Sekhar engagement report

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• Jan 25, 20263.3x their median

  Timepass talk on Sunday 1. Time to Be a Small-Cap SIP Investor Small-cap investors are completely squeezed. SMEs are facing a liquidity choke, and metals have suddenly grown Red Bull wings. Yet the age-old truth remains unchanged: small caps create disproportionate wealth when bought at reasonable valuations and held patiently until the tide turns. That patience, however, demands a strong stomach, one that allows us to see a sea of red in the portfolio. If that isn’t your temperament, the safer route is simple: opt for small-cap funds. Any decently managed small-cap fund tends to deliver 70%+ returns within a year once the cycle turns. Even ICICI Prudential Small Cap Fund, which had shut the doors to fresh inflows for nearly two years, is now saying, “Mutual Funds Sahi Hai." So, if you’ve stayed invested through the pain, don’t quit now. Just ensure your stocks are falling because of market conditions, not because earnings visibility has collapsed. The antithesis is equally important: Holding companies with no earnings visibility is dangerous, such names can permanently destroy capital, even take it to zero. Conviction matters. So does discrimination. 2. Multi-baggers and the ₹100–1,000 Cr PAT Transition Amit Jeswani (@Amit_Jeswani1) famously mentioned at an @ias_summit a few years ago that most multi-baggers are created during the journey from ₹100 Cr to ₹1,000 Cr in PAT. A textbook example of this phenomenon today is MCX. MCX reported a PAT of ₹149 Cr in FY23, which dropped to ₹83 Cr in FY24, largely due to the technology contract issues that played villain during that phase. Post those setbacks, the turnaround has been phenomenal: PAT jumped to ₹560 Cr in FY25, and for 9M FY26 itself, MCX has already delivered ₹801 Cr. The company is now well on track to cross ₹1,000 Cr PAT for the full year. Unsurprisingly, the stock has delivered ~10x returns over the last three years. Another powerful example is Laurus Labs. Laurus already delivered disproportionate returns once during the 2019–2022 cycle, when PAT surged from ₹94 Cr to ₹984 Cr. That was followed by a downcycle, but the next upcycle clearly started from FY24 onwards. PAT in FY24 stood at ₹162 Cr, while the last four quarters have reported ₹233 Cr, ₹162 Cr, ₹194 Cr, and ₹252 Cr respectively. The stock has already turned into a multi-bagger again during this phase, and arguably, the journey is still far from over. The real exercise, therefore, is simple but not easy: Identify companies currently in the ₹100–300 Cr PAT range and assess which among them have the management quality, scalability, balance sheet strength, and sectoral tailwinds to compound into a four-digit PAT business. The hard truth is that nearly 80% of such companies may never get there, which is why this game is never easy. But the formula remains valid, and repeatedly proven. 3. MTF and the Recent Sell-off: A Reality Check MTF has been the talk of the town lately, and some stocks may indeed have felt the pressure during the recent sell-offs. That said, when you actually run the numbers, the issue appears far less systemic than it has been portrayed. Yes, the impact will vary from stock to stock, and a few names could see temporary stress. However, at the aggregate market level, the risk seems contained. Consider this: Out of 2,134 stocks with MTF exposure, ~83% can be fully unwound within ≤5 trading days based on average traded volumes. The total MTF outstanding for these 83% names stands at approximately ₹91,000 Cr. The combined market capitalisation of these companies is around ₹382 lakh Cr. Put differently, MTF exposure is a small fraction of overall market value. 4. Hospitals Are Getting “Admitted” Too In this sell-off, even hospitals, typically considered safe havens during brutal markets, haven’t been spared. Several leading names have seen meaningful corrections from recent highs: Max Healthcare Institute: ~24%, Narayana Hrudayalaya: ~23%, Artemis Medicare Services: ~22%, HCG: ~21%, Apollo Hospitals: ~16% Hospitals, of course, go through their own earnings cycles, largely driven by capacity additions and ramp-ups. That said, structurally, the sector remains a strong portfolio candidate for stable and consistent compounding, given predictable demand and improving operating leverage over time. Medical tourism from Bangladesh would have obviously slowed, but this should be more of a short-term blip. At this stage, it may be worth evaluating how close these names are to their long-term median EV/EBITDA valuations. Any meaningful deviation below historical averages could start throwing up selective entry opportunities. 