BC SECTORLEARNINGS
Saved by @SAnngeri

After writing on Banking & Paints, this thread focuses on the 'Logistic Sector'. Idea is to give a small start to the retail investors looking at investing in this space from where they can build on.

This thread covers,
- Macro
- Business Model
- 3PL & 4PL
- Valuation (1/n)

 Logistics business macro

-14% of India’s GDP is spent on Logistic
-Organized market is 42%
-Growing at 10-15%
-Employs 2.2 cr
-Achieved Infrastructure status
-FY 14-18 attracted 1,00,000 cr FDI (2/n)
What’s the business?

Logistic is traditionally seen as a warehousing & transportation business where goods, needs 2b transported 4m point A to B using Road, Rail, Ship or Air & can be stored at multiple warehouses before the consumer receives the product (3/n)
The business landscape is changing fast with newer competition and technology is challenging the older business models. 3PL (3rd party logistics) & 4PL is one such change in the business of logistics, will discuss about the same ahead. (4/n)
Listed companies involved in the business may or largely may not own the Trucks, Rails, Aircraft, Ships, Warehouses etc., but uses outsourced services of other vendors and the listed companies manage the logistics from point A to point B (5/n)
Which are the top 5 companies in this space?

Container Corporation – 28,000 cr
Blue Dart – 10,000 cr
Mahindra Logistic – 3,500 cr
Allcargo Logistic – 3,000 cr
Gateway – 2,000 cr (6/n)
What business are they in?

(A) Container Corporation

-Transportation of the shipping container from point A to B using the rail network
-Has monopoly in this business
-Globally more than 500 km of logistics is done through rail but in India it is still done through road (7/n)
- In India only 25% of the logistics happen through rail

(B) Blue Dart – Is in the traditional business of courier within India using Air & Road network (8/n)
(C) Allcargo

(i) Multi-Modal - The multi-modal process usually begins with a container being moved by a truck to a rail, then back to a truck to complete the process (9/n)
(ii) Container freight station operation - A container freight station is a location, usually a warehouse, where products and other goods are collected, stored, and where they wait to be shipped to the next location. (10/n)
iii) Inland container depot–Ports equipped 4 handling & temporary storage of containerized cargo
iv) Contract logistic operations–Managing end 2 end 4m designing facility, warehousing, transportation, order processing & distribution, inventory management & customer service (11/n)
(D) Gateway – It is also into Multi-Modal & Container Freight Station management

(E) Mahindra logistic - Mahindra Logistics is a 3PL (3rd party logistic) & 4PL player (12/n)
What & how of 3PL industry operation

Imagine it to be like Uber. There is a traveler and a driver, Uber connects them and manages the entire logistics. (13/n)
3PL is outsourcing the entire operations of your logistic supply chain management, Transportation (Asset), Warehousing (Asset) & other value added services to a 3rd party logistic company (3PL) (14/n)
What are the value added services?

ERP/API – Procurement planning, raw material, billing, working capital management, leasing out trucks & warehouse etc., now can be managed by the 3rd party logistics company (15/n)
Analytics – Transport efficiency (reducing cost), warehouse management (reducing cost), Inventory management (optimum capital utilization) leading to improved ROI using AI (16/n)
Cart Management & Customer Portal – Retailer who wants to go online, 3PLs take care of everything from website making, inventory management, billing, to delivery & reverse logistics (17/n)
Similarly, Automatic Billing, Sorting, Inventory Management, Pick, Pack, Ship, everything can be managed by the 3PL company (18/n)
Infact some companies provide 4PL, where u allow the logistic player 2 become a part of ur own supply management & they redesign things internally within ur own organization like changing the manufacturing layout, to make it more effective over & above all the 3PL services (19/n)
If you look at the last 5 years, companies have not been able to grow sales. Valuations still look rich. May be market participants are expecting this sector to do well. (This is not an advice ☺) (20/n)
Took some data from the very interesting FOF presentation done by @oraunak of @PPFAS the last year (21/n)
Hope the thread added value :) Hit the 're-tweet' & help us reach more investors. We have written multiple similar educative threads on personal finance. You can find them as a pinned tweet on my profile or click the link below (**END**)

https://t.co/UrRt87OLLF

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In a business where the buying & selling price is fixed by the government, how is that the sugar stocks are rallying so much?

