• US retailer with an unrivaled value proposition!

    Retail is a very competitive industry.Per spglobal, 300 US retailers have gone bankrupt over the last 10 years — avg 2.5 retailers a month.Some of the prominent ones include Sears, JCPenny, Bed Bath & Beyond. Many other retailers are reducing their store footprint significantly and trying to stay afloat. But there is a mass retailer…

  • What is ROIC and what does ROIC breakdown tell us about a sector?

    A business creates value when the Returns on Invested Capital exceed the Cost of raising that Capital.Consistently high ROIC (>> Cost of Capital) is a recipe of enormous shareholder value. ROIC — also referred to as the measure of Quality of investment — is a function ofa. how efficiently capital is deployed ( measured as…

  • Want to learn some Powerplay and “Good Will” from Reliance? 

     I mean Goodwill in Finance! 🙂 On 28th Aug, Wed, the Competition Commission of India approved the merger of Reliance and Walt Disney’s India media assets. Earlier this year, Walt Disney had reported a ~70% drop in earnings due to a $2B dent in Disney’s India business. Reason:Walt Disney had a $2B “𝗴𝗼𝗼𝗱𝘄𝗶𝗹𝗹 𝗶𝗺𝗽𝗮𝗶𝗿𝗺𝗲𝗻𝘁” charge…

  • PVR INOX Equity Research and Valuation DEMO

    Pre pandemic — China sold 170 Cr movie tickets. India sold 100 Cr tickets.2023 — The admissions (ticket volume sale) has almost fully recovered in India. China has some catching up to do, but is still a lot higher than India. Despite producing ~50% less movies than India, China box office collection is 5x that…

  • What do Airlines, Utilities, Telecom, Hotels, Resorts, Movie theaters and Technology companies have in common?

    All of them have high Operating Leverage! Companies which incur relatively low incremental cost of serving additional customers have high operating leverage. Such companies have a higher proportion of their overall costs as fixed (and have lower variable costs). e.g., NetflixAfter paying for large fixed costs such as content, licensing and tech infrastructure, the cost…

  • What do Airlines, Telecom, Hotels, Resorts, Movie theaters have in common besides Operating Leverage?

    All of them have high leases i.e., rental payment obligations! For instance, movie exhibition companies (e.g., AMC Theatres in the US and PVR INOX in India) do not own the space in which they run their business within the shopping malls. They pay rent for using that space over a contracted period. Until 2019, these…

  • Interested in learning equity research and valuation step by step – through practical examples?

    In the past, I have put out videos teaching detailed analysis and valuation of companies across different industries.In almost all of them, I cover– [ ] 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸: how to systematically analyze a business and asset business moat?– [ ] 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗤𝘂𝗮𝗹𝗶𝘁𝘆 𝗔𝘀𝘀𝗲𝘀𝘀𝗺𝗲𝗻𝘁– [ ] 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀 — beyond textbooks– [ ] 𝗠𝗮𝗿𝗸𝗲𝘁…

  • Standalone health insurer Niva Bupa IPO

    Health insurance (and broadly general insurance) is not a very easy business to understand. There any many news articles and videos that merely state Niva Bupa’s key financials, talk of the huge growth runway ahead, but do not go far at all in analyzing the underlying story. 𝗜𝗻 𝘁𝗵𝗲 𝗯𝗲𝗹𝗼𝘄 𝘀𝗵𝗼𝗿𝘁 𝗽𝗹𝗮𝘆𝗹𝗶𝘀𝘁, 𝗜 𝗵𝗮𝘃𝗲 𝗮𝘁𝘁𝗲𝗺𝗽𝘁𝗲𝗱…

  • Is the Indian stock market overvalued? Will the correction continue?