5. Menon Bearings Menon Bearings delivered one of the strongest quarters in its history. Exports rose to an all-time high of ~36% of revenues, notably without any adverse impact from US tariffs. In its recent concall, management noted: “…we have already started additional business with one of the major customers from the US… we hardly see any impact from the tariffs imposed by the USA. On the contrary, our exports are poised to grow further going ahead...” For a company of this size, this is an interesting and positive development, especially in a challenging global environment. That said, management also acknowledged that elevated copper prices are a margin headwind. While the company claims a pass-through mechanism, the timing and completeness of quarterly/monthly pass-throughs remain an open variable and need close monitoring. From a cautionary standpoint, it’s worth recalling that in 2023 the company had articulated an ambition to double revenues by FY26. At the current run rate, the company appears far from that target, and it no longer seems to be a stated objective in the latest investor deck. Nevertheless, a company executing well amid headwinds deserves a closer look. 6. Zydus Lifesciences - Zycubo (US$50 mn Peak Sales Opportunity) Zycubo, a brand under Sentynl Therapeutics (a subsidiary of Zydus Lifesciences), has recently received approval from the U.S. Food and Drug Administration for the treatment of Menkes disease. Menkes disease is an ultra-rare, life-threatening genetic disorder, diagnosed in newborns, with an estimated ~56 new cases annually in the US. If left untreated, median survival is less than 18 months. Zycubo is the first and only FDA-approved therapy for this condition and has demonstrated meaningful survival benefits. In pivotal studies, when treatment was initiated early, within 10 days of birth, median survival extended to ~177 months, representing a step-change in clinical outcomes. From a commercial standpoint, @SystematixGrp estimates price realisation at ~US$600,000 per patient per year. While affordability raises legitimate ethical and policy questions, Zycubo offers real hope to families with access through insurance or alternative funding. 7. Mackenna's Gold Krishnadevaraya was the greatest ruler of the Vijayanagara Empire, presiding over an era of exceptional prosperity where gold, trade, and culture thrived at a civilisational peak. Legend has it that during his reign, gold and diamonds were so abundant that they were traded like grain. That legacy seems to have quietly endured. Even today, Indian households are estimated to collectively hold ~34,600 tonnes of gold, one of the largest private gold stockpiles in the world. At $4,700 per ounce, this hoard is worth approximately $5.2 trillion. For perspective, India’s GDP is about $3.7–4.0 trillion, while the total equity market capitalisation stands near $5.0–5.2 trillion. Some civilisational habits don’t fade, they compound. The Jewellery companies and gold lenders are certainly trying to take advantage of it! 8. Defence Goes Global On Jan 18, 2026, Rajnath Singh flagged off the first export consignment of guided Pinaka rockets from Solar Defence and Aerospace’s Nagpur facility. This marks the first export of the guided variant, following completion of unguided Pinaka deliveries by late 2024. Armenia had earlier signed a ₹2,000 crore (US$250 mn) contract in 2022 for four Pinaka batteries, making it the first overseas customer for the Defence Research and Development Organisation (DRDO)-developed system. Pinaka offers precision strike capability up to 75 km (trialed up to 120 km). This milestone reflects India’s defence export journey, from <₹1,000 crore a decade ago to ~₹24,000 crore today. Globally, defence spending hit US$2.7 trillion in 2024, with 100+ countries increasing spends. With global tensions unlikely to ease soon, defence remains a structural, multi-year theme. India, the world’s 5th-largest military spender with the 2nd-largest standing army, is uniquely positioned to benefit from this trend, both domestically and via exports. From a market lens, the Motilal Oswal Nifty India Defence ETF (MODFENCE) is ~20% off recent highs and near a key support zone. Direction from here is uncertain, but with the Budget approaching, the theme is worth tracking closely. 9. Chemicals: Bottoming Out? I came across a chart from Nuvama Research suggesting that both RoE and RoCE are likely at the bottom of the cycle after a sharp correction from FY22 peaks. RoE declined from ~20.5% in FY22 to ~8.1% in FY25 and RoCE fell from ~23.2% to ~11.6% over the same period. This compression reflects the severity of the chemical downcycle, weak demand, inventory destocking, and elevated costs. At current levels (RoE ~8%, RoCE ~12%), return ratios are near the lower end of historical ranges. More importantly, the trend now points to stabilisation with marginal improvement, rather than further deterioration (of we course, we can never say never). While a return to peak profitability will take time, the data suggests that most of the downside to returns has already played out, shifting the narrative toward gradual recovery and operating leverage. Within this space, a few names I am actively tracking include: 📌Aether Industries – transitioning from a heavy capex phase to monetisation. 📌Acutaas – moving into a faster-growth CDMO phase. 📌Balaji Amines – positioning FY27 as a recovery year. Each has a distinct playbook, and these are not a BUY or SELL recommendations. 10. DIIs & Retail Running Out of Gas? Aggregate cash holdings of equity mutual funds have declined from ~7% in April 2025 to ~5.5% by December 2025, the lowest level since H1 2024. Large-cap funds: ~6% → ~3.9% Small-cap funds: ~9% → <6% In simple terms, most funds are already fully invested. That limits incremental buying power from DIIs unless fresh inflows come in. Adding to the pressure, FPIs have already sold ~₹33,000 crore YTD. With mutual fund cash buffers thin, market upside now depends more on new money and earnings, while corrections may feel sharper in the absence of dry powder. The open question though: Can the Budget pull a rabbit out of the hat, via tweaks to LTCG, STCG, or STT, to revive FII participation? Or is that asking too much? That’s all for today’s version. Happy Sunday!

