
Groww has emerged as the top
brokerage firm in India in terms of 4
the number of active users (as of Sep '21 Sep '23
September 2023), ending Zerodha’s
ten-year-long tenure at the top spot.
0UK\Z[YPHSHJ[P]P[`!0UKL_VM
Data revealed by NSE shows that
Groww currently commands an
ExxonMobil to 0UK\Z[YPHS7YVK\J[PVU
active user base of 66.3 lakh against buy shale group 20 % change YoY
Zerodha’s 64.8 lakh. Founded in

2014, Groww entered the stock Pioneer for 10
broking business in 2020. $59.5 bn 0
-10
ExxonMobil announced
Aug '21 Aug '23
the acquisition of Pioneer
Natural Resources,
creating one of the largest `]Z
oil and natural gas 72 Inverted scale
companies in the US. The
acquisition is valued at 75
$59.5 billion and will be an 78
all-stock transaction. The
merged entity is estimated 81
to have 16 billion barrels 84
of oil equivalent resources Oct '21 Oct '23
in the Permian Basin.
*Y\KLVPS
$2 billion
150 Brent $/barrel
120
(or about `16,300 crore) is the

90
valuation of Tata Technologies, at
which Tata Motors has entered an 60
agreement to sell its 9.9 per cent stake. Oct '21 Oct '23

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STOCK STORY VODAFONE IDEA
Surviving the
telecom tempest
Vodafone Idea’s quest for survival in an
aggressive industry
V
odafone Idea is the third- spectrum costs, and increasing
largest telecom operator in competition.
the country, jointly held by Idea Cellular had a similar
Aditya Birla Group and UK-based story. It was once the most
Vodafone. This telecom behemoth valuable company in the Aditya
came into existence when the then- Birla group. Mobile number
struggling Idea Cellular and portability and their unique ad
Vodafone India decided to campaigns helped them
join hands. But even six years secure market share. But
after the merger, it is once again, the high
struggling to hold its place. spectrum fee was the party
Vodafone UK entered the spoiler as they had to spend
Indian market in 2007 by buying around `30,000 crore on renewing
majority stake in Hutchison Essar their existing 2G spectrum.
and spent thousands of crores on The final straw for both
acquiring a new spectrum. It companies was the entry of Jio,
aimed to take advantage of the fast- which forced them to lower rates
growing market in the country. to unsustainable levels. The
But its dreams were crushed just a companies announced the merger
few years after its entry due to in 2017 in a bid to stay alive. It was
inconsistent policies, high the biggest merger in the country,
Sensex rebased to stock price Apr 16, 2015

Oct 14, 2013 `122
Vodafone Idea Sensex
`112
Mar 9, 2007 Sep 30, 2011

`52 `60
Jun 11, 2009
`22
March 21, 2007 June 26, 2008 May 20, 2010 June 12, 2014 Nov 25, 2015
Idea inks a 10-year Idea acquires Spice Idea wins 2.1 GHz 3G Raises `3,000 crore Buys spectrum in two
service contract Communications spectrum in 11 circles through QIP circles from Videocon
with IBM for `5,769 crore for `3,310 crore

with a deal value of `1.5 lakh crore
5HYHQXHDQGQHWORVV 7RWDOGHEW
(approximately). But this desperate
z Revenue (` cr) z Net loss (` cr) `2.1 crore
move wasn’t of any help as
cutthroat rates and mounting 0.5
debt came to bite the company. 1.4
0
Market share and subscriber
base continued falling. 0.7
-0.5
It had to dilute its stake multiple
times, sell its stake in subsidiaries, -1.0 0
and forgo payment of adjusted FY18 FY23 FY18 FY19 FY20 FY21 FY22 FY23
gross revenue (AGR) dues to stay
afloat. Since the merger,
the company has reported a 0DUNHWVKDUHDQG 4XDUWHUO\DYHUDJH
cumulative loss of `1,94,430 crore! QXPEHURIVXEVFULEHUV UHYHQXHSHUXVHU $538
Its poor performance is reflected z Subscribers (in cr) z Market share (%) `150
in its share price over the last 45
five years, which has fallen by 125
30
12 per cent per annum.
But in the last six months, the 100
15
stock is up 76 per cent as the
0 75
company paid 50 per cent of its
FY19 FY20 FY21 FY22 FY23 Jun ’18 Jun ’23
licence fee and spectrum. The
promoters also ensured that they
would inject capital when there
was a need, which boosted
market sentiment.
263
By Udhayaprakash
`10,000 `2,101
Jan 18, 2017 Mar 2007 Sep 2023

`41
79%
wealth destruction!
Nov 14, 2019

`3
Oct 9, 2023
`11
March 20, 2017 Feb 16, 2018 April 10, 2019 Nov 20, 2020 Feb 03, 2023
Idea Cellular Raises `3,500 crore Conducts rights issue Raises `3,760 crore Government becomes the
announces merger via QIP for `25,000 crore by selling 11.2 per largest shareholder post-
with Vodafone India cent stake in Indus conversion of AGR dues worth
Towers `16,133 crore into equity

BIG MOVES
Large caps
3M returns Price to 3Y avg 3Y earnings 3M price (`)
(%) earnings RoE (%) growth (%) movement
IRFC 135.0 2.1* 14.6 25.7 76

It raised `2,500 crore via bond issue and signed an MoU with Rites. 32
REC 82.5 1.3* 21.1 30.1 294

161
Its Q1 FY24 net profit rose 21 per cent YoY.
IOB 66.6 3.7* 9.8 – 44

Its Q1 FY24 net profit rose 28 per cent YoY. 27
Vodafone Idea 54.9 – – 19.0 12

A promoter entity assured investment of `2,000 crore into the company. 8
6,426
Linde India 46.1 137.8 15.2 -18.7
4,399
It received a letter of acceptance from the Indian Oil Corporation to establish an air separation unit.
Power Finance Corp 40.9 0.9* 28.0 30.7 252

It raised `5,000 crore through NCDs and signed pacts worth `2.37 lakh crore for green energy projects.
179
112
Zomato 39.1 - -12.8 16.8
It reported net profit for the first time since its inception in Q1 FY24. 80
Polycab 38.6 55.9 19.1 24.8 5,421

Its Q1 FY24 revenue and net profit grew 42 and 80 per cent YoY, respectively.
3,912
JSW Energy 36.8 55.2 8.5 4.2 401

GQG Partners acquired a 1 per cent stake in the company for `571 crore. 293
312
Coal India 35.6 7.1 45.6 24.4
Its Q1 FY24 profit grew 45 per cent sequentially. 230
330
Adani Power 34.3 8.9 32.7 95.4
Its Q1 FY24 net profit doubled YoY, and GQG Partners acquired an 8.1 per cent stake. 246
Indian Bank 32.4 1.2* 11.0 30.3

325 430
Its Q1 FY24 net profit and net interest income grew 47 and 26 per cent YoY, respectively.
Bharat Forge 29.6 88.9 7.7 87.7

1,122
Its Q1 FY24 net profit jumped 33 per cent on a YoY basis. 866
4,339
Supreme Industries 29.3 65.9 26.4 22.1
3,355
It was included in the MSCI Index, and its net profit grew 25 per cent YoY in Q1 FY24.
105
Union Bank 26.6 1.0* 8.9 30.2
Its net profit more than doubled in Q1 FY24 on a YoY basis. 83
*Price-to-book value. Our large-cap universe has 133 large companies, making the top 70 per cent of the total market capitalisation. The list mentions the stocks that have fluctuated most wildly in
the last three months. Data as of Oct 16, 2023.

Passive debt funds
for investors
When you think of investment returns ,
the first thing that probably comes to mind is stocks.
Their ability to create wealth is well known.
However, investors often miss out on two critical aspects To avoid such outcomes, investors can
of investing: risk and asset allocation. Not only can allocate a portion of their investable
you lose your investment in stocks but the inherent funds to the debt asset class. Through
volatility can make you a Nervous Nellie. this diversification, investors can enjoy
relatively stable returns
offered by such securities.
A low-cost way to add debt to your portfolio is passive debt funds . They simply track an underlying
index and seek to generate returns as per that. They comprise index funds and exchange-traded funds/fund of funds.
An example of passive debt funds is If investors hold these funds till maturity,
target-maturity funds which they can expect to earn the indicative yields.
account for a majority of the passive debt With interest rates at their peak, investors
segment today (based on
AUM data as of Sept 2023).
can ‘lock-in’ a rate of return for
themselves through these funds. Investors
These funds invest in may ensure that their investment horizon
bonds and come with a matches the duration of the fund and there
fixed maturity. are no interim liquidity needs.
The views expressed here constitute only the opinions and do not constitute
Securing your portfolio with any guidelines or recommendation on any course of action to be followed by the
passive debt funds is as easy as… reader. The data/information/opinions are meant for general reading purposes
only and are not meant to serve as a professional guide/investment advice for
the readers. Readers are advised to seek independent professional advice and
arrive at an informed investment decision before making any investments.
An investor education and awareness initiative by Mirae Asset Mutual
Fund. All Mutual Fund investors have to go through a one-time KYC (Know
Your Customer) process. Investors should deal only with Registered Mutual
Funds (RMF). For further information on KYC, RMFs and procedure to lodge
a complaint in case of any grievance, you may refer the Knowledge Center
section available on the website of Mirae Asset Mutual Fund.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.

BIG MOVES
Mid caps
292
ITI 169.7 – -3.3 -250.7
It signed an MoU with TCIL and C-DOT and introduced laptops and micro PCs under the ‘Smaash’ branding. 108
83
MMTC 140.2 7.7 -62.6 77.7
It reported a profit in Q1 FY24 as compared to a loss in Q1 FY23. 35
416
GMDC 133.3 12.2 10.7 71.5
The stock rallied due to general market conditions. 178
397
KIOCL 100.6 – 8.6 -242.3
The resumption of its Pallet Plant Unit operations led to the rally. 198
256
Himadri Speciality 80.2 43.1 5.2 30.2
A committee of creditors approved its resolution plan for the bankrupt Birla Tyres. 142
147
Ircon International 75.4 18.6 12.6 30.8
Its Q1 FY24 revenue and net profit grew 36 and 30 per cent YoY, respectively. 84
669
Authum Investment 68.8 52.7 29.2 184.8
It acquired a 1.9 per cent stake in the realty developer DB Realty. 396
305
Jupiter Wagons 68.4 72.8 13.0 865.3
Its Q1 FY24 PAT grew five times YoY. Also, the Board approved raising `700 crore via QIP. 181
GE T&D India 65.1 502.3 0.3 27.3 409

Its net profit grew 344 per cent in Q1 FY24 YoY. 248
76
SJVN 63.3 27.6 10.3 -12.8
It won various orders, including a `7,000 crore order from Punjab State Power Corp. 46
1,059
Cochin Shipyard 60.7 38.1 12.0 -13.3
Its Q1 FY24 net profit doubled YoY. Also, it won several orders, including orders from the Indian Navy and Wilson Shipowning AS. 659
J&K Bank 60.1 1.3* 10.3 10.4 115

Its Q1 FY24 net profit doubled YoY. 72
Jyothy Labs 58.0 48.6 13.8 18.1 374

Its net profit jumped 99 per cent YoY in Q1 FY24. 237
Apar Industries 57.0 29.4 20.4 115.9

5,494
3,500
A 60 per cent YoY PAT growth in Q1 FY24 and the government’s `75,500 crore Gati Shakti plan led to the rally.
284
Kalyan Jewellers 56.6 63.4 6.7 44.8
Its Q1 FY24 net profit jumped 33 per cent YoY, and it opened 33 showrooms during the quarter. 181
*Price-to-book value. Our mid-cap universe has 294 mid-sized companies, making the next 20 per cent of the total market capitalisation. The list mentions the stocks that have fluctuated most
wildly in the last three months. Data as of Oct 16, 2023.

BIG MOVES
Small caps
591
Jai Balaji Inds 485.5 25.8 – 61.7
Its net profit jumped more than seven times YoY for the second consecutive quarter. 101
298
Piccadily Agro Inds 343.5 114.5 11.9 30.4
Its Q1 FY24 net profit grew 45 per cent YoY, and its product won an award at the ‘Whiskies of the World’ event. 67
9
GVK Power & Infra 243.7 0.5 – 59.8
The company reported a profit of `119 crore in Q1 FY24 as opposed to a loss in Q1 FY23. 3
Insolation Energy 201.2 88.3 47.2 47.4 445

Its subsidiary commercialised the production of 600 MW of solar capacity. 148
219
Websol Energy 159.7 – 8.7 -234.9
Ashapura Minechem 145.9 16.5 19.8 -27.2 324

Its Q1 FY24 PAT more than doubled YoY, and it won two big contracts for bauxite supply. 132
199
Prakash Industries 145.1 14.9 5.3 41.0
It received clearance for commercial coal mining, and its Q1 FY24 net profit more than doubled YoY. 81
68
HMT 139.7 – – -191.9
Its Q1 FY24 revenue grew 43 per cent YoY, and net loss narrowed. 28
DB Realty 129.1 – -5.1 20.0 170

The company is set to acquire three hotels for `2,300 crore. 74
Mafatlal Inds 119.3 23.1 -4.8 45.2 157

3
Unitech 100.0 – -207.1 -66.3
324
Birla Cable 90.7 23.3 11.1 220.6
Its Q1 FY24 net profit grew four times on a YoY basis. 170
Mufin Green Finance 87.4 8.0* 14.1 171.2 89

The company recently raised $1 million from the Shell Foundation. 47
309
Quick Heal Tech 84.2 – 9.6 -142.1
It entered into a partnership with Tata Tele Business for cybersecurity solutions. 168
23
Media Matrix 81.9 1,383.5 3.3 -35.8
*Price-to-book value. Our small-cap universe (minimum market capitalisation `550 crore) has 1,010 small-cap companies, making the last 10 per cent of the total market capitalisation. The list
mentions the stocks that have fluctuated most wildly in the last three months. Data as of Oct 16, 2023.

