tag:blogger.com,1999:blog-136151554537446773.post2094265516816542101..comments2024-03-19T17:37:10.128+05:30Comments on Value Investing in India: Decoding eCommerce Market in India from Seller Perspective Value2wealth Adminhttp://www.blogger.com/profile/00607741170030741933noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-136151554537446773.post-54721028612970866622016-12-04T14:22:30.960+05:302016-12-04T14:22:30.960+05:30Hi v2w, pls suggest some small stocks which poten...Hi v2w, pls suggest some small stocks which potential is higher like intrasoft, technvision. maheshhttps://www.blogger.com/profile/09390786095523171026noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-21317109808406286932016-10-21T23:57:22.853+05:302016-10-21T23:57:22.853+05:30Hi V2W,
Can u please have a look at kunststoffe i...Hi V2W, <br />Can u please have a look at kunststoffe industries ltd which is showing turnaround performance from past 3 quarters. Please share ur valuable views if you find any important info. ANANDhttps://www.blogger.com/profile/12539495975988097194noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-82285030999886023732016-10-13T15:11:34.310+05:302016-10-13T15:11:34.310+05:30Dear Sir,
I follow last 1.3 year when you buy Tech...Dear Sir,<br />I follow last 1.3 year when you buy TechNvision , Intrasoft. I am fully trust your advise for long term prospect no doubt about it & i want to invest for next 10 to 15 year prospect of so plz advise some great stock ideas for my child education & retirement , god blessing you always & forever... Gauranghttps://www.blogger.com/profile/16719105973466237504noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-27489009746154151072016-10-13T10:29:48.974+05:302016-10-13T10:29:48.974+05:30Hi Gaurang ,
I wish I could give multibag...Hi Gaurang ,<br /> I wish I could give multibagger stock ideas every now and then . But unfortunately , I don't have skillset required for it . I believe in margin of safety with huge upside potential , current market searching for this type of companies will required very special skill . Secondally , I am firm believer that if you give frequent stock call then quality get degraded and chances of errors become very high . It shouldn't be driven by compulsion . If something comes where I feel very chance to loose and good upside potential for my follower then I will give you . No doubt , I take more risk in my own portfolio buy buying some companies with small duration . But , I can't give those picks to my follower since exit is very important strategy in those type of companies and my blog reader may not able to exit on time . So , I only give long term stock picks with high growth and good margin of safety .<br />If you have 4-5 year horizon then go and buy Camline fine science which may go to RS70 in short term(even 1 year) but in long term it will sure pass target of Rs 240 . Value2wealth Adminhttps://www.blogger.com/profile/00607741170030741933noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-7380840385077127872016-10-12T12:22:55.680+05:302016-10-12T12:22:55.680+05:30i want your valuable feedback on below mentioned c...i want your valuable feedback on below mentioned company:-<br /><br />Name:- Futuristic Solution Limited<br />Bse Code:- 534063<br /><br />company is dealing in sale purchase of debt.<br /><br />Total Shareholding is 1,04,73447 share out of which 1,04,55,765 share in demat and 17682 share in physical form.<br /><br />Look at shareholding below:-<br /> as on 30.06.2016<br />Promoter 64,44,661 share<br />Nandita Shaunik 37,48,890 share<br />public (demat) 2,62,214 share<br /><br />after 30.06.2016 promoter mandeep sandhu is acquring share from market on daily basis and bought 194285 shares till 14.09.2016 so now only 67929 share are available with public.<br /><br /><br />company recently executing some deals related with debts and land for which agreement was executed 4 to 5 years back through subsdiary companies.<br /><br />Nandita shaunik is from military background and a known faishon designer.<br /><br />kindly look at these company and suggest me. <br /><br />waiting for your revert.<br />SHYAMhttps://www.blogger.com/profile/00010260104513204458noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-31192383360980756062016-10-10T12:51:07.242+05:302016-10-10T12:51:07.242+05:30Nice article om Indian eCommerce for targeting mid...Nice article om Indian eCommerce for targeting middle class and non metro cities . <br /><br />http://factordaily.com/middle-india-ecommerce-market/ Value2wealth Adminhttps://www.blogger.com/profile/00607741170030741933noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-45505818690521782052016-10-09T23:33:39.353+05:302016-10-09T23:33:39.353+05:30Second part of comment :