  68196342176K viewsView on X
• Aug 16, 20262.9x their median

  Timepass talk on Sunday 1. Marksans Pharma Marksans Pharma is a globally focused consumer healthcare and generic pharma company with a dominant presence in OTC (over-the-counter) store brands. It manufactures and markets 350+ products across 2,000+ SKUs, primarily for regulated markets including the US, UK, Europe, Australia, and Canada. The company operates 4 manufacturing facilities (India, US, UK) with 26 billion units of annual capacity and is amongst the top 5 Indian pharma companies in the UK by revenue. Top Growth Drivers The company's growth is being propelled by four key engines. First, European front-end expansion is the most significant new driver, Marksans has acquired QliniQ in the Netherlands (contributing ₹44 crore in Q1FY27) and ABCnow in Germany (consolidating from Q2), while also establishing new entities in Ireland and Germany, with Europe revenue already surging 75% YoY. Second, product pipeline momentum remains robust with plans to launch 20–25 new products annually, 112 SKUs added in the US in FY26, and a target to double the portfolio in every country over the next 2–3 years. Third, manufacturing scale and operating leverage is improving as Goa Unit 2 (acquired from Teva) ramps toward ₹80 crore revenue, and the company aims to expand total Indian capacity from ~8 billion to 16 billion units per annum. Fourth, new geography entry through Canada (entity incorporated, filings underway) and continued strength in Australia/New Zealand (54% YoY growth in Q1 with new Rx brand launches under Nova Pharma) is diversifying revenue beyond the traditional US and UK markets. How Big Could the Europe Opportunity Be? Europe is rapidly emerging as Marksans' most exciting new growth frontier. In FY27, management expects the region to generate approximately ₹180 crore in revenue, a sharp step-up from the sub-€10 million historical run-rate at QliniQ, reflecting both the acquired base and roughly 40% organic growth expected. Looking further out, management has explicitly guided that they hope Europe can reach "about thousand odd crore" (~₹1,000 crore) within 3–5 years, driven by additional acquisitions and scaling the existing platform across more European countries. The strategic appeal is heightened by Europe's prescription-heavy market structure (80–90% Rx versus 50–50 in the UK), which offers higher-margin, stickier revenue streams compared to the company's traditional OTC-heavy portfolio. Bottom line: Marksans offers a rare combination of high-teens revenue growth, expanding margins, net-cash balance sheet, and a clear M&A-driven geographic expansion roadmap, all at a scale where the company is transitioning from a niche OTC player to a multi-continent consumer healthcare platform. Now, what's the anti-theis, that's for you to figure out! 2. Sona BLW Precision Forgings Sona Comstar is executing a bold "Sona Comstar 2.0" strategy that aims to replicate its historical 10x revenue growth over the next decade. The company delivered its best-ever quarter in Q1 FY27 with 54% revenue growth, 49% EBITDA growth, and 45% PAT growth. What makes this growth particularly impressive is its quality and diversification, BEV revenue surged 107% YoY to ₹435 crore, now constituting 44% of automotive product revenue, while the company simultaneously won significant hybrid and ICE programs. The management has demonstrated exceptional capital allocation discipline, having invested ~₹2,750 crores across acquisitions (Comstar, NOVELIC, Railway Business) that now contribute roughly 40% of revenue, alongside organic innovation where over 35% of revenue comes from products that didn't exist seven years ago. New Growth Verticals The recently announced DENSO joint venture represents arguably the most important strategic partnership in the company's history, filling a critical gap in high-voltage electric and hybrid powertrain systems for passenger and commercial vehicles. This two-JV structure, where DENSO leads the 4-wheeler high-voltage segment and Sona Comstar retains control of the 2/3-wheeler segment with reciprocal royalty arrangements, provides access to world-class technology while validating Sona's own IP. Equally significant is the company's early and substantive entry into Robotics and Physical AI, a market management believes could be transformational given AI's emergence as the next general-purpose technology. With three orders already secured (aggregating ₹6 billion, taking the vertical's total order book to ₹8 billion), and SOPs beginning as early as next quarter, this is no longer conceptual, it is a real business with customers. The company's net order book stands at a robust ₹240 billion (5.4x FY26 revenue), with 64% from automotive EV, providing multi-year revenue visibility. Strong Market Position Sona Comstar holds dominant market positions, 55-60% share in Indian PV differential gears, 80-90% in CVs, and 75-85% in tractors, while expanding globally with 7 of the world's top 10 PV OEMs and 3 of the top 10 EV OEMs as customers. The company maintains a negative net debt position (net debt/EBITDA of -1.06x), providing significant balance sheet flexibility for future investments. Despite near-term margin pressure from input cost inflation and product mix (traction motors carry lower margins), management expects progressive improvement from Q2 onwards as cost pass-throughs materialize. With 69 EV programs across 36 customers, a technology roadmap spanning mechanical to software capabilities under "EPIC Mobility," and a proven ability to both build and buy capabilities, Sona Comstar appears well-positioned to capture outsized value as mobility undergoes its most significant transformation in a century. 3. Finolex Cables Finolex Cables is one of India's largest manufacturers of electrical wires and cables, with a dominant 23.9% market share in the organised wires industry. The company manufactures a comprehensive portfolio spanning electrical cables, power cables, communication cables (including optic fiber), switchgear, lighting, fans, water heaters, and conduit fittings. It operates five manufacturing facilities across India and sells through an extensive distribution network of ~800 distributors, ~5,000 channel partners, and ~2,15,000 retailers pan-India. Top Growth Drivers The company's growth is being propelled by four key engines. First, optic fiber and communication cables is the standout performer, Q1FY27 revenue surged 62% YoY with margins near 30% (which will normalize from Q2 on), driven by a global fiber shortage, AI/data center demand, and export opportunities to the US and Europe. The company is aggressively expanding fiber draw capacity from 4 million to 8 million km by Q2FY27 and cabling capacity from 8 million to 10 million. Second, electrical cables diversification continues with strong volume growth in auto cables, solar cables, agricultural cables, and flexible wires (all high double-digit growth), while the company is actively bidding for utility-side power cable projects and planning greenfield expansion once utilisation crosses 70%. Third, backward integration via preform manufacturing, the company has commissioned India's second preform plant (100 metric tons, equivalent to 4 million km fiber), eliminating import dependency, saving 5% duty, and creating potential for external sales; Phase 2 expansion is under evaluation given the demand boom. Fourth, FMEG scaling and channel expansion, despite Q1 headwinds from LPG shortages and PVC supply issues, the company maintains its ₹500 crore FMEG revenue target by FY28, with new product launches in fans and water heaters expected within 6 months and retail reach targeted to expand from 2,15,000 to 2,50,000 outlets. How Big Could the Communication Cables Opportunity Be? The communication cables segment is positioned for a step-change in scale and profitability. In Q1FY27, the segment generated ₹176 crore revenue (vs. ₹109 crore YoY), with exports contributing ₹35–40 crore. At full 8 million km fiber draw capacity and assuming $11/km fiber prices, management indicated potential revenue of ~$88 million (~₹730 crore) if selling only fiber, with an additional 25–30% value-add from cabling, implying peak potential revenue of ₹900 crore+ annually from this segment alone. The demand drivers are structural and global: AI-driven data center buildouts (hyperscalers investing $5–6 billion+ in India), 5G rollout completion by telecom operators, BharatNet Phase 3, and India's per capita fiber consumption at just 25 million km/year vs. China's 400+ million km, suggesting significant runway. Management also noted that fiber prices have risen from $5–6/km to $12–13/km currently, with premium fibers selling at $25–50/km, and that the global shortage is likely to persist. The company is also evaluating doubling preform capacity and has the technical capability to manufacture cables with fiber counts up to 14,000+ for data center applications. The balance sheet is exceptionally strong, net worth of ₹5,099 crore, negligible debt (debt-to-equity near zero), and cash equivalents of ₹163 crore, providing capacity for the ₹300 crore annual capex plan without strain. 