INDEX WATCH
S&P BSE Telecom

The S&P BSE Telecom index has recently emerged as one of the best-performing
indices, returning 15.8 per cent in the past three months. The recent rally can be
attributed to the performances of Airtel and Vodafone Idea. However, the index’s
valuations are concerning, marked by a negative P/E, P/B, and a low dividend yield.
.H\QXPEHUV ,QGH[PRYHPHQW
z BSE Telecom z BSE Sensex z Median
– –
2,500
2,000
Price to earnings Price to book
1,500
0.43 8.0 1,000
500
Sensex rebased to index
Dividend yield (%) Market cap (` lakh cr) Oct ’18 Oct ’19 Oct ’20 Oct ’21 Oct ’22 Oct ’23
,QGH[ZHLJKWV 3ULFHWRERRNYDOXH 3%

20
HFCL 1.8 Others
8.3 10
Indus Towers 4.4
0
Tata Comm. 5.9
-10
-20
Vodafone
Idea 8.0 In % -30
Oct ’18 Oct ’19 Oct ’20 Oct ’21 Oct ’22 Oct ’23
Airtel
71.6 3ULFHWRHDUQLQJV 3(
50
25
0
9DOXDWLRQVGLYLGHQGVDQGUHWXUQV
-25
Dividend 1Y
Company P/B P/E yield (%) return (%) -50
ITI 12.3 – 0.0 187.2 -75
Tata Communications 27.1 31.3 1.2 54.3 Oct ’18 Oct ’19 Oct ’20 Oct ’21 Oct ’22 Oct ’23
Vodafone Idea – – 0.0 38.9

Airtel 7.1 68.0 0.4 23.4
'LYLGHQG\LHOG
In %
Tejas Networks 5.2 – 0.0 22.1 2.5
Route Mobile 5.3 28.3 0.7 13.3 2.0

HFCL 3.1 34.0 0.3 -0.1 1.5
1.1
Indus Towers 2.3 17.5 0.0 -0.3 1.0
Sterlite Tech 3.0 29.8 0.6 -5.4 0.5
Tata Teleservices – – 0.0 -12.9 0
'DWDDVRI2FWREHU Oct ’18 Oct ’19 Oct ’20 Oct ’21 Oct ’22 Oct ’23

IPO TRACKER
D-Street debutants
Here is how the S&P BSE IPO Index has performed over the last one year and
how the biggest IPOs have fared
HIGHEST
LISTING-DAY GAIN ,32LQGH[YVWKH6HQVH[
Ideaforge Tech With a slew of IPOs, the IPO Index has performed well in the last few months
130 z IPO z Sensex
94.2%
122
120
HIGHEST
LISTING-DAY LOSS
110
Yatra Online
114
-8.5% 100
HIGHEST 90
POST-LISTING GAIN
Kaynes Tech 80 Rebased to 100
238.4% October 2022 October 2023
HIGHEST HIGHEST LOWEST BIGGEST TOTAL

POST-LISTING LOSS SUBSCRIBED IPO SUBSCRIBED IPO IPO ISSUE SIZE
Ideaforge Tech Ideaforge Tech Radiant Cash Mgmt. Mankind Pharma
-38.7% 106.1 times 0.5 times `4,326 cr `41,466 cr
7RS,32VE\LVVXHVL]H
Subscription Issue Issue List Current Listing Change post Sensex Current
Company Listing date ratio (times) size (` cr) price (`) price (`) price (`) gain (%) listing (%) change (%) P/E
Mankind Pharma 09-May-2023 15.3 4,326 1,080 1,300 1,815 20.4 39.7 7.1 56.7
JSW Infra 03-Oct-2023 37.4 2,800 119 143 168 20.2 17.1 1.0 47.5
RR Kabel 20-Sep-2023 18.7 1,965 1,035 1,179 1,403 13.9 19.0 -0.9 83.4
Five-Star Business Finance 21-Nov-2022 0.7 1,593 474 450 758 -5.1 68.4 8.2 5.0*
Global Health 16-Nov-2022 9.6 1,571 336 398 788 18.5 98.0 6.8 64.8
Concord Biotech 18-Aug-2023 24.9 1,551 741 900 1,190 21.5 32.2 1.9 51.9
KFin Technologies 29-Dec-2022 2.6 1,500 366 369 457 0.8 23.9 8.2 39.9
Archean Chemical 21-Nov-2022 32.2 1,462 407 449 658 10.3 46.5 8.2 20.6
Samhi Hotels 22-Sep-2023 5.3 1,370 126 131 154 3.6 18.3 0.2 -
Sai Silks 27-Sep-2023 4.4 1,201 222 230 254 3.6 10.2 0.1 39.9
Fusion Micro Finance 15-Nov-2022 2.9 1,104 368 361 618 -2.0 71.5 6.9 2.6*
SBFC Finance 16-Aug-2023 70.2 1,025 57 82 84 43.8 2.6 1.0 59.8
Sula Vineyards 22-Dec-2022 2.3 960 357 358 475 0.3 32.6 8.8 47.9
Bikaji Foods International 16-Nov-2022 26.7 881 300 321 491 7.1 52.9 6.8 79.8
TVS Supply Chain 23-Aug-2023 2.8 880 197 206 222 4.7 7.5 1.1 243.8
*Price-to-book value. Data as of October 16, 2023.

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MARKET BAROMETER
Trends and trails

Here are some charts that will help you make sense of the current market in
terms of valuations and return potential
z Max Current z Median z Min
Sensex’s movement The Sensex is the most convenient indicator to

In ’000 tell the state of the Indian market. The 10-year
72
graph presented alongside shows the secular
67,839 run in the markets. However, this rally was
60 punctuated by several bearish phases. The
66,167
most prominent ones include the following:
48 Chinese growth concerns in 2015, demoneti-
sation blues in 2016, the sell-off in 2018 due
to US–China trade war, and the March 2020
36
COVID-19 shock. After staging a remarkable
recovery from the lows of March 2020, the
24 markets yielded to the Russian invasion of
20,193 Ukraine and rising interest rates. With reces-
12 sionary fears easing, Sensex reached a new
Oct ’13 Oct ’23 all-time high.
Sensex’s price to earnings The price-to-earnings ratio of the Sensex is a

40 simple market-valuation ratio. A general
guideline to help understand the valuation is:
35 35.1 Highly undervalued
(mouthwatering Fairly Dangerously
30 valuations) valued overvalued
25 23.0 P/E
24.1 12 16 20 24
20 Undervalued Overvalued
16.8
15 This graph is based on standalone data of Sensex companies.
Oct ’13 Oct ’23 If one takes the consolidated data, the P/E will likely be lower.
Sensex’s price-to-book value

4.0 The price-to-book value ratio tells us how
3.83 many times an investor is ready to pay for
a rupee of net assets. Since book value is
3.6 3.58 stable and less volatile than earnings, some
consider it better than the P/E as a measure
3.2 3.02 of valuation.
If:
2.8 P/B > Median P/B = Overvalued
P/B < Median P/B = Undervalued
2.4 2.36
2.0
Oct ’13 Oct ’23

Sensex’s dividend yield
1.7% Dividend yield is nothing but the return an
investor gets in the form of dividend on his
investment. It is measured as dividend per
1.5 1.52 share divided by price per share. Generally
speaking, when stocks are cheap, dividend
yields are high.
1.3
1.24 If:
Dividend yield > Median dividend yield
1.22 = Undervalued
1.1
Dividend yield < Median dividend yield
= Overvalued
0.9
0.7
0.72
Oct ’13 Oct ’23
Market cap to GDP

125% Here we have considered the market
capitalisation of all the listed companies on
112 the BSE.
100
106 This measure is Buffett’s personal favourite.
81 He said, “It is probably the single best
75 measure of where valuations stand at any
given moment.”
57 If:
50 Market cap > GDP = Overvalued
Market cap < GDP = Undervalued
25
Considering market cap of all the listed companies on
the BSE, revised estimate of FY22 nominal GDP and
advance estimates of FY23 and FY24 nominal GDP
0
FY14 FY16 FY18 FY20 FY22 FY24
10Y G-sec yield vs Sensex’s earnings yield

4.0%
3.97 The spread between G-sec yield and Sensex’s
earnings yield is another valuation measure.
G-sec yield is the yield of the 10-year
3.2 2.91 3.19 government bond. Sensex’s earnings yield
is the inverse of the Sensex’s P/E ratio.
The greater the deviation from the median
2.4 in either direction, the greater the degree
of overvaluation or the undervaluation
of the Sensex.
1.6
If:
0.94 Spread > Median = Overvalued

0.8 Spread < Median = Undervalued
0
Oct ’13 Oct ’23 All data as of October 16, 2023

ANALYST’S DIARY
Sectoral spotlight
Understanding re-rating and market response beyond the numbers
L
et’s dive into the high-stakes However, as with any good story, and the earnings growth of
world of investing, where there’s a twist. companies in these two sectors are
rewards might not always Enter the price-to-earnings nearly the same. This indicates that
follow the most obvious path. One multiple (P/E). Imagine two they utilised their earnings
might think finding a company that companies: both accelerating at the efficiently in their operations over a
is growing its earnings fast is the same earnings speed but with longer period of time.
key to increasing share price. different P/E ratings. Contrary to On the other hand, household
what you’d expect, their returns can products and paint companies were
be remarkably different. unable to reinvest all the excess cash
The P/E has doubled… Our curiosity led us on a journey that they were generating. So they
Chemicals and bearings had the to look for sectors where the market rewarded their investors with higher
biggest re-rating
has shifted its valuation significantly dividends (the 12-year average
Mar 2011 Sep 2023
- what we call a “re-rating.” We found dividend payout ratio ranged
seven sectors that have been re-rated between 38 and 52 per cent).
by a quantum of more than 100 per However, in the case of footwear
cent over the last 12 years. and tyres, puzzlingly, the market
7.2 Chemicals 43.8
We chose such a long horizon gave a significant re-rating despite
because quick valuation changes low earnings growth.
often respond to future prospects or The key takeaway is that while
earnings outlooks in the sector. poor earnings growth may or may
9.8 Bearings 46.6 However, if a sector has been not be rewarded by the market,
re-rated consistently over a longer sectors or companies with good
period, we can analyse whether earnings growth with good
Mr Market was right or wrong in its fundamentals will always get
8.1 Tyre 26.1 discounting mechanism. rewarded in the long term.
Data reveals that the chemical Ultimately, focusing on
and bearings industries posted good fundamentals and sticking with
earnings growth, and the market them is the key to wealth creation.
re-rated them justifiably. The ROE By Kunal Bansal
9.4 Footwear 38.4
…but the performance was a mixed bag

Even sectors with relatively low growth received good appreciation
16.8 Consumer durable 43.5 FY11-23
Sales
Sector growth (% pa) PAT growth (% pa) Median ROE(%)
Chemicals 16 17 19.3
21.9 Paints 49.2 Bearings 10 16 19.6

Household products 10 12 39.3
Paints 13 11 23.1
Household Tyre 10 9 17.3

27.4 products 59.2
Consumer durable 11 9 22.3
Data as of September 29, 2023. Sectoral P/E calculated
by taking the median P/E of the constituents. Footwear 7 5 12.7

ANALYST’S DIARY
Chronicles of resilience
Triumphs, trials, and redemption of CG Power and Industrial Solutions
R
emember those childhood tales of heroes vanishing
into obscurity, only to rise again, stronger, and
more invincible? CG Power and Industrial
Solutions’ journey feels just like that.
The company, at its lowest point, was valued at a
market cap of `308 crore (as of March 30, 2020). However,
as of October 6, 2023, it is valued at `63,909 crore. The
stock has been able to generate a spectacular return of
59 per cent per annum in the last five years! That’s a solid
enough reason to look into this company in greater detail.
Flashback to yesteryears equipment business completely. Ideally, the amount

CG Power mainly deals in power transmission and received from this sale should have been used in the
manufacturing of industrial equipment such as expansion of their power business. However, that
motors, switchgear and alternators. The company has didn’t happen. Moreover, the financial performance of
had a long history of good performance and has the company also deteriorated in the same year due to
established itself as a notable player in the industry. It huge losses in the B2B overseas transformer and
was also the first company to introduce an under-light switchgear business.
ceiling fan in the year 1989! The company was also a serial acquirer. It made many
However, their steady growth hit a speed bump in acquisitions to diversify its revenue sources, but they
2015. The company de-merged its electrical equipment were not paying off. It raised high amounts of debt in 2015
division (now listed as Crompton Greaves Consumer to fund the losses of these foreign subsidiaries. Moreover,
Electricals) to a private equity firm. Now, this promoters started to pledge their shares.
business was a cash cow for the company and formed To aggravate the situation, Gautam Thapar, the
around one-third of sales. promoter of the company, was arrested in 2019 on
Initially, Avantha Group (the promoter entity of CG charges of fake accounting transactions, money
Power) had a holding in the company (CG Consumer laundering, and related party transactions.
Electricals) of 34.4 per cent. However, the promoters Consequently, he was dismissed from the board, and his
decided to divest their entire stake for a total shareholding was removed. This, along with the COVID-
consideration of `2,000 crore and exited the electrical 19 pandemic and a slowdown in the power sector,
deteriorated the financials of the company further to
the point that it started reporting massive losses. Its
)LYH\HDUVKDUHSULFHSHUIRUPDQFH equity became negative in FY20! It had also defaulted on
CG Power has risen more than nine times in five years their debt of `1,100 crore. The company filed for
1,000 z CG Power and Industrial Solutions z Sensex
restructuring. The future was looking bleak, and it was
looking for some immediate cash infusion.
800
600 The saving grace

400 The white knight came as Tube Investments (of
the Murugappa group). Tube Investments bought a
200
55 per cent stake in the company for an immediate cash
0 infusion of `650 crore. It did some cost as well as debt
October 2018 October 2023 restructuring and got rid of redundant functions, thereby
Data as of October 6, 2023. Both Sensex and stock price rebased to 100.
improving efficiency.