Now, we have earlier assu...Second part of comment :<br />Now, we have earlier assumed that asset to inventory ratio of 1.5 so total inventory would be = 70*1.5 = 105 crores .<br />We have also assumed inventory turnover ratio=6% . So total GMV would be 105 * 6 = 630 crores <br />We have also assured that NPM of 3 = Total NP = 18.9 crores ~ around 19 crores <br />If market give PE of 15 then mcap would be = 285 crores and @PE of 20 = 380 crores and @ 25 PE = 475 crores .<br />Please note this expected market cap is based on full diluted equity base so while calculating expected return you have to consider current mcap is not 55 crores but somewhere around 90 crores .<br /><br />PE re-rating depends on n number of factors but major are the overall market condition , sector outlook , ROCE , growth, and moat .<br />I can't even have hint of overall market condition or sector outlook . We can discuss ROCE , growth and moat .<br /><br />No guess there will not be much moat for Olympia except up to some extend volume moat and thin margin moat like Costco ( You can read about Costco moat (Ability to operate at lower gross margins and inventory turnover ratio at http://www.fool.com/investing/2016/08/22/what-costcos-inventory-turnover-says-about-its-moa.aspx )<br /><br />Growth if a company grows from 190 crores to 630 crores in 3 years then that is too good growth .<br /><br />ROCE :- 3% NPM looks unattractive but even that can generate ROCE above 40% . Let me explain how . 3% NPM means around 5% operating profit that means 5% of 630 = 31.5 crores of operating profit .<br />That on earlier discussed total asset(shareholder fund plus debt) of 70 it means ROCE = (31.5/70) * 100 = 45<br /><br />I have given estimation like solving maths problem ( Maths was favorite subject :) ) but what we need to keep eye on our assumptions , management action and even competition (like 25% cap for cloudtail) . Reality can be very different .<br />I will again put our assumptions for the calculation is Net Profit Margin = 3% ,inventory turnover ratio=6% and asset to inventory = 1.5<br />Value2wealth Adminhttps://www.blogger.com/profile/00607741170030741933noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-52009593459779353002016-10-09T23:33:00.950+05:302016-10-09T23:33:00.950+05:30Hi Pavan ,
Investors return depend on the...Hi Pavan ,<br /> Investors return depend on their paid price . Future return depends on price and future growth . If someone paid high price then chances of return reduced but sometimes after even paying higher he can get good return depend on other investors behavior or growth surpass our conservative estimates . So , any one invested at higher prices in Flipkart/Snapdeal then their investment return at risk . Secondly , even if their valuation is down then that happens with even non e-commerce companies , valuation never goes in straight line.<br /> <br /> I small and micro cap investors , I do my own research and I do more weightage to right questions that matters for small cap . Sometimes right questions are correct for large cap or established player but not that much appropriate for small cap . I see the threat from Cloudtail because they are are not competing for profit . It is hard to beat this type of company . But , good news is that they will be restricted to 25% .<br />I don't worry about the entry of other players because Olympia is small fish in this pond .It has GMV of 190 crores in 1 lakh crores GMV market .It has only 9000 listing while Amazon India has 5 crores listing while eBay India claims to 10 crores listing .There will be a very small overlap of products . <br />I agree margin and inventory turnover ratio can be under pressure due to Cloudtail till 25% cap is not fully implemented . If I ask why Olympia has 190 crores GMV and not 1000 GMV then my answer is not because of lack of demand but because of lack of capital required to scale . <br />If we remove other operating income from last year result then last year was bad on profit front because of CloudTail pressure , while top line growth was very good . This pressure is going to be ease going forward due to 25% cap on Cloudtail . The market is currently giving around 15 PE ( by adjusting other operating income and dilution ) .