4. Kusumgar Limited Kusumgar is an India-headquartered specialty engineered textiles and aerospace & defence solutions company with deep expertise in polyamide and polyester filament technology, polyurethane chemistry, and advanced fabric engineering. Founded in 1970 and listed on NSE/BSE in July 2026, the company manufactures high-performance fabrics for critical applications including parachute canopies, tactical clothing, camouflage systems, and bulletproof jackets, serving both as a fabric supplier and as a forward-integrated solutions provider for military and aerospace end-users. It operates six vertically integrated manufacturing facilities across Gujarat and Uttar Pradesh with a workforce of ~2,000, and holds the distinction of being one of only two global suppliers of zero-porosity parachute fabrics and the only Indian manufacturer of Kevlar filament fabrics. The company's moat is exceptionally wide, four to five decades of accumulated technical know-how in engineered fabrics, extensive qualification and approval barriers that take years to clear, exclusive global partnerships providing access to proprietary IP, and co-development relationships that translate into long-term sticky recurring business. Top Growth Drivers The company's growth is being propelled by four key engines. First, aerospace and defence solutions expansion, Kusumgar has successfully forward-integrated from fabric supplier to complete systems provider (parachute systems, camouflage solutions, rapid deployment systems), driving a significant portion of the ~7-8x revenue growth seen over the last five to six years; ready parachute contracts were a major contributor to Q1FY27's 102% YoY revenue growth. Second, indigenization tailwinds in Indian defence, India is accelerating its shift toward indigenous defence manufacturing to reduce import dependency, and Kusumgar is deeply embedded as an incumbent supplier to the Indian military with decades of qualification barriers and approval cycles that make switching costs prohibitively high for customers. Third, outdoor and lifestyle fabrics scaling, the company is rapidly building partnerships with global outdoor and activewear brands entering or expanding in India, with product approvals progressing brand-by-brand and season-by-season; this segment offers more predictable, recurring demand compared to the lumpy defence business. Fourth, global defence spending and export growth, the company is a challenger in international markets with growing inroads into foreign militaries, and management explicitly views geopolitical tensions and heightened global defence budgets as a secular tailwind; exports already contribute ~10-15% of revenue and the company has put in place arrangements to mitigate tariff risks. How Big Could the Aerospace & Defence Opportunity Be? The aerospace and defence segment is positioned for sustained multi-year growth driven by structural indigenization and global rearmament. In Q1FY27, the company reported revenue of ₹247 crore (up 102% YoY) with EBITDA margins of 31%, though management cautions that Q4FY26 was an anomaly due to tariff-resolution-driven export shipments, and Q1FY27 is more representative of normalized quarterly run-rates. Over FY20-FY26, revenue grew at a ~35% CAGR while PAT grew at an even faster ~70%+ CAGR, reflecting the shift from lower-margin fabric supply to higher-margin integrated solutions. The addressable opportunity is substantial: India's defence budget continues to expand, with increasing emphasis on domestic procurement; Kusumgar's product portfolio spans parachutes, tactical clothing, sleeping bags, rucksacks, bulletproof jackets, camouflage nets, and stealth systems, all of which have both steady replenishment demand (consumables for standing armed forces) and surge demand during geopolitical escalations. Management also highlighted partnerships in stealth/camouflage and lightweight carbon-based materials with Russian and Japanese technology partners, which could open new premium product lines. While management deliberately avoids formal guidance due to tender unpredictability, they indicated FY25 and FY26 margin levels (~19-27% EBITDA) are reasonable benchmarks for FY27, with the business broadly on track for continued steady growth. 5. Solar Industries Solar Industries is executing a compelling strategic pivot from a pure-play explosives manufacturer into a diversified defence-industrial complex, and the Q1 FY2027 numbers validate this thesis with force. The company delivered its highest-ever quarterly revenue (₹3,668 crore, up 70% YoY), EBITDA (₹1,024 crore, up 82%), and PAT (₹666 crore, up 89%), demonstrating that the defence vertical is not merely additive but multiplicative to profitability. With an order book of ₹21,350 crore, of which defence constitutes roughly ₹18,000 crore, the revenue visibility extends well beyond the current fiscal year. Management has guided for ₹14,000 crore in annual revenue (up from ₹9,800 crore previously), and has explicitly flagged potential upward revisions after H1, suggesting conservatism in their base case. The ~28% EBITDA margin, which management characterizes as the "new normal," is being structurally supported by a higher mix of defence products, efficient supply chain management, and recent capacity expansions. The defence segment is the critical engine for re-rating. It grew 123% YoY in Q1 and is targeting ₹4,500 crore for the full year. The Pinaka rocket system remains the anchor order, with extended-range variants (up to 75km) in final negotiation stages expected by H2. Beyond Pinaka, the Bhairavastra anti-tank guided missile is completing advanced trials with formal orders anticipated next year, while the 155mm artillery ammunition facility is being commissioned with initial revenue recognition in FY2028. These are not one-off contracts but platform-level opportunities that create annuity-like revenue streams and deepen the company's moat as India's first private-sector player in integrated defence manufacturing. The management's commentary on "increasing engagement with customers across domestic and international markets" implies export potential, which would further expand the addressable market. The balance sheet provides strategic flexibility without compromising returns. With approximately $80 million in cash and equivalents, the company is actively evaluating greenfield projects, acquisitions, and startup investments to augment organic growth. The planned capex of ₹2,050 crore for FY2027 (₹450 crore already deployed in Q1) is directed at capacity expansion in high-growth geographies, Dhule in Western India, Dholpur in the North, and upcoming facilities in Odisha and South India, ensuring that volume growth is not constrained by infrastructure. International explosives growth of 65% YoY, led by South Africa and Australia, confirms that the global footprint in 90+ countries is more than a marketing claim; it is a scalable revenue base. Now, what valuation offers you comfort is your own judgement! That's all for this edition. Have a great Sunday! Disclaimer: None or buy or sell recommendations. This publicly available information is shared for learning and education purposes.