helped them repay a part of its debt. This, along with the
.H\ILQDQFLDOPHWULFV operational and cost efficiency introduced by the new
Operating profit margin has improved significantly promoters, helped the company get back on track.
Operating Oprating
Today, the company is completely debt-free. Its
Revenue profit profit
Year (` cr) (` cr) margin (%) PAT (` cr) CFO (` cr) ROCE (%) aggregate order book value has increased by 17.2 per cent
FY18 8,031 -134 -1.7 -719 380 -2.4 to `4,319 crore in FY23. The company also paid its first
interim dividend of `1.5 per share after eight years in Q1.
FY19 7,998 89 1.1 -504 811 -0.5
FY20 5,110 -174 -3.4 -1,324 692 -
What lies ahead?
FY21 2,964 -22 -0.8 1,295 -242 - CG Power is planning to expand its capacity for
FY22 5,484 548 10.0 913 483 - transformers and motor segment with a cash outlay of
FY23 6,973 911 13.1 963 947 65.5 `400 crore, not involving any debt, as it will be completely
funded by internal accruals.
The company reported negative equity in FY20 and FY21. FY21 PAT inflated due to an
exceptional item of `1,544 crore. From defaulting on its debt to becoming debt-free in
just three years, this is a remarkable turnaround. It also
demonstrates the pivotal role and profound impact of
It also improved its working capital management effective leadership within a company.
significantly. Debtor days (the number of days it takes However, the valuation of the company remains a
for debtors to pay back the money) were reduced from concern. It is currently trading at a P/E of 63 times,
78 days in FY19 to 50 days in FY23. significantly higher than its listed peers. Whether the
The company also had some legacy issues at its company can sustain this momentum in the future or not
Kanjurmarg Land in Bombay. New promoters cleared is something that only time will tell.
them off by selling the land for around `382 crore. It By Nipun Arora
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ANALYST’S DIARY
In corporate limbo
Why some big companies couldn’t keep the pace
H
industan Unilever’s share price didn’t move Fifteen companies met our criteria, of which five
anywhere between 2000 and 2009. Similarly, are public sector companies. All these companies once
Infosys’ share price stayed flat from 2000 to had promising investment potential but, for some
2006. This made us wonder if there were more such reason, failed to capitalise on it. Here is a closer look
examples of companies in limbo for a long time. at each of the remaining 10 companies.
Essentially, these companies fail to generate
substantial wealth in the long run, often due to Sun TV Network
changing business climates, towering debts, In the streaming era, platforms like 9.0
governance hiccups, or simply lacklustre industry Netflix and Amazon have rattled Revenue growth
(FY13-18; % pa)
growth. Shareholders in such ventures end up losing traditional media and entertainment
money and wealth-creating opportunities. companies. Sun TV in South India is no
4.9
To identify these companies, we applied the exception. The company’s financials
Revenue growth
following filters. remain intact, and it continues to be the (FY18-23; % pa)
Q Market cap exceeding `10,000 crore on most-watched channel in South India.
September 30, 2013 However, as viewers migrate to OTT,
4.0
Q 10-year price return between -5 to 5 per cent advertising dips. And subscribers? 10Y price return
per annum They’ve plateaued for three years. as of Sep 29, ’23

Glenmark Pharma payment hiccup in FY23 had a severe impact on the
Despite its revenue growing at 10 per cent
-7.1 company’s profitability in FY23.
PAT growth
annually over FY13-23, the profit growth (FY13-23; % pa)
has not followed. High average interest Vedanta
expense (around 21 per cent of operating 3.9 High debt, inconsistent profits, and a 2.04
Debt-to-equity
profit), product recalls, and multiple fully pledged promoter stake are some of ratio (FY23)
antitrust and consumer protection lawsuits have led to a the key issues with Vedanta. The median
decline in profit after tax. Recently, it even had to sell a interest expense as a percentage of 2.3
majority stake in Glenmark Life Sciences to repay debt operating profit was 38 per cent over the
and raise capital for investments. last 10 years. The government’s no to the sale of its
international assets to Hindustan Zinc and a failed
Hero MotoCorp joint venture with Foxconn have also hurt the
Hero bet on focusing only on the affordable
-1.4 company’s long-term prospects.
Sales volume
segment. However, because of the premium growth
two-wheeler segment witnessing (FY13-23; % pa) GlaxoSmithKline Pharma
1.9
significant growth, its move backfired. As a
3.7 There are three primary reasons why
Revenue growth
result, revenue and net profit have grown GSK Pharma’s revenue and PAT have (CY12-FY23; %pa)
only by 3.7 and 2.9 per cent per annum, respectively, in remained flat over the last 10 years.
the last 10 years. Q Addition of several products to the
2.1
National List of Essential Medicines
Oracle Financial Services over the years. That meant the prices of such
While Oracle has high capital efficiency,
5.1 products were regulated by the government and the
Revenue growth
the business has witnessed mediocre (FY13-23; % pa) company could not charge a higher price on them.
growth. Net profit has grown 5.3 per cent Q The sale of its consumer business in 2018.
annually in the last 10 years. And most of

3.3 Q Sale of the Vemagal facility post-recall of a drug.
the profit is returned to shareholders in the Even with these negative developments though,
form of dividends. The dividend payout ratio has profit margins and ROCE of the company have
averaged around 130 per cent between FY15-23. remained intact over the years. However, the
parent’s renewed interest in Indian business and
Lupin increased market penetration have helped the
In FY16, Lupin was the fifth-largest
24.4 company grow in the last two years.
Median ROCE
pharma company in the US by (FY14-18; %)
prescriptions. Eager to scale, it acquired Zee Entertainment
two US companies for 6.1 In 2019, key promoters failed to repay their
-2.1
Median ROCE Operating
$880 million. By FY23, the company went obligations and lost the majority of their profit growth
(FY19-23; %)
from fifth to third position. However, its stake. Then, SEBI brought up corporate (FY13-23; % pa)
profitability took a major hit. High 2.9 governance issues and took strict action
1.2
impairment charges on overvalued against the directors. The pandemic and
acquisitions, a fall in revenue and profitability, the rise of international streaming
inflationary pressures, and price erosion in the platforms further left a severe dent in all the major
US market eventually led to a decline in the revenue streams.
company’s financials.
Castrol India
Indus Towers Consistent performance, optimal cash
4.3
At its peak, the Indian telecom sector
7.4 flow, and zero debt make Castrol look
Revenue growth
(CY12-22; % pa)
PAT growth
had 14 service providers. Now, there are (FY13-23; % pa) like a good candidate for investment.
just three. This dramatic decline in However, the problem lies in its growth. -1.5
competition has meant trouble for Indus
2.9 There has been no meaningful capex in
Towers. The co-locations and average the last 10 years. As a result, the
sharing factor fell sharply in FY19 and FY20, resulting company’s 10-year revenue growth has been poor.
in minimal revenue growth. Further, a customer’s By Hemkesh Khattar

VIS-A-VIS
On a solid footing
This month, we have put two leading footwear
companies in the ring. Who kicks whom?
Bata Relaxo Footwears
India’s largest footwear manufacturer by revenue, Bata Relaxo is India’s largest footwear company in terms
India, has four manufacturing facilities, with a total of market cap and pairs sold. It has eight manufactur-
manufacturing capacity of 2.1 crore pairs per annum. It ing facilities that can crank out 10 lakh pairs a day! It
owns and operates 63 per cent of its 2,053 pan-India primarily sells through a network of more than 65,000
stores. Unlike Relaxo, Bata has a strong presence in all multi-brand outlets. It focuses on the mass-market
price segments, from the mass market to the premium. segment, which reflects in its average realisation per
As a result, its average realisation per pair (`712 in pair of `161. In FY23, it sold 17.1 crore pairs – four
FY23) was four times higher than that of Relaxo. times that of Bata.
Financials (All numbers in ` cr)

Revenue Operating profit Net profit Net worth Total debt Cash from op. Market cap
3,467 482 311 1,438 2,449 629 20,994
2,854 227 172 1,855 128 400 22,805
3ULFHFKDUW 1XPEHURISDLUVVROG
480 In cr
360 18.4 17.9 19.1 17.5

15.7 17.1
240
4.7 4.7 4.9 3.2 3.8 4.9
120
0
FY18 FY19 FY20 FY21 FY22 FY23
October 2018 Rebased to 100 October 2023
67.6 132.5 13.6 11.9 0.8 0.3 0.7 0.1

Price to earnings Price to book Dividend yield (%) Debt to equity
19.9 20.9 )LYH\HDUDQQXDOLVHGJURZWK SD

13.9
11.8
8.8 8.0 8.5 5.6 7.5 10.6 7.9
6.0
-14.2
-3.2
Net Operating ROE (%) ROCE (%)

margin (%) margin (%) Revenue Operating profit EPS
Price data as of October 16, 2023. P&L data for TTM ended June 2023. Other data as of FY23. Debt includes lease liabilities.
The Indian footwear industry faced the brunt of the pandemic. Although the sales volume is gradually
recovering, profitability is still unstable owing to volatile raw material prices. Still, the industry is expect-
ed to grow at 15–20 per cent per annum between FY22–25 in terms of value as per a CRISIL research report.
Growing consumer preference for the mid to premium segments will likely drive this growth.

WORDS WORTH WISDOM
“Cheap companies are not

always good bargains”
A
swath Damodaran
is a renowned
professor of
corporate finance
and valuation at the Stern
School of Business at New
Investing
York University. His
teachings focus on both
lessons from
academics and industry a valuation
practice. However, they
are not restricted to the professor
classroom alone. You
can also learn from the
master by visiting his
blog ‘Musings on
Markets’ and by
reading his books.
In fact, we went
through one of his
well-known books -
‘Investment Fables’.
While the book talks
about various
investment
philosophies
available to an
investor, in the
end, Damodaran
summarises the Illustration: ANAND
lessons investors
should keep in mind
while investing in
stocks. Here, we have
shared snippets from the
book to present these
lessons to you.
Most stocks that look Know yourself

cheap are cheap for a reason Before you decide to adopt any
…many stocks that traded at below book investment strategy, you should
value did so because of their poor earning consider whether it is the right
power and high risk, and that stocks that traded at low strategy for you… There is no one best
P/E ratios did so because of anaemic growth prospects. investment strategy that fits all investors.

The more things change, the more they stay the same
…as more and more data on stocks becomes high growth and momentum–has allowed some
available to investors, some investors have investors to create composite screens that they
become more creative in how they use this data can then label as unique. Be wary of complex,
to find stocks. In fact, the ease with which they fancifully named investment strategies that claim
can screen stocks for multiple criteria–low P/E, to be new and different.
If you want guarantees, Everything has a price

don’t invest in stocks Companies with powerful brand names
No matter what the proponents of an trade at high multiples of earnings, as `
investment strategy tell you, no stock do companies with higher expected
strategy can offer guaranteed success. Stocks growth. Thus, the question that you have
to answer as an investor is not whether
are volatile and are driven by hundreds of different
having a strong brand name makes a company
variables, some related to the overall economy and
more valuable, but whether the price attached
some arising as a result of information that has
to the brand name by the market is too high
come out about the firm. The only predictable thing or too low. Good companies may not be good
about stocks is their unpredictability. investments.
Numbers can be deceptive No pain, no gain

Studies, no matter how detailed and Why are some investors so willing to
long term, generate probabilistic rather delude themselves into thinking that they
than certain conclusions… Every study can earn high returns without taking much
also suffers from the problem that markets risk? One reason may be that the risk in some
change over time. No two periods are exactly strategies is hidden and shows up sporadically. These
identical, and it is possible that the next period strategies succeed most of the time and deliver solid and
may deliver surprises that you have never seen modest returns when they do, but create large losses
before and that these surprises can cause time- when they fail. If you cannot see the risk in a high-
tested strategies to fall apart. return strategy, you just have not looked hard enough.
Respect the market Luck overwhelms skill

When you do uncover what looks like a (at least in the short term)
market mispricing and an investment The most depressing lesson of financial
opportunity, you should begin with the markets is that virtues such as hard
presumption that the market price is right work, patience and preparation do not
and that you have missed some critical component always get rewarded. In the final analysis, whether
in your analysis. It is only after you have rejected you make money or not on your portfolio is only
all the possible alternative explanations for the partially under your control, and luck can play a
mispricing that you should consider trying to take dominant role. As an investor, you should take both
advantage of the mispricing. success and failure with a grain of salt.
Remember the fundamentals

In every bull market, investors forget the In the aftermath of every bull market, investors
fundamentals that determine value—cash flows, discover the truth that the fundamentals do
expected growth and risk—and look for new matter and that companies have to earn money
paradigms to explain why stocks are priced the and grow these earnings to be valuable. Ignore
way they are. fundamentals at your peril.

Coming soon...
Stock investing is about

to get a lot simpler
or

COVER STORY
New kids on
the street
IPOs steal the show
at Dalal Street
By Udhayaprakash and Hemkesh Khattar
T
he market has been on a soaring bull run for was no exception, as proven by many unique
the past few years, generating a return of companies such as Zomato, Paytm, MapMyIndia,
13 per cent per annum since 2020. Whenever Dreamfolks Services, and more.
such a euphoric rise happens, it’s like a grand We have identified 26 such companies and have
party, and guess who receives the most invites? IPOs! given a brief introduction along with their strengths
No wonder, this season, Dalal Street witnessed over and weaknesses. For those companies coming from
150 IPOs since 2020, from small niche players to the same industry, we have also provided a brief
industry behemoths. introduction.
But here’s where it gets interesting. With every IPO But please remember dear reader, our goal is to
wave comes a batch of breakout stars, those unique simply familiarise you with these companies, and you
companies from different industries, and with business must not mistake this information for recommendations
models that make investors go, “Hmm, that’s a new or endorsement. Like always, you must do your own due
one. Haven’t seen that before.” Again, this IPO season diligence before taking any investment action.

COVER STORY
CASH MANAGEMENT SERVICES
Banking’s behind-the-scenes
E
ver wondered how banks
shuffle the heaps of
money we deposit with
them, from one spot to another?
The answer is cash management
companies. Despite the meteoric
rise of digital payments in
India, good old cash remains the
predominant payment medium.
But cash movement is not all
that these companies do. These
7KHFDVKIRRWSULQW
5Y cumulative 5Y cumulative 5Y median
companies also assist in Company M-cap (` cr) revenue (` cr) PAT (` cr) ROCE (%) P/E
streamlining the digital AGS Transact Technologies 747 8,808 158 15.4 40.9
payment systems and
CMS Info Systems 5,801 7,340 921 26.8 18.5
settlement of transactions for
Radiant Cash Mgmt. Services 993 1,332 195 48.7 15.8
multiple businesses.
AGS Transact Technologies CMS Info Systems Radiant Cash Management

resent in over 2,200 towns, ndia’s largest cash and ATM adiant, a premier integrated
P AGS Transact Technologies is
the second-largest ATM and cash
I management company, CMS
Info Systems, provides services to
R cash logistics firm, stands as
India’s foremost retail cash
management service provider in five of the largest banking management organisation by
India. Unsurprisingly, ATM networks in India. Along with network locations and
management accounted for cash management, the company touchpoints. In FY23, cash pick-up
47.5 per cent of its total revenue derives a significant portion of its and delivery represented
generated in FY23. revenue from IoT-based security 68 per cent of its revenue.
The company also provides solutions for banks and ATMs. The company’s expansive
digital payment The company has an network in tier 2 and
services and annual revenue and 3 cities is its
prepaid cards to PAT growth of differentiating
expand in the 20.9 and factor, with the
payment 31.3 per cent, latter
automation respectively, contributing
industry and over the last five 63 per cent to
accommodate the years, consistently its FY23 revenue.
changing business improving operating Moreover, it has
dynamics. The share of margins. Further, with a been the industry
digital payment services has gone five-year median ROE of 18.4 per leader in terms of operating
up from 8.7 per cent in FY19 to cent, the consistent financial perfor- margins and ROE over the last
16.8 per cent in FY23. However, a mance is a testament to the compa- five years. Some major concerns
2.4 per cent annualised revenue ny’s operational efficiency. are the continuously lower use of
growth in the last five years, However, rapid technological cash in the economy and the
volatile earnings, significant debt, advancements and a constant fall in revenue concentration risk, as
and trade receivables are the the use of cash pose major challeng- 65.4 per cent of its FY23 revenue
factors working against it. es to its management. came from the top five clients.