    Let’s look at a few indicators: 𝟭. 𝗕𝘂𝗳𝗳𝗲𝘁 𝗜𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿Market Cap to GDP is over 130% i.e., Market Cap exceeds GDP by 30%Up until 2020, this indicator was below 100% (except in 2007). Over the last 3 years,, this indicator has been rising and is now above 130%. 𝟮. 𝗚𝘀𝗲𝗰 𝗮𝗻𝗱 𝗜𝗻𝗱𝗲𝘅 𝗘𝗮𝗿𝗻𝗶𝗻𝗴 𝗬𝗶𝗲𝗹𝗱Earnings yield =…

  • Unraveling GDP growth rates!

    Lot of clamor about India’s abysmal 5.4% GDP growth rate in Q2 FY25. People were expecting a much higher growth. But, is the 5.4% GDP growth real or nominal? What is the difference between real and nominal GDP growth rate at the first place? Moreover, is this reported GDP growth rate in ₹ terms or…

  • How to estimate market size, top-down and bottom-up?

    Market sizing is a key step in equity research and investing.In fact, market sizing is a favorite topic for Strategy & Consulting recruiters (I was asked to estimate the 2-wheeler market size in my case interview for my present firm almost a decade ago) Now, let’s understand market sizing for a few industries.Let’s understand 𝘁𝗼𝗽-𝗱𝗼𝘄𝗻…

  • How to analyze con calls?

    Seen a lot people jumping to valuation without developing a reasonable business understanding. A valuation model is as good as its inputs.Garbage in garbage out. A great source to understand a business is earnings conference calls or con calls in short.They are a phenomenal source of industry insights, understanding competitive advantage besides business performance and…

  • What are some of the other sources of moat?

    “𝙉𝙤 𝙛𝙤𝙧𝙢𝙪𝙡𝙖 𝙞𝙣 𝙛𝙞𝙣𝙖𝙣𝙘𝙚 𝙩𝙚𝙡𝙡𝙨 𝙮𝙤𝙪 𝙩𝙝𝙖𝙩 𝙩𝙝𝙚 𝙢𝙤𝙖𝙩 𝙞𝙨 28 𝙛𝙚𝙚𝙩 𝙬𝙞𝙙𝙚 𝙖𝙣𝙙 16 𝙛𝙚𝙚𝙩 𝙙𝙚𝙚𝙥. 𝙏𝙝𝙖𝙩’𝙨 𝙬𝙝𝙖𝙩 𝙙𝙧𝙞𝙫𝙚𝙨 𝙩𝙝𝙚 𝙖𝙘𝙖𝙙𝙚𝙢𝙞𝙘𝙨 𝙘𝙧𝙖𝙯𝙮. 𝙏𝙝𝙚𝙮 𝙘𝙖𝙣 𝙘𝙤𝙢𝙥𝙪𝙩𝙚 𝙨𝙩𝙖𝙣𝙙𝙖𝙧𝙙 𝙙𝙚𝙫𝙞𝙖𝙩𝙞𝙤𝙣𝙨 𝙖𝙣𝙙 𝙗𝙚𝙩𝙖𝙨, 𝙗𝙪𝙩 𝙩𝙝𝙚𝙮 𝙘𝙖𝙣’𝙩 𝙪𝙣𝙙𝙚𝙧𝙨𝙩𝙖𝙣𝙙 𝙢𝙤𝙖𝙩𝙨” — Warren Buffett Buffett also says that “A truly great business must have an enduring moat that protects excellent returns…

  • “Secured Lending to MSME” is an attractive industry

    Analysis of an industry, market (incl. size of the market) and the key metrics in that industry is a starting point in equity research, strategy, consulting and business analysis. In this enclosed document, I discuss an interesting credit/lending industry catering to a specific market — Secured Lending to the Self-Employed / MSME segments. I have…

  • Decoding a general / non-/ property & casualty insurance business model

    General Insurance business makes money largely the same way as a traditional bank.Sounds weird, right? But, it’s true. Read on please! A bank gives us an interest on our deposits, which the bank uses to give out loans at a higher interest rate. The bank makes money on the interest rate differential.A well-run general insurer…

  • Learn to analyze a bank in 5 mins?

