Forum Posts

Atul Gulrajani
Dec 05, 2018
In Smalll Cap Equity
Eris Lifesciences is unique with 100% of its sales from domestic pharma market, unlike other Indian pharma companies. Over the past 5 years, its revenue has grown over 50% and net profit by ~300%. Its stock price has corrected by 25% over the past 12 months. Is it worth buying now at around Rs. 600 at PE ratio of around 30?
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Atul Gulrajani
Aug 31, 2018
In Smalll Cap Equity
Sreeleathers continues to impress in terms of achieving consistent revenue and profit growth of about 20% in each year for 5 years in a row. Further, the company has near zero debt, with no long term borrowing and only Rs. 1 cr in short term borrowing as of March 31, 2018. The stock currently trades at around Rs. 250, up from Rs. 125 recorded in October 2016. Its TTM PE ratio currently stands at Rs. 29.9 when compared to the industry PE ratio of Rs. 49.9. The stock price hit a peak of Rs. 342 in December 2017 and since then has been ranging in between Rs. 290 to Rs. 227. The growth in its stock price hasn't been consistent though given the strong and consistent financials, which raises a red flag. A brief about the company: Sreeleathers (SL) was founded, as a small organization in Jamshedpur. It later expanded the business to become a leader in Eastern India, and gradually entered the international market. At present, Sreeleathers caters to public demand with a wide range of shoes and allied products and accessories. Over the years, it has grown to become a household brand exemplified by the queues outside the stores during festivals. The company credits its success to its philosophy of "World Class, Right Price". With this motto the company has steadily established itself in the national as well as international markets. The store locator indicates that the company has expanded to mainly North Indian market with about 5 stores and 1 store in the South Indian market. It lacks presence in West India. SL also has an online presence and its range of products are displayed on its website and are available for purchase.
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Atul Gulrajani
Aug 30, 2018
In Virtual Reality (VR)
Nvidia on Aug 13, 2018 announced a powerful new graphics architecture with the potential to blur the line between virtual and actual reality. Nvidia's CEO Jensen Huang unveiled the new chips at the company's SIGGRAPH 2018 event in Vancouver, Canada. The Turing architecture enables a new generation of hybrid rendering that can be used to create cinematic-quality interactive experiences, effects powered by neural networks, and fluid interactivity on highly complex models. A wide variety of lighting effects that mimic real life can be rendered with Turing that in the past were just too resource-intensive to create in real time. "You're moving from a painting to a photograph in terms of rendering quality," said Daniel Wong, professor of electrical and computer engineering at the University of California, Riverside. "It will allow game developers to create more photorealistic games," he told TechNewsWorld. "Now when you play a virtual reality game, you know you're in a video game. With ray tracing, everything looks real because light is bouncing around as it does in real life," Wong explained. "It will be possible in the future, with ray tracing, for you not to be able to tell the difference between the virtual reality world and the real world." Engines of Mass Rendering Aimed at the US$250 billion visual effects industry, Turing combines two engines to make real-time ray tracing possible. Its RT Cores accelerate ray tracing, while its Tensor Cores are used for AI referencing. The RT Cores are dedicated ray-tracing processors that accelerate light and sound travel in 3D environments to up to 10 GigaRays a second. Turing accelerates real-time ray tracing operations by up to 25 times that of previous generation chips, Nvidia noted. What's more, the architecture's GPU nodes can be used for final-frame rendering for film at more than 30 times the speed of CPU nodes. The Tensor Cores are processors that accelerate deep learning training and inferencing. They're capable of providing up to 500 trillion tensor operations per second. To help developers take advantage of Turing's capabilities, Nvidia also introduced a new RTX development platform, which includes artificial intelligence, ray-tracing and simulation software development kits. In addition, it announced the Nvidia NGX software development kit, a deep-learning technology stack to help developers easily integrate accelerated, enhanced graphics, photo imaging and video processing into applications with pretrained networks.
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Atul Gulrajani
Aug 09, 2018
In Smalll Cap Equity
Indian Terrain (IT), a casual and sportswear, men's only apparel company, which posted strong growth in both topline and bottom line during the period FY14-FY17 seems to be losing its momentum. During FY14-FY17, IT's operating revenue grew at 20% CAGR and operating profit grew at 40.3% CAGR. This is despite a 16.5% YoY decline in operating profit in FY17. FY18 turned out to be even worse, operating revenue was almost flat YoY, while operating profit declined further by 7.8%. With a PE ratio of around 20 in an industry where the average PE ratio stands at around 50, the stock is attractively priced. More so, given its strong balance sheet that boasts of Rs. 196 cr in reserves and surplus and total (long-term and short-term) debt of about Rs. 37 cr as on FY17 end. The long term debt is negligible at around Rs. 2 cr. Is IT a classic case of a small company that starts off strong and struggles to grow once it reaches a certain scale? Or is there scope for IT to stage a comeback and achieve the strong growth rate that it achieved in the past? Let's discuss the following to answer this question: factors that led to strong growth in the past current issues that IT is struggling with IT's response to these issues (e.g. change in strategy) expected effectiveness of new measures and projected outcome Based on the above, we can agree or disagree if investing in this stock after the recent 40% correction from Rs. 233 in 15 Jan. 2018 to Rs. 138.5 on Aug 09, 2018 really offers a good growth opportunity to enter.
Indian Terrain Losing its Way? content media
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Atul Gulrajani
Aug 08, 2018
In Mid Cap Equity
The recent significant (97%) YoY decline in profit in Q1 FY19, led to as much as 38% correction in Indigo’s stock price. Which raises the question that given such correction, does it offer a good investment opportunity to buy it at a lower price and make handsome profits? Below is a look at some of the favorable and unfavorable factors that will influence its stock performance over FY19: Internal Factors Strengths Effective cost management – low cost structure Strong customer service record – best on-time performance (OTP) Efficient operations – High technical dispatch reliability and low flight cancellation rate Presence into smaller cities with competitive pricing – cities where either there was a lack of reliable air service or had high air fares Strong and consistent revenue and profit growth – in a sector where peers are struggling to stay afloat High utilization rate – passenger load factor above 80% in FY17 and FY18 Continued additions in destinations served Improving balance sheet – Consecutive decline in long-term debt in last 4 years (FY15-FY18) Limitations No presence in full-service airline segment Limited international presence (currently serving 8 international destinations) High order book at a time when fuel prices are increasing Operational challenges with the new A320neo aircrafts, which account for 20% of its fleet as of end of FY18 Higher proportion of sale and lease back aircraft which increases the ownership cost External Factors Favorable Strong economic growth – also expected to surpass that of China in CY18 Expanding middle class segment Growing aviation infrastructure Unfavorable Wide fluctuations in fuel prices Depreciating rupee Increasing airport costs High competition Here, in this link I have shared a more deeper analysis: https://www.perspectivesansights.com/single-post/2018/08/08/Is-it-a-good-time-to-buy-Indigos-stock-after-the-recent-price-correction
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Atul Gulrajani

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