A thread 🧵 to learn how the sugar sector works. Do re-tweet and hence us educate more investors (1/n)

- Sugar is made out of Sugarcane
- The government fixes buying price (FRP – Fair & Remunerative price) for the mill from the farmers at 2.850/Kg
- Selling price is also fixed at Rs. 31/Kg (MSP – Minimum selling price) (2/n)

Lets understand the sector,

- Sugarcane purchased by the mill is crushed to remove the juice (exactly like you have sugarcane juice at a hotel)
- Juice is heated & boiled to remove sugar (3/n)

- The juice can be boiled upto 3 times to remove sugar. Each time it is boiled, sugar is removed, than some water is added and boiled again to remove more sugar (4/n)

- There are 2 by-products as well. The residue left behind after the boiling process is over is like a gum/paste called molasses & the fiber/stem of the sugarcane after juice is extracted (5/n)
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Kirtan A Shah
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Learn about the STEEL SECTOR in this thread

The demand for steel is generally only 1.2 times the GDP & there is no significant growth in our GDP but still the sector has rallied relentlessly, lets try & understand

Do ‘re-tweet’ & help us educate more investors (1/22)
#Investing

The metal sector is broadly divided into 2,
-Ferrous is a category of metal that has Iron in it, Steel as an example
-Non-Ferrous is a metal, which does not have Iron content, Aluminum, copper, lead, nickel, Zinc etc.
This thread focuses on Ferrous & hence Steel (2/22)

To start, lets understand with how steel is made (its important).
Iron ore is mined, it is then first converted to Iron & Iron is then converted to Steel. There are 3 processes of making steel
-Blast Furnace
-Scrap Metal
-DRIP/Sponge
We will discuss all three (3/22)
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Kirtan A Shah
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Amongst other performance details, what we miss out while selecting an actively managed mutual fund is the AUM.

In equity, moderate the better. In debt, higher the better.

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@kirtan0810
Market PE at 40 and yet the market is not falling, why? Getting asked this question multiple times. Here's a thread covering ‘very basic’ premier on valuation for my retail investor friends.

Do hit the ‘re-tweet’ and help us educate more investors (1/n)


For us to be able to comprehend the situation, we need to understand 4 very basic valuation matrixes
(1) Trailing EPS
(2) Forward EPS
(3) Trailing PE
(4) Forward PE

Formula

EPS = Profit After Tax / Number of outstanding Shares
PE = Market Price / EPS (2/n)

So what's a trailing EPS?

So in March 2020, RIL generated a Profit after tax (PAT) of 39,354 cr. The number of outstanding shares of RIL is some 676.21 cr. which means the 39,354 cr of PAT belongs to the 676.21 cr. shareholders, right? (3/n)

That also means that per share, RIL earned Rs. 58.20 (39,354/676.21). This 58.20 is called the trailing (TTM) EPS. Trailing means past, already done. (4/n)


So RIL earns 58.20 rupees per share but you pay 58.20 * 33.16 = 1930, 33.16 times more to buy 1 share from the market, that 33.16 is called the Price/Earnings (PE) ratio. This is again trailing as 58.20 EPS is trailing. (5/n)
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Kirtan A Shah
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@kirtan0810
In this #IPO frenzy market, lets talk (Thread) about some basics around
-Angle/VC/PE
-Allotment process
-IPO Funding
-Grey Market

Hit the ‘re-tweet’ & help us educated more investors (1/n)

Why do companies come out with an IPO?

(a) Funding needs
- Business expansion plans
- Debt payoff

(b) Non-Funding requirement
- Enhancing corporate stature
- Exit options to large investors like the VCs & PEs (2/n)

While most of us believe IPOs are for funding requirements, you deep dive and understand it’s more of an exit channel for large investors (VC/PE). Let me explain the same concept from a start-up's perspective (3/n)

If u r starting off ur entrepreneurial journey & need capital, how do u raise funds?
-Self Funding
-Friends & Relatives (F&R)
-Bank Loan
-Angel Investor
Angel investors r the 1s who invest @ the idea stage & PE/VC who invest in the growth phase of the company.(4/n)

- Self funding can be the best option but everyone’s not prepared
- F&R I wish helped
- Bank loans need collateral and
- Angel investors invest only when they see scalability in the business and hence a belief that they will get their investments back. (5/n)
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A list of all the articles that we have created - From Banking to Fiber!

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(Thread) With Kotak launching its International REIT Fund of Fund NFO, it is worth revisiting our old thread on Real Estate Investment Trust (#REIT). The Idea is to educate readers on REIT & share our view on the Kotak #NFO

Do ‘re-tweet’ & help us educate more investors (1/n)

What’s a REIT?