DREAMFOLKS SERVICES
Connecting banks and lounges
B
anks often provide partnered with all major card 95 per cent. Dreamfolks also enjoys
complimentary airport lounge issuers and networks such as Visa, a high return on capital due to
services to their debit and Mastercard, HDFC Bank, ICICI minimal reinvestment needs, and it
credit cardholders. But how is this Bank, Axis Bank, etc. This has has a five-year median ROCE of
facility seamlessly extended? Do solidified its industry position with 55.3 per cent!
banks directly partner with all a market share of around One of its most significant
lounges to establish this? No. drawbacks is its dependence on the
Enter Dreamfolks. This company 2,715 air travel industry. Any drop in
M-cap
integrates card networks and even (` cr) air travel can impact its
airlines with airport lounge 1,777 financials significantly. For
operators. Apart from lounge access, 5Y cumulative instance, during the
it also connects food & beverage revenue (` cr) pandemic, in FY21, it
outlets, spas, baggage services, and 134 witnessed a downturn and
5Y cumulative
more. Notably, approximately PAT (` cr) saw a 71 per cent revenue
83 per cent of Dreamfolks’ decline. Moreover, a P/E
55.3
touchpoints are international. 4Y median ratio of 38 times - though
The company’s biggest strengths ROCE (%) much lower than its median
are a robust network and an asset- 37.7 of 121 times - is another reason
P/E
light operation model. It has that warrants caution.
eMUDHRA SERVICES
Navigating digital trust
F
or various online an advantage in the market by associated with software
transactions, digital becoming the only Indian company heavyweights such as Microsoft,
signature certificates are to be registered with the European Adobe, Mozilla, etc. These
vital. eMudhra, one of the Cloud Signature Consortium and affiliations bolstered its position in
prominent players in this domain, Certifying Authority Forum. It is the industry. Currently, the
offers digital trust services to both also the only Indian company company has a 38 per cent market
individuals and share in digital signatures and
organisations. The company 3,719 18 per cent in digital trust services.
M-cap
issues SSL certificates In the last five years, it has more
(` cr)
(authenticating the legality than doubled its client base.
781
of a website), device 5Y cumulative Meeting regulatory standards
certificates for IoT devices, revenue (` cr) while upholding technological
secure digital transformation 155 prowess is imperative for its
5Y cumulative
services and more. Since its clients and partners to prefer
PAT (` cr)
inception, eMudhra has eMudhra. It also faces competition
25.0
issued over five crore digital 5Y median from established global players
signatures and has over ROCE (%) like DocuSign and Adobe. Lastly,
88,000 channel partners. 58.9 at a P/E of 59 times, the stock
P/E seems to be pricing a lot of growth.
As a first mover, it gained

COVER STORY
ELECTRONIC MANUFACTURING SERVICES
From design to service

T
he electronic manufacturing services sector is
one of the fastest-growing industries in the
country, gaining increased attention in recent
years. This industry primarily encompasses the
contract-based manufacturing of electronic goods,
which can sometimes extend to their design. Within
this sphere, the business framework can be delineated
into four main segments.
z Original design manufacturers are companies that
design and manufacture products as per the
specifications provided. This is a relatively high-
margin business.
z Electronic manufacturing is the predominant
business model in the country. Clients provide
companies with the design, who then manufacture
the products.
z Job work is the most basic model where
companies simply assemble the parts without
any manufacturing.
z The final model is after-sales service, where companies
offer end-to-end service on behalf of their clients.
Avalon Technologies Cyient DLM

Avalon designs printed circuit boards Cyient DLM designs and manufactures
3,734 5,301
(PCB) and manufactures box builds for M-cap PCBs, box builds, and cable harnesses. M-cap
various original equipment (` cr) The PCB segment contributed to (` cr)
manufacturers (OEMs). It has a strong 3,118 63 per cent of its revenue, and box 3,118
4Y cumulative 5Y cumulative
overseas presence, which generated revenue (` cr) builds contributed to 32 per cent of revenue (` cr)
58 per cent of revenue in FY23. revenue in FY23.
149 76
Avalon’s biggest strength is the 4Y cumulative Cyient’s biggest strength is its long- 5Y cumulative
virtual barrier it has created due to its PAT (` cr) standing relationship with its PAT (` cr)
experience and expertise in 17.5 customers. The company has 13.0

3Y median 3Y median
components. As a result, the company ROCE (%) continued to partner with most of its ROCE (%)
forged long-term customers for over a decade and has
70.9 167.1
relationships P/E also become the largest supplier of P/E
with many EMS to aerospace and defence
of its customers. services in India. At the
However, on same time, it suffers from
the other hand, revenue concentration.
it faces the risk Its largest client
of high revenue contributed 22 per cent
concentration as the top to FY23 revenue.
five clients account for Besides, it trades at a
50 per cent of the revenue. P/E of 167 times.

DCX Systems Syrma SGS Technology
The company operates in the domain of system integration and This is yet another electronics
manufacturing of cable harnesses. It is one of the leaders in these manufacturer involved in the
products in terms of capacity, with system integration as production of printed circuit
its primary revenue driver, contributing to around boards. Apart from this, Syrma
2,916 96 per cent of the revenue. also manufactures
11,279
M-cap Armed with the expertise it has radio frequency M-cap
(` cr) (` cr)
gained over the years, DCX was able identification
2,997 to build a strong client portfolio. projects, 4,257
3Y cumulative 5Y cumulative
revenue (` cr) It has become the preferred offset electromechanical
revenue (` cr)
167 partner for various Indian and parts, and various
272
3Y cumulative international OEMs, such as the IAI computer parts. 5Y cumulative
PAT (` cr) PAT (` cr)
group from Israel and different Indian The company
17.4 defence companies and departments. Just boasts a strong 17.2
2Y median 4Y median
ROCE (%) like its peers, DCX also suffers from high revenue clientele, including
ROCE (%)
38.5 concentration, with its largest customer contributing to some reputed
85.3
P/E 47 per cent of total revenue. companies such as P/E
TVS Motor, Eureka
Forbes, Total Power Europe, and
Elin Electronics more. It has had ongoing
933
This company operates in the domain of consumer M-cap partnerships with 16 of its
electronic products such as lights, fans, small (` cr) customers for over a decade, and
appliances, fractional horsepower motors, and 4,435 almost two-thirds of its revenue
more. It is a leader in the manufacturing of small 5Y cumulative comes from its long-term
revenue (` cr)
electric motors with a market share of 12 per cent. customers.
137
It also takes up the designing of products for some 5Y cumulative Apart from
clients based on specifications. PAT (` cr) trading at a
Elin’s biggest advantage also paves 13.9 high P/E
5Y median
the way for its shortcomings. The of 85 times,
ROCE (%)
company has some of the biggest it also
34.8
consumer electronics P/E operates in
manufacturers, such as Phillips, a highly competitive
Crompton, Eveready, and others, as its clients. industry, and despite
But on the other hand, its top two customers, Signify high profits, it hasn’t
and Phillips, contribute to 49 per cent of total revenue. Additionally, it been able to convert
not only has relatively lower margins but also a low return on capital. them into cash flows.
Kaynes Technology generating product. of its peers who are niche 14,822
Starting out as a simple Kaynes’ technological players. Following a similar M-cap
(` cr)
contract manufacturer, over expertise is its biggest strength, trend, Kaynes also suffers from
2,985
three decades later, Kaynes has as it is one of the very few IoT- a high revenue concentration 5Y cumulative
become one of the leading enabled end-to-end from top customers and a poor revenue (` cr)
design-led electronics manufacturers in the country. cash conversion cycle, forcing 165
manufacturers. The company With its design it to rely on short-term 5Y cumulative
PAT (` cr)
caters to core industries such capabilities, it has borrowings.
15.4
as automotive, industrials, been able to cater to Besides, it trades 5Y median
defence, railways, IoT, and an array of at an exorbitant ROCE (%)
more. Printed circuit boards industries as P/E of 156 156.0
are its biggest revenue- opposed to many times! P/E

COVER STORY
LANDMARK CARS
Premium car pursuits
L
ooking to buy a new premium further by after-sales services and 15.2 per cent of the brand’s total cars
car? Landmark Cars could pre-owned car sales. sold in the country. The recent
very well be your destination. Landmark Cars has maintained a boom in the premium and luxury
The company is a leading premium long-standing car segment has resulted in an
3,158
car retailer in India and operates relationship with M-cap annual revenue growth of
dealerships of multiple premium multiple premium car (` cr) 37.2 per cent in the last five years.
and luxury car manufacturers. It manufacturers, 13,360 However, it’s essential to observe
5Y cumulative
operates 62 sales showrooms and including Honda, revenue (` cr) the challenges intrinsic to the
53 workshops across 26 cities in Volkswagen, Jeep, etc. business. Apart from its cyclical
107
India. As of FY23, approximately In FY23, it emerged as 5Y cumulative and capital-intensive nature, its
82 per cent of its revenue is driven a market leader for PAT (` cr) reliance on the performance of car
by new car sales, complimented Mercedes in India, 15.6 brands under its dealerships makes
5Y median
accounting for ROCE (%) the company vulnerable. Notably,
some of its key brand partners have
37.4
P/E witnessed a drop in sales volume
in the last few years. Given that
these brands contribute to around
60 per cent of its volume, this trend
can hurt the growth of the business.
CE INFO SYSTEMS
Cartographic chronicles
C
E Info Systems, also known as of its clients for at least 10 years. 20.1 and 33.7 per cent, respectively
MapMyIndia, is a leading and Around 19 lakh new vehicles in the last five years.
premier digital map service manufactured in FY23 included this While CE Info Systems enjoys
provider in India. The multiple company’s navigation system, dominance among domestic players,
applications of maps allow the recording an annual volume growth it faces tough competition from
company to service a broad clientele of 38 per cent over the last three international tech giants, including
that spans enterprises, years. As a result, it Google and Apple. Further, it is
governmental bodies, and the retail 11,971 has reported annual heavily dependent on the
M-cap
sector. The map-led business revenue and PAT automobile sector for its revenue
(` cr)
contributed to 79 per cent of its total growth of (around 54 per cent in FY23).
918
revenue in FY23. 5Y cumulative Thus, a downturn or fall in
The mapping and licensing of a revenue (` cr) automobile sales will
country is an intricate, costly, and 311 have a huge impact on
5Y cumulative
time-consuming process. This acts its performance. Also,
PAT (` cr)
as an entry barrier for new you should pay
26.5
companies, and allows CE Info 4Y median attention to the
Systems to earn high-profit margins. ROCE (%) alarmingly high P/E
Moreover, the company has 103.8 of 104 before making
P/E an investment decision.
managed to retain over 90 per cent

COVER STORY
DATA PATTERNS
Electronics in defence
D
ata Patterns stands as a vertically integrated operations has also improved immensely,
premier provider of electronic have helped it attract multiple with an annual PAT growth of
solutions, with a focus on the defence contracts. This is reflected 94.6 per cent over the last five years.
comprehensive range of defence and in its record-breaking revenue of The company is highly dependent
aerospace domains - space, air, land, `462 crore and order inflow of on government policies and capital
and sea. The in-house design, `901 crore in FY23. The profitability allocation in the defence sector for
development and manufacturing its growth. Although the PAT
capabilities ensure production 11,716 has grown, high working
M-cap
efficiency and superior product (` cr) capital requirements - cash
quality. As of FY23, the company conversion cycle exceeding
1,275
generated 45.2 per cent of revenue 5Y cumulative 250 days and trade
from radars and its processors, revenue (` cr) receivables at 84.3 per cent
followed by 25.4 per cent from 302 of total revenue - have
5Y cumulative
avionics and electronic warfare. PAT (` cr) stagnated the growth in
Given the intrinsic complexity of operating cash flow. To top
20.5
the defence industry, entry barriers 5Y median it all, it currently trades at a
are notably high for new companies. ROCE (%) P/E of 86 times, significantly
Further, Data Pattern’s 86.4 higher than its median P/E
P/E
technological expertise and its of 70 times.
PARAS DEFENCE AND SPACE TECHNOLOGIES
Pioneering defence innovations
P
aras Defence has carved a company that provides critical has even started developing
niche for itself by engaging in imaging components through in-house drone technology for the
the design, development, advanced optics solutions and offers defence sector.
manufacturing, and testing of a turnkey electromagnetic pulse Although it has manufacturing
wide range of defence and space (EMP) protection facilities in India, it relies on
2,829
engineering products and solutions. solutions. In fact, it M-cap imports of key electronic elements
Its three major segments include (` cr) for production. This not only
defence and space optics, defence 850 increases its cost but also leaves it
5Y cumulative
electronics, and heavy engineering, exposed to supply chain constraints.
revenue (` cr)
with each segment contributing Also, the company has struggled
117
almost equally to the revenue. The 5Y cumulative to grow financially. The annual
company has two manufacturing PAT (` cr) revenue and PAT growth of the
facilities in Maharashtra. 12.5 last five years are 9.2 and
5Y median
Technological 7.5 per cent, respectively. Its
ROCE (%)
advancements are the operational inefficiencies can
80.8
bedrock of this company’s P/E also be attributed to a poor cash
success and have allowed conversion cycle (283 days) in
it to thrive in a niche segment FY23. Moreover, it trades at a
in the defence sector. It is the only P/E of 81 times.