<br /><br />Last 3 year Net Profit Margin are (3.73 , 1.60) and inventory turnover ratio of (7.27 , 5.30) and asset to inventory (31.62/12.17 = 2.60 and 39.46/32.59 = 1.21 )<br /><br />if you agree last year was a bad year ,but after 3 years It can have Net Profit Margin = 3% ,inventory turnover ratio=6% and asset to inventory ratio = 1.5 then you will have a company with ROCE of above 40 and growth of 3 x in 3 years .<br />I agree followings are just estimates , and real situation may drastically different . But , It doesn't mean we shouldn't estimate .<br />To estimate we will need to first find out probable Asset after 3 years . Last years total shareholders fund was 19.58 ,around 11 crores will be added due to dilution and next two years assume it can add around 10.5 crores by retained profit.So total would be around 41 crores of total shareholders fund after two years . Now If we assume demand remain robust then the company can take the debt of around 70% to equity (debt/equity ratio of 0.7 ) which is very conformable . i.e. debt of 28.7 . So , total assets would be 41 + 28.7 = around 70 crores .Value2wealth Adminhttps://www.blogger.com/profile/00607741170030741933noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-60511443720602538112016-10-08T23:14:53.117+05:302016-10-08T23:14:53.117+05:30Hi Pavan ,
I had covered preferential a...Hi Pavan ,<br /> I had covered preferential allotment part at http://value2wealth.blogspot.in/2015/09/olympia-industries-ltd-annual-report.html . I also agree that this share is not for the investors who has very concentrated portfolio with only 4-5 shares . Even It is not the share where you will put your money today and check performance or price after 5 years . One need to closely watch it regularly and take decision . I am sure there might be something which I am not able to see due to ownership biased .Value2wealth Adminhttps://www.blogger.com/profile/00607741170030741933noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-42774222924644322732016-10-07T12:12:31.414+05:302016-10-07T12:12:31.414+05:30Dear Sir,
Please suggest next Stock IdeaDear Sir,<br /><br />Please suggest next Stock IdeaGauranghttps://www.blogger.com/profile/16719105973466237504noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-60154971523234066482016-10-04T23:36:34.613+05:302016-10-04T23:36:34.613+05:30please think of investor confidence who invested i...please think of investor confidence who invested in snapdeal/Flipkart at higher valuations after strong entry of amazon..think of ola after uber.. these bigger players are struggling .. because of thier is not so unique thing.may be if we are not unique , any big brand even though it's big in other countries or other variety of services if it has solid content can crash existing/emerging leader or atleast give big dent.i think always their is pressure on margins untill brand consolidation which take ages and lot of positive reviews. if any intelligent iit guy comes with data analytics software with money backup can be threat.if they try for profit then revenue increase or more business becoming difficult as evident from first quarter of olympia.pavanhttps://www.blogger.com/profile/04425102616217594003noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-62996583459929120202016-10-04T22:09:33.444+05:302016-10-04T22:09:33.444+05:30dear,why company allotted shares at 45rs in recent...dear,why company allotted shares at 45rs in recent times if at all present price is cheap. though olympia doing suit and boot trading they don't have any product or this company is completely dependent on one intelligent guy ..if something happens to that guy and this company is otherwise trading company and being knowing promoters themselves allotted at 45 to 55 around .. being concentratrd portfolio investor like us/me i am seeing risk is higher even reward higher.but i am seeing with equal potential of returns other safe stock. I hope you don't take to emotions as this argument is not at all targetting you.pavanhttps://www.blogger.com/profile/04425102616217594003noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-45681575452982678912016-10-03T23:22:10.908+05:302016-10-03T23:22:10.908+05:30What impression I am getting from reader that they...What impression I am getting from reader that they don’t see anything special in Olympia Industries and they are under impression that they can start with little capital by selling no profit , no loss they can reach 200 crores in 3-4 years . Anyone with 1 crore capital will become seller on Amazon India and easily take away business from Olympia Industries Ltd in 3-4 years by reaching 200 crores GMV company . Earlier , I have explained by volume size advantage (some can call moat ) that it is hard to beat which is enjoyed by Olympia or any existing big player but now understand from capital point of view .