  5978324160K viewsView on X
• Aug 17, 20262.1x their median

  If you are not making good money in this season, with so many sectors running, then you must revisit your investment process. If your names are running, then get the best out of it thru better allocation. As the boss says “Allocation is Khaas Baaki Sab Bakwaas”

  4691719239K viewsView on X
• Aug 23, 20262.1x their median

  Timepass talk on Sunday 1. Nephrocare Health Services Think of your kidneys as your body's personal waste-treatment plant. Every single day, they filter roughly 150–180 liters of fluid from your blood, removing waste, excess water, and helping maintain the right balance of salts and minerals. When your kidneys lose around 85–90% of their function, they can no longer adequately perform these vital jobs. Waste products and excess fluid can begin building up in the bloodstream, potentially becoming dangerous. Dialysis is a treatment that takes over part of the kidneys' filtering job when they can no longer do enough of it themselves. It removes waste and excess fluid from the blood, but it does not replace everything healthy kidneys do. NephroPlus is India’s and Asia’s largest dialysis network and the world’s fifth largest, operating over 550 clinics across five countries, India, the Philippines, Uzbekistan, Saudi Arabia, and Nepal, serving more than 38,000 guests. The company operates as a pure-play, end-to-end dialysis platform delivering care through multiple formats including in-hospital captive centers, public-private partnerships (PPPs), standalone clinics, home hemodialysis, and mobile services. It leverages an asset-light, scalable operating model built on centralized global procurement, in-house biomedical engineering, proprietary technology such as the Renova dialyzer reprocessing system, and protocol-driven clinical quality, while partnering with government health schemes and insurers to maintain affordability and access. NephroPlus’s growth is underpinned by three key levers: consolidating leadership in India as the market shifts from unorganized to organized care (currently only ~21% organized), scaling its international footprint in higher-price markets where realizations are 3–13x above India, and pursuing disciplined acquisitions and PPPs to expand capacity. They plan to add 40-50 clinics in India and 10-15 in the Philippines annually. The business benefits from powerful macro tailwinds including rising diabetes and hypertension driving chronic kidney disease, significant under-penetration relative to global benchmarks, and strong operating leverage that has expanded adjusted EBITDA margins to 23.1%. Complementing this are strategic initiatives such as the NephroPlus International Dialysis Academy (NIDA) for renal nurse training, AI-driven clinical and operational tools, and a roadmap to enter a new international market every 12–18 months, all supporting scalable, capital-efficient expansion. 2. Tunnel Boring Machine (TBM) When you think of massive infrastructure programs such as Urban Metro Networks, High-Speed Rail & Expressways, Undersea Rail Tunnels, Hydroelectric Power & Strategic Tunnels, and Water & Sewage Infrastructure, there is one common element that quietly powers many of these projects: the Tunnel Boring Machine (TBM). A Tunnel Boring Machine (TBM), often called a "mole", is a massive, cylindrical piece of heavy equipment used to excavate circular tunnels through earth and hard rock. Instead of traditional drilling and blasting, a TBM uses a rotating front "cutterhead" equipped with heavy disc cutters to slice through rock or soil, automatically lining the tunnel with pre-cast concrete segments as it advances. For decades, India has been heavily dependent on overseas suppliers for TBMs, with most machines and critical components sourced from countries such as China, Germany, Japan and Australia. Domestic manufacturing capability has historically been limited, making TBMs a largely import-dependent segment. The Indian central government finalized a $1.2 billion PLI-style incentive scheme targeted at boosting domestic manufacturing of high-value construction and mining machinery. This initiative focuses directly on creating local capacity for high-end equipment like TBMs to curb dependence on imports. Herrenknecht India (subsidiary of Germany-based Herrenknecht AG) established a dedicated plant near Chennai where up to 60–70% of non-critical structural components are localized, assembling machines domestically while importing only the specialized European core components. Indian engineering firms like BEML are collaborating with international partners to build capabilities to design and manufacture indigenous TBMs. A TBM is a highly engineered machine containing substantial amounts of castings, forgings, machined components, shafts, gears, housings, cutter assemblies, structural components, etc. As localisation increases, OEMs will look to localise more of these components to reduce cost, lead times and import dependence. 