IDEAFORGE TECHNOLOGY
Propelling drone dominance
I
deaforge is a manufacturer of software solutions. range. Furthermore, it develops
unmanned aircraft, commonly Being an early mover, the proprietary software. Combined, all
referred to as drones, in the company could capture over these factors resulted in its
country. This company serves both 50 per cent of the market. It ranks explosive growth in recent years,
civil and defence sectors, with seventh globally, in the dual-use with multiple orders from the
defence being the primary growth category of drone manufacturers. It defence sector and a revenue growth
driver, contributing to 69 per cent of also increased its of 137 per cent in the last five years.
its revenue (FY23). Its product offerings by 3,443 The company heavily relies on
M-cap
comprehensive offerings span from providing drones (` cr) the government for the majority of
hardware components, according to weight its revenues and also has a poor
394
encompassing drones, batteries, and class, altitude range, 4Y cumulative working capital cycle. Its debtors
communication systems, to robust and communication revenue (` cr) and inventory levels have more
48 than doubled in the last three years.
4Y cumulative
PAT (` cr)
As a result, it has started depending
on short-term borrowings for day-to-
16.1
3Y median day operations, which has jumped
ROCE (%) over six times during the same
107.7 period. Moreover, it trades at a
P/E
hefty P/E of 108 times.
NETWEB TECHNOLOGIES
Exploring the supercomputer sphere
A
re you well-acquainted with you witness high levels of Seagate have achieved this. As a
the realm of supercomputers? customer loyalty and repeat result, it has created virtual entry
The recently listed Netweb clientele for Netweb Technologies. barriers and enjoys a high return
Technologies is one of the leading Strategic collaborations with on capital. In the last three years,
and very few manufacturers in the international stalwarts like Intel, the company has posted an median
domain. The company provides AMD, Samsung, Nvidia, and ROCE of 53 per cent!
high-performance computing However, there are certain
systems, private cloud 4,556 concerns to be noted too. Netweb’s
infrastructure, AI systems, M-cap receivables have tripled in the last
(` cr)
enterprise workstations, and more. three years with inconsistent
991
It has installed over 300 4Y cumulative operating cash flow. As a result, its
supercomputers in the last two revenue (` cr) cash conversion cycle has also
decades in various reputed 82 worsened. The company is exposed
institutions such as IIMs, ISRO, 4Y cumulative to revenue concentration risk as its
PAT (` cr)
CDCA, etc. top three customers contribute to
52.6
Its comprehensive product range 3Y median around 40 per cent of total revenue
makes it the preferred vendor for ROCE (%) (as of FY23). Moreover, it currently
various institutions. Combine this 97.1 trades at a P/E of 97 times, making
with technological expertise, and P/E this a poor entry point.

COVER STORY
EASY TRIP PLANNERS YATRA ONLINE RATEGAIN TRAVEL TECH.
Navigating Booking Hospitality

profits behemoth tech herald
I Y R
n the new-age tech landscape, atra Online is India’s third- ateGain is the largest
a consistently profitable largest online travel agency software as a service
company sounds too good to be (OTA) by gross booking and (SaaS) company in
true, right? However, Easy Trip operating revenue. As the leading India’s hospitality and travel
Planners, better known as corporate travel service provider, industry. Operating on a B2B
EaseMyTrip, has firmly it boasts over 800 major corporate business model, the company
established its presence, emerging clients, with a 98 per cent retention offers software solutions to a
as a premier online travel agency rate in FY23. wide spectrum of verticals,
in India. It is predominantly used It has the country’s maximum including hotels, airlines,
for air travel bookings, hotel and accommodation online travel agents, and car
constituting around 91 per cent of affiliations and provides rental companies. In FY23, it
the total revenue in FY23. comprehensive travel served 23 of the
EaseMyTrip’s key services, including world’s top 30
to success is its bookings, ticketing, hotel
astute business packages, etc. Its brands
strategy. parent company, and
Eliminating Yatra Online Inc., generated
convenience fees is listed on around
on travel bookings NASDAQ. Nearly 86 per cent
reduces costs for 84 per cent of its FY23 of its revenue
consumers, thus making revenue was from air from North
it a popular choice. A lean travel bookings, but its heavy America and Europe.
business model and low employee reliance on the competitive and RateGain uses AI and
costs help it maintain high-profit volatile hospitality industry means data analytics to monitor
margins. As part of its expansion high marketing and customer and aggregate the ever-
strategy, the company has also acquisition costs. changing consumer
forayed into the charter flight Its revenue peaked in FY18, patterns. This information is
bookings segment. dropping about 81.4 per cent in incorporated into its clients’
The business is susceptible to FY21 during the pandemic. FY23 database for targeting
downturns in air travel or saw marketing expenses and trade consumers and their key
tourism, as exemplified during receivables at 83 and 42.2 per cent needs while travelling. Data
the recent global pandemic. of revenue, respectively. services, marketing, and
Additionally, a P/E of 59 times is It reported its first profit in distribution are the key
cause for caution while making FY23 and now trades at a P/E areas through which the
an investment case. of 329 times. company serves its clients
and enjoys long-standing
relationships with the
majority of them.
<RXUWUDYHOSDUWQHUV
High dependence on the
5Y cumulative 5Y cumulative 5Y median
Company M-cap (` cr) revenue (` cr) PAT (` cr) ROCE (%) P/E global travel and hospitality
industry, volatile earnings,
Easy Trip Planners 7,528 1,119 358 60.4 59.2
and a P/E ratio of 77 times
Yatra Online 2,166 2,222 -422 -14.8 328.9
are some key concerns from
RateGain Travel Tech. 6,601 1,843 39 3.8 77.4 an investor’s perspective.

ZOMATO
Culinary clicks count
Z
omato is one of the prominent benefiting from India’s growing 89,830 Zomato’s bottom line
food delivery platform smartphone and internet usage. M-cap is in shambles.
(` cr)
companies in the country. The recent pandemic acted as a It has never posted
Although the company is involved catalyst to the service as the gross 17,183 an operating or net
5Y cumulative
in quick commerce, food delivery order value has more than tripled revenue (` cr) profit in a year, and
continues to be its bread and in the last three years. -6,316 has consistently
butter, contributing to Since FY18, its revenue 5Y cumulative reported negative
PAT (` cr)
71 per cent of total revenue has grown at cash flows. In the last
in FY23. Zomato remains 72 per cent per annum! -12.2 five years, its
5Y median
the market leader in the It has been able to grow ROCE (%) cumulative operating
food delivery segment, its user base with - cash outflow totalled
with a market share of attractive discounts. P/E `6,459 crore! Besides,
around 55 per cent. While its topline at present, it suffers
As a trailblazer, looks fantastic, from increased competition,
it quickly achieved forcing it to maintain deep
scale, becoming discounts to retain a consistent
familiar in tier 1 user base. On the other hand, the
and tier 2 company has also been splurging
cities, cash on acquisitions.
FSN E-COMMERCE (NYKAA)
Beauty's online bloom

42,637
F
SN E-commerce, the parent Lakme, Forest value since FY19.
M-cap
company of Nykaa, is an Essentials, Mirroring many other online
(` cr)
online retailer of fashion Maybelline New platform companies, Nykaa’s
14,285
products. It offers a wide range of York, etc. Its rapid 5Y cumulative financial performance is marked
in-house products and various growth can be revenue (` cr) by robust topline growth and an
third-party beauty and personal attributed to its 72 inconsistent bottom line. While it
5Y cumulative
care brands. At present, its online marketing has remained profitable
PAT (` cr)
platform is its primary revenue campaigns where it in the last three
7.3
generator and growth driver. The partners with digital 4Y median years, it has
company also has a small offline influencers. It has ROCE (%) frequently
presence with around 145 stores. spent `1,580 crore on 2,366.8 reported negative
Like other online platform marketing in the P/E operating cashflows.
companies, Nykaa’s advantage past five years! This volatility in
was its early foray into this This has profitability has led to a
market. It has a large product led to a poor return on capital,
portfolio of over 3,400 domestic fourfold signalling inefficiency. On
and international brands, increase in top of this, the company
including notable names such as its gross trades at an insane P/E of
L’Oréal, Charlotte Tilbury, merchandise 2,367 times!

COVER STORY
CARTRADE TECH
Digital auto dynamics
H
ave you ever visited revenue from website advertising
CarWale to check out and lead generation.
various car models and CarTrade’s success can be
compare them before buying? attributed to its vast automotive
CarTrade Tech is the company market ecosystem and
behind CarWale and BikeWale, engagement with various recent acquisition of
the top-ranked platforms in stakeholders. In OLX’s classified and auto
search popularity among their 2,874 FY23, it reported 3.4 transactions aims to
M-cap
peers. It offers an integrated (` cr) crore average broaden its consumer base.
ecosystem allowing buyers access monthly unique For context, the used and new car
1,468
to sellers as well as facilities like 5Y cumulative visitors across all its segments grew by 136 and 26 per
servicing, insurance, finance, and revenue (` cr) platforms, of which cent in FY23, respectively.
customer relationship 33 86.3 per cent were However, profitability
5Y cumulative
management services. PAT (` cr) organic, underlining remains a significant concern.
In FY23, the company its increasing user While CarTrade was the
3.4
generated 55.8 per cent revenue 5Y median base and popularity. industry’s only profitable
from commission earned on ROCE (%) With a positive company in FY20, it reported a
auctions and sale of pre-owned 64.8 outlook on India’s loss of `132 crore in FY22. Also,
P/E
vehicles and 42.2 per cent used car market, the it faces intense competition.
NAZARA TECHNOLOGIES
Esports ecosystem expanse
T
he online gaming and esports hosting on its media platforms. Its the North American region
industry has gained expansion in the US market is a jumped from 5.3 per cent in FY19
significant traction in India significant milestone, where it to 42 per cent in FY23.
over the last few years, and Nazara entered in 2019. Since then, it has However, Nazara operates in an
Technologies has been at the managed to effectively target the intensely competitive business
forefront of this revolution. US audience with tailored content environment, notably from
Renowned for its mobile gaming and strategic acquisitions, thus international heavyweights like
applications, esports promotions, successfully Microsoft, 2K, etc. The evolving
5,744
and sports-focused media outlets in M-cap penetrating the US government policies regarding
India and the US, it reported in (` cr) sporting market. As online gaming add to the volatile
FY23 that esports and gaming 2,584 a result, the revenue business environment. Financially,
5Y cumulative
contributed 49 and 37 per cent, revenue (` cr) contribution from while the revenue has grown
respectively, to its overall revenue. immensely, its profit margins are
93
The company has successfully 5Y cumulative still low. The
leveraged the explosive growth in PAT (` cr) valuations also do not
internet and mobile connectivity 3.4 favour the
5Y median
in the country. Nazara expanded ROCE (%) company as it
its footprint through game trades at a P/E
113.5
applications and Esport event P/E of 114 times.

ONE97 COMMUNICATIONS (PAYTM)
Transcending traditional transactions
‘P
aytm Karo’ is something its platform and 58,866
almost every Indian hears marketing. It has M-cap
(` cr)
on a daily basis. One97, been one of the
widely known as Paytm, is one of biggest beneficiaries 22,272
5Y cumulative
India’s leading payment services of internet revenue (` cr)
platform. The firm provides a penetration and -12,875
comprehensive range of services, unified payment 5Y cumulative
PAT (` cr)
including e-commerce offerings, interface (UPI). Its
credit card issuance and buy-now- early entry in UPI -21.6
5Y median
pay-later options. Payment payment services is a ROCE (%) Like many platform-centric
services remain its primary key factor behind its - firms, Paytm is yet to turn
growth driver, contributing to present popularity. P/E profitable, even at the operating
62 per cent of total revenue, The introduction of profit level. In addition, its
followed by 19 per cent each the Paytm Soundbox further operating cash flow has remained
from financial services and solidified its position among highly volatile. The past five
cloud commerce. merchants. To establish itself, the years have seen a reported cash
Paytm’s biggest strength was company has consistently spent on outflow of `9,775 crore. However,
being at the right place at the right marketing activities. In the last in FY23, it posted a positive
time and investing consistently in five years, it has spent `7,313 crore! cashflow from operations.
PB FINTECH
Personal finance reimagined
I
f you have bought or thought of present, the platform sells
buying insurance in recent products of major insurance struggle with profitability.
times, Policybazaar, under providers such as ICICI Prudential, PB Fintech is no
PB Fintech, is a name that you HDFC Life, Max Life, Care, Star exception. As a result of
would have definitely come across. Health, Bajaj Allianz, etc. high employee costs and
It has one of the largest online With an investment of marketing spend, the
marketplaces for insurance and approximately company has been
credit products. It primarily sells `3,381 crore in 34,303 incurring losses.
M-cap
insurance via Policybazaar and marketing over recent (` cr) Additionally, some
credit offerings through years, PB Fintech has insurance partners,
6,133
Paisabazaar. In fact, insurance seen annual growth 5Y cumulative focusing on strengthening
services accounted for rates of 55 and 32 per revenue (` cr) their online platforms, are
50 per cent of its FY23 revenue, with cent in insurance -2,119 pulling products from Policybazaar.
5Y cumulative
the balance stemming from other premium and loan PAT (` cr) This trend, combined with the
services, including credit products. disbursements, intricacies of operating in a tightly
-22.1
PB Fintech’s transformative respectively, over the 5Y median regulated environment, might pose
impact on the online insurance last five years. ROCE (%) hurdles to its future growth.
sector can be attributed to its Most new-age -
P/E
persistent brand-building efforts.At platform companies All price data as of October 6, 2023.

INTERVIEW
Through a
professional’s lens
Investing insights from a fund manager
DAYLYNN PINTO
Senior Fund Manager,
Bandhan AMC
D
ive into the nuanced world of investing with small caps). We find a relatively lower value in mid-
Daylynn Pinto, Senior Fund Manager at caps followed by small caps at the current juncture.
Bandhan AMC. From unearthing small-cap
gems to debunking market myths, Pinto shares Do you invest based on themes or prefer to look
invaluable insights into portfolio strategies, value at companies on a case-by-case basis?
perspectives, and the delicate dance between quality Both strategies work, and we need to look at them
and efficiency in the ever-evolving financial from a portfolio perspective. Themes provide a
landscape. Explore, learn, and adapt. panoramic view, aligning investments with broader
market trends. However, the intricacies of governance
How do you go about investing in small-cap or capital allocation can render specific stocks within
companies? Are mid- and small-cap companies a theme undesirable. Thus, a surgical stock-by-stock
looking overvalued? approach becomes imperative, injecting flexibility
Small cap companies can be looked at from multiple into the overarching thematic strategy.
dimensions while adding them to your portfolio, i.e.,
(1) a pure bottom-up approach (unique product/service Have you been able to spot good value for your buck
offering), (2) a theme-based approach (e.g., EMS stocks/ in the current market? If yes, then where do you see
railways/defence etc.), (3) a sector tailwind approach such opportunities?
(delta in earnings is usually higher in an upcycle for Value is incrementally hard to find in the current

market. However, we continue to prefer large caps While a low P/E does not
over mid/small caps and continue to prefer sectors make up for low capital
where valuations are at long-term averages. efficiency, a high P/E does
not necessarily make up
Where do you stand on the quality-value for high capital efficiency
spectrum? Can a low enough P/E ratio make up
for low capital efficiency?
While a low P/E does not make up for low capital The most ludicrous thing/myth you heard
efficiency, a high P/E does not necessarily make up about investing in stocks...
for high capital efficiency. One has to take a balanced BUY AT ANY PRICE (BAAP). It resonates as a
view of the growth/return on invested capital whimsical notion in the serious symphony of
dynamic while investing. investment. Blindly embracing this philosophy is
akin to casting caution to the wind. It underscores the
You manage a diverse set of funds (ELSS, Multi Cap, necessity for a methodical, disciplined approach to
Value Fund, and sectoral). Do you think different investment decisions, emphasizing the impracticality
circumstances call for different investment of recklessness in financial endeavours.
strategies? If so, then how can investors adapt to
different market conditions? What was your biggest investing mistake, and
All three funds (except sectoral) have a judicious what did you learn from it?
allocation towards large, mid, and small caps and the Getting into companies where fortunes are decided by
investment strategy is largely driven by the same set of binary events. While the upside can be substantial if
factors. While ELSS and Value offer more flexibility, you are right, one must be careful to construct a
the multi-cap category is more restrictive and therein portfolio that can withstand the shocks if such
lies the difference in approach to portfolio construction. investments do not work out.
Learn from the