<br /><br />Now let take example person A has 50 lakhs and raised 50 lakh capital from friends and family on interest free. So, total capital is 1 crore with debt and equity ratio of 1 : 1 .<br />Person A puts 70 lakhs into inventory and rest 30 lakhs into non inventory expenditures like ( Computer , furniture , employee salary , transportation cost and so many other stuff needed to run business) . So , it has inventory of 70 lakhs . Olympia is having Inventory turnover ratio 6.37 7.27 5.30 from last 3 years . So , we can assume that even Person A can also have Inventory turnover ratio of 6 but it is selling on no profit and no loss then it can have even better ratio of 8 instead of 6 .<br />So whole year It can have GMV of 0.70 * 8 = 5.6 Crores of GMV . Great ! , it had made GMV of 5.6 from one crore initial capital . One now may say one year 5.6, second year 5.6 * 5.6 and like this . Soon , we will surpass Olympia .<br />Are you with me till this point ?<br /><br />But reality is different from capital point of view . First year inventory was 70 lakh , second year it need to be increase then only GMV will increase provided Inventory turnover ratio remains constant at 8 .<br />Inventory can be increased by four ways <br />1. Get more inventory on credit from distributor or companies ( Tarde Payable) but It depend on Person A ‘s relationship and scale of operation . If is good at convincing skill then he may get 10-15 lakhs credit .<br />2. Raise Debt , but person A ‘s debt/equity ratio is already 1:1 , he will get disappointment here and even if get it then it will be very for no profit no loss company to afford interest burden .<br />3. Raise capital , but who will invest in person A’s business . Already investors are not putting money on Olympia which is trading at reasonably low valuation :) .Person A is not going to make any profit in next 3-4 years . person A is very small , new player and nonprofit making player , not many will put their capital.<br />4. By retained profit , free cash flow , internal accruals but company is not making any profit. For Person A this is not the option .<br /><br />So, if person A can’t increase its inventory next year then it will again make same GMV of 5.6 crores in second year of operation. If we even assume that person A gets 10 lakhs credit from supplier / distributors then it can make 0.80 * 8 = 6.4 crores .<br />Growth will be slow down if person A is not able to increase inventory and choose to do operation with no profit and no loss with constant Inventory turnover ratio .<br /><br />On another hand , Olympia has scaled up from 6 crores to 190 crores GMV in 2 years . It is remarkable achievement but not many acknowledge it . They don’t see anything special in it. <br /><br /><br />Now let’s assume a company B has 200-500 crores cash . They want to enter spend that on entry of new business . Will they become seller on Amazon ? Is it attractive opportunity to put cash in thin margin business with lot of headaches ?<br /><br />Answer is No <br /> <br /><br />I don’t see much threat from small player or new entry of players . I see threat from Cloudtail if they don’t expands to other market places because objective of Cloudtail is not to make any profit and they get continues capital inflow from their parents .<br />Threat of Cloudtail can be neutralized if they enters in Marketplaces like SnapDeal , Paytm , EBay India , Shopclues , infibeam etc .<br />Value2wealth Adminhttps://www.blogger.com/profile/00607741170030741933noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-72664391207400790672016-09-20T01:06:55.678+05:302016-09-20T01:06:55.678+05:30Superb and detailed analysisSuperb and detailed analysissridharhttps://www.blogger.com/profile/04437658630573688386noreply@blogger.comtag:blogger.com,1999:blog-136151554537446773.post-83511366402107590942016-09-19T11:49:52.860+05:302016-09-19T11:49:52.860+05:30Dear Sir,
Good one analysis on E commerce cos , Th...Dear Sir,<br />Good one analysis on E commerce cos , Thanks a lot...Gauranghttps://www.blogger.com/profile/16719105973466237504noreply@blogger.com