Lets say I am a RE developer, K Raheja. I like a land in Mumbai & Hyderabad 4 some commercial development. I decide to buy it. Where will I get the monies 2 buy & construct it?
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So I invest some monies, got some 4m banks & MF’s & I also got Blackrock to invest 2 buy the land & make the business park called 'Mindspace'. I constructed around 23-mn sq ft with multiple building & I started leasing them out to companies who wanted rented office premises (3/n)

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Saket Mehrotra \U0001f60e\u2615\U0001f4b0
Saket Mehrotra 😎☕💰...
@mehrotra_saket
For almost seven years, I have tracked the hotels space very closely.

While everyone wants to jump on the 'unlock trade' bandwagon, I do not feel it's a great idea because the business model in itself is a little flawed.

Here's a thread 👇 (1/n)

Let's first start with the industry overview.
The whole industry works on one and one thing only. Revenues. (Let's call this A)

Are you capable of charging higher Revenues from your customers on a regular basis?

Are you able to maintain your Revenues if not increase them? (2/n)

Why is this relevant?
Well, think of a regular business selling goods / services.
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Typically you have a certain level of demand estimation before you manufacture(3/n)

Whether you manufacture a product or sell a service, you do a certain degree of demand planning.

In the context of hotels, this would be based on the location, the demand of tourist arrivals and accordingly the number of keys (hotel rooms).

(4/n)

The only catch here is the fact that you only have a 24 hour window to sell a day's inventory.

Taj Mahal Palace in Mumbai only has a 24 hour window on a daily basis to sell 560 room nights.

Once the day gets expired, the inventory is gone. (5/n)
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So many terminologies in Banking!

Confused?😥🤔

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Types of banks:-

Your money should be parked in scheduled commercial Banks

Scheduled Commercial Banks
-PSU Banks
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-Foreign Banks
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Do not park money is Co-operative/Regional Banks

List is shown below

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NPA, NPA, NPA! Kya hain yeh NPA?🤔

Gross NPA (GNPA)-

It is the total loans on which no payment has been paid for 90 days or more.
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Net NPA (NNPA)-

The total figure left after deducting provisions made for bad loans from GNPA.
(GNPA – Provisions+upgrades/writeoffs = NNPA)

(4/20)

Special Mention Account (SMA) –

SMA-0

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One can worship Hanuman ji by chanting Hanuman Mantras. There are many different types of Hanuman Mantras, each fulfilling a specific purpose. Hanuman Mantras help to beget the blessings of Mahabali Hanuman for success. 3/n


Let’s explore these powerful Hanuman Mantras one by one. Here’s the list for you:

1. Hanuman Moola Mantra
!! Om Hanumate Namah !!
ऊँ हनुमते नम:

You can chant the “Hanuman Moola Mantra if you usually face problems and obstacles in your life.4/n
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However, the Human Moola Mantra is also a very powerful success mantra.

It’s a Kaarya Siddhi Mantra.

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My simple Approach towards Breakout trading :

1. Scan stocks on the basis of FTDB Scanner.

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Again sharing bank nifty intraday weekly straddle. How to play by selling straddle.
Mostly will work on Monday to Wednesday. Sometimes on Friday.
Why to pay your money to learn this if u can get it here.
U need only practice.
Let’s go.

Say bank nifty future is at 32000.
Sell both 32000 call and put.
Considering current volatile market lest say premium on Monday morning is 350 on both sides.
Sold with 700 points combine premium.
If bank nifty will trade in narrow range say +\- 100 hold it.
If moving 200 points

then exit previous sold straddle. Sell new one. Let’s say BN moved +200
Now sell 32200. If bank nifty will move here within range then u will get profit through theta decay. Follow same procedure for next 150-200 pts move.

This is only for single straddle sell position.

Now in second case sell three straddle. 31900/32000/32100
In case of 100 points move no need to change.
If 200 + then future is 32200.
Exit 31900 and sell 31200 straddle.
If moving another 100 then exit 32000 and sell 32300. Continue same with 100 points move.
If no move then

it will consolidate between 32000-32200 or 32100 to 32300 and u will get theta decay.

This is for normal move. Sudden big move may come anytime. So keep SL in system.
If u r selling at 350-350 then keep SL in system 475 for both legs.
Practice it. No need to attend webinar.
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