Gurus of Investing
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of world-class money managers
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STOCK ADVISOR
Pfizer, Vaccines and Stocks

The strange story of Pfizer stock’s collapse highlights something
important about equity investing
five years ago? I can understand vaccine, especially amongst boys
the stock price being lower than aged 12 to 17. Notably, this age
the vaccine bump of 2022 because group has practically zero risk from
expectations ran ahead of reality, COVID-19, so the mRNA vaccines’
but how could they be lower than net effect has been to raise the total
five years ago? Is there a clue in mortality and disease risk of boys
the public space anywhere? aged 12 to 17. Interestingly, the
On social media, the general talk side-effect that Pfizer has admitted
for many weeks now has been that to has been widely noticed since the
Wall Street has realised that there beginning but was just as widely
is a serious prospect of ruinous condemned as ‘misinformation’ and
product liabilities from the mRNA a ‘conspiracy theory’.
By Dhirendra Kumar
vaccine. Sure enough, something Moreover, even though Pfizer
interesting is buried in the 2023 distributed this vaccine only
E
quity investments are tricky. guidance Pfizer released just last where it obtained protection from
I’ll discuss an interesting week. Around 4,000 words deep in product liability, this protection
example that everyone will this 6,000-word document, Pfizer generally does not extend to any
have an opinion about. admits to a chance of heart disease deliberate malpractice or fraud.
Let’s take Pfizer, one of the few (myocarditis) caused by the mRNA Wall Street understands this very
companies for whom COVID-19 was
supposed to be an unalloyed bonan-
za. Even so, the company’s stock is
almost at a five-year low – just a bit
above where it was in the pre-vac-
cine, early 2020 COVID-19 slump. If
you had bought the stock five years
ago and held on when the vaccine
story started, you would now be sit-
ting on a 20 per cent loss.
By any simple, straight-line
analysis, this is a big puzzle – quite
inexplicable. For 2021 and 2022, the
company had a $70+ billion bump
in revenue from the mRNA vac-
cine alone – a complete windfall.
Sales of Paxlovid, its anti-Covid
treatment, were about $18 billion
in 2022. The rise in profits was just
as impressive. From $12 billion in
2020, profits rose to $23 billion in
2021 and $38 billion in 2022.
So what happened? Why is the
stock price now lower than it was

well. As I said upfront, equity ger of overreactions to temporary this set to start building your port-
investments are a tricky thing. The problems. But, how many business folio right away!
side effects of not understanding a domains can an individual inves- Q The complete investment thesis for
business can be as harmful as the tor understand enough to gain all recommended stocks so that you
side effects of a medical treatment. this confidence? understand why you are investing
In general, the healthcare indus- Enter Value Research Stock Q New recommendations as soon
try can be a minefield for investors. Advisor. It doesn’t merely provide a as they are released
It’s many industries wrapped in roster of stocks to consider but also Q Continuous updates and analysis
one label, and there is little in com- their underlying investment ration- on all recommended stocks straight
mon between a hospital company ale. Beyond this, our researchers from our dedicated analyst team
(such as the one in our recommen- and analysts continually revisit and Q Tools and data to research and
dations) and a generic drugs compa- refresh the rationale. Subscribers analyse any other stock
ny like Pfizer. Moreover, the field is receive the ‘what’ and the ‘why.’ Many investors make good choic-
an ethical minefield. Many years Investing is a marathon, and you es, but in the ups and downs of the
ago, I had resolved never to recom- could use every assistance availa- markets, they lose confidence and
mend any healthcare business ble. Here is where Value Research bail out too early. What we do is
where an ethics-related issue was Stock Advisor steps in. We don’t give you all the inputs you need for
possibly cropping up. claim to make every decision for you to maintain the strength of
However, my primary message you — consider us your dedicated your convictions. A key part of our
today is not about healthcare per research team, aiming to empower job is to keep in touch and support
se but that equity research must be you as an investor. you when things look shaky.
built upon a foundation of finan- Let me recap what you get when All things said and done, recom-
cial evaluation and a comprehen- you become a member: mendations are just that – some-
sive study of the business domain. Q Access to all our (currently 52) thing that we recommend you do.
Without that, even if you invest, stock picks A lot of people give recommenda-
there is no confidence; without Q Best Buy Stocks: 17 stocks select- tions. The real achievement of
confidence, there’s always the dan- ed from our recommendations. Use Value Research Stock Advisor is
that all those members are becom-
ing real investors.
Value Research Stock Advisor is a

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You can subscribe to the service at
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Illustration: ANAND

STRAIGHT TALK
Megathreats
Here is why global debt has risen to such alarming levels
Over 80 per cent of this came from should use fiscal policy counter-
the developed European and US cyclically – increase debt when
markets. It represents a global debt- the economy slows and pay it
to-GDP ratio that comfortably down when it improves. However,
exceeds three-fold. low and falling interest rates
In 2016, the US Fed Fund rate was maintained by central banks
0.5 per cent, which has now surged using unconventional tools
to 5.5 per cent. The European like zero interest rate policy
Central Bank, too, has seen its (ZIRP) and quantitative easing
interest rates rise by 4.5 per cent. (QE) have fuelled an
With the US debt exceeding beyond extraordinary debt buildup.
By Anand Tandon $33 trillion, a 5 per cent increase in High debt levels and a slowing
interest rates will translate to an economy with interest rates raised
incremental $1.6 trillion in interest to rein in inflation leave little
N
ouriel Roubini is a professor payments. Globally, at $300 trillion, room for policy action. A slowing
emeritus of economics at the it adds $15 trillion – which is around economy has fewer resources to
Stern School of Business at 80 per cent of China’s GDP. pay down debt. The only option is
New York University and the CEO to let inflation ride and erode the
of Roubini Macro Associates, a Will this time be different? value of debt over time. In this
global macroeconomics The world has witnessed several scenario, inflation coexists with
consultancy. In 2022, he published a cycles without collapse – will this economic depression.
book, ‘Megathreats’, where he debt bubble also resolve? A healthy A debt-fuelled growth has also
brings together what he views as level of debt can be repaid without led to asset price inflation across
the top ten threats to humankind. impacting growth. Governments the world. If a shock triggers a fall,
As we enter yet another conflict in
the Middle East, Roubini’s
arguments merit a deep look. 3DQGHPLFEOLS
Debt, percentage of GDP
Debt Crisis
300% Global private debt Global public debt Global total debt
While most of our challenges today
2020 (Covid-19): 258 2022: 238
are manufactured, the global debt 250 2019: 229
crisis can be attributed to
economic mismanagement. 200
Global debt has risen sharply over
150
the last few decades, particularly
since 2008. It peaked in 2020 due to 100
COVID-19, registering a drop the
following year. However, the upward 50
journey soon resumed, with
0
international debt at $307 trillion in
1950s 1960s 1970s 1980s 1990s 2000s 2010s 2019 2020 2021 2022
the first half of 2023. The first six
Source: IMF 2023 Global Debt Database and IMF staff calculations. The estimated ratios of global debt to GDP are weighted by
months of the year saw an each country’s GDP in US dollars.
incremental addition of $10 trillion.

central banks don’t have the tools with environmental challenges weaponisation of the dollar, along
to bail out markets. such as floods, heat, and food with the loss of share of global
shortages may make the planet trade and the emergence of
Why is inflation more unliveable. These investments will unconnected trading and political
structural than it is also increase the cost of production. blocs, can potentially reduce the
commonly assumed? dollar’s attractiveness as a reserve
A shift in global geopolitics is a Growth prospects – where currency. Like in the 70s, when
fundamental cause for sustained are the jobs? high inflation existed along with
price rise. For decades, AI and technology improvements high unemployment, a scenario
globalisation has moved low- threaten white-collar workers – like that can well be expected in
paying jobs to emerging markets. unlike in the past when the US in the decades ahead. The
The manufacturing base of technological developments impetus then was the oil price
developed countries has hollowed impacted only blue-collar shock that raised unemployment.
out as companies continue to set workers. An ageing population in Today, supply shocks can come
up facilities predominantly in Japan and large parts of Europe from various directions – from
China. While this led to fewer mid- also affect government revenues de-globalisation and technology to
level jobs in countries with as more people require social pandemics and cyber-threats.
developed economies, it allowed support, and fewer remain in the
consumers to buy cheaper earning bracket to pay taxes. A Managing risks
products. Globalisation increased combination of lower government Investors often use the ‘near-term
world GDP but left a hole in the revenues and fewer job prospects direction of markets’ to assume that
developed world’s middle class. every new information has been
A change in the world’s Rising interest rates, a ‘discounted’ by the market and past
geopolitical order is underway. changing geopolitical order, a trends will continue. Markets
China has emerged as a slowing economy, climate cannot forecast discontinuities and
counterweight to the US. The change, and the threat of factor in the effects. If they could
European Union is increasingly AI automation all aggravate look a few decades ahead, many
marginalised and struggling with the global debt crisis. industries likely to not survive a
its internal matters. cataclysmic climate impact would
De-globalisation has gathered have gone out of business. Instead,
momentum. Global supply chains for white-collar workers they stay and grow. The
are emphasising friend-shoring or performing repetitive and assumption is that technological
on-shoring of production capacity. standardised jobs raise change can solve today’s problems.
Efficiency and price are no longer unemployment prospects and For example, the only way that the
the sole focus of supply chains. In signal the governments’ reduced planet can survive rising
this environment, the cost of ability to provide support. temperatures is by assuming the
production will naturally increase Developed markets also face development of a new energy
as production facilities move to demands for more leisure time source that will simultaneously be
more expensive locations. from their population. Organised carbon-neutral and low-cost.
Climate change is another factor worker unions demand a 4-day Alternatively, a chemical process
that impacts inflation. Investments work week. When strikes paralyse like photosynthesis accelerates
in changing fuel mix or creating industrial production, it creates carbon capture multi-fold. The
climate-resilient infrastructure are inflation, not jobs. A similar development of such technologies
estimated at trillions. These will trend today would likely increase cannot be manipulated, so markets
not generate revenues the rush towards using robots react as if everything is normal.
commensurate with the on the factory floor. Investors need to consider these
investments – large parts of the risks based on their estimation of
investments are not for creating Supply shocks these risks materialising and
new capacities but for replacing The US dollar has been the position at least a part of their
existing ones. Without these world’s reserve currency since the portfolio to reflect a non-zero
investments, the cost of dealing Second World War. The probability of this occurrence.

MAIN STREET
Urban Indian women have more

money than men
Find out the reasons for the rapid rise of Indian women
through different parts of the coun- ent book on the rise of Indian
try. It was heartening to see in women, they had just started to
Census 2011 that for the first time nudge ahead of the men in terms
the number of additional literate of the Gender Parity Index (GPI).
women in the last ten years exceed- GPI measures how many girls
ed the number of additional liter- per boy are getting enrolled in
ate men. This convergence of liter- school across all levels. Over the
acy rates over the next ten years last four years, the GPI has been
will be a big driver of women’s eco- greater than one, indicating that
nomic independence and empower- more girls than boys are enroll-
ment in my view.” ing in schools across all levels
By Saurabh Mukherjea – Anirudha Dutta, of education!
author of ‘Half a Billion Rising: If we go one step further and
The Emergence of the Indian look at the GPI for higher educa-
F
or the past decade or so, Woman’ (2015) tion (i.e., for the age group 18-23
Indian women have sur- years), not only is it higher than
passed men in terms of edu- Surging education levels have one across all social categories, but
cation levels and academic perfor- been a game changer for the improvement has been the fast-
mance. Interestingly, new data India’s women est for Scheduled Castes and
shows that urban Indian women When a decade ago, Anirudha Scheduled Tribes. It implies that
typically have more money in the Dutta was researching his presci- women in the most disadvantaged
bank than men. Further, in
India’s booming tech industry,
women usually earn more than /DVW\HDUVKDYHFRQVLVWHQWO\VHHQPRUHJLUOVSHUER\VJHWWLQJ
their male counterparts. HQUROOHGLQVFKRRO
At Marcellus, we are tilting our Gender Parity Index (GPI) z 2018-19 z 2019-20 z 2020-21 z 2021-22
portfolios towards companies that 1.01 1.02 1.00 1.00 1.03 1.02
focus on India’s women. We believe
the rise of Indian women’s wealth
and spending will be a defining
investment theme for years.
“While education has not
changed the male engineer’s mind,
education has empowered this girl
to walk out of a marriage and earn
Elementary (Std. 1 to 8) Secondary (Std. 9 to 10) Higher Secondary
her own livelihood and to bring up
(Std. 11 to 12)
her daughter. Such economic inde-
Source: Marcellus Investment Managers, Department of School Education and Literacy, Ministry of Education; Gender Parity
pendence would not have been pos- Index refers to the Gross Enrolment Ratio of Girls divided by Gross Enrolment Ratio of boys at different levels of education and
sible without education. I saw this measures how many girls per boy are getting enrolled in schools
again and again as I travelled

Not only are more Indian women
7KHWUHQGRIPRUHZRPHQJHWWLQJHGXFDWHGIRUORQJHULV getting educated, but they are also
FDVWHDJQRVWLF getting educated faster than their
1.10 z All Categories z Scheduled Caste z Scheduled Tribe male counterparts. Between 1961
and 2011, female literacy levels
Gender Parity Index (GPI) for
1.05
have grown three-fold as fast as
male literacy levels.
ages 18-23
1.00
0.95
Central Board of Secondary
0.90
Education (CBSE). It was also the
0.85
case back in 2010 when the female
2016-17 2020-21
pass percentage in the Class 12
exams was 80 per cent, compared
Source: Marcellus Investment Managers, All India Survey on Higher Education, Department of Higher Education, Government
of India; Gender Parity Index refers to the Gross Enrolment Ratio of Girls divided by Gross Enrolment Ratio of boys at different to the male pass percentage of
levels of education and measures how many girls per boy are getting enrolled in institutes of higher education about 73 per cent!
Despite the uptrend in women’s
educational attainment in the
sections of Indian society are pow- annum vis-à-vis around 1 per cent country, their Labour Force
ering ahead the fastest. per annum). Participation Rate (LFPR) has been
Not only are more Indian However, the ascendancy of trending down since 2000, when
women getting educated, but they Indian women in education is even it peaked at about 31 per cent.
are also getting educated faster more comprehensive than the Although the rate in the last
than their male counterparts. enrolment numbers suggest – not 3-4 years has slightly improved, it is
India’s female literacy rate in 2011 only are more women getting edu- still lower than in the 1990 levels.
was 64.6 per cent compared to the cated than men, but they are also Due to this seemingly worrying
male literacy rate of 80.6 per cent. BETTER educated than males. As trend, there is naturally a lot of
However, between 1961 and 2011, recently as May 2023, the pass per- concern and noise surrounding the
female literacy levels in India have centage of girls was six percentage employability and income of
grown three-fold as fast as male lit- points higher than that of boys in Indian women. Are these concerns
eracy levels (around 3 per cent per Class 12 examinations of the rightfully justified? Is the situation
of Indian women worse than it was
over 30 years ago?
:RPHQ¶V/)35KDVEHHQWUHQGLQJGRZQIRUWKHODVWWZRGHFDGHV The answer to these questions is
a clear ‘no’. Indian women today
32
are in a much better position,
socially and financially, than ever.
29 There are primarily three reasons
31
LFPR (in %)
why we believe so.