    This is a click bait!5 mins are usually not enough unless of course you have analyzed the business before and you know what exactly you are looking for. But if you give me 5 mins, I will help you understand one of the most important financial metric that investors use to evaluate banks / financial…

  • Balance sheets are forgotten during Bull markets!

    … and remembered when BEARS start showing up. If you give me 35 mins of your time then I’d make an honest effort to help you understand a Balance Sheet and the various line items that make a Balance Sheet. Can I have that time commitment? Are you ready? Link to the video playlist in…

  • Equity Research | Narayana Hrudayalaya

    1. Investment Thesis 1.1 Improving Margin: The company has increased its operating margin from 8% in FY13 to 23% in FY24 by improving efficiencies and increasing contribution from Cayman islands. Profits were lower in FY18 and FY19 because they opening new hospitals in Delhi, Gurgaon and Mumbai. 1.2 Mass Appeal: NH chooses to keep the price of…

  • Valuation and Equity Research – Interview Questions

    This linked document has the list of topics/questions that I have covered in my LinkedIn posts. A snapshot of the document is presented below

  • Financial Statement Analysis

    If you want to learn Valuation and Equity Research, please subscribe to my YT channel and follow me on LinkedIn:   / gautamrastogi1 . Feel free to email me at gautamrastogi.investandrise@gmail.com or PM me on linkedin This education video series has 3 videos: Understanding the three Financial Statements | How the three statements are linked? Learning Objectives: Link…

  • Equity Research | Agarwal Industrial Corp Ltd

    This blog post has links to my 3-video equity research series on Agarwal Industrial, an infra ancillary, which seems to be uniquely positioned to capture the road construction led bitumen import demand in India. If you want to learn Valuation and Equity Research, please subscribe to my YT channel and follow me on LinkedIn:   / gautamrastogi1   Feel…

  • Equity Research | Radiant Cash Management

    This blog post has links to my 3-video equity research series on Radiant Cash Management, a valuable logistics company in India. If you want to learn Valuation and Equity Research, please subscribe to my YT channel and follow me on LinkedIn:   / gautamrastogi1   Feel free to email me at gautamrastogi.investandrise@gmail.com or PM me on linkedin Video 1…

  • My notes on Rajshree Polypack, a company that makes packaging for F&B industry

    As I have understood, there are two packaging types – rigid and flexible. In rigid packaging, there are broadly two methods to make packaging – Thermoforming and Injection Molding. In thermoforming, plastic rigid sheets are subjected to heat for molding into a desired shape. IM on the other hand, converts plastic pellets into molten material,…

  • My notes on Tinna Rubber, a company that recycles tyres

    When you come across a growth story with powerful powerful (yes used the word twice!) tailwinds, you may be inclined to overpay for growth. But then you hit on too many red flags relating to quality of reported financials — then you pause, you think shall I leave it and go find another company or…

  • My notes on Macpower, a company that makes CNC Machines

    Image Credit: https://www.thecrucible.org/guides/machining/lathes/ I came across CNC machines through a post in LinkedIn. Up until that time, I had never heard of CNC. CNC stands for Computer Numerical Control. CNC machines are software driven machine tools used in manufacturing plants for metal cutting. My wife, who has an automotive engineering background, explained to me the…

  • My notes on Sealmatic, a company that makes mechanical seals

    For any questions or comments, feel free to email me at gautamrastogi.investandrise@gmail.com or PM me on linkedin

  • Oriental Carbon and Chemicals – Indian company operating in an Oligopoly

    Image credits: tirehub.com OCCL makes Insoluble Sulphur, which is used as a vulcanizer in the manufacturing of tires. There are 4 companies – Eastman / Flexsys (US), Shikoku (Japan), Chinese Sunsine and OCCL – that make a major chunk of the IS in the world. High capital intensity and long IS approval cycles by tire…

  • Vardhman Textiles – playing the commodity game

    image credits: moneylife.in In my quest to find honest, well run and moated undervalued securities, I chanced upon the Cotton Textiles sector. I quickly realized that most of the companies (more specifically companies that spin cotton yarn and make fabrics) in this sector are trading at high single digit / low double digit PE due…

  • FIIs raise stake in 6 Indian PSU banks for 3 straight quarters; do you own any?