3. Casting, Forging and Machining The US heavy-duty truck market (Class 8) in 2026 has seen an intense, record-breaking front-half of the year, driven heavily by the "pre-buy" race to secure current-generation diesel slots before the strict 2027 EPA guidelines hit production. Caterpillar is operating at or near effective capacity in its power generation business, with a $72 billion backlog (nearly 3.5x what it was 18 months ago) and delivery slots extending to 2029–2030. The company is responding with an unprecedented capacity buildout (tripling large engine capacity, 2.5x-ing turbines), but the gap between demand and supply won't close quickly. When you combine the Class 8 truck backlog stretching into 2028–2029, Caterpillar's record $72 billion order book with deliveries into 2030, aerospace's 16,683-aircraft backlog representing 12 years of production, India's defence capital outlay of ₹2.19 lakh crore with a 75% domestic procurement mandate, Wabtec's $27 billion rail backlog, and the global offshore wind pipeline of ~500 GW, all of which are metal-intensive, long-cycle industries hitting capacity constraints simultaneously, the casting, forging and machining space appears to be in the early innings of a genuine multi-year cycle. Which forging or casting company one chooses to pick is a personal choice, but the underlying story certainly seems to be coming together. 4. Peptides It took decades for around 110-130 peptide drugs to reach FDA approval. Today, nearly 800 peptide drugs are already in development, a striking indication of how rapidly the peptide therapeutics pipeline is expanding. A peptide is a short chain of two to fifty amino acids linked by chemical bonds. Because amino acids are the building blocks of proteins, peptides are essentially mini-proteins. They act as tiny messengers in the body that tell cells what to do. Human body uses native peptides constantly as messenger molecules to control naturally occurring processes: Insulin (51 amino acids) tells your cells to absorb sugar. Oxytocin (9 amino acids) manages social bonding and contractions. GLP-1 (30 amino acids) tells your brain you are full after eating. When scientists develop a peptide drug, they aren't inventing a completely foreign, synthetic chemical that the body has to figure out. They are copying or lightly tweaking a "native text" your cells already know how to read. Peptides have existed for decades, but only recently have they emerged as a major growth area in therapeutics as several long-standing development and manufacturing constraints have been successfully addressed. Historically, peptide drugs were challenging and costly to manufacture at commercial scale, often characterized by low yields, impurity-related issues, and complex production processes. However, advancements in solid-phase peptide synthesis (SPPS), automation, purification technologies, and process engineering have substantially improved manufacturing efficiency, product quality, and scalability, making large-scale commercialisation increasingly feasible. Peptide drug development has gained significant momentum in recent years, driven by the commercial success of GLP-1/GIP therapies and advances in manufacturing technologies that have improved scalability, yields, and cost efficiency. The peptide pipeline is now deeper than ever, with ~800 peptide molecules under development globally, including ~600 in preclinical stages and ~185 in clinical development. Notably, nearly 100 peptide candidates are already in Phase 3 trials, highlighting the strong probability of future commercial launches. We believe this expanding pipeline, coupled with growing interest in metabolic, cardiovascular, oncology, and rare disease indications, will continue to drive robust demand for peptide manufacturing capacity over the coming decade. Bottom line, Indian CDMO companies with Peptide capacities are expected to be in the middle of a super-cycle! Now, go look for those! 5. Motilal Oswal Financial Services Motilal Oswal Financial Services (MOFSL) is India’s largest integrated non-bank capital market player, operating across Asset Management, Private Wealth, Retail Wealth Management, Capital Markets (Institutional Equities & Investment Banking), Housing Finance, and a strategic Treasury Investment book. The company has delivered a decadal Operating PAT CAGR of 33% and an average ROE of 23% entirely through internal accruals, with zero equity dilution since its 2007 IPO. MOFSL is successfully transforming from a cyclical brokerage-heavy firm into a steady-state Asset and Wealth Management (AWM) machine. Q1FY27 marks an inflection point: Asset Management + Private Wealth now contribute 55% of group Operating PAT (vs. 42% in FY25), driving the ARR (Annual Recurring Revenue) mix to a record 66%. With a treasury book compounding at 41% CAGR, and multiple structural tailwinds (financialization of savings, rising HNI/UHNI wealth, India’s capital market deepening), MOFSL is transitioning from a cyclical broking-led franchise to a high-quality, annuity-heavy compounder. The shift from Transaction-Based Revenue (TBR) to ARR looks structural. Fee & NII revenue share now stands at 78% of total revenue, significantly de-risking the P&L from market volatility. AMC business: Asset Management (Mutual Funds + PMS + AIF) is the new growth engine (73% PAT Growth) and is firing on all cylinders Private Wealth Management: PWM business caters to 400+ UHNI families with an AUM of ₹2.4 lakh Cr (Grew 42% YoY in Q1) Alternates Expansion: Management plans to launch a commercial real estate fund in H2 FY27 and is finalizing its maiden private credit fund of ₹3,000 crores. Capital Markets: Ranked #2 in IPO/QIP league tables for Q1FY27The "Twin-Engine" Model Creates a Self-Sustaining Compounding Machine Housing Finance: PAT up 36% YoY to ₹32 Cr. AUM at ₹6,164 Cr (up 23% YoY). Pristine asset quality (GNPA 1.1%, NNPA 0.6%). Disbursements grew 64% YoY. That's all for this edition. Have a great Sunday! Disclaimer: None or buy or sell recommendations. This publicly available information is shared for learning and education purposes.