26 24
28
Education is a major driver of
23 delayed workforce entry
When someone stays longer in the
20
education system, their entry into
the workforce will be later (than
1990 2022
what it would have been had they
Source: Marcellus Investment Managers, ILO modeled estimates, World Bank; Labor force participation rate is the proportion
of the population ages 15 and older that is economically active: all people who supply labor for the production of goods and
not studied further). As we had
services during a specified period. pointed out in our note ‘Educated,
Employed, and Empowered: The

MAIN STREET
Rise of Indian Women’, “if we look

at the LFPR data but with a differ-
Illustration: ANAND
ent lens, namely age-wise stratifi-
cation, a completely new picture
emerges – whilst the LFPR for
women in the age bracket 15-24 has
gone down substantially since
2010, the LFPR for 25-35 years has
remained fairly stable and remark-
ably, the LFPR for 35+ age bracket
has actually gone up.”
If you combine this with the
fact that a majority of India’s
demography in the past decade
was in the 15-24 bracket (source:
Future of Global Wealth
Management report by BCG and
Kotak Wealth Management, 2020),
it implies that as more girls were
getting educated, it affected the
LFPR. However, such an impact be in the workforce). counterparts in 1993-94. By 2018-19,
is optical because as this cohort this gap had reduced to 28 per cent.
starts entering the workforce, the The wage gap between women If we refer to the Periodic Labour
LFPR will improve. Ironically, and men has narrowed Force Survey (PLFS) for 2021-22, the
suppose you believe in this line of Considerable progress has been share of urban women in salaried
thought. In that case, a more deci- made in the battle for gender pay jobs exceeds that of urban men at
sive improvement in LFPR will parity in the last 30 years. According 50.3 per cent vis-à-vis 46.2 per cent,
only happen when India starts to to the International Labour respectively. The same cannot be said
age (because then, in proportional Organization (ILO) and National for rural women and men, though.
terms, fewer Indian women will Sample Survey Office (NSSO), Intuitively, as more educated and
enter higher education and a India’s women, on average, earned skilled women become, they will lap
more significant proportion will 48 per cent less than their male up the more intellectually inclined
jobs. Since urban centres provide
more such employment opportunities
6KDUHRIZRPHQDJHGLQODERXUIRUFHKDVIDOOHQPRVWOLNHO\ than rural areas, that’s where women
GXHWRPRUH\HDUVVSHQWLQHGXFDWLRQ are more likely to excel professional-
160 z 65+ z 55-64 z 45-54 z 35-44 z 25-34 z 15-24 ly. And that is precisely the trend.
In conclusion, in the most
Female labour force (in million)
sophisticated part of the Indian

120
economy, women should earn more
than men. That’s precisely what
80
surveys of India’s tech sector show -
women in technology make, on
40 average, 7 per cent more than men.
0 In urban India, women

1990 2030 usually have a higher bank
Source: Marcellus Investment Managers, ILO modeled estimates, Our World in Data; underlying database created as of 2017 balance than men
and therefore all the figures 2018 onwards are estimates The flow of money into bank
accounts is a function of wages. At

women did not have bank
accounts of their own, which
2QDQDYHUDJHZRPHQLQPHWURDQGXUEDQDUHDVKROGPRUHLQ
meant that their money was sit-
GHSRVLWVWKDQPHQ
ting either at home or in their
1.2 z 2019 z 2023 husband’s bank accounts.
Over the last four years, with
Average deposit (in `) held by
0.9 UPI having become the preferred

women per man
mode of payment in urban India,

0.6 Indian women’s earning power is
visible in their bank accounts
0.3
and the way they invest. As noted
in our blog, ‘Educated, Employed,
and Empowered: The Rise of
0
Indian Women’, “With the grow-
Rural Semi Urban Urban Metropolitan All India
ing ease of access to smartphones
Source: Marcellus Investment Managers, National Statistics Office, MOSPI; metric used is average deposit or total deposit for
men and women each divided by the number of accounts held by each gender, disaggregated by geography and thanks to low-cost broad-
band, Indian women are access-
ing the financial system not only
a pan-India level, men, on aver- figure in women’s account than through bank accounts and tradi-
age, hold about `90,000 in their in men’s) in 2023. tional instruments like fixed
bank accounts, whereas women More interestingly, in metro- deposits (FDs) but also experi-
have less than half that amount. politan areas (defined by the RBI menting with new age investment
However, the numbers change as areas with a population great- avenues like cryptocurrency.
sharply if we look at the bank er than 10 lakhs), women’s aver- Shaili Chopra writes in her book
deposit data for urban India age deposit ticket size has grown ‘Sisterhood Economy’ (2017),
(where the role of physical by 10 per cent between 2019 and “This is a story of a woman who
strength in earning is lower than 2023, way above 1, and hence, wanted to dabble in cryptocurren-
in rural India). larger than that of men’s. cy in the words of Kavita Gupta
In urban areas (defined by the As the Indian economy shifts of Delta Blockchain Fund…
RBI as centres with a population from being dominated by indus- A student from a village in
above 1 lakh but less than 10 tries investing in tangible assets Punjab studying engineering and
lakhs), women’s bank deposit bal- to those investing in intangible working as a receptionist had
ances have, on average, grown by assets, the kind of jobs that incre- crypto money. She invested `100
3 per cent from 2019 to 2023 to mentally get generated will daily in crypto from the salary
exceed 1 (meaning higher deposit require more intellectual than she earned as a receptionist.
physical strength. With more skil- Later, she earned so much money
As the Indian economy shifts from ful women entering the workforce, through crypto that she could pay
being dominated by industries there is a strong reason to believe her education loan. So as far as
investing in tangible assets to that wealth and income will swing digitalisation of financial servic-
in favour of urban India’s women es is concerned, options for
those investing in intangible
even more decisively. investments and savings have
assets, the kind of jobs that
Whilst the bank deposit chart dimensionally increased and
incrementally get generated will
suggests that only in recent become easier and young girls
require more intellectual than years, urban Indian women’s are willingly experimenting.”
physical strength. With more bank accounts have become big-
skilful women entering the ger than men’s, we believe there Saurabh Mukherjea is part of the
workforce, wealth and income will is a high probability that this Investments team at Marcellus
swing in favour of urban India’s trend is at least a decade old. Investment Managers (www.marcellus.
in). He is the author of ‘Diamonds in the
women even more decisively. However, until the rise of Jan Dust: Consistent Compounding for
Dhan and then UPI, many urban Extraordinary Wealth Creation’.

EVERYDAY ECONOMICS
The Taylor Swift economy

Read how a pop sensation added billions to the US economy
1 million tickets to ‘Swifties’, as Outfits, costumes, and merchan-

the popstar’s fans are called. The dise are also boosting the local
craze for Taylor has produced a economies of cities where Taylor is
whole new lexicon. performing, as fans splurge on
The tour crossed into Mexico in dresses and accessories to wear to
August. By the time you read this the concerts. And so, while the
column, Taylor would be perform- thumb rule of the industry is that
ing in Argentina and Brazil, wrap- even $100 spent on hosting a live
ping up for 2023. In 2024, she’ll per- performance generates about $300
form in Japan, Australia, of consumer spending in the host
Singapore, France, Sweden, city, the Taylor Swift tour is gener-
By Puja Mehra Portugal, Spain, the UK, ating nearly five times that.
Netherlands, Switzerland, Italy, The average ticket price is $250.
Germany, Poland, Austria, and US Travel Association data,
W
e’re living in extraordi- Canada, closing the 102-show tour reports the BBC, shows that the
nary times. Last time, a year later in November 2024. average fan spent almost $1,300
this column delineated Ticket sales are expected to cross over and above on outfits to wear
how the phenomenal success of a $2.2 billion from North America to concerts, travel, and other costs.
single company is making policy- alone – something no performer Rolling in profits, Swift reportedly
makers of a country delightful but has ever accomplished. paid a $1,00,000 bonus to the 50-odd
also giving them dilemmas and truck drivers that drove her show
headaches by dominating and dis- While the thumb rule of the props and equipment across the
torting the economy. This time, let industry is that even $100 spent US. She also gave her entire tour
us look at a woman who seems on hosting a live performance staff $55 million in pocket money.
close to attaining a similar feat: generates about $300 of consumer Cities typically drop taxes on
Pop sensation Taylor Swift. spending in the host city, the gambling, alcohol and other
The central bank of the United Taylor Swift tour is generating crowd-pullers to boost the tourism
States, the Federal Reserve, has economy. They’re finding that
nearly five times that.
noted the impact of Swift’s ongoing Taylor’s proving to be an even
tour on the country’s economy and bigger draw than those addictions.
how it’s boosting the tourism Recently, a film on her was also Time magazine reports that con-
industry to deliver the strongest released, drawing huge audiences certs in Las Vegas pushed tourism
performance since the pandemic in to screens. Plus, her music cata- spending to the highest level
one of its official documents. The logue has seen a more than since the pandemic ended. Hotel
concerts have already grossed an 80 per cent increase in the number occupancy in Chicago hit
estimated $300 million from selling of streams since the tour went live. 97 per cent during the three shows
more than 1.1 million tickets in As per estimates, the US leg of the there. It’s being called the ‘Taylor
22 outings (final sales figures are tour would alone result in consum- Swift Economy’.
yet to be reported). ers spending more than $5 billion, Initially, 27 shows were
Such has been the mad rush for known as the trickle-down effect. announced in North America, but
the concerts that the day tickets While travel, dining, and lodg- later, another 26 were added to
went on sale for the US leg, ing are known to get a boost from include cities such as New
Ticketmaster crashed. It recovered major sports and entertainment Orleans, Indianapolis, and
soon and delivered more than events, ‘Swiftomania’ goes further. Toronto, all waiting to see their

economies get a leg-up.
All of this isn’t just pent-up
demand for concerts after the pan-
demic and Swift’s – I am sure,
immense – music talent. Swift is
enjoying a popularity that no pop
superstar has managed so far. In
that case, it’s also because the suc-
cess of the concerts rides strategi-
cally on millions of streams by her
fans. She has been constantly re-re-
leasing her previously recorded
music, which has helped her domi-
nate the global music economy in a
way not imagined before, making
her the first artist with five albums
simultaneously on Spotify’s ‘Top
Ten Albums Global’ chart.
Seeing the economic dividends
up for grabs, cities not on this tour
say they will invest in public infra-
structure, transport systems, and
safety, to host shows. Economists
are calling this the Taylor Swift
economic model.
Another pop superstar,
Beyonce, showed that superstars
can be an economic engine. The
Illustration: ANAND
fallout of Beyonce’s shows in
Sweden turned out to be inflation. The chief economist for Sweden through properly to avoid the mis-
The chief economist for Sweden at at the Danske Bank has ascribed takes of the Indian Grand Prix,
the Danske Bank, Michael Grahn, the country’s sudden spurt in which was launched in 2011. It
has ascribed the country’s sudden was estimated to generate approx-
consumer inflation to a Beyonce
spurt in consumer inflation to a imately $170 million in revenue
solo tour earlier this year, her
Beyonce solo tour earlier this and provide employment for up to
first in seven years.
year, her first in seven years. 10,000 people. Unlike most other
According to Grahn, just the tour’s F1 races at the time, the govern-
first two shows pushed consumer But significant sporting and ment did not subsidise it. The
price inflation to a higher-than-ex- entertainment events featuring Indian organisers had to pay $40
pected 9.7 per cent in May. Fans celebrities with mass popularity, million annually to Formula One
that travelled to Stockholm from easier to build in the new-age con- Holdings to host the event. The
abroad and across the country to nected world, can also become project was a draw for an elite
see Beyonce perform added about massive crowd pullers in India. audience. However, insufficient
0.2 to 0.3 percentage points, Grahn The thrill of experiencing collec- infrastructure support and dis-
wrote, by pushing up demand for tive joyfulness at a time of nuclear putes between organisers led to
clothing and hotel rooms, their ris- families, political, economic and the racing tracks, built at an exor-
ing prices behind most of that social fault lines, and the loneli- bitant cost, falling into disuse.
spike, the data showed, offsetting ness of modern life distancing peo-
the declining prices of electricity ple become an added pull factor. Puja Mehra is a Delhi-based journalist and the
author of ‘The Lost Decade (2008-18):
and food. Sweden’s population is There’s an economic upside to be How the India Growth Story Devolved
less than half of Delhi’s. harvested. But it has to be thought into Growth Without a Story’