    Well, to each their own, but here are some metrics that one may want to consider looking 𝐁𝐕𝐏𝐒 𝐜𝐨𝐦𝐩𝐨𝐮𝐧𝐝𝐢𝐧𝐠: Long term stock price compounding for banks follow Book Value / Share compounding, which in turn depends on𝐑𝐎𝐄 = ROA * Leverage𝐑𝐞-𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭𝐬 (incl equity raises) a. 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐀𝐬𝐬𝐞𝐭𝐬:(Net Interest Inc + Fees + Treasury Inc –…

  • Equity Research – Aditya Birla Sun Life (ABSL) Asset Management Company (AMC)

    ** I will be creating an equity research report for ABSL AMC. For now, I am sharing the summary of my analysis and valuation (long-term return expectations) of ABSL AMC ** ** Analysis and Valuation dated 29/7/2022 ** 2 months ago, I had put out an equity research report on HDFC AMC, in which I…

  • Equity Research Report – Micron Technology

    Please use the below gdrive link to access the pdf reports: FY22-Q3: https://drive.google.com/file/d/1lrhCqXfn1uBp20taLtysahhk7ImiRmUE/view?usp=sharing FY22-Q2: https://drive.google.com/file/d/1yod8T7z8Q6ed9_LxLS4QSPzVO3kesbsl/view?usp=sharing . FY22-Q2 report is also published on Seeking Alpha. Here is the video link to the FY22-Q2 report:

  • HDFC AMC – Equity Research Reports

    Please use the below gdrive link to access the pdf report document: 2022 Q3: https://drive.google.com/file/d/1kQdvxuFlmzaI9Vx0ZT3dnadndoS95Hjw/view?usp=sharing Here is the video link to the 2022 Q3 report: In the video, I give a quick walk through of my report on the company. I primarily focus on the industry and my investment thesis. You would find more details…

  • UTI AMC Valuation 2021

    Mutual Fund AUM penetration in India is 12% of GDP vs the global average of ~60%. Emerging markets such as Brazil and SA are at ~50%. Overall MF in India has crossed INR 30 Trillion in FY21 by growing just under 20% over the last 5 years. As per estimates, overall MF in India will…

  • Zomato IPO Valuation 2021

    After coming across so many polarized views, I couldn’t stop myself from valuing this much talked about IPO. While I had originally intended to value the entire business, I had to contend myself with valuing their major business segment of “food delivery”. I have not valued “dining out” and B2B “hyperpure” (which is into suppling…

  • Invisible leverage is no longer invisible: Is investor risk perception impacted?

    In 2019, accounting rules regarding treatment of operating leases were changed. Under old accounting operating leases were expensed. As per new accounting, operating leases have finally found the place where they long belonged, the balance sheet. Retail, restaurants, airlines, logistics and telecom companies have significant operating lease obligations. With lease liabilities becoming visible as debt (and…

  • Zuora – bet on subscription economy?

    Zuora was founded by Tien Tzuo (ex-chief strategy officer at Salesforce) in 2007. Tien coined the term subscription economy to define the shift taking place from product ownership to service consumption (Uber and Netflix are very relatable examples of companies that helped enhance the movement form car and dvd ownership to “as a service”). He…

  • Lyft Valuation Update – 2020

    In this writing, I dive into Lyft’s numbers again and value the firm as it battles the pandemic. Valuation is built on the expectation that after mobility levels recover, economies of scale will start taking effect in the mid-long term. Using rider based economics in my DCF valuation, I value existing active riders at ~$15…