  4384024141K viewsView on X
• Aug 2, 20261.9x their median

  Timepass talk on Sunday 1. Ujjivan Small Finance Bank If you look at the top 10 highest-volume trading days on the NSE over the last 12 months, four of them occurred on four consecutive trading sessions, July 23, July 24, July 27, and July 28. This highlights the exceptionally strong investor participation and heightened market activity following the earnings season. Why such interest? Strong Balance Sheet & Deposit Expansion: Ujjivan delivered a well-rounded quarter, with its gross loan book growing 28.9% YoY and deposits rising 25% YoY, supported by an impressive 37.8% YoY growth in CASA deposits. While many financial institutions have managed strong loan growth but struggled to mobilize deposits, Ujjivan successfully delivered healthy growth on both fronts, reflecting the strength of its franchise. Cost of Funds Benefits: The steady deposit mobilization supported a favorable liability mix, keeping the overall cost of funds on a downward trajectory at 6.86% for the quarter. Accelerated Non-MFI Asset Diversification: Secured loans expanded 42.7% YoY to constitute 50.4% of the total book, keeping the bank on track for its 56% secured mix target by FY27-end. High-Margin Growth Engines: Emerging portfolios saw rapid scaling: Gold loans jumped 248.1% YoY, Vehicle loans rose 85.1% YoY, and MSME Agri loans grew 68.6% YoY. Improving Asset Quality & Reduced Slippages: Bank-level GNPA dropped 10 bps QoQ to 2.17% with a strong 85% PCR, supported by annualized MFI slippages dropping to 1.72% (down from 2.68% in Q4 FY26). Upgraded Guidance for Profitability & Asset Quality: Management raised its FY27 ROA guidance to 1.8%-2.0% and lowered credit cost expectations to 0.9%-1.0% of average total assets. Operational Efficiency Cushion: The management optimized full-year OPEX guidance downward to ~6.4% of average assets, even after factoring in ₹250 crore in planned capacity building and branch additions. Could the re-rating be finally on the cards? 2. Privi Speciality Chemicals Privi posted yet another good quarter living up to it's consistent compounder tag! Management is confident of maintaining a 20% revenue CAGR with 24-25% EBITDA margins. FY27 Growth Triggers Phase 1 capacity expansion: 48,000 MT → 54,000 MT by September 2026, with current utilization already at ~90% Merger completion: Consolidation of Privi Fine Sciences and Biotechnologies adds ~6,000 MT capacity and operational synergies by FY27 year-end Givaudan JV scaling: JV turned profitable in Q4 FY26 (₹18 crores revenue with an EBITDA margin of 14-15%); additional ₹50 crore equity infusion planned for next phase of 42 products FY28 Growth Triggers Phase 2 capacity expansion: 54,000 MT → 66,000 MT by September 2027, adding 12,000 MT of flagship product capacity New specialty products commercialization: Maltol, Ethyl Maltol, Musk T, Cyclopentanone and 10+ specialty molecules coming online by H2 FY28, furfural vertical alone targets ₹1,000+ crore revenue Backward integration moat: Only global player fully integrated from corn cob to maltol/ethyl maltol, capturing China+1 demand as 95%+ supply currently comes from China 3. Gravita India If one has a preference for value buys, Gravita could present an interesting opportunity over the next month or two! Near Term challenges Scrap supply disruption: 15-20% of imports from Gulf remain stuck due to Middle East war; Q2 will still see some impact Low lead volumes: First YoY decline in lead volumes seen in Q1; recovery depends on supply normalization High working capital: 95-day cycle and INR 150cr net debt due to copper inventory and transit stock Copper utilization stuck at ~50%: Debottlenecking only by end-FY27, so near-term margins diluted Growth Triggers for H2FY27 & FY28 Own scrap yards in US/developed nations: Setting up now; operational by year-end to replace Gulf dependency and cut costs Copper debottlenecking + new Gujarat plant: Utilization to hit 60%+ by Q4FY27; EBITDA/ton to rise from INR 55k to 60k by year-end, 70-75k over 2-3 years Lead capacity utilization recovery: Phagi and Mundra expansions at ~45-50% now; to reach ~70% as scrap flows normalize Copper capacity doubling: From ~30k to 60k MTPA over next 3 years via organic expansion LME brand listing for lead: Opens global OEM doors and export opportunities Value-added product mix: Already at 63% (from 45%); even ex-copper improved to ~50%, supporting margins Lithium-ion battery recycling: R&D for full value chain (not just black mass); refining unit planned as volumes scale Strong balance sheet: AA rating, capex fully funded by internal accruals; no equity dilution risk 4. Ramkrishna Forgings After going thru multiple struggles for several quarters, RK Forgings has delivered back to back good quarters with good growth and margin expansion. Management claims they are on track to hit 8000 crore revenues by FY29 and that essentially means a 23-25% CAGR for the next three years. Management also assured that company should see continued improvement in terms of margin every quarter from now onwards. In the previous earnings cycle, company used to operate at 21-22% margins and that's perhaps would be the first target to reach. Company is planning to reduce debt by at least ₹500 crore in FY27 and that should directly flow into PAT! The company is targeting an ROCE of 12-15% in FY27 and 20% in FY28 (it was in single digits last two financial years) So where is the growth coming from? Exports: Management stated that FY27 could be one of the best years in export revenue Mexico Plant: Contributed ₹6 crore revenue in Q1 and but expected to clock significant numbers from Q3 FY27 Railway & Wheel JV: Trial production has already started, expected to submit the samples to Indian railways in August, and management is hoping to start Bulk by September or October 2026. Future Growth Trigger: Company has commenced bulk supplies of aluminum forgings, marking non-ferrous products as its next major growth lever. Management is aggressively expanding into aluminum, stainless steel, Inconel, and other advanced alloys for aerospace, semiconductors, and robotics, with meaningful revenue contribution expected over the next 12–24 months. 5. ACCs and Battery chemicals Recently Nuvama published an interesting read about Battery Chemicals and here is the short summary of it: Advanced Chemistry Cells (ACC): Next-generation rechargeable battery cells, including Lithium-ion (LFP, NMC, LMFP, NCA), Sodium-ion, Solid-state, and other advanced chemistries. Today, lithium-ion accounts for more than 95% of global ACC demand. India ACC demand to grow at 39% CAGR during 2025-30E and the demand would grow at 27% CAGR during 2030-35E; EV battery demand to grow at 35% CAGR during FY25-30; BESS is likely to see a 78% CAGR during FY25-30 (although supply seems to be low as of now). India is transitioning from being primarily an importer of battery materials to developing a domestic battery chemicals ecosystem. The Government launched the ₹18,100 crore PLI Scheme for ACC Batteries to establish 50 GWh of domestic cell manufacturing capacity. In addition, over 10 manufacturers have announced around 178 GWh of battery manufacturing capacity, creating significant downstream demand for battery chemicals. Cathode materials alone account for roughly 35–45% of battery cost, with anode and electrolyte adding another 20–25% combined. Key Indian players Neogen Chemicals: Electrolytes, Electrolyte salts (LupF6), electrolyte additives Himadri Speciality: Synthetic graphite, silicon-carbon anodes, LFP cathode materials Gujarat Fluorochemicals: LiPF₆(electrolyte salt), Electrolyte formulations & additives, LFP Cathode Active Material (CAM), PVDF & PTFE battery binders, Next-generation anode materials Tatva Chintan Pharma Chem: Electrolyte additives and specialty chemicals Sudeep Pharma: Battery-grade iron phosphate and other derivatives for Cathode Active Material (CAM) That's all for this edition. Have a great Sunday! Disclaimer: None or buy or sell recommendations. This publicly available information is shared for learning and education purposes.