STOCK SCREEN
Small-cap growth stocks

Investing in small caps that go on to become mid and even large caps is any
stock investor’s dream. Here are some promising small caps to explore.
A
stock screen filters out companies few survived to tell their tale.
based on certain criteria. The Thus, in order to remove poor-quality
main advantage of using a small caps, we have applied the filters
stock screen is that it helps for solvency (debt), quality of business
you generate stock ideas with a few (i.e., ROE) and revenue growth. To
clicks. It does away with the time- refine the list further and incorporate
consuming process of ‘finding’ valuation as well, we have selected
companies. companies with a PEG (P/E to earnings
Value Research applies carefully growth) of less than one.
selected stock filters to the universe of Small-cap investing requires you to do a
Indian stocks to identify and present you with lot of groundwork. Pick companies that you
attractive companies. In this issue, we will be covering understand and research them in detail. This is not for
the ‘Small-cap growth companies’ screen in detail. We the fainthearted or amateurs. In their journey to
have also given a concise list from the other screens. If become a larger company, small caps will undoubtedly
you want to view all the companies, then you can find encounter multiple headwinds. You should have the
them at: https://www.valueresearchonline.com/ skillset to judge whether these are transient or not.
stocks/selector/ You will also need perseverance to deal with the
frequent drawdowns in your portfolio.
Small-cap growth companies
The greatest joy of compounding, for any investor, is A word of caution
unarguably the journey of a small-cap company These are not stock recommendations. Please do your
transforming into a large-cap company. However, the due diligence before investing. If you are interested in a
small-cap arena is like the Roman-era Colosseum – list of stocks to invest in, subscribe to Value Research
many participated in the gladiatorial games but only a Stock Advisor.
Key terms
<UP]LYZLJVTWHUPLZ willing to pay for the earnings. The company to its total equity capital. rate of a company’s earnings per
thumb rule of valuing a stock is that Tells us which companies use share (EPS).
Should have traded on all the days
a high-growth stock will have a high excessive leverage to achieve :[VJR:[`SL
for the last two quarters and should
P/E ratio, while a value stock will growth. Conventionally, a debt-to-
have a market capitalisation of more Derived from a combination of the
have a relatively lower P/E ratio. equity ratio of less than two is
than `500 crore, the lower cut-off stock’s valuation – growth or value
7YPJLLHYUPUNZ[VNYV^[O considered safe.
for small-cap stocks as per the – and its market capitalisation –
Value Research criteria YH[PV7,. 9L[\YUVULX\P[`96, large, mid and small. For example,
4JHW Ratio of price to earnings to the Measured by taking profit after tax here is the stock style of a large-
EPS (earnings per share) growth of as a percentage of the net worth of cap growth stock.
Stands for market capitalisation.
a stock. Demonstrates how high a the company. Indicates how
Obtained by multiplying the stock
price we are paying for the growth efficiently the company has been
price by the total number of shares.
that we are purchasing. In all our able to utilise investors’ money.
Shows a company’s market value Growth Value
analyses, we have taken five-year @YL]LU\LNYV^[O
or size.
historic EPS growth. Large
7YPJL[VLHYUPUNZ7, The three-year annualised growth
+LI[[VLX\P[`YH[PV+, rate of a company’s revenue. Mid
The ratio of the stock price and
Calculated as the ratio of total @,7:NYV^[O
earnings per share (EPS). It shows Small
outstanding borrowings of the
in multiples how much investors are The three-year annualised growth

No. of companies that
Reasons to invest The filters CLEAREDTHElLTERS
Fast-growing companies M-cap between `578 and `9,738 cr 1,010
Chances of high wealth creation D/E 0 to 1
828
Fundamentally sound ROE 3Y avg more than 20%
Revenue 3Y growth more than 20% 225
Reasonable valuations
PEG (5Y) 0 to 1 125
73
Banking and finance companies were removed from this analysis as the metrics don’t apply to them.
Small cap growth companies

Company Stock Debt-equity 3Y avg 3Y revenue 3Y EPS Market cap Share 52-week
Industry style P/E PEG ratio RoE (%) growth (%) growth (%) (` cr) price (`) high/low (`)
E.I.D. - Parry (India)

11.5 0.30 0.2 29.6 24.6 14 8,993 498 670-433
Sugar
Godawari Power And Ispat

12.7 0.60 0.1 37.7 20.0 67 8,861 646 675-227
Sponge Iron
Chennai Petroleum Corp.

5.0 0.47 0.7 49.9 24.8 46 8,738 590 613-187
Oil Refineries & Marketing
Deepak Fert.& Petchem

9.7 0.25 0.7 21.6 28.9 48 8,552 689 1,062-512
Misc.Chem.
Sarda Energy & Minerals

13.3 0.53 0.4 22.8 30.7 75 7,999 226 256-81
Finished Steel
Religare Enterprises
2.4 0.07 0.4 197.7 29.0 64 7,686 235 281-136
Misc. Fin.services
Mastek
25.5 0.83 0.2 29.9 31.0 22 7,304 2,362 2,540-1,475
Software
Balaji Amines
27.9 0.96 0.0 33.1 31.9 29 7,110 2,195 3,148-1,880
Organic Chemicals
Gravita India
32.2 0.94 0.6 36.7 29.6 82 6,780 978 1,013-342
Non-Ferrous Metal
JK Paper
5.3 0.15 0.7 21.3 32.8 55 6,640 402 453-306
Paper
Kirloskar Ferrous Industries 16.1 0.29 0.5 31.3 30.9 46 6,501 479 534-254
Pig Iron
H.G. Infra Engineering 11.4 0.27 1.0 28.3 34.6 53 6,113 941 1,019-532
Construction
Tega Industries 33.3 0.74 0.3 21.3 21.0 41 6,071 934 1,110-525
Other Metal Products
Man InfraConstruction 19.5 0.66 0.2 24.4 107.6 932 5,903 160 169-66
Construction
Prudent Corp. Advisory 44.6 0.91 0.0 38.0 37.7 50 5,592 1,349 1,378-677
Misc. Fin.services
Magellanic Cloud 65.1 0.87 0.6 29.3 31.0 128 5,413 464 467-78
Misc. Fin.services

STOCK SCREEN
Company Stock Debt-equity 3Y avg 3Y revenue 3Y EPS Market cap Share 52-week
Industry style P/E PEG ratio RoE (%) growth (%) growth (%) (` cr) price (`) high/low (`)
West Coast Paper Mills 4.9 0.13 0.1 24.4 29.8 64 4,867 761 780-461
Paper
Share India Securities 13.6 0.16 0.2 47.6 60.2 87 4,782 1,461 1,493-991
Brokerage Services
Greenpanel Industries 21.7 0.18 0.2 20.8 31.2 121 4,684 384 400-255
Wood
Tips Industries 50.7 0.57 0.0 58.5 43.6 74 4,382 347 370-143
Media & Entertainment
Tilaknagar Industries 23.6 0.86 0.5 69.9 25.0 -25 4,120 215 227-91
Liquors
JTL Industries 35.6 0.58 0.2 36.4 88.8 78 3,925 232 252-130
Steel Tubes & Pipes
HLE Glascoat 59.4 0.97 0.8 38.2 30.2 7 3,787 553 765-465
Chemical Machinery
Sunflag Iron And Steel 16.1 0.30 0.2 23.8 31.5 45 3,555 198 249-80
Finished Steel
IIFL Securities 9.9 0.43 0.4 24.1 27.5 25 3,303 108 112-48
Brokerage Services
WPIL 15.8 0.36 0.3 21.9 26.3 48 3,111 3,176 3,825-1,060

Pumps & Compressors
Stylam Industries 28.9 0.79 0.1 23.8 31.0 84 2,967 1,732 1,971-945
Wood
Sharda Motor Industries 13.1 0.60 0.0 26.9 52.7 97 2,854 962 1,102-550
Auto Ancillaries
Gufic Biosciences
35.2 0.96 0.9 32.8 29.5 61 2,791 279 333-178
Drugs & Pharma
Waaree Renewable Tech.

48.2 0.19 0.5 40.4 334.2 157 2,726 1,305 1,509-430
Electricity Generation
Venus Pipes & Tubes

51.3 0.93 0.3 47.1 45.9 90 2,693 1,320 1,579-645
Steel Tubes & Pipes
Cigniti Technologies
14.5 0.77 0.1 29.2 24.6 15 2,631 959 990-516
Software
Dreamfolks Services
36.1 0.27 0.0 27.4 28.2 32 2,601 490 847-348
Business Services
Globus Spirits
19.7 0.35 0.3 23.1 32.9 21 2,438 846 1,328-722
Liquors
Balu Forge Industries

49.0 0.20 0.3 21.5 997.4 49 2,362 219 239-54
Auto Ancillaries
Vishnu Chemicals
17.0 0.30 0.9 31.1 27.2 68 2,234 341 417-245
Inorganic Chem.
Expleo Solutions
22.1 0.88 0.0 26.7 36.3 18 2,112 1,360 1,777-1,151
Software
Data as of October 18, 2023. This is not the full list. For the full list, visit https://bit.ly/3yVWT2W

Want more? Here you go
Other screens available on the Value Research website, along with their themes
and some of their stocks
P/E P/E
Attractive Kama Holdings 9.6 SRF 34.8

bluechips Coromandel International 16.9
Gives you large caps with strong fundamentals Angel One 17.8
and solid growth that are trading at a Hindustan Aeronautics 21.8
reasonable valuation
Reasonably priced Satia Industries 5.4 LT Foods 13.6

growth stocks Kuantum Papers 7.0 Marathon Nextgen Realty 13.9
Combines growth and value investing and Mangalore Chem. & Fertilisers 8.0 Jindal Saw 14.0
spills out companies with high earnings growth Chaman Lal Setia Exports 9.3 GNA Axles 14.3
trading at a cheap valuation D-Link (India) 12.8 Godfrey Phillips 14.9
Shriram Pistons & Rings 14.3 Dr Reddy’s Labs 20.0

Quality stocks
Fiem Industries 16.4 Neuland Labs 24.4
available cheap
CMS Info Systems 19.1 Gujarat Fluorochemicals 25.1
Companies that clear our essential checks on
solvency, accounting, recent financial Granules India 19.7 Fine Organic Inds. 26.6
performance and valuation Voltamp Transformers 19.9 Wonderla Holidays 27.4
Dividend yield (%) Dividend yield (%)
Oil India 6.1 PFC 4.3

High dividend
ONGC 6.0 Rashtriya Chem. & Fert. 3.8
yield stocks
GSFC 4.9 GE Shipping 3.4
A screen for those looking for a steady stream
of dividends GNFC 4.5 Sundaram Finance Holdings 3.2
REC 4.4 India Motor Parts 3.1
P/B P/B
Dhunseri Investments 0.23 Shreyas Shipping 0.83

Discount to
Jindal Poly Investment 0.30 DCB Bank 0.87
book value
Zuari Agro Chemicals 0.40 Canara Bank 0.91
Presents companies that are available at less
than their net worth, thus helping you spot GFL 0.43 Bank of Baroda 0.96
value stocks RSWM 0.70 Kirloskar Industries 0.97
For all the screens and to customise them

as per your requirements, visit
z Customisable filters z Value Guru screens z Easy peer comparison
www.valueresearchonline.com/stocks/selector

WORDSWORTH NOW
NARENDRA MODI
Prime Minister, India
Reviewed the readiness of the Gaganyaan Mission and also

reviewed other aspects relating to India’s space exploration
efforts. India’s strides in the space sector over the past few
years have been commendable and we are building on them
for more successes. This includes the setting up of
‘Bharatiya Antariksha Station’ by 2035 and
sending first Indian to the Moon by 2040.
Twitter, October 17, 2023
HOWARD MARKS SHAKTIKANTA DAS

Co-founder, Oaktree Capital Management Governor, RBI
I’m not saying interest rates, having The need of the hour is to remain
declined by 2,000 basis points over the last
vigilant and not give room to
40 or so years, are going back up to the
levels seen in the 1980s. In fact, I see no complacency. Lessons from the past
reason why short-term interest rates five one and a half decades and from living
years from now should be appreciably through
ugh the global
higher than they are financial
ncial crisis and
today. But still, I
the taper
aper tantrum
think the easy
times – and easy tell us that risks
money – are and vulnerabilities
largely over. can grow even in
Further Thoughts on Sea
goodd times.
Change, October 11, 2023
India Today,
oday,
October 6,
6 2023
MOHAMED EL-ERIAN
Chief Economic Adviser, Allianz
The US bond market is losing its strategic footing, whether in economics, policy, or technical
aspects… But my primary concern lies elsewhere: the most influential segment of the world’s
financial markets is losing its longer-term strategic anchors and is at risk of losing its short-term
stabiliser ones as well… No matter how you look at it, the world’s most crucial benchmark
market is on an unpredictable journey with an uncertain destination.
Financial Times, October 17, 2023

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Over 3,70,000 unique investors^ in this fund,

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PRODUCT LABEL
Alternative to: Suitable for: This fund is suitable for investors who
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*Investors should consult their financial Investors understand that their principal
Sized Companies Creation will be at Very High risk
advisers if in doubt about whether the
product is suitable for them. Riskometer is as on September 30, 2023
Follow us at: âs on September 30, 2023

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Name and Riskometer of Benchmark Name of scheme Riskometer^^ of the Scheme

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EDITORIAL POLICY 37 COVER STORY

DESIGN Anand Kumar, Aprajita Anushree,

DATA SOURCE FOR STOCKS AceEquity

PRODUCTION MANAGER & CIRCULATION

The value investing virtuoso Pfizer, Vaccines and Stocks

Urban Indian women have more money

Passive debt funds for investors The Taylor Swift economy

S&P BSE Telecom

November 2023 Wealth Insight 5

Two sides of the coin

worthy of some scrutiny. Much conventional waters can also offer

November 2023 Wealth Insight 7

and follows the mantras

investing as the overarching

Subscription copy of [dhavalmore845@gmail.com]. Redistribution prohibited.

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Subscription copy of [dhavalmore845@gmail.com]. Redistribution prohibited.

RBI retains repo rate

Microsoft gets the shareholders. The amount listed companies.

Tech giants declare their Q2 FY24 results

YoY growth (%)

10 Wealth Insight November 2023

JP Morgan includes Indian bonds in

HDFC Bank posts strong

November 2023 Wealth Insight 11

K&R Rail wins a ECONOMIC METRICS

Zerodha to become the 7

Zerodha’s 64.8 lakh. Founded in

broking business in 2020. $59.5 bn 0

(or about `16,300 crore) is the

12 Wealth Insight November 2023

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Sensex rebased to stock price Apr 16, 2015

Mar 9, 2007 Sep 30, 2011

14 Wealth Insight November 2023

Jan 18, 2017 Mar 2007 Sep 2023

Nov 14, 2019

November 2023 Wealth Insight 15

IRFC 135.0 2.1* 14.6 25.7 76

REC 82.5 1.3* 21.1 30.1 294

IOB 66.6 3.7* 9.8 – 44

Vodafone Idea 54.9 – – 19.0 12

Power Finance Corp 40.9 0.9* 28.0 30.7 252

Polycab 38.6 55.9 19.1 24.8 5,421

JSW Energy 36.8 55.2 8.5 4.2 401

Indian Bank 32.4 1.2* 11.0 30.3

Bharat Forge 29.6 88.9 7.7 87.7

16 Wealth Insight November 2023

November 2023 Wealth Insight 17

GE T&D India 65.1 502.3 0.3 27.3 409

J&K Bank 60.1 1.3* 10.3 10.4 115

Jyothy Labs 58.0 48.6 13.8 18.1 374

Apar Industries 57.0 29.4 20.4 115.9

18 Wealth Insight November 2023

Insolation Energy 201.2 88.3 47.2 47.4 445

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