  • Costco Equity Valuation

    Costco Wholesale Corporation (Costco) has a solid business model with a predictable stream of subscription revenue, which constitutes 90% of the net profit. In the video (embedded below), I have projected out Costco’s financial statements and valued its equity. Although, Costco trades at a P/E of ~36 (amongst the highest in the retail business it…

  • Value in Facebook

    Facebook earns close to 99% of its revenue by advertising. Marketers pay for ad products based on the number of impressions delivered or the number of clicks done by users. The business continues to impress me given that my friends, family and colleagues are so hooked to the platform and most of them (albeit to…

  • Equity Valuation for a Financial Firm

  • Bandhan and Gruh Merger Valuation

    This blog post has two sections – In the first section, we value Gruh Finance separately (before merging into Bandhan). We have analysed and valued Bandhan separately here (in our previous blog post). In the second section, we value the merged entity and estimate the value of synergy to assess if Gruh’s pricing as per…

  • Bandhan Bank Valuation (just prior to merger with Gruh)

    In this blog post, we have assessed the key fundamentals of Bandhan Bank just prior to its merger with Gruh Finance. Using Discounted Cash Flow valuation with latest reported numbers from Sep’19, we have estimated an intrinsic value of Rs. 495 per share, making the Bank slightly overvalued before the impending merger. We have also…

  • TCS Stock Valuation

    The objective of this blog is to analyze TCS fundamentals and estimate a fair value per share. Please note that this valuation was done on 4/29/2019. Just as a manufacturing company invests in building new products/plants, a service company such as TCS invests in up-skilling (learning and development) its existing employees and recruiting new talent.…

  • Virinchi Stock Valuation

    The objective of this blog post is to analyze the fundamentals and value the 3 lines of businesses of Virinchi separately and estimate a consolidated Fair Value Per Share. Any opinion expressed in this blog post is solely my own and does not represent views of my employer. Moreover, this stock valuation should not be…

  • Lyft IPO 2019 Valuation

    Ride sharing companies have revolutionized the way we commute. While Uber has gone global and continues to expand to other businesses, Lyft has shown a much smaller narrative and is present only in US and Canada. Lyft just filed for a much awaited IPO and should get listed by the end of this month. I…

  • Lyft – User Based Valuation

    Edit (9th March 2019) – Using the user based statistics and financial information made public in Lyft’s S-1 prospectus, I have revalued Lyft at ~$17 billion. My valuation is presented in the link alongside https://investandrise.com/lyft-ipo-2019-valuation/ Ride sharing companies have revolutionized the way we commute. Both Uber and Lyft would be going public next year. While…

  • Upwork (UPWK) IPO Valuation

    The objective of this article is to estimate the intrinsic share value for freenlancing platform Upwork, which went public on Oct 3rd. The estimate is arrived at using a DCF valuation based on the company fundamentals given in its S-1 prospectus and my own views/forecasts on the company Disclaimer: The intent is certainly not to give…

  • Bandhan Bank IPO Valuation

    Image Credits: businessnewsdaily The objective is to give a range of fair values to Bandhan Bank’s IPO to help the reader make an informed decision before investing (and the idea is certainly not to predict listing/short-term gains). Relative valuation alone does not really help us when the firm does not have a close second.  In…

  • LT Foods Stock Valuation

    Edit (20th Jan 19) – Updated valuation present in https://youtu.be/GlGAZMqMNWY The objective of this article is to analyze the fundamentals of LT Foods (Daawat Rice) Stock and estimate a fair value per share based on its fundamentals. I have attempted to compare the stock with its peers using certain key financial ratios. I have gone ahead and modeled the financial…

  • The Energy Oxymoron – Ecofriendly Municipal Waste

    We have been talking a lot about renewable sources of energy and how the energy mix is slowly but steadily changing. Under the National Solar Mission, the government aims to install 100 GW of solar capacity by 2022. Currently, 5 GW of solar installed capacity has been achieved and it is poised to cross 20…