  3963817246K viewsView on X
• Aug 19, 20261.6x their median

  So many younger CDMO players are announcing new contracts. Now imagine what the order books of the established CDMO leaders must look like. The real opportunity could be in the non-linear growth that follows. When it comes to CDMO, capability alone isn’t enough. Capacity and scale matter just as much. Of course, the flip side of such strong growth is premium valuations. #Laurus #Divis #Sai

  3461321036K viewsView on X
• Aug 24, 2026

  I think somewhere along the way, we are probably under-appreciating just how big some of our manufacturing businesses can become. Most of our investing world has revolved around services exports, and perhaps because of that, we sometimes struggle to visualise the kind of scale that Indian manufacturing businesses can eventually achieve. Some of the orders (Welspun Corp, Ratnamani, OFC players etc. ) and capacity expansions we are seeing today are beginning to give us those hints. Take peptides, for example. When we look at the current peptide capacities of some CDMO players, and then compare those with what Divi's is capable of, Divi's can look like a demigod, until you compare Divi's scale with global players. There is an interesting parallel with Indian IT services. Three decades ago, Indian IT companies were tiny compared with their global peers. When TCS crossed the $1 billion revenue milestone in FY03, it was a landmark achievement and a major moment for the industry. Obviously, I am not suggesting that manufacturing will replicate the exact trajectory of IT services. They are completely different businesses, and the kind of scale that technology-enabled businesses can achieve simply cannot be replicated in manufacturing. But I do think we are entering a period where some Indian manufacturing companies could surprise us with the sheer scale they are capable of reaching over the next 5–7 years. Perhaps we are still underestimating what “Made in India” can eventually become.

  2801515024K viewsView on X
• Aug 25, 2026

  DRDO Technology Transfer Approved: Defence Minister Rajnath Singh has approved the transfer of technologies developed by DRDO for all conventional missile systems to Indian defence companies for indigenous production. This is an important step towards expanding domestic missile manufacturing capabilities, reducing import dependence and deepening the Indian defence supply chain, while potentially accelerating the shift from a largely government led missile ecosystem towards a much broader public-private manufacturing ecosystem. Obviously, there is still a lot of paperwork, qualification, certification and technology-transfer framework to be worked out before this translates into actual production. But the approval itself is a very important milestone. Companies across the missile and defence ecosystem, including BDL, BEL, Data Patterns, Bharat Forge, Astra Microwave, Apollo Micro Systems, Paras Defence, Solar Industries and others, could potentially have a role to play, depending on the specific technologies, qualification requirements and production partnerships. While some companies may benefit directly from the technology transfer itself, others could benefit from the resulting expansion in missile production and the broader defence manufacturing ecosystem.

  227169122K viewsView on X
• Aug 19, 2026

  The biggest gift of the Congress government to Hyderabad: unlimited, unmanageable traffic! Traffic management has completely gone for a toss, and drunk-driving checks seem to have disappeared altogether. And if that’s not enough, Hyderabad has some of the most ‘advanced’ drivers who can magically create six lanes out of a two-lane road. Two-wheelers then take it a step further and turn the whole thing into spaghetti. Absolute chaos on the roads.

  2031327022K viewsView on X
• Aug 20, 2026

  Announcing the second offline meet of Hyderabad Investing Enthusiasts – 2026 This event comes with round-table seating and a bit of "class work" 📅 Date: Sep 27, 2026 📍 Venue: Vaaraahi, KPHB ⏰ Time: 8:30 AM – 3:00 PM 🍽️ Includes: Tea/Coffee & Lunch 💳 Registration Fee: ₹1,599 🎤 Speakers: The Unusual Suspects and Few surprises! Overall market outlook, sectoral and thematic views, what’s hot and what’s not, allocation strategies, profit-booking and stop-loss discussions, and, above all, an extensive Q&A session that will be hard to match at any other investing event! Please register @ https://t.co/F8zQQRIa9j

  1461441355K viewsView on X

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